U.S. Government Loans to Automakers

MotorTrend just released this article today and the comments were flying. My view is that Domestic automakers should have anticipated the need to retool years ago. With nearly half of the world's oil supply gone, what have they been thinking? We should not get involved in that process. Companies like VW have invested very early on in Diesel and small cars and are positioned well enough that they don't need the money either. What happened to American free enterprise? Reward the guys that are being innovative and helping people, not the fat lazy whales sucking their thumbs in Detroit.

MotorTrend article:

VW Wants a Share of U.S. Government Loans to Automakers, Should They Get It?

Concerned that the recently approved U.S. Government loans to domestic automakers could unfairly affect competition in the auto market, Volkswagen indicated today that they will seek a share of the $25 billion available.

Volkswagen CEO Martin Winterkorn told reporters in Paris that Volkswagen will seek access to the loans, saying, "We will raise our hand when the time comes." The bill, which President Bush signed into law yesterday, authorized funding of the low-interest loans and set aside $7.5 billion to get the program started. Domestic automakers have been pressing to fund the loans ever since the program was approved last December and, more recently, tried to get the size of the loans doubled to $50 billion. Domestic automakers say they need the loans to fund the retooling of plants to build smaller cars in order to meet the government's upcoming fuel economy mandates, and the loans have been made available for that express purpose. VW is planning on shifting production for the U.S. market to a new plant in Tennessee.

While the bill was designed to help domestic automakers, Winterkorn brings up a valid point. Government loans to businesses affect the market and could give domestic manufacturers an advantage over foreign competitors. Should the loans be made available to foreign automakers as well, or should they be reserved for domestic brands only? Share your thoughts in the comments below.