Car makers want government loans too
U.S. Capitol Building
TEXT OF STORY
The thing about government bailouts is, once you start, everybody wants one. First, there was Bear Stearns. Now, there's Fannie and Freddie. And today in Washington, the car industry is looking for some love, I mean, money from Congress. Here's John Dimsdale.
John Dimsdale: Car makers need new capital to retool for more fuel-efficient vehicles. But lenders are demanding premium interest rates since prospects for car company profits are dim. So the industry wants government-subsidized loans at low-interest rates. Why should taxpayers help? David Cole at the Center for Automotive Research says because the government is requiring more fuel-efficient cars.
David Cole: In a sense, the government has laid some pretty heavy stuff on the industry, and one of the consequences of the run-up in energy prices is a dramatic reduction in revenue by the industry.
After Fannie and Freddie, Congress may not have a taste for more government bailouts, but Cole says, in the end, there may not be a cost to taxpayers.
Cole: The Chrysler bailout in the early 1980s, the government actually made money.
Car makers are also making a political appeal: What politician wants to see more layoffs from car factories in the swing states of Michigan and Ohio?
In Washington, I'm John Dimsdale for Marketplace.