DETROIT -- While the auto industry's push for government aid is gaining steam in Washington, a lot of Americans don't think bailing out the industry should be one of President-elect Barack Obama's economic priorities.
According to a USA TODAY/Gallup Poll, 47% of adults believe "providing loans and other help" to auto companies is "not very important."
By contrast, 60% of the 1,010 adults surveyed Nov. 7 to 9 said stricter regulation of financial companies is a "critical" or "very important" economic priority for the newly elected president.
"Most people do not understand the ramifications of a collapse within the U.S. auto industry," says Dennis Virag, president of Automotive Consulting Group. "They see GM, Ford and Chrysler, but they don't understand the relationship and the total size of the problem with regard to not only the three automakers, but their full supply base, their support structure and all of the dealers."
Despite a lack of public support, Obama's transition team seems to be working on getting aid to automakers as soon as possible. The newly appointed chief of staff, Rahm Emanuel, has said that Obama is looking for ways to use existing laws rather than waiting for congressional action.
The push to airlift a rescue package to the automakers comes on the heels of General Motors' admission Friday that it has barely enough cash on hand to make it through the end of the year — and not enough to make it through the first two quarters of next year.
On Monday, shares of GM fell $1, or 23%, to close at $3.36 a share after Deutsche Bank analyst Rod Lache cut his rating on GM to "sell," and cut his 12-month price target to zero.
"Even if GM succeeds in averting a bankruptcy, we believe that the company's future path is likely to be bankruptcy-like" in its effect on shareholders, Lache said in a research note.
Lache says he thinks the government will be compelled to intervene, preventing an all-out GM failure that would then "precipitate systemic risk that would be difficult to overcome for automakers, suppliers, retailers and sectors of the U.S. economy." But even if it is able to secure government loans, Lache thinks the company is burning through cash too quickly.
So far this year, GM has depleted it cash reserve by $9.66 billion to $16.2 billion. The automaker has said it needs about $11 billion to $14 billion on hand to run day-to-day operations.
CEO Rick Wagoner told industry trade magazine Automotive News Monday that help to alleviate GM's financial distress can't wait until Obama takes office in January. "This is an issue that needs to be addressed urgently," Wagoner said.