US Auto Industry Part II

In a sequel to my first post on the auto industry, as I read reports of the possible bail-out, I thought I'd discuss this a little further...

Our country is now looking at throwing between $15B and $17B (ok, that's billions, with a "B") in short term loans that will "carry [the big 3] into March". So, the conclusion is that the big 3's woes are going to be completely solved by March. It doesn't take a rocket scientist to realize that if they're burning cash that fast, and if so many economists are telling us that we're not out of the woods, then we're just throwing up to $17 Billion at these companies with no guarantee of repayment.

I need to make something clear. One could make assumptions about my political leanings from how I talk. Oddly enough, you'd probably assume wrong... But my perspective is largely non-political. The business side of this is absolutely ludicrous. These companies' burn rates aren't likely to improve without massive restructuring, and by infusing all this cash, the Big 3 will lose their urgency to make major changes. Then what? Another bailout?

What's becoming absolutely clear is that none of the Big 3's business models are working. They should be allowed to face the market and sink or swim.

Yes, again, I am concerned for the workers - anyone who is hurt financially by these companies' trials. Right now, though, they're inevitably going to be hurt with or without the bailout. It's just a matter of "when".

So, let's just focus on helping employees that will be displaced due to the fact the MBA's in Detroit can't figure this out. (I'm an MBA, too, so I can say that...) Help them retrain for a more stable industry, or relocate to a new job, or something. But the US Government shouldn't give these companies short-term loans at this point. If they can't prove themselves to institutional or private finance sources, that should be enough proof that the US shouldn't finance them.