The drama over the future of the US automobile industry –or lack thereof – continued last week. Representatives of GM are running around Washington saying that if the company is allowed to go bankrupt, the US economy would be irreparably harmed. President-elect Obama and some Congressional Democrats are pushing for allowing the industry access to the $700 billion Troubled Asset Relief Program, while the Bush administration favors giving the industry immediate access to loans from the $25 billion already voted to assist the industry retool for more efficient cars.
A showdown appears likely this week with some predicting there will be no action until the new administration and new Congress takes office in January. Some are starting to doubt that GM can last another two months without substantial government money. Last week European insurers said they would no longer insure Ford and GM parts suppliers against the automakers’ bankruptcy.