Interesting situation. The original automaker pitch was that they needed loans so that they could retool to make alternative fuel cars. They had just closed a bunch of truck & SUV plants and oil was above $140 bbl in July.
Automakers Seek $50B In Loans From U.S., Industry Wants Help To Modernize Assembly Plants, Develop Fuel-Efficient Vehicles - CBS News
Now, oil is down around $60 and the hybrid tax credit is expiring at the end of the year.
Even at high oil prices in July, it was unclear whether purchase of a hybrid was a good deal for the consumer.
Overview - NADA Guides Company Information
So does the government need to bail out the automakers to produce hybrids that will be a bad deal for consumers if oil prices stay at $60?
Or are oil prices going way up soon?
Credit Suisse forecasts $60 through 2009 and $80 through 2010
It seems to me that not too many people will want to buy a premium priced hybrid if those projections are correct.
So will the car makers be producing (with taxpayer assistance) a bunch of expensive hybrids that nobody wants to buy?
Will the government need to force people to buy hybrids by taxing gas back up to $5?