The bailout of the auto industry seems to be going down in flames from a congressional standpoint. Cash strapped GM and Chrysler are Runnin' On Empty with limited cash, and in need of roadside assistance, while further up the road Sirius XM Radio is on the curbside waiting for their ride.
Auto sales are down, and consumer confidence is shaken. Congress says that the best solution is an "organized and streamlined" bankruptcy. Auto insiders and the White House balk at that idea, saying that consumers will not buy cars from a bankrupt company. NEWSFLASH - Consumers are not buying cars at all!
Thus, the auto meltdown continues, and satellite radio sits on the curbside virtually helpless. Sure, sales will transfer to other brands, but those brands need to have chipsets in their hand and get them into cars. That takes time. The big three are an integral part of the SDARS equation, and a hick-up by any of the big three will be felt by Sirius XM in one way or another.
A bailout for the big three will happen one way or another, but it is readily apparent that few want to put their stamp of approval on the deal. Everyone is sitting in hopes that the next guy will make the ugly deal and save the industry. In the end, the bailout will likely be tied to Bush, as his term is up.
Position - Long Sirius XM, No Position, Ford, GM, Chrysler