Automakers need sales not loans

America, in many ways, is based on a high-horsepower engine under the hood. Whether that man-made machine comes in an American, Japanese or German brand doesn't matter that much anymore.

Americans love their cars, and there is no reason to think that affinity will not continue and grow as it always has.

Clearly the American auto industry is at a crossroads as it tries to persuade Congress for billions in government loans to stay afloat.

What many of those congressional power brokers want to hear is that Ford, GM and Chrysler will change the type of product they are producing. Bury the SUV, make the pickup tamer and replace those gasoline powered engines with battery-powered motors is the Capitol mantra.

Neither party wants to hand over billions in taxpayer money to automakers without some concrete assurance there will be big change in the kind of vehicle coming out of Detroit. That change lawmakers want is a big mistake.

Many Americans want nothing to do with "hybrids" or anything else that compromise the roar of the engine. Believing that all of the country's drivers are eagerly awaiting battery-operated vehicles is as naive as to think banks would actually lend the $125 billion in bailout funds that now sit idle in their vaults.

Americans have not stopped buying American cars because they do not like the design, or they prefer an environmentally correct car. Americans have stopped buying cars because

they cannot get financing.

Instead of patching together loans and financing for the automakers, Congress should start patching together loans and financing for Americans to buy cars from the Big 3. Put the money in the hands of the consumer. Don't judge what they want to drive.

While the Prius may be a status symbol in Berkeley and Boston, the pickup rules the roads in rural America. SUVs are still beloved in suburbs because they give comfort and security. The Mustang will always be a top seller because of its reputation for style and substance.

While Speaker of the House Nancy Pelosi taps her finger waiting to hear that Detroit will start churning out vehicles that forsake horsepower for green power, she and her cohorts should think outside the Beltway box about actually doing something that will have an immediate impact on sales. How about a procurement program that buys millions of new vehicles for everything from the Forest Service to the IRS?

Because banks and lending institutions have crawled into their shells to wait out the financial storm, auto dealerships are having a difficult time teaming prospective buyers with loans.

There is no reason to think that this scenario will change anytime soon.

With gas prices falling at a record rate it is hard to believe that a battery-power engine will be a big seller. The Ford F Series pickup and the Chevy Silverado pickup are still the top two selling vehicles in the country.

During the housing boom that turned homes into piggy banks, automakers of all stripes benefitted greatly as the fruits of mortgage refinancing often went to the purchase of a new car, pickup or SUV. Americans will always want new cars, pickups or SUVs, it's matching that demand with financing that is the problem.

Capitol Hill should focus on how to restart auto sales, whether that be through government financing, a tax credit for any new vehicle bought or outright purchases of vehicles for government agencies.

http://www.mercurynews.com/breakingnews/ci_11121941

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Automakers need sales not loans