The Auto Writer

The U.S. auto industry has run aground, facing its worst crisis in decades. A rising tide of federal intervention is on its way, promising tens of billions of taxpayer dollars as a remedy for what ails General Motors, Ford, and Chrysler.

Tens of Billions of Dollars at Stake

The managers of America’s Big 3 automakers are no dummies, despite having been caught unprepared when the auto industry suddenly and violently shifted earlier this year. When sales of one of the best run car companies such as Honda tanks, then you know that the problems facing the automotive world are much deeper than not having the right product mix.

Wasting no time with the election of Barack Obama to the presidency, leaders from General Motors, Ford, and Chrysler are actively lobbying Congress for more money and they want that money now. Fresh on the heels of a truly dismal October selling period, the leading U.S. automakers are pleading their case, contending that action needs to be taken immediately or there just may not be much of an industry left come Inauguration Day.

Giving the New Commander in Chief a Break

Congress, not wanting to saddle the new president with more than he can handle (good luck with that), is listening and will likely give the executives much of what they want in exchange for ensuring that plant closings and job losses are kept to a minimum.

We’ve been seeing this coming over the past few weeks in many forms as General Motors announced that they would be pushing product introductions back while trimming marketing costs, leasing, and automotive financing. For its case, Ford has said that they will be closing down some plants for an extended period of time in a bid to adjust supply; while privately owned Chrysler has been the most mysterious one of them all – unveiling three vaporware lithium-ion models while simultaneously doing the “let’s get hitched” dance and prance around GM management.

The Best and Worst of Times

Paraphrasing Charles Dickens, “these are the worst of the times for GM, Ford, and Chrysler and they are the best of the times too.”

We already know what the worst of these times are – tens of billions of dollars in losses, multiple plant closings, and hundreds of thousands (perhaps millions) of assembly line, administrative, supplier, and related job losses pending. Double digit unemployment would be the result, a deep recession that would extend into 2010, even beyond.

But, how could these be the best of the times? That’s easy! Use your company’s misfortune, a shifting political landscape, and add in a heavy dose of fear and you make a compelling case for federal intervention now that you have everyone’s attention.

Like House Speaker Nancy Pelosi. Like Senate head Harry Reid. Like the incoming president who knows that the S.S. Change will never float if a real or manufactured or exaggerated tsunami comes crashing down upon him, crushing hope and upsetting fickle American voters who know that 2010 isn’t all that far away, with a flailing economy opening up the distinct possibility of handing the Democrats a stunning defeat ala Bill Clinton and Congress in 1994.

The Timing is Right & Taxpayers Will Have to Pony Up

Thus, if you own an American manufacturing operation, have billions of dollars of assets and loans at stake, millions of jobs hanging in the balance, and you want the federal government to fix your problems, this is certainly a auspicious time to make your case.

How do I expect things to play out? If I were a betting man, I’d put my good money on a massive federal government bail out of General Motors, Ford, and Chrysler, the likes we’ve never seen before and hardly equal to anything that we could have imagined just a few short weeks ago.

Further Reading

Automakers pinning hopes on Obama

Automakers to Washington: It’s Crunch Time

Detroit Pushes Capitol Hill for Bailout

UAW chief urges $25 billion in U.S. auto support