February 18, 2009
Posted: 1222 GMT
The news that GM and Chrysler need more government cash is not a surprise. Everyone said they would. The changes that are being made to their businesses are deep and structural. Plants closed, jobs lost, models discontinued.
And there is no guarantee of success. All of this wouldn't be of much interest outside the United States, if other governments hadn't jumped on the bailout bandwagon and doled out dosh to their car companies too.
The Brits (or at least the foreign owners of British cars plants, the Italians, the French... all have in some shape or form attempted to level an uneven field.
No doubt the Japanese and Germans will have to follow suit otherwise their car companies will cry "foul."
But enough is enough. The chairman of luxury car brand Daimler told me on this week that he hoped there would be an end to this bailing out of car companies because it distorts competition. He also refused to say "no" to whether he ruled out asking for German government cash.
It seems once the bailout cash starts flowing, it is never ending.
Car companies have economic tentacles that few other industries experience. From raw materials, to manufactuer to distribution to credit facilities and the retail end. They stretch the length and breadth of the global economy. That is why we bail them out
Last night on our show many of your Twittered me on the subject. There was a clear majority in favor of NO more bailouts... it was throwing good money after bad.
So do you agree ? Is it time to let the car companies go to the wall (with all the possible consequences ? )
Bailout or bust - Your thoughts?