The Auto Bailout

[moneysense]

The Auto industry needs help because they are struggling right now, and are asking for $25B , but the Bush administration does not want to use any of the $700B rescue package to help the big 3 auto makers.

Instead, there are those that think that this $25B come from the Department of Energy program which was approved previously to develop fuel-efficient vehicles.

According to those in the know, the $700B bailout money was never intended to help anyone, anywhere except the credit crisis in the financial sector.

The real issue here is will this $25B keep the big three on top, or will they eventually go under?

With the economy in the state it is in, will people have the money to spend to buy the newer, more fuel efficient cars? With banks wanting people to have a 720 or better credit score to secure a loan, will enough people be able to buy cars to keep the big three going?

Now that there are more and more layoffs happening everyday and more businesses closing, I find it hard to believe right now that people will be able to afford to purchase new cars.

So, with those facts in mind, is the government just postponing the closing of more automakers with this proposed bailout, or will this be enough to get them back on solid ground?

Some of the legislators seem to think that this bailout money will be doing just that, postponing the inevitable.
Barak Obama said that he believes that this aid is need for the auto industry but that it should be part of a long term plan, not just a blank check.

Senator Shelby believes that the auto bailout money wont make them survive and that it will just be postponing the inevitable.

This is a situation that only time will tell if the $25B will be enough to keep the Big Three going. But, personally, I think that unless more jobs are created, and more people get back to work, and unless the banks relax the loan requirements, that there may not be a rosy future for the automakers.