Posted by: David Welch on October 31, 2008
Without some kind of help from the government, General Motors may not be able to acquire Chrysler from its owner, Cerberus Capital Management. In fact, GM probably needs government support just to stay out of bankruptcy next year. GM sources say the government is willing to help, but the Feds want to cut a deal that won’t anger taxpayers. In other words, they want to save Detroit while saving face.
Good luck with that. A recent survey from online automotive community CarGurus says that 52% of American consumers hate the idea of bailing out Ford and GM and 48% like it. So no matter what Washington does, half the country won’t like it. CarGurus surveyed 8,000 people worldwide. Most of the respondents are Americans, but the overseas vote could distort the tally since those people probably don’t care one way or the other about saving Detroit.
Anyway, here’s what I say to Washington’s policy makers. Help the U.S. carmakers get through this. If they fail, the job loss will be too great. There will be depression-like unemployment levels in parts of the upper Midwest, the U.S. will lose more of its declining manufacturing base and the trade imbalance will widen.
Politicians are notoriously bound to surveys and polls. This one says that they can’t win either way. They were handed a situaiton no-win as soon as Detroit asked for help. As long as they’re all going to pay a price with about half the public, they may as well try to preserve the U.S. auto industry.