Do you want fuel-efficient cars? Well, then GM thinks you should pay to help it retool its business. How? Via $50 billion of government-backed loans (NYT):
G.M.’s vice chairman, Robert A. Lutz, said the car companies need money to retool their plants but probably cannot raise enough capital on their own because of the tight credit markets. He said the automakers have already made considerable progress in transforming themselves and that the government should help them proceed faster.
“The American auto industry is deserving of government loan guarantees,” Mr. Lutz told reporters at an event near Chicago where G.M. showed off its 2009 lineup. “We have done a whole bunch of things that people said, ‘Why aren’t you doing this?’
On the contrary: The American auto industry is NOT deserving of government loan guarantees, any more than any industry is that made as bad a strategic blunder as GM and Ford (F) did over the past decade (putting all its eggs in the gas-guzzler basket, despite having made exactly the same mistake in the 1970s).
Since GM CEO Rick Wagoner believes the oil spike was an act of God, however, it’s no wonder that GM and Ford were left flat-footed when oil prices rose to record highs.
GM and the other automakers don’t deserve a bailout. But of course that doesn’t mean they won’t get it.
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