GM coming to government’s rescue
Bankruptcy has certainly been kind to GM. It’s now able to dig into its own cash reserves and help the government out.
Auto dealers, fed up with government’s tardiness in sending out the rebates, started abandoning the program since they’re hardly in a position to float the up to $4,500 a pop given to those exchanging their clunker for a new, more fuel-efficient car.
Enter GM Thursday with a pledge to advance dealers the cash owed by the government so they can “continue immediately delivering new vehicles to GM customers.”
It’s hardly altruistic. The program has single-handedly pulled U.S. auto sales out of the depths of despair and given the spanking-new GM a fighting chance.
It’s also been a boon for GDP. Stephen Stanley over at RBS says the program should bump up third quarter real consumption to a little over 1% from flat, but that estimate could prove optimistic if the program loses momentum.
So well done GM, but let’s hope you have more up your sleeve for your turnaround than Cash for Clunkers.