Two. President George W. Bush's decision in the last days before Christmas to spend $17.4bn bailing out the big three Detroit carmakers, and push the problem on to Barack Obama, his successor, does not change the basic problems of the industry. In terms of employment, car and truck plants and dealers, Detroit's infrastructure is too big.
The Detroit big three have not only been pumping up sales volumes with cheap credit but also failed to invest in fuel-efficient cars to compete head on with the Japanese and Korean makers. Honda and Toyota are far ahead of General Motors, Ford and Chrysler in technology and it will be an enormous struggle for Detroit simply to catch up.
That means a great deal of overcapacity will need to be cut and the obvious victim will be Chrysler. Cerberus Capital Management, which owns the company, has already signalled that it would like to see Chrysler's vehicle operations folded into GM to protect its majority stakes in CMAS and Chrysler Financial, the finance arms of the two companies. John Gapper