The federal government must do several things to help resuscitate the domestic auto industry and ensure its long-term health. In the short run, Congress must move quickly on an aid package for General Motors, Ford Motor and Chrysler LLC. The package ought to include sufficient loans - maybe even direct equity investment - to help the companies stay afloat. President-elect Barack Obama should encourage Congress to include a direct boost to Detroit 3 vehicle sales as part of the broader economic stimulus package. A good starting point for the discussion might be a proposal by industry executives Don Runkle and Hal Sperlich, who suggest a USD3,000 federal payment to buyers of new Detroit 3 vehicles that also carry a factory incentive of at least USD3,000.
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