No Government Help for Struggling Automakers

Posted: Jul. 16, 2008 10:07 a.m.

U.S. automakers struggling against an economic downturn and a consumer shift away from profitable American SUVs toward small foreign cars shouldn't expect any help from their government.  Reuters reports, "President George W. Bush urged motorists on Tuesday to conserve gasoline while automakers move to make their fleets more efficient, and said General Motors Corp and other mainstays of the U.S. economy should not expect a government bailout."  Administration officials are asking Congress to approve a temporary line of credit to mortgage giants Fannie Mae and Freddie Mac, but have rejected the idea of a similar move to help out automakers. 

GM, for its part, says it hasn't asked for any government help.  Company spokesman Greg Martin told the Detroit News "The action and urgency [are] on our shoulders."

The next U.S. administration may not offer any assistance, either.  The Wall Street Journal notes that Republican candidate John McCain "said he wouldn’t offer a bailout to the Big 3 automakers" two weeks ago on a tour of a GM plant in Michigan. 

Democratic candidate Barack Obama hasn't directly addressed the question of a government bailout for automakers.  Detroit Free Press reporters asked Obama about GM's restructuring announcement yesterday.  He replied only, "When a mainstay of the American economy is forced to make a restructuring decision like the one General Motors is announcing today, it is a sober reminder of the difficult economic times we're facing and of why we need change and a new direction in Washington.  My heart goes out to all the workers and families in Michigan and across the country who will be affected as well as those who have been impacted over the last few months and years of turbulence in the auto industry." 

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