Ford Considering Volvo Sale

Ford is reportedly considering listening to offers for Swedish car maker Volvo, sending shares in the auto giant surging higher in trade. That latter fact should give them an indication that what needs to happen is they need to divest assets, consolidate balance sheets and review strategy and stop asking for government capital.

Romney on Auto Bailout

I missed this in The New York Times over the weekend but it’s an op-ed piece from former Republican presidential candidate Mitt Romney which provides a really well argued overview as to why the auto industry in the US should not receive bailout money.

I’m inclined to agree with him on his points in essence. Essentially, Romney argues that saving the big three will doom them as they will never learn from the mistakes made, a central component to their eventual evolution and survival. By not bailing out the industry, the US would send a clear signal that they need to provide better cars and assimilate into the modern automaking industry rather than relying on the government to pay for years of neglect and laurel-resting.

In principal he’s right. But he’s saying the words in an America which has seen the crash of Lehman Brothers, the near-demise of AIG and the essential evaporation of its investment banking industry. Allowing these automakers to fail at this time in history just doesn’t seem viable given that, should they indeed fail and not manage to evolve into modern entities which can survive the downturn, the job losses would be so enormous and wide-ranging that any stimulus package from the Obama administration would be unlikely to provide any stability. It’s a tough question which has an impossible answer and we’ll see what that is in coming weeks.

Auto Execs Taking Bailout Hopes to Congress

Executives from the Detroit Three were due to appear in front of Congress today to try and make the case for the Democrats proposed $25bn bailout for the industry, currently opposed by Republicans. Ford executive Alan Mulally has warned that there could be major consequences for the US economy should the companies not receive the bailout capital.

This one is going to be a real battle for Obama.