Berkshire Hathaway Chairman/CEO Warren Buffett talked about bankruptcy and bailouts for the Detroit Big Three on CNBC Monday morning.
The billionaire investor talked about how a new business model for the Big Three is essential. The new model has to adapt to the lower demand for cars, he says. The challenge is to get the new business model to work so that the automakers don’t have to go into bankruptcy.
Buffett also said how it’s not the current executives, management and unions’ fault that the automotive industry got into this mess. The domestic auto industry has a lot of legacy costs, he said.
After about three minutes into the interview clip, Buffett talks about the supply/demand problem with the housing industry, so if you’re interested in only the automotive news, the first three minutes are what you want to watch.
Surprisingly, Buffett did not discuss the car loan financing problems or the TALF program. Since Buffett is a successful investor, I would have liked to hear his take on how to help consumers get car loans to buy cars to help the Big Three and when he thinks auto loan financing will be more available to those who don’t have credit scores above 700.