Detroit steadfastly refuses to call their $25b – $50b trip to the federal begging bowl a bailout. No suprise there. Any such admission would lead to a golden parachute unfurlment to rival those old films of WWII paratrooper assaults, if not some serious strictures and sanctions. So, while House Speaker Nancy Pelosi may say it’s about jobs, jobs, jobs, Motown’s mavens need some other way to justify their assault on the public purse– especially in these times of incipient bailout fatigue. The increasingly worried spinmeisters are returning to Mark Fields’ rallying cry: our national security is at stake! Or, it’s all about the batteries stupid. The Wall Street Journal feeds the beast: “But securing an adequate supply of batteries over the next few years has become a growing concern for auto makers everywhere. The U.S. industry is leery of depending too heavily on foreign battery makers allied with Japanese auto makers, for fear those suppliers would give priority to filling the orders of their Japanese partners.” To be fair, teh WSJ mentions American battery makers, but concludes with a whiny bitch [paraphrasing] from Johnson Controls. “Mary Ann Wright, vice president and general manager for Johnson Controls’ hybrid-battery business has been lobbying Washington for a national effort to establish research labs and manufacturing technology to make the U.S. a battery-manufacturing leader… ‘[Asia’s dominance of the battery biz is] our punishment for inventing this stuff and allowing manufacturing to go somewhere else.'”
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Given the destination of lots of federal aid, e.g. manned space flight, I think prudent investment into energy storage technology, that would be applicable to cars, is a good idea. Of course the ‘prudent’ qualifier means the 2.5 must not be involved in deciding where it goes.
The government spends billions on something as stupid as Global Warming and no money for batteries. Of course if they went back to the Constitution and quit taxing and regulating away the freedom in America the battery situation would take care of itself.
Much better to go offshore were you won’t be taxed, regulated and unionized until you need government handouts to survive.
The type of industry that will locate in the USA is heavily government subsidized tarrif protected boondoggles like ethanol.
If batteries are the primary consideration to this technology…why not fund these companies and not Detroit automakers? They can infuse $10B into the battery to jump start their research. Detroit and others who would buy these batteries would be better off including the consumer. Detroit would still have to fix their business instead of stealing away $50B from US taxpayers just to save their incompetent asses.
If our government was smart, I think they have proven not to be, they would spread the risk out on this bailout loan business, instead of putting all their eggs in the Detriot basket. I agree with the other posters, give the money directly to battery companies, and several of them. GM, Ford and Chrysler don’t need a bailout, send the money to the battery suppliers and technology suppliers to push these fuel saving techs along faster. They are trying to weasel money out of us, call their bluff.
If companies don’t see hundreds of millions to billions of dollars per year in revenue from battery technology an incentive to invest in R&D and manufacturing capacity, then why in the world should the taxpayer fund it?
These businesses are lazy and they either need to adapt or die. We don’t need national herculean efforts to do anything, but the will to take risk and the desire to excel. By putting the financial risk on the taxpayer we remove an incentive to succeed in a relevant time frame.
Johnson Controls would be doing a disservice to its shareholders by investing their money in a battery plant, if a good whine will bring in free taxpayer money.
The sad thing is, the money isn’t free (we, as taxpayers are forced by law into paying and the consequences for refusing aren’t pretty) and it may never result in JCI or any other company developing new batteries or manufacturing facilities. Looking at the broad history of gov’t funded R&D it’s likely that JCI shareholders may suffer long term as they’re not likely to be any more competitive against their overseas rivals.
If JCI needs money for battery development, they should sign a development agreement with an OEM and get the money from them if they’re so concerned about supply. Oh, yeah, right. The OEMs don’t have any money either.
The money quote, from the WSJ: Unlike the U.S., Japan has made energy savings a top priority for years. While Detroit has focused on highly profitable large trucks and sport-utility vehicles in recent years, Japanese auto makers have continued to concentrate on smaller, fuel-sipping vehicles, including hybrids.
So don’t use my tax dollars to bail out Detroit, now that their bet has gone sour.
If US companies don’t have the ability or foresight to invest wisely, but foreign companies/countries do, we end up exporting our wealth to get what we need. Assuming wise investment, our govt could do this and save us all money. Look how many billions of taxes we’re pouring into the pockets of those who gambled on financial schemes with no national benefit at all. I’d much rather take some chances on manufacturing ideas with promise.
How can anyone begrudge the 2.8 a piddly $50 billion when the government just committed $85 billion to AIG to keep it from bankruptcy?
It’s all getting crazier and crazier faster and faster.
Doesn’t Congress and the President have to approve this stuff? Or can private companies tap the treasury willy nilly if the sob story is bad enough and the Treasury Dept. agrees?
It looks to me that there is no control at all anymore over government spending. Money is disappearing down rat holes on Wall Street and no one seems able to stop it.
Oh, the government now owns 80% of AIG. If this keeps up the government will own everything. Isn’t that called communism? Where’s the outrage?
Giving Detroit or any business R/D money to develop products just helps level the playing field.
The only reason Korean/Japanese/German products are price cheaper is the government pays for R/D. As long as the product is cheaper, the American consumer will find it and buy. They do not understand the social effects of failed companies and lost retirement funds.
Remenber the P/C CPU was developed with government funds to aim our guns/rockets/tanks etc. So, where is the complaints about our PC we are talking with thru the internet another goverment funded product.
Better my tax money goes to this than supporting a bunch of welfare professionals. At least this way the money goes back into companies stimulating the economy somewhat. Versus just giving it to the leaches in our society. I support this, take 50B from welfare and immediately funnel it into a big 3 R&D incentivation plan.