Something about the stories on the potential auto industry bailout has really been bothering me. Time after time, I see it asserted that Detroit needs the money in order to re-tool their plants to make electric or hybrid cars. Really? If so, that may be the argument that kills the little bit of doubt I have about opposing the bailout.
It isn't as though I oppose those types of cars. If people want them, I say sell 'em. But here's the problem-they don't solve any of the big three's problems. They still won't be able to make high quality, profitable, traditional cars, a product for which there would still be a large volume potential. Instead, they'd be betting their futures on something which is still a niche vehicle that sells at a premium.
Four months ago, that might have made sense. Today, when gas is under $2 and people are cutting back their spending, it makes no sense what so ever. Those vehicles work for Toyota because they have a strong, profitable passenger car program and they can absorb the wild swings in demand that are possible with their high margin hybrids. Detroit doesn't have that luxury. They would need to rely on those vehicles to replace their lost truck and SUV sales, and that just isn't going to happen for a while.
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