Two terms keep popping up that need clarification for the Auto Issue: Bailout and Plan.
Re: Bailout.
The short answer is that the US automakers need LOANS to see them through until new products make it to market. (The MSM likes the term “bailout” – this is misleading).
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Re: Plan.
The automakers ARE in the process of creating newer, more fuel efficient products. Unfortunately, it takes about 3 years to get a new model off of the assembly line. Gas prices can spike in a matter of hours.
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As recently as 2007, the Center for Automotive Research (the same group that issued the economic impact warning last week) surveyed auto industry executives to find out what was being done in response to gas prices being $3(!) a gallon. The car companies were already scrambling to make better vehicles by the time gas went to $4. Then people stopped buying cars altogether.
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So there you have it. Had gas stayed at $3 this past year, the Biggish-3 may have made it to the goal line. Not now. Do you throw a person a life ring when he’s they’re in sight of the pier? Or, do you chastise them for not having swam harder, sooner?
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CAR: “Every automotive program has an internal business case that is ultimately controlled by vehicle prices and sales volumes; all aspects of a program plan must meet the resulting budget constraint.”
KB: And when sales volumes evaporate…it’s time for Plan B.
