They All Need Help

There's a common notion that "Detroit" needs bailout money from the US government because they have been so bad at running their businesses.  That they somehow deserve to be taken down by the financial crisis striking the entire world.  Sure, they haven't been the best run companies and they have been up against the ropes for years.   But the reason they need help at this point in time is that sales of new cars have dropped more than 30%.  For all manufacturers.  No company can sustain that type of drastic, unexpected drop in revenue, especially when the cause has nothing to do with the way you run your business.   The car business is extremely competitive, resulting in an extremely low margins.  The best car companies in the world make 3 -5 % return on investment.    You'd be better of putting your money in a savings account at your local bank than trying to make money running a car company.

People are not buying cars because they've lost confidence in the economy, they don't know if they'll have a job in the near future, and the  banks are not lending money as freely as they once were.  It has nothing to do with whether that car is a Chevrolet or a Toyota.

"Detroit" is asking for help from the government, but so are a lot of the other so called successful car companies.  Toyota has asked for a $2 Billion dollar loan from a Japanese government-backed bank.  Nissan and Mitsubishi are following suit. Mazda, and Honda are rumored to also be working on  assistance from the Japanese government.  The French government is providing about $8 billion in loans to Renault and Peugeot-Citroen. The German government has committed nearly $2 billion dollars to scrapping bonuses, paying people to trade in their old cars and buy new ones.  And they are in the process of committing more money.

Its not just "Detroit" that needs some assistance to survive, its pretty much everyone in the business.  All of these companies don't deserve to fail, and neither does "Detroit."