- The Washington Times - Sunday, November 23, 2008

In the next days or weeks, the Congress will be asked to vote on a short-term bridge loan for the U.S. auto industry. The issue has become controversial with the outgoing Bush administration and the incoming Obama administration seeming to take fundamentally differing positions on the matter.

Some questioned why there should be federal assistance to the automotive industry. OK, fair enough, but let’s take a careful and measured assessment of the issues involved.

The U.S. automotive industry is in meltdown. The nation’s financial crisis has frozen credit at every level of the auto industry (corporate, supplier, dealers and consumers) and stopped the industry in its tracks. What we have seen in the past months is the most immense collapse of sales in the U.S. auto market since World War II. That alone is astonishing.

The 2007 $25 billion program for Advanced Technology Vehicles. In 2007, Congress approved loans up to $25 billion to the industry as part of a national commitment to dramatically increase automotive fuel efficiency requirements.

But auto companies and suppliers have not received a cent of the $25 billion. This program was never designed as an emergency bridge loan to the industry nor is it currently structured to deal with the unprecedented financial, economic and credit collapse in the U.S. economy.

$25 billion short-term bridge loans. The freeze in global credit markets is causing a total shutdown of the normal functioning of the U.S. automotive industry at the manufacturing, retail and consumer levels. An investment of these funds, in the form of a short-term loan that will be paid with interest, is a social benefit to all U.S. taxpayers and the millions of American workers supported by the U.S. auto industry.

Our country is the only industrialized nation in the world that does not have a directed national industrial policy to support and strengthen its core manufacturing industries.

All of our major competitors treat their automotive industry as a strategic asset. We have chosen a different path. But, if we walk away and abandon the core of our manufacturing industry, we will be forfeiting forever the industrial base of the United States and millions of jobs for the next generation.

Stephen J. Collins is the president of the Automotive Trade Policy Council.

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