Buying time

Does it make sense to loan money to the Big Three automakers?

61% of those who participated in a poll this week by CNN/Opinion Research Corp. didn’t think so.

The real question is: Would the money that GM, Ford, and Chrysler are requesting make a real difference? The answer is likely no. it will just delay the inevitable. The automakers have come up with the plans that Congress demanded as a precursor to getting funds, but they are in reality “too little, too late.” the companies’ problems are deep seated, and many of their proposals should have been implemented long ago. All three have too many brands, too many dealers, and aren’t efficient manufacturers. Throwing money at them won’t solve the problem.

GM’s CEO said that bankruptcy wasn't an option. Actually it is. Only if they can renegotiate legacy costs, recast their debt, eliminate redundant product lines, and reorganize their distribution systems can they become profitable. They, and the UAW know that, but don’t want to take the bitter pill. They need to.