UK car industry asks for bail-out

horseandcart wrote:

There's been the mother of all credit bubbles. It's burst. Companies and individuals need to go bankrupt until supply and demand come back into some sort of balance.

I don't disagree with most of what you say. Other than that there should be a multi-pronged approach. I had a 2% tax cut last year; it equated to £8 a month on my pay cheque (what with the doubling of my student loan rate on the £3k loan I had to take to become a teacher, the increase in national insurance, the extra slice my pension took etc). A 1% or even 2% tax decrease will make very little difference to people's spending power currently.----------------------------------------------------------------------- Also I believe that pure capitalism, supply, demand etc does not work and does not always act in our best interests. The continent has an approach where there is more government intervention, mostly based on socialist and protectionist ideals. While not totally condoning these they have been protected from the worst ravages of the current economic climate (no doubt one French car maker will look like going under though) - the price they paid was a lower % of GDP growth during our growth period - which as you correctly state was based on false credit and the belief that house prices would continue to rise.--------------------------------------------- To tackle the current problem there has to be the understanding that manufacturers must cut prices, dealers must cut their profits too. Some may well go under. I hate to say it, but I'm quietly grinning that Mini sales have slumped, despite good fuel economy I have always seen it as totally over-priced compared to the practical value - making it a luxury item. Therefore sales have plummeted. Shame it's made in the UK really. It would just be a shame that if car companies are going to go under then UK dealers and makers go under first, because we are not prepared to bankroll them as no doubt the French Government will for theirs and the German Government are considering for Opel.