Big Three bailout passes House. Senate could be different story

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The House of Representatives passed a $14 billion bailout plan for the beleaguered Detroit automakers. Unfortunately for The Big Three, there is little hope that the Senate will rally behind the bailout later this week.

Some points of contention are fuel economy and emission standards, whether or not to appoint a “car czar”, realistic long term goals by the automakers to make their products viable for this economy, or whether the automakers deserve a federal assistance in the first place.

GM says it will need $4 billion by the end of the month, Chrysler would need $6 billion by the end of the first quarter of ’09, while Ford seems to currently be doing just fine on its own, not asking for any handouts at all. Deadlines are looming, for GM especially, but it may not be enough to save one of the world’s biggest carmakers, if you believe GM, of course. With no real future plan in place, it is unlikely that the Senate will approve this bailout, even though it is considerably less than the $34 billion originally requested.

The crux of the problem is that the US government, and most Americans in general, don’t see any signs of change from the Big Three. The fear is that taxpayer dollars will be handed out and it will remain business as usual, with taxpayers left holding the bag (the Feds having learned this after the $700 billion Wall Street bailout). Unless a plan is in place form the automakers, along with some federal oversight, to drastically change the type of cars produced and how they are produced, I am afraid that the automakers won’t see one cent of taxpayer money. GM especially, needs to trim the fat, shed some weight, and streamline their products. The only one of the three with a viable future is Ford. Reading the writing on the wall some time ago, Ford decided to sell its products globally, meaning the cars Ford sells in Europe will be the same cars it sells in the US, and vice versa. Not only will they save on production costs, but it should allow them to focus their efforts on fewer products and hopefully make them better. Now if they would only do something with Mercury.

The writing is on the wall, and GM and Chrysler had better read it, and fast. Bailout or not, consumers have been left with a bad taste in their mouths, and the Big Three need to do all they can to survive. Better start now.