US Car Makers Need a Larger Bail Out Plan

November 15, 2008

Washington (Chattahbox) — Doubts are being raised on the rescue plan for car makers in the US as it is being widely doubted if Congress will approve the $25 billion bail out plan for the ailing auto industry in the US. The Democratic Party that holds the majority in both the Houses of Congress wants to vote on the bail out package in the upcoming session that starts next week.

However, the Republicans seem more reluctant on the bail out approval of the package. They want to disburse the loan to companies to develop more fuel efficient cars. The Democrats want the loan to be disbursed to Ford, General Motors and Chrysler but their majority is not enough to support their stand. They need the standing supports of the Republicans on the issue to get the approval in the Congress.

The Democrats are concerned about the 2.5 million jobs that need to be secured. If Chrysler, General Motors and Ford fail in the country, then it would means as many job losses. House Speaker Nancy Pelosi said this week that federal aid is needed “to prevent the failure of one or more of the major American automobile manufacturers.”

General Motors had been ailing fora long time. It had been burning about $52,000 per minute or $3.1 million in one hour in recent months. According to the industry watchers, if General Motors declared bankruptcy, then the entire domestic auto industry could be badly hurt. “Once the first domino falls, it rapidly takes out all the other dominoes,” said Dennis Virag, president of the Automotive Consulting Group. The suppliers and the auto component makers will be the first ones to feel the brunt as General Motors spends $31 billion in the US alone on parts from 21000 different suppliers.

Meanwhile, the auto industry continues to report losses in Europe as well as other countries including the developing nations.


Comments

2 Responses to “US Car Makers Need a Larger Bail Out Plan”

  1. Texasoil on November 15th, 2008 12:21 pm

    As some one who spends a lot of time outdoors you learn a lot about nature.
    She can be good and evil at the same time. She doesnt care if you live or die. She gets rid of the weak so the breed can grow stronger. That is why animals adapted to their enviorment so they can survive.
    The market and our ecnomy is controlled by Human nature not by government.
    They have a choice on how their money is spent. If they feel that a product is not worth the price they will not buy it. As our economy slows more companies will go out of business and others that adapted will rise. That is the nature of it all.
    Out of ashes there rises life so why throw gasoline on a gasoline fire to save some thing that is burning anyway.

  2. Mike Allen on November 15th, 2008 1:38 pm

    I think they should once again allow an individual to deduct interest paid on auto loans and credit cards. This would certainly stimulate both industries.
    Mike Allen

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