by Frank James
First it was $25 billion to bailout the auto industry. Then, once the Big Three automakers submitted their plans to Congress, it was $34 billion.
Now, we've head Mark Zandi, chief economist at Moody's Economy.com, say at the Senate Banking Committee hearing that's still in progress that for a bailout to really work to save the Big Three, an effective bailout would have to be more like $75 billion to $125 billion in size.
Zandi, who's testifying today along with the auto executives, says $34 billion would only get the Big Three through the next few months. The higher range would be needed to get the companies through the next few years, especially if the automakers' annual sales come in around 10 million to 11 million vehicles compared with the 17 million units they were manufacturing annually before the bottom fell out of the auto market.
Needless to say, Zandi's numbers caught the attention of lawmakers who aren't too happy at the thought of a $34 billion bailout let alone one that, to be effective, might need to be more than twice as large.
Comments
Off course it is not enough. They have to control their costs. Bankruptcy is not Armageddon. It is the only way to control costs. Let GM file. Asbestos manufacturers did it. Companies do it all the time. That's why the process exists.
Posted by: DFBJ | December 4, 2008 1:38 PM
Best way to save the auto industry is get rid of the union and will make the American Auto Industry world competive.
Posted by: Inky | December 4, 2008 2:16 PM
Next week they will tack on $18 billion, the next week $36 billion and so on, and so on until they reach the $700 billion given to the Wall Street failures that BTW has not worked.
Posted by: lochnessmonster | December 5, 2008 6:56 AM
Best way to save the Auto Industry is to reduce the pay scale of the CEOs and their management staffs. I would wager, they make as much as the union workers do and do far less the work !!
Come on, America, you bailed out the Crooks of Wall Street, why not the workers on Main Street !!?
SUPPORT OUR TROOPS, BRING THEM HOME, ALIVE AND WHOLE. NOW.
Posted by: Don Fitzgerald, Chicago | December 5, 2008 7:56 AM