Here's a plan that someone should suggest, imo.

Instead of lending the three US auto manufacturers this money, the government should commit to buy the equivalent number of cars. These cars would have to be models that get at least 30 mpg, or maybe 35 mpg, and they would come with a 5 year warranty and 5 years of paid up full coverage insurance. It should be able to be gotten for something in the range of $20,000 each. , so we are talking a sizeable buy in terms of number of units.

These vehicles would be bought from each manufacturer in pro ratio to the current market share they have of the US auto market.

Then these cars would be used to provide any US citizen that makes less than a certain income level, say $80,000 per year, and currently drive a car that is more than 10 years old, but younger than 25 years old. The vehicles would be provided to the people that qualify with no cost leases. Their current beater would be used as a trade in. The trade ins would be recycled and the manufacturers would be required to use the recycled materials in their manufacturing to be in the program.

Obviously there would be other restrictions for the recipients to prevent fraud and unsafe drivers from being eligible.

The Auto manufacturers would probably also need some guarantees by the government for short term cash flow credit and the Federal government would have to have the power to redo the union contracts. Also they would need to be able to override local and state laws that currently make it almost impossible to get rid of dealers that can not be supported by some markets.  GM has something like 7500 dealers compared to Toyota's 1500 dealers for a comprable number of vehicles sold I heard the other day.

GM may have to scale back to three or four main vehicle divisions, maybe Chevy, Saturn, Cadillac and big trucks.  Although I heard they were talking about dropping Saturn and Pontiac.  They need to stop building vehicles that people don't want to buy and concentrate on those that people do want to buy - about half their current models.

There would also need to be more restrictions also to address executive compensation and such, but I think those could be worked out also.

There are probably some downside to this plan, but considering they are talking about giving unsecured loans now with many restrictions that get the government into running the companies, somewhat, I think this would be a better route.

As I see it this would provide what the US auto manufacturers need: Sales and a lot of them. It would put many auto workers to work along with all of the supporting industry, automatically raise the fleet mileage, take polluting vehicles out of circulation and provide a "leg up" to folks the more liberal politicians always worry about. The giveaway I'm not thrilled about, but hopefully it would give the recipients more money to spend to boost the economy and it seems better than the giveaway to the executives being floated now.  I know these are loans, but really?

Canadian taxpayers are being asked to provide at least $6-billion to the Detroit Three auto makers - and the two most troubled companies say they need a big chunk of the money immediately.

The total bill could soar to $7.2-billion if conditions worsen, the three auto giants told Ontario and Ottawa as they submitted requests for money to help them restructure amid the most serious crisis the auto industry has faced in generations.

General Motors of Canada Ltd. has asked for $2.4-billion in loans, with $800-million of that necessary before the end of the year. Chrysler Canada Inc. needs even more than that in the next three weeks, seeking $1.6-billion by Jan. 1, sources knowledgeable about the company's plans said.

Ford Motor Co. of Canada Ltd. asked for $2-billion but said it would only use the line of credit if conditions worsen.

The requests for assistance arrived in Ottawa one day after the political crisis was settled - at least temporarily - by the suspension of Parliament until late January.

"Cabinet still functions while the House is not sitting," said a spokesman for Industry Minister Tony Clement, when asked whether Ottawa could provide financing while the House of Commons is not sitting. In fact, the government has provided more than $25-billion in liquidity for Canada's banks without seeking approval of Parliament.

The Commons will eventually have to approve such spending.

Mr. Clement said no decision on aid has been made.

A federal source suggested the companies still need to line up support from dealers, unions and suppliers.

"Before committing taxpayer dollars, we need to review the plans to ensure that they have met our requirements and contain a long-term solution that sustains the industry in Canada," Mr. Clement said in a statement last night.

The Conservatives are unlikely to face opposition to an auto bailout from the three parties that sought to unseat Prime Minister Stephen Harper this week. The Liberals and New Democrats - supported by the Bloc Quebecois - had pledged to provide assistance to the manufacturing sector, including the auto industry, if their coalition had succeeded.

"The numbers are going to seem big to taxpayers because they are big," Ontario Economic Development Minister Michael Bryant said yesterday.

The auto sector is vital to Ontario's economic prosperity, Mr. Bryant said, but noted, "I'm as skeptical as anybody would be and should be when it comes to governments using taxpayer dollars to loan money to any industry."

News releases from Chrysler and Ford offered few details of what the companies would actually do with the money.

"We're asking for the money to sustain our business," said David Paterson, GM's vice-president of corporate affairs. The $2.4-billion figure is based on vehicle markets in Canada and the United States improving slightly next year.

An additional $1.2-billion from governments will be needed if markets deteriorate further, Mr. Paterson said.

GM requires "liquidity support to stabilize its operations, proceed with new product mandates in Oshawa, St. Catharines and Ingersoll [to] complete the restructuring initiated in November, 2005," the company said in a statement. GM has a car assembly plant in Oshawa, Ont. - a truck plant there is scheduled to close next year - a crossover utility vehicle factory in Ingersoll, Ont., and an engine plant in St. Catharines, Ont.

Ford Canada president David Mondragon said in a statement: "The company believes it has the liquidity to weather the current economic crisis, however, it is asking for access to government-backed loans in case the economy significantly worsens, or in the event that a major competitor is forced into bankruptcy."

Chrysler president Reid Bigland said his company is requesting a temporary, repayable loan from the two governments with two aims.

"First, to ensure Chrysler has sufficient funds to complete our restructuring activities during what is an unprecedented downturn in vehicle sales caused by the global financial crisis and second, to ensure Chrysler Canada's substantial Canadian manufacturing and operational footprint is protected," Mr. Bigland said