The automakers whining lobbying in Washington seems to be paying off. The Detroit Free Press reports that 71 members of the House of Representatives have said they'll support the Advanced Technology Vehicles Manufacturing Handout Initiative. The $25b program's meant to help the domestic automakers catch up with the transplants meet the 2020 CAFE standard of 35 mpg by giving loaning them money to engineer fuel-efficient vehicles or upgrade old plants. Rep. Sander Levin from Michigan explained, "Funding this new program is critical to the future of the U.S. auto industry, as well as our nation's efforts to reduce our dependence on foreign sources of oil. The federal government must be an active partner in the effort to create these jobs and technologies here in Michigan the United States." Several members of the Senate have also expressed support for the program, including Sen. Barak Obama (surprise!). But the chances of it (or anything else) being passed this year are slim. Congress will start their August vacation recess this week; they have no plans to convene after the election. That leaves only September for them to get anything done. As if. [thanks to carveman for the link]
Find Reviews by Make:
Read all comments
What would happen if the gov’t did not bail them out? Just curious if somebody could write up a plausible scenario.
Of course the employees would be out of jobs, the mortgage market would be further depressed, but what then?
Will the gov’t force the car makers to make certain changes like ending top level bonuses worth millions?
Not sure that I want to gov’t to bail these guys out. Let them sink. What swims to the surface ought to be much smarter and leaner.
It would never happen, but I would like somebody to write a bill and bring it to a floor vote. Tomorrow would be good.
Oh no, I’m not in favor of it.
You see, Florida’s primary election comes up on Tuesday, August 26th. By showing their colors (and voting for or against) such a bill early would give me and other voters a chance to more completely assess our candidates.
As it is, they won’t bring it to a vote until after the elections, when we have a whole two years to forget this porkbill.
It’s wrong, both economically and morally, to force people outside of Detroit to pay for Detroit’s shortsightedness.
I don’t really get this. Isn’t america supposed to be a free market enterprise? What is all this shit about a handout?
From where I come from, if a private company needs the government to bail them out, that means the management have lost their right to manage the company. The company will be nationalized, the management sacked, and the government will loan money to the company with obligations to actually pay it back, and then sell the company.
If you need that kind of money from the government, it means that you are severly incompetent, it means that you are, in fact, not competent enough to run the business. But a handout without obligations? I don’t get this…
All the Det 2.6 have to do is stay alive until next January.
Hey wait. Is this an election year?
Can we label all the folks who support this as fascists?
ChuckR,
Don’t forget socialists. Can’t forget to label folks that too!
Seriously though, if the government has to fund a companies survival like they have been lately said company’s management team and board of directors needs to be sacked and replaced for the injection of funds.
Not to mention we’ve been spending more than that a month on one country over seas.
Leave it to our government to bail these bums out. Do we really deserve the kind of government we have??
Yes, if you look at the state of affairs overall with our nation and society we definitely do have the government we deserve.
Isn’t america supposed to be a free market enterprise?
Nope. America is a free market for the little guys, which pretty much translates to being free to fail on an unlevel playing field. It is socialist for the big guys, which translates to tax abatements, lobbyist designed tax and regulatory loopholes, government loans, and outright gifts from the taxpayers. It’s the worst of both worlds.
A car benching 23/31 on the new EPA test would probably score 10% to 15% better using the previous EPA test. So that would be about 26/34. But even that test isn’t what is used for CAFE. Those reported 26/34 numbers are adjusted down by 10% and 22% respectively from the actual CAFE test scores–which is what is apparently being used for the new CAFE requirements. So, calculating backwards, that 26/33 is really 29/43. Finally the 29/43 is given 0.55 and 0.45 weighting to arrive at a single score: 35 MPG!
There are plenty of cars that are at or close to 23/31 right now. Those cars are probably just about meeting the official CAFE rating of 35.
Sadly, the number of principle centered legislators is heavily outweighed by those bought by GM, Pfizer, Bank of America and all the other big companies.
Want to change the rules of the game? Shop at local shops, spend your money with smaller companies any chance you get. In short, walk the talk.
Orian
Socialists and fascists, pretty much the same thing, but with different target audiences. Bourgeosie for the fascists, huddled peasant masses for the socialists and commies. With either epithet, you skirt close to Godwin’s Law, but it would be fun to see Dingell and Granholm splutter about a fascist label. You can pick your favorite RINO supporter to label as a commie. Neither label is really appropriate for those who rescue the likely big beneficiaries, the cosseted and out of touch bosses.
Although we have RIM and Dalsa(of Mars rover camera fame) in my neck of the woods, our government continues to play us up as a hi tech country. No we are not. Canada is a resource country. RIM didn’t bring up our dollar on the strength of the Blackberry. It was the Albertan oil and gas fields that brought our 66cent dollar to parity – not that the IRAQ war didn’t hurt either.
Our politicians however like to promote the fiction of us being an industrialised manufacturing nation. You watch, our government will start with the handouts here as well but only to the large ‘slaveowners’. Sorry I meant to say ’employers’.
I looked into the Small Business Development Bank recently but it only lends to businesses valued above $10million. Small loans are not worth their time to set up otherwise LOL . Hmm… At $10M I would think you don’t need a lot of help.
Isn’t it about time the big 2.5 should be seeking for venture capital from Wall Street or at least float more shares to pay for the investment ?
The government’s job should be to assist smaller businesses to put more competition out there. The big 2.5 could have then been the big 8.5 by now.
We also need better corporate governance. Shareholder democracy is non-existent for the millions who have small stock holdings. It allows companies like GM to lose 75% of their share price and yet still retain the same management.
The only way the domestic car companies could be paying any tax at all to the government (that they can’t claw back) is through employees income tax.
So it is the employees of the company who are paying for their own jobs. Isn’t this some form of slavery ?
Secondly all the really small busineses never get in on these donations so your dry cleaner and pizza parlours etc are actually subsidising the car industry. Is that form of market distortion healthy ?
Then let’s not forget the electricity rates that are slanted towards the big consumers with bargain low rates “to encourage industry to come here” Later on, try getting them to go green. “Why do we need to save energy when we can get it so cheap ?” For the rest of us it’s like going to a restaurant agreeing to divide the bill equally except when the waiter comes over the ordering by the other players turns it into an ‘all you can eatfest’ !
Frank, I appreciate your crossed out humour, and all who posted here
T2
So what, why not?
We will borrow from Chinese to pay for it and not pay them back.
Qwerty:
It is socialist for the big guys, which translates to tax abatements, lobbyist designed tax and regulatory loopholes, government loans, and outright gifts from the taxpayers. It’s the worst of both worlds.
If you define UAW workers as ‘big guys’ and include ‘jobs banks’ & ‘six-figure buyouts’ into what ‘translates’, then we’re almost in agreement…
The brilliance of labeling a liberal a fascist is that they really can’t argue the point with any intelligence without painting themselves into the socialist camp. Their only hope is to argue that they are not racists and depend on the ignorance of the audience.
The CEO’s of the failed Freddie Mac and Fannie Mae (both recipients of Gov’t bailouts as part of the effort to quench the “Mortgage Meltdown”) both pulled in $14.5m for their ‘work’. The home buyers that are in trouble will also see some benefit from this bill also, so, everybody wins, right?
No reason that taxpayer money shouldn’t be used to bail out all such mismanaged industry, as the ‘trickle-down’ effect will eventually benefit some taxpayers.
As been said, socialism for the big guys, “free market” for the little guys — so the middle class gets it in the pooper no matter what.