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AUTOMAKERS' CRISIS... * USA ... and ... SOLUTIONS ?
* Saving Detroit Automakers with an Advance Purchase of Cars and Trucks
Washington, D.C.,USA -The Heritage Foundation, by Ronald D. Utt, Ph.D. -December 9, 2008: -- After several days of negotiation, the President and the leadership of Congress are closing in on an agreement to bailout the indigenous automobile manufacturers with a loan that may be as high as $15 billion. Details are still fluid as the final agreement is hammered out, but under the President's initial proposal, a "car czar" would be tasked with overseeing the industry's recovery, while early reports on the congressional plan suggest that Senator Christopher Dodd (D-CT), as chairman of the Senate Banking Committee, expects to lead the reformation of General Motors, Chrysler, and Ford... It is essential that any bailout plan be structured to limit the damage that unqualified bureaucrats and elected officials might inflict on the companies while at the same time better protecting the taxpayers' investment in the struggling industry. And while a bankruptcy filing is still the best bet for fundamental reform, if Congress and the President insist on "helping" Detroit, the better bet for short-term relief is not a federal loan but an advance cash purchase by the federal government of some dollar volume of cars and light trucks manufactured by the American companies. With current federal car purchases amounting to about $1.3 billion per year, an advance payment for a seven-year supply would provide the manufacturers with nearly $10 billion in liquidity...Labels: automakers' crisis
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