Thursday, November 20, 2008

Cash for carmakers

Watching the car maker CEOs testify yesterday was interesting. They behaved like skilled salesmen, presenting arguments about why we should buy what they were selling, which wasn't cars but a pig in a poke. The point about their having traveled from Detroit in private jets pretty much captured the moment and sealed the deal.

There was no discussion about how the $25 billion they wanted would be split among the three companies but let's assume it would be split equally, so each would get $8.3 billion. How long would that last each of them? Just a guess but it sounded like they could burn through $8.3 billion in about a month and a half. Then what?

Fortunately, it appears the deal is dead. They will not get that $25 billion. But they still could get the $25 billion that has already been authorized -- for development of new, energy-efficient cars. And after January 20th it's nearly certain they'll get more.

No comments: