It is no secret that the “Big 3″ auto companies do not have a history of producing many cars on the cutting edge.  Sure, cars like the Corvette and the Cadillac CTS are right up there with other manufacturers, but that is about where the list begins and ends.  Since consumers realize this, and they may have some relatives who make a living working for a foreign car company here in the states, the big fellas in Detroit have been hurting.  Now they can help themselves.

It looks like their bailout money – expected to be about $15 billion – will come from an existing loan program meant to help them build fuel-efficient vehicles.  Huh?  This one leaves me scratching my head when I think about it.  There was already a loan program in place for them to make better, more fuel-efficient, cars and since they have failed (miserably) to do that they need to use that money to be bailed out.  Only in America.

Basically, someone from the government is going to make sure the automakers restructure, re-tool and do whatever necessary to use this money wisely.  If they don’t, I don’t know what will happen but there are two things (in my mind) to think about:

• GM and Chrysler have previously stated they need billions just to keep the lights on after this month.  If this is the case, it is a mystery to me how they can change anything with this money.  It seems to be parallel operations when one operation needed the money to begin with.
• Since this whole thing is rather suspect, we can only hope that nobody (congress/government) previously involved with the auto industry – including those getting any kind of “donations” – has nothing to do with this new oversight.  If so, we can expect more of the same right?

The last thing that makes this one a hard pill to swallow is the pay received by the CEOs of GM, Chrysler and Ford.  I don’t have the numbers in front of me, but I think they all make base saleries in the $2 million neighborhood, but when all was said and done they made somewhere in the neighborhood of $60 million (at least) combined.  Those are two distinctly different neighborhoods!

The big three automakers, General Motors, Ford and Chrysler want the government to throw some  bailout money their way.  Are they worthy?  I’m not so sure.

I’m not going to get into the American versus foreign buying debate, but the comparison is important.  Beauty is in the eye of the beholder, but I think it safe to say American cars aren’t the best looking vehicles on the road.  While some cars from the big three are getting better, vehicles like the Pontiac Aztec really set American cars back in the looks department.  One could say the Aztec is like the modern day Pacer – the Pacer is another questionable looking American car.

The functional quality – to include reliability and gas mileage – is another area where foreign cars seem to have an advantage.  Statistics can be thrown all over the place, but one thing is obvious: pound for pound, there are foreign cars out there, namely Japanese cars, much more reliable with better gas mileage than their American counterparts.  Japanese automakers are hitting the sweet spots with cars like the Honda Accord, Odyssey, Civic and the Toyota Tundra, Camry and Corolla.

My question for years has been why can’t American cars put the technology into cars to get gas mileage similar to other cars.  Additionally, why do they do things like put all the plastic cladding on Pontiacs, use blue emblems (Ford) on every color of a car and other things which make their cars downright ugly.  Yes, I know beauty is in the eye of the beholder, but this is my opinion.

Getting back to bailout money, the heads of the big three rolled into Washington DC last month asking for money and were rightfully criticized for their mode of transportation.  All three men arrived via (separate) private jets.  It was jokingly suggested they downgrade to a first-class commercial fight.  So this time, in a transparent attempt to look more needy, at least one of them planned to drive from Detroit to our nation’s capitol.  Let’s be real, I doubt they will be behind the wheel on the drive; they will probably hire a driver.  Even if they do drive, do you think they will get a car fresh off the assembly line?  I’m sure they have a lot of unsold vehicles to chose from righ now. 

All I keep hearing about is the need for the House and Senate to pass a $700 million bailout package in order to prevent our economy from going into a recession.  Okay, whatever. What I want to know is how does this current economy affect my money!  And, how will a bailout help me?  So, to help me find some understandable answers, I went to my trusted friend — Google.  As usual, my friend did not let me down.  Google brought up an article that the New York Times recently printed that addressed my concerns.  So, I thought I’d pass on to you my findings as I’m sure you’re concerned about your money too.

Q. Is any investment truly safe right now?

A. As long as you trust the United States government, sure. Plenty of banks, like HSBC Direct and Capital One are offering online savings accounts paying more than 3 percent. These accounts have all the normal Federal Deposit Insurance Corporation protections of at least $100,000. Also, the Treasury Department is currently insuring investors who had holdings in money market mutual funds as of Sept. 19, as long as the fund company pays to participate.

Q. My retirement portfolio has been wrecked by this. How should I respond?

A. Continue to save. Big losses mean you’ll need that much more time, or good news, to bring your balances back to where they need to be for you to retire comfortably. If your employer matches your contributions, this is a great time to take advantage of the largess.

As for whether you should pile into beaten down stocks, no one knows how much further the markets will fall or how long they’ll take to bounce back. But people who move their savings to ultrasafe investments and then leave them there usually miss out on the gains when the markets come back. If you need to do that to sleep at night or avoid stomach ulcers, then do what you have to do. But it may cost you in quality of life come retirement time.

Q. But what if I am about to retire? Then what?

A. Leaving the work force at a time like this creates big problems. Not only is your portfolio down, but you need to start withdrawing from it. So you are essentially locking in your losses.

If your portfolio has taken a big hit, it may be time to seriously consider delaying retirement. Working just a few years more can make a big difference. Or, a part-time job may keep you from having to dip into your portfolio before it recovers. To get a better idea of how much you can afford to withdraw, you can test different amounts with a retirement income calculator on the Web, like T. Rowe Price’s.

Q. Is it time to buy stocks?

A. Like gambling? This is a great time to make bets on the wide price swings that we’re seeing in some stocks and entire sectors of the market. Just be prepared to lose big, as plenty of professionals have done of late.

Q. What’s the next shoe to drop?

A. It seems certain that it will be harder for consumers to borrow money in the next year or two than it was earlier this decade. How much harder isn’t clear yet. It will be more difficult for people who need jumbo mortgages than for those whose lenders can simply sell off their loans to Fannie Mae or Freddie Mac. Home-equity lenders are already cutting plenty of people off, while credit card companies are lowering credit limits on others.

Q. What about more bank failures?

A. They will happen. In recent days, we’ve seen the F.D.I.C. getting out in front of troubles at big banks like Wachovia and Washington Mutual, by arranging for other banks to take over their consumer accounts. What’s less clear, however, is how many healthy institutions are left to take in other big banks that may run into trouble.

As always, stay within F.D.I.C. deposit limits, which is currently $100,000.  Then, the worst-case scenario is that it will take a couple of days to extract your funds from a failed bank.  (NOTE:  The powers-to-be in Washington and the FDIC are in talks to raise the deposit limit to $250,000).