COMMENT General Motors, Chrysler and Ford have asked the biggest player in US banking for a huge loan: the US federal government. They came armed with dire portents of imminent collapse, but the Big Three should not be helped to stumble on through the downturn. If there is to be government support for the carmakers, it should focus on forcing the Big Three to consolidate.
The US carmakers are in poor shape. The recession has reduced sales dramatically and they are poorly positioned to benefit from a recovery. Lulled by cheap petrol into reliance on gas-guzzling sports utility vehicles, they are moving belatedly to offer more cheaper-to-run cars. Despite vigorous cost-cutting, they are still at a disadvantage compared with foreign-owned, US-based plants. Like their cars, the domestic motor industry must become smaller and more efficient.
