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Hopes Dim for Quick Bailout for Automakers



 

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curious if anyone thinks the us auto industry should be "saved." job losses are a drag, yes, but, wait, the corner grocery store just failed too. he made good sandwiches, and not a single hideous bloated SUV. what indications are there that the US car companies would make anything that could compete with Japan and Germany in time to make a difference anyway? is there one american car to cite as an example of being "green" in any real way, beyond just the marketing? and if the US economy is so cracked that it can't "survive" the death of Detroit's outmoded industry, who thinks it can be "saved" in the short term at all? finally, what faith does anyone have that a "bailout" would be done with any more intelligence than the current payout to the banks? Detroit, New Orleans, and other parts of this country are third world countries, essentially. it has caught up with us. the world war two boom is over. the last 8 years has sped the demise, but it was coming anyway. no disrespect meant to the workers who made all those american cars, but, why would we reward companies who ignored the lessons of the oil crisis of the 70's and let greed overtake reason in their corporate plans? i seek one good reason why they should receive a dime of public assistance.

Here's why I don't think they should be:

The Auto Industry Is Backsliding on Global Warming. Historic fuel-economy data reveals a disturbing trend -- every automaker’s average new vehicles emit more global warming gases today than ten years ago, with the exception of BMW.1 In 1999, US fuel economy overall dropped to its lowest value in 20 years. Two decades of fuel-saving technologies that could have helped curb CO2 emissions have instead gone into increasing vehicle weight and performance.
The Big 3 Account for Most Global-Warming Emissions from New Vehicles. The Big 3 sell the dirtiest vehicles and capture the vast majority of US passenger vehicle sales, making them the worst polluters by any measure. Together, Daimler Chrysler, Ford, and General Motors’ vehicles are the source of 76 percent of the CO2 emitted by vehicles sold in 1998. Immediate action by these automakers to raise the fuel economy of their light trucks would significantly reduce global warming emissions from new automobiles. http://www.aceee.org/pubs/t003.htm It's not that GM doesn't have any hybrid products. It's that GM isn't building many of them. http://money.cnn.com/2008/04/23/autos/gm_missing_hybrids/index.htm?postversion=2008042304

As said by other commentors, it's not like this "crisis" is new:

During the Clinton administration, the government offered the big three automakers, Daimler-Chrysler, Ford and General Motors, incentives to develop energy-efficient cars, but the carmakers arrogantly ignored efficient solutions and developed even larger and thirstier automobiles. Seemingly, GM missed the memo that oil is neither plentiful nor cheap in 2003 when it introduced the 10-mpg Hummer. http://www.dailycardinal.com/article/14265

Yes, we as a society are to blame for this, just as we are to blame for the housing collapse and investment greed. Our apathy and gluttony are destroying our way of life. Sadly, there is little will to change from the top to bottom of society. That's why we need real consequences for this otherwise we are just enabling the junkie to continue down their self-destructive path.

We don't have time to let "the market" fix the environment and our economy. We need strict enforcement on these issues before it is too late. Just look at the current recent warnings from the NIC:

• The unprecedented transfer of wealth roughly from West to East now under way will continue for the foreseeable future.
• Unprecedented economic growth, coupled with 1.5 billion more people, will put pressure on resources—particularly energy, food, and water—raising the specter of scarcities emerging as demand outstrips supply. http://www.dni.gov/nic/NIC_2025_project.html

I say they agree to make Al Gore the new CEO of General Motors and THEN they get their precious bail out! ;)

I was sitting in a poli sci class at the University of Michigan (just 40 miles from Detroit) in 1989 when I distinctly remember my professor describing the US automakers as a "sunset industry." They had 20+ years to figure this stuff out. It's so aggravating.

While it is irritating that the american auto makers didn't step up to the plate and produce a lot of greener cars, it's not like public policy encouraged it. CAFE standards - remember those? Completely ignored by Washington, D.C. so why should Detroit, MI give a damn? And how many legislators drive SUVs these days?

Ford did produce an electric car in the 1980s; a friend of mine owned one. It didn't take hold in the market, so why keep pushing something that's economically unfeasible to produce? Quite frankly, with the price of gas back down, lots of folks are driving to their hearts's content right now.

So Toyota and Honda beat us to the punch. A lot of working stiffs are wondering about Christmas, their house, and the like. I'd be up for a bailout if new leadership for each recipient were part of the picture.

I see the problem from both sides - the auto makers missed a golden opportunity, and those who want to drive hummers/SUVs, or just get in the car to go half a mile because it's their individual right to the pursuit of happiness.

That's a lot of change to expect from a lot of people.

This is what I sent to my representatives:

Although the current credit crisis has left the US auto makers on the verge of bankruptcy, the seeds of their demise were sown over the past two decades. The U.S. automakers have failed to plan for the future. Aligned with the oil companies, they have spent billions to circumvent regulation, manipulate consumers and hamstring the federal government to prolong a profitable but unsustainable business model.

The SUV was not an answer to consumer demands. The automakers sought a detour around CAFE standards by developing a CAFE-exempt light truck dressed up for families and developing an advertising campaign to artificially stoke consumer demand.

The oil and auto industry colluded to destroy California's zero-emission mandate (ZEV). Oil companies bought battery developers in order to inhibit electric car success. Detroit left the research and development of hybrid technology to Japan and Japanese high-efficiency vehicles were ready as oil prices and consumer demand went up.

The oil companies have profited and continue to profit immensely. Exxon Mobil recently posted the biggest quarterly profit for a US company in history ($14.83 billion). Unfortunately this alliance has not worked as well for the American auto companies. They have now found themselves in the position of begging for a tax-payer bailout. Obviously, allowing the automakers to fail is unacceptable, even though their business models are fundamentally flawed.

I ask you to tie a bailout specifically to a windfall profit tax on oil revenue that is pinned to the rescue of the auto industry. The $25 billion can be obtained directly from a percentage of the record oil company profits. Insist on stipulations for electric car development, far higher fleet MPG averages without flex-fuel backdoors, a freeze on executive bonuses and executive pay cuts.

"I see the problem from both sides - the auto makers missed a golden opportunity, and those who want to drive hummers/SUVs, or just get in the car to go half a mile because it's their individual right to the pursuit of happiness.

That's a lot of change to expect from a lot of people."

Wow we are such a spoiled country, you know?
Extreme changes are certainly coming to this country no matter what choices we make on this one, so I hope Americans are ready for it!

I agree with you. I just have seen how slowly we go. I ride or walk to work and other places when I can (my knees are getting kind of cold on the ride these days, but, meh).

My point is that there have been attempts at change and people are dragging their collective feet all the way to their cars in their garages.

Also that I feel for the workers who will have no gig because of poor management decisions combined with market forces.

This is an example of where letting the market place decide is not in our best interest.

curious if anyone thinks the us auto industry should be "saved."

Yes, I think we need a combination of Chapter 11 Bankruptcy that will force re-structuring, while extending loans to keep GM going through the bankruptcy proceedings. There also need to be strict environmental standards, including fuel efficiency standards, attached to the bailout. But generally, the loss of revenue in Federal and State taxes, and well as the downstream consequences on the economies for OH and MI, necessitates a bailout.

If it's done well--IF--it would be more cost-effective over the long term.

curious if anyone thinks the us auto industry should be "saved."

Yes, I think we need a combination of Chapter 11 Bankruptcy that will force re-structuring, while extending loans to keep GM going through the bankruptcy proceedings. There also need to be strict environmental standards, including fuel efficiency standards, attached to the bailout. But generally, the loss of revenue in Federal and State taxes, and well as the downstream consequences on the economies for OH and MI, necessitates a bailout.

If it's done well--IF--it would be more cost-effective over the long term.

curious if anyone thinks the us auto industry should be "saved."

Yes, I think we need a combination of Chapter 11 Bankruptcy that will force re-structuring, while extending loans to keep GM going through the bankruptcy proceedings. There also need to be strict environmental standards, including fuel efficiency standards, attached to the bailout. But generally, the loss of revenue in Federal and State taxes, and well as the downstream consequences on the economies for OH and MI, necessitates a bailout.

If it's done well--IF--it would be more cost-effective over the long term.

curious if anyone thinks the us auto industry should be "saved."

Yes, I think we need a combination of Chapter 11 Bankruptcy that will force re-structuring, while extending loans to keep GM going through the bankruptcy proceedings. There also need to be strict environmental standards, including fuel efficiency standards, attached to the bailout. But generally, the loss of revenue in Federal and State taxes alone would, in my view, necessitate some sort of a bailout.

If it's done well--IF--it would be more cost-effective over the long term, to say nothing of the human cost. Usually the principle, "Too big to fail" is flawed; in the current economic climate, I think it has a lot of purchase: letting the big three fail will have upstream consequences for supplies and downstream ones for sellers, and all their employees. Less local revenue will mean less consumer spending, and so on, and so on.

GM is on the verge, perhaps, of putting a fully functional electronic car on the market and has invested heavily in it. If they are given a little more space to carry that project through, the U.S. could corner a global market and create more jobs.

dammit. Sorry about that all.

The American public has been in complete collusion with the auto industry for the last 20 years. I work with people who wouldn't be caught dead driving a car (no matter how stylish or expensive) preferring a SUV the size of a locomotive that gets 8 miles to the gallon in town. Even Toyota and Nissan gave in and started building monster-sized trucks while the automotive press like Motor Trend almost quit reviewing cars at all replacing them with truck reviews. Part of this problem is the public got too fat to easily fit in a car - particularly a small car. The auto industry didn't do this all alone. The American public happily went along even demanding even bigger, less efficient vehicles to cart their big butts to work and back while small, European-style cars can't turn a profit in this country. This orgy had a lot of willing participants some of which suddenly turned against this game when it became too expensive to run their personal locomotives. There's millions of guilty people who are now pointing fingers. Sort of the junkie blaming the dealer for all his problems.

I just thought of the most brilliant way to deal with the big three. We agree to provide a bail-out...a handsome robust bail-out that will cover all needs and save the American Auto-Industry from certain bankruptcy...however here's the big catch. We are ONLY going to bail out ONE of the big three. Meaning that they have to fight amongst them selves over a series of short week or months to prove that they have the best ideas, plans, foresight, and ambition to create the kinds of fuel efficient vehicles that we need to carry us into the 21 Century. I'm telling you if we do it this way they will be fighting like dogs pulling out all the technology that they have been sitting on for the past 20 years that they damn well know will provide the kind of fuel efficient vehicles that we are talking for. I think this is truly the best way to go at it!

that's good. after all, if we had one standard bearer, then other companies could step up to compete with something worthy. as it stands, the "big 3" are a big joke. funny, i used to get flak from friends who are staunchly pro-union, for driving a honda. my reply was always the same - tell ford or chevy to beat the product. if you want to play open market then play, bite it if you can't make a better car. i've had two honda civics over a 20 year period. minimal hassle, low maintenance, clean, relatively quiet. and over 30 mpg, consistently. duh. this bar was set decades ago. i have little sympathy for any company which deliberately ignores reality.

Why politicjunky, you are on to something, i b'lieve.

Here's another good point from Mark Morford:

...I fully understand there might be reasons far larger and more fiscally complicated to justify keeping the Big Three alive for awhile longer, simply because, like AIG, so many billions are wrapped up in their operations and in the various supply chains that support them, to let them all fail nearly simultaneously could rip a hole in our sinking ship of state far larger and more dangerous than the one that results from letting them suffer and die slowly, bleeding billions all the way.

What's more, I'm also not so heartless to ignore the brutal job losses, the tens of thousands of collapsed pension plans and failed retirement accounts that would result from the end of American auto industry. It would be horrible indeed. But maybe that's where the government's billions would be far more useful, to ease the meltdown and provide retraining.

{Best Car Ad Evah!](http://www.youtube.com/watch?v=xr4Gye05gKk&feature=related)

Wow - Ralph Williams. I haven't seen that guy in more than thirty years. He used to bombard us all the time while watching late night movies when I was a kid - and the send-up here is good!

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