Dec 10th, 2008
Bailing Out Domestic Automakers–What’s the Plan?
As we all know, the former Big Three automakers (now referred to as the Detroit Three) showed up in Washington asking for money. After their first stumbles (private jets, anyone?), it looks as if the lawmakers are going to toss some dollars their way.
The question, of course, is this:
“What are you going to do differently to make your companies run profitably?”
Yes, the government is the lender of last resort and yes, these are huge companies that employ many Americans. But if they can’t be run profitably, what’s the point?
If I had a business, I can’t expect to get funding from anyone unless I have a business plan that makes sense and some chance of making money. The standard needs to be the same for any kinds of loans. Let’s remember this: we got ourselves into this mess by lending money to people who really needed to not be leant that money–they couldn’t pay it back! While that was largely about homes and this is about business, the point is the same: lending money to people who can’t pay you back is not the best plan. Let’s not have the government do (more of) this too!
This post has been featured on the 89th Carnival of Money Stories at Retire at 40.
Very good points. In reality if a business can’t make money, then it won’t survive and there is no point prolonging the process. I fear they’re just cashing in due to the current climate.