Quote:
Originally Posted by rmyers
You are assuming they will be able to pay it back.
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This isn't the first time the auto industry has gotten a similar loan. And each time they pay it back early with interest.
So, yes, I'm assuming that the Auto industry is more honest about their current situation than banks are being. And will be able to use the loan to weather the current storm, retool factories to allow them to meet new CAFE standards, and pay it back.
Additionally, I make that assumption based on the fat trimming that has already taken place, and the new products already in the pipeline which move them in concert with the market demands.
And to be clear, "being able to pay back the loan" is the assumption any lender makes when loaning money. That doesn't change the fact that, as it is currently being proposed, it is a loan and not a gift/bailout. Which means the big three are expected to pay it back.
The real question is, will this loan keep them from filing bankruptcy or not? If you think they will go bankrupt, don't loan them the money. That wouldn't make sense.