Consumer confidence and the car companies

One interesting argument for giving the Detroit car companies a hefty bailout is the claim that consumers will not buy cars from a bankrupt car company due to concern about the vehicle warranty. GM is currently arguing that data shows that 30% of consumers who decided not to buy from GM did so primarily because of concern that they would be going bankrupt.

So, even though I still believe that GM, et al can somehow squeak by from a raw financial perspective over the next year without a bailout, this consumer confidence angle would argue strongly for giving them enough extra cushion so as to "guarantee" that they will not have to file for bankruptcy.

I hate the idea of the government bailing out companies, but I have a greater hate of Wall Street speculators attacking companies and spreading rumors and contrived speculation just to line their own pockets no matter who in the real world might be hurt by their exagerated claims. The car companies do need restructuring, but that is something than can be worked out, assuming that the companies can get a "time out" from the assaults of the hedge funds.

-- Jack Krupansky