Word: detroiters
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...Instead of providing a new injection of funds, many Republicans believe Detroit should simply tap the $25 billion that was already appropriated earlier this year to help the companies develop more fuel-efficient technologies for the future. The White House, at pains to show that it is not simply giving up on the nation's entire domestic automobile sector, pushed that approach again on Monday, saying the Administration "does not want U.S. automakers to fail...
...very popular with the Republicans' counterparts on Capitol Hill. "Both Speaker [Nancy] Pelosi and Reid have raised concerns about that," says Jim Manley, a senior adviser to Reid. "It robs the industry's future to pay for the present. We shouldn't have to choose." And unfortunately for Detroit, automakers would need congressional approval to access those funds on an emergency basis...
What would Canada's Detroit Three, who export about 85% of their production south, do with a cash infusion - by some estimates anywhere from $2 billion to $4.3-billion? "They would cover payroll and hope things get better," says Alan White, an investment specialist at University of Toronto's Rotman School of Management. As a result, critics warn Ottawa and the Ontario provincial government against throwing good money after bad. "If there's a government bailout it will be helping companies at the center of losing jobs, and punishing companies who have created jobs," says veteran Canadian analyst Dennis DesRosiers...
...people want to drive, it might not be such a bad thing to force GM to reinvent itself under Chapter 11 bankruptcy protection. However the wider, short-run repercussion might be too much to bear for the North American industry. "There's a real fear if one of the Detroit Three fails it will threaten the future of the others on both sides of the border," says Jayson Myers, president of Canadian Manufacturers & Exporters, the country's largest trade and industry association. Says Buckley of the CAW: "If GM fails, we'll lose hundreds of thousands of jobs in Canada...
Canada will likely have no choice but to bail out Detroit North if Washington rescues its own car companies. Rewarding decades of abysmal management and arrogance with billions of taxpayers' dollars might seem wasteful, but at least in the short run it will save Ontario, whose fortunes rise and fall with Detroit, from sliding further down the economic ladder...