Soon after General Motors announced a huge third-quarter loss of $4.2 billion, and that it was burning through an additional $2.3 billion a month, CNBC host Larry Kudlow said automakers should not be given any more taxpayer cash.
“We should not be pouring bad money after bad money,” Kudlow said on the financial news channel.
“They should have to make major, surgical, structural changes.”
Kudlow’s comments follow a report in The New York Times that automakers would ask Congress for double their previous request to as much as $50 billion in government-backed loans so that they can build more fuel-efficient cars.
It also came on the tail of an earlier report that Ford lost $129 million in the third quarter and burned up $7.7 billion in cash in the three-month period, and that privately held Chrysler could run out of money and go bankrupt.
In addition, GM said it would not merge with Chrysler.
“The taxpayers cannot possibly finance their burn rate cash problems,” Kudlow said. “They need to go into bankruptcy.”
Kudlow noted that job losses in such a case would be steep, but that building cars in the United States at a profit is possible.
Toyota, Hyundai, and other foreign auto makers have expanded car production in the United States in recent years, although in southern states where unions are practically non-existent and labor is cheap.
“Detroit North has to borrow a page from Detriot South when it comes to restructuring,” Kudlow said.
Meeting automakers, Democratic House Speaker Nancy Pelosi suggested that some form of publicly financed help was certain.
"It is essential that we preserve our manufacturing and technology base in this country," Pelosi in a statement.
"Today, the Democratic leadership discussed how to protect hundreds of thousands of workers and retirees, safeguard the interests of American taxpayers, and use cutting-edge technology to transform blue-collar jobs to green-collar jobs for generations to come."
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