I'm driving a Ford and it's been a great vehicle. I mention it because, from a consumer standpoint, it's been competitive with anything from the Japanese in quality, reliability, and performance. At the time of purchase, there was a significant cost advantage to the Ford when I compared it to the Toyota Camry I also thought of buying. That's a roundabout way of saying thatI believe the American car companies can compete head to head--if not for their exhorbitant costs, part of which come from the fat union contracts negotiated by the auto workers.
I'm not totally against unions nor employee wages and benefits, but when they become so extortionist that they strangle and threaten to bankrupt the industry, it's hard to support any "bailout" of that industry with taxpayer money. Yet, that's what Nancy Pelosi asked Hank Paulsen to do with some of the 700 bn bailout money.
The Fed responded to Pelosi's letter of beseechment but it was a neutral reponse. Paulsen was right in stonewalling and let's hope he continues to do so. The Japanese make cars in the U.S.; they're squeezed too but there's no talk of bankruptcy.
There's nothing wrong with the U.S. car industry that can't be remedied with a little management "kan-ban." That means assembly line "efficiency" (and a whole lot more) but both union and corporate fat cats could use a little such discipline in regulating their appetites for power.
So you can see what Pelosi and Reid are up to--extending the range of the TARP for political reaons. They want to push a payback to the unions which provided millions for the Obama victory. Coupled with a "card check legislation" which limits the freedom of American workers, the unions certainly expect to extract more than a pound of flesh from the American taxpayers.
The TARP was designed with only one purpose in mind--to buttress FINANCIAL institutions providing liquidity to the economy. Somebody ought to explain to Pelosi and Reid that they can't hand taxpayer money over to pay their own political debts to the United Auto Workers Union.