Give ’em the Loan!

2009-buick-lucerneAs angry as I am at GM,  Ford, Chrysler, and the UAW, I have decided to speak up for the bridge loan. It is so simple, yet I almost blew it. If these companies suddenly go out of business, we will be forced to buy foreign. Think about that for a minute. Where will all those cars and trucks come from? The US car companies make about  four million cars in the USA each year. If their plants are no longer producing, who will build these cars? Easy you say, Japan, Korea, Germany, Italy, Sweden, etc. Well folks, these companies all have their own markets. They would never be able to ramp up to build an extra four million cars overnight.

So your beater finally died, and you have no other choice than to buy another car. You go to the local Toyota showroom and discover that a Camry costs one hundred thousand dollars, and you are placed on a waiting list. Not to worry, you amble over to the used car dealer to discover that a used Chevy with one hundred thousand miles is commanding twenty five thousand dollars. What the hell is going on?

It takes several years to build new car plants. The extra sales placed on the foreign car companies would strain their resources. There would be a severe shortage of cars for several years after the “big three” have been buried. The shortage plays into the hands of the economists old rule that the price is dictated by suppy and demand. Fewer cars, more sales equals higher prices.

Do we really want to see car prices triple, or do we want to see the “big three”  live on?

As much as I hate the UAW, and the even dumber GM management for their stupid tactics over the last forty years,  I would sooner see the big three survive.  Let’s give them the loan!

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