![\"Ford Motor Co. executives Bruce Andrews, center, and Tony Brown have an impromptu meeting with U.S. Sen. Debbie Stabenow of Michigan at the Democratic National Convention.\" (text and photo courtesy autonews.com)](http://www.thetruthaboutcars.com/wp-content/uploads/2008/09/bilde.jpg "\\"Ford Motor Co. executives Bruce Andrews, center, and Tony Brown have an impromptu meeting with U.S. Sen. Debbie Stabenow of Michigan at the Democratic National Convention.\\" (text and photo courtesy autonews.com)")
According to Automotive News [AN, sub], Motown's plans to suck $50b from the public purse to retrofit 20-year-old plants to build fuel-efficient cars are "being overtaken by events." Which is, I suppose, cheerleader speak for "Detroit's automakers have screwed themselves so badly through their own incompetence that they're in danger of going belly-up before the presidential election." AN reached this conclusion thanks to the increasingly hysterical rantings of Senator Debbie Stabenow. "We need to do something now," the Michigan democrat insisted, after a "conversation with Ford Motor Co. executives at a convention breakfast." Meanwhile, even AN is willing to admit that that "something" is a bailout by any other name. "With falling vehicle sales and deteriorating credit markets, the program has become a potential financial lifeline for some automakers and suppliers." Need I mention any names?
5 Comments on “Bailout Watch 19: When do we want it? NOW!...”
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I find this a little (please note the word here) hard to believe.
Let’s run with the hypothesis that detroit have screwed themselves to such a point that they can’t hold out until election time. How bad must their accountacy department be? We’ve already been assured that they have plenty of cash and it should see them through until (you guessed it) 2010 when the panaceas come to market. So what’s changed? Where did they lose about $20 billion?
I reckon they just want to get their hands on that money before public opinion gets heard or there’s a dramatic shift economically.
How bad must their accountacy department be?
Good question. And how about the auditors? No “going concern” language in the quarterly reports?
There seems little doubt that they’ll get it, and equally little doubt about the long term benefit; as in none at least in the case of GM. Kind of like pouring water into a barrel with no bottom. So all we can do is watch the show. Relative to the dismal possibilities, a moderately positive outcome would be that the Chinese, or maybe an Indian company, buys the 2.8 before the number of bailout cycles gets to double digits.
I suppose the absolute best case is that Ford becomes profitable after the first cycle and thus demonstrates that GM management isn’t worth further effort. But Mulally has only 3 years or so before retirement which isn’t much time to flush out a rotten system.
Automakers and suppliers are almost the next few months problem. How ’bout virtually every dealer with way too much unsellable/leasable inventory? And the floor plan and other expenses? This is certain to turn into a clusterf of much bigger proportions than just Detroits small 3.
I didn’t realize the good senator was so (ahem) plump.