How to Create a Successful Auto Manufacturer Bailout Plan

I was recently asked to participate on a forum with the LA Business Journal whereby six CEO's weigh in with their opinions of the Government Bail Out of the Automotive Companies. I was asked to do so because of my twenty five years of automotive experience and my recent numerous television interviews regarding my National Foreclosure Solution Plan proposed to the Obama Adminstration that would remove all foreclosure inventory in the US by Mid 2009. This is what I proposed:

I believe it is important to our entire economic structure that the auto manufacturers are assisted at this time. However, regardless of where the money comes from, it should never be given without having a solution in place that will resolve the entire problem. Any program that does not address and handle all the components of the problem will not result in any real solution.

A successful bailout must include assisting all components involved; a) manufacturers, b) dealers, c) consumers, d) lenders and if any of these ingredients are left out the bail out will fail.

While I have a personal love for GM, Ford and Chrysler as American symbols of American industry and would hate to see any of them fail, if the individual dealers are unable to fund inventory and the American consumer is unable to get loans to buy cars and unwilling to purchase the plan will fail and the manufacturers will all be back in 2009 needing more money.

The Solution:
1) Provide the 25 billion that includes provisions whereby the auto dealers are provided with zero percent interest floor plans for a limited period of time.
2) Provide Fed Funds Rate money to consumers for all auto purchases made from 2008-2009 inventory.
3) Provide 100% tax credit for all purchases made between 2008 and June of 2009 for both wholesale and retail auto purchases.
4) Provide tax incentives to all lenders for granting these loans in order to get money flowing.

The plan above would give the manufacturer the immediate assistance he needs, provide the vitally important car dealer the help he needs, give the customers incentive to purchase, and cause lenders to start lending again. I have proposed a similar solution to resolving the real estate foreclosure issues in this country and am offering my help to successfully execute solutions to these situations.

Grant Cardone, Author and CEO of Cardone Enterprises

Read More:

Should the Government Bail Out the Big Three U.S. Automakers? HuffPost Bloggers Weigh In

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Comments

[wilfish4774]

All of the ideas about who should put up the funding for this bailout are great however has anyone given any thought to the fact that chrysler is owned by a German outfit and not by Americans. I still don't know how that is going to be accomplished. It seems that someone would find out about the true ownership of the company and say something about it.

[USNVet]

My suggestion? Why don't the oil companies bail them out? They, in collusion with the automakers, tore up street tracks of public transportation trolley cars, in major cities all over the country back in the early 50's. A prime example is the city of Los Angeles. The colluding oil companies and automakers alone are responsible for the demise of public transportation all over the country. Their goal, in which they succeeded, was to put everyone in an automobile. The oil companies should be helping out with their "partners in crime."

[0emissions]

The three of them together have been spending 25$ billion each year just on advertising.
We were brain washed a long time ago into buying these health hazards.
We spend trillions in support for the use of these things that are so destructive to our health, our environment and our bank account.
How many more of these things are we going to permit on our roads and streets. We needed REGULATION on this DECADES ago.
We are over run. It has been EXHAUSTING!!

[JBS]

There ain't nothing manufactured in 2008 - 2009 model years worth buying, and I ain't just talking about the "Big 3". EVERY car manufactured in the world today costs too much and provides too little utility.

I need safe, reliable, flexible transportation that will take me where I need to go, when I need to go there, at a price I can afford.

I don't care how you do it; whether it's a car or something else.

But until I see something in a bailout plan that addresses that need, I say no.

[wdw102]

wow......ain't ya

[steve70638]

"A successful bailout must include assisting all components involved; a) manufacturers, b) dealers, c) consumers, d) lenders and if any of these ingredients are left out the bail out will fail."

Any deal that doesn't do anything to fundamentally make the big three more competitive from a cost perspective is DOOMED.

First of all the author is leaving out the obvious other constituencies: Workers, Retirees and states.

The labor contracts they are operating under are not competitive with the transplant factories in America, this cannot remain. The author is also leaving the patchwork of state laws that don't allow automakers to trim their dealer networks--these need to be revised.

The solution presented here is little more than a continuation of the mess the US has found it self in. The solution is one of "easy credit" and "cash back"...it is a demand solution. It encourages consumers to get into more debt, it encourages dealers to get into more debt and it forces the US taxpayer to fund the mess with--you guessed it--more debt. The big three and the US for that matter needs to learn not to use debt to solve every problem, to make products customers need and not products with easy financing as they key marketing benefit.