Analyst assails handout to automakers

DETROIT, Sept. 8 (UPI) -- Pulitzer Prize-winning automotive-industry journalist Paul Ingrassia wrote Monday that increased government help for U.S. car companies is a flat-out bad idea.

The 2007 energy bill included $25 billion in low-interest loans for automakers, a program automakers hope to double to $50 billion, Ingrassia wrote in an editorial published in The Wall Street Journal.

"This is bad public policy," he wrote.

The decisions that put Detroit's Big Three "in their current quandary" were their own doing "with some help from the United Auto Workers union," Ingrassia wrote. Further, the impression that they are corporate welfare recipients will hurt sales, he said.

Beyond all that, "the last thing these companies need just now is more debt. They are leveraged to the hilt and risk climbing into a financial hole from which they'll never recover."

Ingrassia recommended the automakers sell more equity and not turn to the government for help.

Besides, he wrote, "just what calamity are we trying to avoid by subsidizing loans to Detroit? That we'll all be sentenced to the indignities of driving Hondas, Mazdas or BMWs?"