The US government’s plan to flood Wall Street with taxpayer dollars is good news for the automotive industry, which itself wants a $25 billion-dollar bailout in the wake of the credit crunch.

Allowing the Treasury to spend a trillion dollars to buy up bad loans should allow lenders to start making auto loans again, reinvigorating Detroit automakers.

The automakers have warned Washington that a lack of credit would delay plans to retool their plants for hybrid cars and electric vehicles.

Unlike the Wall Street firms, auto makers have promised to pay back all the money they receive. However, they do not want to pay interest on the $25 billion, as they see the money as necessary for compliance with last year’s energy bill.

When the government bailed out Chrysler in 1979, they required the automaker to cut executive pay and make concessions with the United Auto Workers Union. No such requirements have been suggested for this bailout.

A bill on the auto industry plan should come to the floor of Congress this week. Auto makers are worried that if action does not occur quickly, the new administration will be unable to take action before mid-2009.

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