Let us all think for a minute keeping aside all the economy and job loss worries.
Should we bailout the Detroit big auto makers?
Why did they fail in the first place?
Lack of vision.
Lack of understanding the market requirement.
It takes several years to build a successfull business. The leaders of these companies are expected to be visionaries with lots of vision towards the future consumer needs and market capabilities. If the Fed is bailing them out in fear of growing job loss, they are just postponing it by 1 or 2 quarters by giving funds. You cannot turnaround a bad business in a month.
When Oil went up to $100 a barrel in 2007 / 08 people stopped buying the inefficient vehicles. Vehicles that got effected are the big SUV's like Hummer and others which are popular for the low mileage. Sales numbers were so low that any business man will yell :) "Stop the production" and switch off the supply to these units. With all other commitments they had they should atleast reduce the number of these vehicles to commitment levels to fullfill existing orders.
Why can't we use the 15/20/30 Billion dollar auto bailout money to create more jobs.
Would'nt that be a better option for the Fed. They can keep the economy in a better shape and also
minimize the job losses caused by these auto makers by doing it in a orderly manner and moving the employee forces to a different sector.
