Auto Bailout

The government has a very tough decision to make in deciding whether or not to provide the American auto industry 14 billion dollars in short-term loans. These loans especially help GM and Chrysler that are in near danger of financial ruin. However, the bigger question is how many restrictions should be placed on these companies. The Republicans and the Democrats do not necessarily agree on the restrictions. Will the loans truly save those companies that choose to take advantage of the loans? Money and incentives do not necessarily mean success. Locally, Kraft Maid Cabinets, is planning on closing its plant and hundreds of people will be losing their jobs just days before Christmas. Officials from Kraft Maid came to Utah in 2004 and stated they would build their plant in West Jordan. Utah officials offered them 2.25 million dollars in a grant, which was one of the largest cash incentives ever offered to a company by the state. Even with this large sum, company officials threatened to build their plant in another state and so their incentive was increased to 3.2 million in tax rebates. Even with the incentives offered by the state, the company will be closing less than three years after opening their plant. Loans and incentives do not necessarily mean success. Will the loans offered to the auto companies be enough to keep them in business? Will they manage their businesses differently?

http://www.sltrib.com/business/ci_11199576
http://www.nytimes.com/2008/12/12/business/12auto.html?hp