It's Beginning To Feel Like 1980 Again

[Some great historical perspective on the Big 3 Bailout by Elizabeth Kolbert in the Talk of The Town in this week's New Yorker. See the top of the story below. Kolbert gets after Obama for not taking a strong stand on the issue but then fails to do so herself. I say give the Big 3 everything they want, but this time break the boom-bust-cycle by tying the money to a significant CAFE standard increase.]

The Secretary of Transportation’s report to Congress begins on a dark note. “Over the past year, the domestic auto industry has experienced sharply reduced sales and profitability, large indefinite layoffs, and increased market penetration by imports,” it states. “The shift in consumer preferences towards smaller, more fuel-efficient passenger cars and light trucks . . . appears to be permanent, and the industry will spend massive amounts of money to retool to produce the motor vehicles that the public now wants.” The revenue to pay for this retooling, though, will have to come from sales of just the sort of cars that the public is no longer buying—a situation, the report observes, bound to produce “financial strain.”

“To improve the overall future prospects for the domestic motor vehicle manufacturers, a quality and price competitive motor vehicle must be produced,” the report warns. “If this is not accomplished, the long term outlook for the industry is bleak.”

The Secretary’s report was delivered to Congress in 1980, a year after what may soon become known as the first Chrysler bailout... --Get the full story here. Copyright © 2008 CondéNet

Image Courtesy of Wikimedia Commons

Phil