The Domestic 3 will be given their bailout come Hell or High water.
Whatever sorry excuse of a plan that GM comes up with for returning to profitability in the next two weeks will fly. Ford has a legit and good plan, which should be allowed to fly and Chrysler will simply come along for the ride. Congress will give them the loans they so badly want with very little in terms of conditions.
If Bush won't allow it, Obama sure will, because he won't let his first action as president be not signing the most socialist piece of legislation ever drafted in the halls of Congress, and he won't break the campaign promise he made to Detroit that he would bring their jobs back, knowing full well that he would forever more be labeled a liar.
What Congress has been doing the past week is called grandstanding to their constituents back home.
They haul Wagoner and the rest into a Senate sub-committee hearing and verbally abuse them for a couple of days.
Once the abuse is over and the public is fooled into thinking that GM got what it deserved, the checkbook opens up.
If we are to let GM and Ford fail, millions of jobs will be lost and the blame will rest at the feet of Congress, which would cost them dearly.
Remember that Congress's job number 1 is to keep themselves in office.
GM is in bad shape, but Ford has enough cash to last until the end of 2009 and has a solid plan. Ford recently announced internally that they will be divesting themselves of a number of poor selling models and replacing them with Ford of Europe products namely the Mondeo, Focus and Fiesta. If these cars are not too watered down from their European counterparts (which they are rumored not to be), they should sell like hot cakes, as the Fiesta blows the Civic and Corolla out of the water and the Mondeo has been on the top ten best cars list in the EU for the past several years.
If GM could use some of their Holden's, Opels and Vauxhalls as Chevys and could reorganize their operations, they could be in better shape. As I see it, Pontiac is gutted and should be canceled. Saturn isn't the import fighter that they are supposed to be, so they can go too. Hummer should go for more than obvious reasons, Saab never sells enough units to make money, so they should also be out. Subaru should be resold to the Japanese Industrial company that they started under. Chevrolet should sell low and mid line cars only, no trucks, no SUVs. Buick should sell upscale versions of Chevrolets, no SUVs. GMC should handle ALL TRUCK AND SUV SALES PERIOD. Cadillac should stick to what they know best, large V8 powered cars and quit trying to compete with Europe because they simply can't.
Chrysler is just screwed. For a while when they had the Mercedes Benz parts bin and engineering files to go through for inspiration they were building some really good products. Now they are having problems that can only be fixed by a car person running the company. Their current crop of models, while good for what they are, are the wrong thing for now. Oops.
Of course all of this talk about model re-alignment and new models is useless if GM, Ford and Chrysler can not get out from under the crushing debts of their pensions and healthcare costs. Also, GM and Ford need to close many dealers, GM has 7000 dealers in the US, Ford has 4000, Toyota has 1500 and Honda 1000. Dealers are a huge liability for Ford and GM right now and they would benefit from getting out from under them. Yet another problem plaguing the Domestic 3 is the UAW, which still is not willing to make concessions on classifications or wages. They need to get real and sit down with Detroit so that the companies can survive.
The money that they will get is nothing but a band-aid if they don't make the changes I've outlined above. These changes are generally accepted as necessary for their survival by the analysts. Hopefully they will make them, if for nothing else but all the jobs that will be saved in the long run.