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The Bailout line

November 25, 2008

The Big 3 automakers are still hoping for more money.  Currently, it looks like the best guess is that they’ll end up getting the $25,000,000,000 that was originally intended for “green” retooling without those strings attached.

I think everyone should right their House and Senate members and ask them to vote AGAINST a bailout. Here’s yet another reason why – Chapter 11bankruptcy is the best solution to their problem. Read  this from a guy smarter than me.  Basically, the Big3 are having problems that are peculiar to them. Other auto companies have less infrastructure to maintain, and fewer financially unsound conctractual obligations.

The dealership situation is a great example. I can think of dozens of GM dealerships that I can drive to. But there’s only 1 Honda dealership in town, and 1 Toyota dealer. That consolidates costs. Instead of having 10 pickups on 10 different lot, Toyota has 10 pickups total. Combine that with more efficient delivery and production systems, and it means that foreign car companies end up making fewer cars that aren’t bought.

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