The future of the American automobile industry is hanging in the balance and is likely to be decided shortly. New reports of plunging sales and large losses make it likely that the big three automakers will be insolvent in a matter of months if not weeks. Early last week the Bush administration refused to come to the industry’s aid with multi-billion dollar loans. Over the weekend, however, Congressional Democrats, fearful of massive job losses should the industry fail, asked the Administration to reconsider its decision.
President-elect Obama appears to favor the industry request for loans, but is powerless to do anything the next two-three months. Some analysts are warning that unless the Bush administration authorizes the loans in the next few weeks it may be too late.
The situation is further complicated by reports that the Obama administration will quickly reverse President’s Bush’s decision and permit the California emissions regulations to go into effect. This California standard would mandate that cars achieve an economy standard of 36 miles per gallon within 8 years