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Automakers now need $34 billion to save jobs & American Car Industry
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Who will buy these bailed out cars?
I have written articles concerning CEO pay as well the outrageous perks that the auto industry chieftains enjoy. You can also read more on this subject from the Business Examiner.
Bowing to public and congressional pressure, the CEO’s of GM and Ford have decided to join the lead of Chrysler’s CEO by only taking $1 a year in pay, though I have not seen any news on the future of their fleet of private jets and other executive benefits.
On the surface this seems like good news, and it is, sorta. On the plus side, these auto industry kingpins have done the right thing and perhaps the power of the pen (or keyboard) had some impact on all of this. On the other hand, we learned late today that the Big 3 now wants $34 billion dollars instead of the $25 billion dollars originally requested. General Motors in fact says that they may need $4 billion dollars this month to avoid bankruptcy.
While all three automakers have an individual plan to rebuild their company, whom are they rebuilding it for? News came today that auto sales dropped 37% in November. My point is simple. Even if the automakers suddenly start offering much more fuel efficient and safer vehicles, who will buy them?
If the economy is as horrible as the experts report, why would consumers buy a new vehicle today? And if they would, how could they afford to make the monthly payments? Given the glut of the available used cars on dealer lots today, what will a bailout due to move those cars off of the lot?
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