Posted on Tuesday, 9th December 2008 by Cheyne
Everyone has their own opinion on the best way to bail out the auto industry (or not to). Here is my plan.
Let them all go down.
Use the money that was not used for the bailout to start a government owned auto company (as a GSE) and set it up in Detroit, hiring workers that were let go by GM, Ford and Chrysler.
Manufacture fuel efficient / electric and affordable (even if its at a big loss for a long time) cars using American labor, American parts everything. This will:
a) Keep the public happy about not bailing out yet another large company who were in the wrong
b) Keep as many auto workers in work as possible
c) Keep all of the other effected industries in work such as the steel industry
d) Create cheap cars that Americans can afford in tough times, which will stimulate the economy
e) Jump start the process to ease America’s reliance on foreign oil.
After a period of time, I imagine it would take perhaps ten years, IPO in a similar fashion to what Fannie Mae did in 1968 and release all government equity to the public markets, possibly in tiers. From than on it would operate as a regular public corporation. There is also the possibility of spinning the business into two competing companies so to avoid a sole monopoly.
The plan isn’t perfect, I am sure there are many things missing here, this obviously hasn’t been fully researched, but these are my general ideas on how to handle the current crises that the American auto market is facing.
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