Why $25 billion bailout may not help strapped automakers
The Big Three are in such bad shape that they may not even qualify for the loans Congress approved in September.
Struggling US automakers have lots of reasons to be making the rounds in Washington, begging for more aid. Their business is colder than their hometown Detroit Lions, for one thing. (The Lions are 0 and 9, if you didn't know.) News reports about the industry often include the words "impending" and "bankruptcy." Their stock prices? Don't even ask.
But here's one thing they don't mention: It's possible they want more money partly because they can't qualify for the $25 billion in loans to develop more fuel-efficient vehicles that Congress approved this September.
Yes, that's how bad things have gotten. The Big Three, or one or two of them, anyway, may no longer be eligible for their own bailout.
Let's rewind a bit here. This fall, Congress voted that $25 billion in loans on the theory that automakers and suppliers deserved a government boost to help them develop products that would meet higher mileage requirements and lessen US dependence on imported oil.
Of course, as New York Times columnist Tom Friedman pointed out on Nov. 12, the government has never had to subsidize Apple to build innovative stuff that customers actually want, so why should we do it for GM? But let's just set that opinion aside for the moment.