http://online.wsj.com/article/SB122608860916209213.html
America's Two Auto Industries Government Aid to GM, Ford, Chrysler Could Preserve Old Way of Building and Selling Cars "....The Democratic Congress and President-elect Barack Obama signaled last week they are willing to lend a hand. "The auto industry is the backbone of American manufacturing and a critical part of our attempt to reduce our dependence on foreign oil," Mr. Obama said Friday. So the question isn't whether Washington is willing to offer more public money to help auto companies survive. There even appears to be a consensus on how much: Up to $50 billion. The tougher question is what's Washington's goal? First, Congress and Mr. Obama will need to decide what they mean by "the auto industry." America has two auto industries. The one represented by GM, Ford and Chrysler is Midwestern, unionized, burdened with massive obligations to retirees, and shackled to marketing and product strategies that have roots reaching back to the early 1900s. The other American auto industry is largely Southern and non-union, owes relatively little to the few retirees it has, and enjoys a variety of advantages because its Japanese, European and Korean owners launched operations in this country relatively recently. Their factories are newer, their brand images and marketing strategies are more coherent -- Toyota uses three brands in the U.S. to GM's eight -- and they have cars designed for the competitive global market that exists today. ....There's another thing the government could do with $50 billion. It could give a $4,000 to $5,000 tax rebate to everyone who buys a new car or truck made in the United States during the next year. The tax break could be scaled up for people who trade in a low mileage vehicle for a vehicle that burns 15%-20% less gas – a percentage that's roughly equivalent to the share of oil the U.S. imports from the Persian Gulf. Leaving it up to consumers what auto companies should benefit from government subsidies might not save GM. But it would save the government from having to choose sides between America's two auto industries." _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
