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Sunday, December 21, 2008

The Detroit Ballout is Not Over

All of Detroit is safe until after the auto show in January, sorta. The government approved $13.4 billion in loans for General Motors and Chrysler for immediate consumption (Ford said “no thanks” for now.) This will take them until February when another $4 billion may be available, but they will also have to show that their operations are able to show "positive net present value" – a tough goal I’ll get to in a moment.

This means at least when the North American International Auto Show hits Detroit in January, at least the Big Three won’t have to ring the Salvation Army bell, and instead they will be able to somewhat focus on products. But this isn’t the end of the fight, the big picture has four elements still to come:

There will be more layoffs
There will be more money needed pumped into the industry
It’s the end of fun new cars
The winner will be the one who returns to big cars first

So for this week, after the just I present a little accounting, a healthy dose of skepticism, and just enough optimism to keep fans of American cars from jumping out the window.

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