It’s tricky, it’s emotional, it’s filled with pros and cons yet very little is clearly, impartially and critically analyzed. Read most comments on articles and blogs and you will see over-emotional and overly patriotic they are.
The gist, when GI’s came back from WWII, they didn’t want Detroits’ choice of heavy and less than precise handling. Why? After having driven sprity little MGs, Alfa Romeos and other European light, powerful and glued-to-the-road cars, it was hard to go back. What did they do? They chopped Detroit’s cars and gave birth to a new generations of choppers, re-designers and hot rods. Think Big Daddy Roth, and you get the picture.
Detroit’s reaction? None. Detroit came back with bigger, heavier and more powerful cars with much, much chrome, still not taking a cue from the emerging market. 20 years later enter stage right, the Japanese with their ridiculous little cars. 15 years later, the ridiculous little cars gain market shares all the way up until today, it has the majority. And Detroit in it all? Detroit watched and let it happen, thoroughly convinced that if you build it, they will buy it.
All of this was true and dandy until gas prices exploded through the roof and Detroit was caught without any working contingency plans. Sure they have a few hybrids, HEV here and there, a few fuel sipper but nothing that raked in the profits as the big, heavy and increasingly unfordable to drive vehicles.
The strange part in it all is that GM, Ford and Chrysler have acquired a few international car makers and have been producing some very good cars abroad, but it has always insited on leaving the home market off limits. Why? It isn’t too hard to speculate lobbies of special interest got involved.
Having said all this, we find the big 3 in Detroit in complete agony from a market they neglected to deal with. And now? 3 private companies are asking a government for money in order to compete, dal with a dwindling economy and tighter loans. In a perfect darned if you do, darned if you don’t scenario, the government is left with a sticky situation. The pros and cons are simple, let them go and the economy will hurt even more, give them billions, that will be enough to pay their bills, hopefully use the rest to retool for modern plug-in hybrid, PHEV technology.
The problem with bot cases is obvious, they hurt the economy in the short term and public moral. If not done in an intelligent way, it is an open road for any company to beg the government for money. So what strings need to be attached if a new bail out is to be handed out? What checks and balances should there be and how applicable should they be?
There is no easy answer herre and emotions but be left behind. Detroit has put itself in a mess. What are the motivations when their officers earn great salaries and not invest their fortunes in their companies? After all, that is what Tesla, AFS Trinity, Fisker and other “revolutionary” companies hare doing. Shouldn’t they also be helped? Then what about small businesses, the backbone of the economy? For them, loans are off limit. Surely, the system forgot how to prioritize, and why should it when there is little motivation and accountability?