File this one under TTAC called it. Yes, even before the The Big 2.8 can tap the Department of Energy’s $25b low to no-interest loans, even before the feds “rescue” GMAC/Chrysler Financial’s bad paper (under the Troubled Asset Relief Program), the automaker/UAW’s duly elected representatives are petitioning The Honorable Henry Paulson (Treasury Department) and Ben Bernanke (Federal Reserve) to use the Emergency Economic Stabilization Act (EESA) to bail the domestics’ asses out. Automotive News [sub] reports on Carl Levin’s group love telephone press conference, wherein the Senator and his pals “opened the door to the federal government acquiring rights to ownership stakes in troubled automakers and suppliers.” We’re talking stock warrants– the same play Chrysler made for its survival back in ’70. “We are after all servants of the broad public interest, and if warrants are of value, or other steps to assist or protect taxpayers, we would have no choice but to be supportive,” House Energy and Commerce Chairman John Dingell, D-Mich. opined. Don’t you hate it when that happens?
[full letter after the jump]
LETTER TO PAULSON, BERNANKE
October 23, 2008
The Honorable Henry Paulson
U.S. Department of Treasury
1500 Pennsylvania Ave., NW
Washington DC, 20220
The Honorable Ben Bernanke
Federal Reserve System
20th St. & Constitution Ave., NW
Washington, DC 20551
Dear Secretary Paulson and Chairman Bernanke:
With the enactment of the Emergency Economic Stabilization Act (EESA), Congress provided the Treasury with an array of significant new powers to be used to stabilize financial and capital markets and restore equilibrium to the nation’s economy. There is no single segment of America’s economy that is more critical to the financial well-being of millions of Americans than the automotive industry. One in ten American jobs is related to auto manufacturing.
U.S. auto makers directly employ about 355,000 American workers and through related industries that are dependent on auto manufacturing and sales, the industry supports about another 4,500,000 workers in the U.S. economy. They are among the nation’s largest purchasers of U.S.-manufactured steel, aluminum, iron, copper, plastics, rubber, electronics, and computer chips.
The three U.S. auto manufacturers provide health care to almost two million Americans and pay pension benefits to 775,000 retirees or their survivors. The disappearance of liquidity in credit markets, if not relieved in coming weeks, threatens to cripple these industries and the communities in which they operate.
Every segment of the U.S. automotive industry – automobile manufacturers, dealers that are engaged in sales of autos and light-duty trucks, and auto finance companies that provide financing to dealers and to consumer and commercial purchasers of vehicles – is experiencing devastating effects that have resulted from the worldwide crisis in financial and capital markets and the freeze-up in credit markets.
Historically, more than 94 percent of new vehicles sold to consumers in the U.S. have been purchased with financing. With the seizing up of credit markets, financing is not available for consumers seeking to buy or lease cars, nor is it available for dealers to purchase inventory. These circumstances have dramatically depressed vehicle sales, and declining sales put at risk not only auto manufacturers, but the widespread network of suppliers, vendors, and other peripheral businesses that provide goods and services to them. New vehicle sales in the United States fell 26.6 percent in September, and are expected to fall by 30 percent in October, bringing the industry to an annualized rate of 11 million vehicles, the lowest since 1983.
In this current economic environment it is imperative that the government ensures that liquidity is restored so that the U.S. auto industry is able to function until normalcy is restored to credit markets. We urge you to use your broad regulatory authority including the powers granted to you by EESA to take the necessary steps to promote liquidity in the U.S. auto industry in order to protect this critical sector of the economy.
Sincerely,
Senator Carl Levin
Senator Debbie Stabenow
Congressman John D. Dingell
Congressman Fred Upton
Congressman John Conyers
Congressman Dale Kildee
Congressman Sander Levin
Congressman Dave Camp
Congressman Pete Hoekstra
Congressman Joe Knollenberg
Congressman Bart Stupak
Congressman Vern Ehlers
Congresswoman Carolyn Cheeks Kilpatrick
Congressman Mike Rogers
Congressman Thad McCotter
Congresswoman Candice Miller
All true. Too bad if they just piss it away like their previous war chests.
What we SHOULD do is use that list of Politicians (socialist scum) as the starting group for American Revolution II, French style… as in, Off With Their F$%^ing Heads!
I attended the Obama stump speech in Indy yesterday. Huge roar of approval from a large crowd when he made the following comments (not exact quotes but close from my memory):
“Americans will be able to buy their fuel efficient cars made in American, not in Japan or South Korea”
“The $25 billion in loans cannot be accessed for a year, Detroit needs help now and he is going to work with Congress to get aid to the automakers now.
Help is on the way, January at the latest.
Let me ask an obvious question: why the industry with a track record so dismal has to exist? We do not manufacture TV sets in US any longer, most of GE products are made abroad and Wal-Mart sells only Chinese products. Never mind Wal-Mart: most of clothes, dishes, furniture, shoes, appliances are made mostly in China.
We have a unique situation when foreign companies are much more successful in building cars in US then “domestics”, why risk to damage that environment? Most of Honda, Toyota & Hyundai cars are already manufactured in US. They employ some number of workers directly and provide for a lot more by purchasing US made parts indirectly. If there is a market and demand then the void left by incompetent companies, their hand picked boards of directors and completely incompetent CEO’s, will be filled by other companies. Shares of Toyota and Honda are sold on NY stock exchange as well as Tokyo. Is there is some significance to location of headquarters? Let bad apples rot.
Government of UK owned British Leyland for a number of years and there is no British Leyland in existence today. How much more talented our government will be in managing auto industry compare to Brits? And if we not going to manage it, but just provide cash for the governing body which proved its inability to manage what do we achieve? There are more cars build in UK today then in 70’s, 80’s, 90’s, yet there is no British company in existence. And who’s loss is it?
Mfg is going to have to come back to the US for the simple reason we do not export enough to pay for our imports – so the dollar goes into a death spiral which kills us and our trading partners.
Might as well start by saving autos, but certainly we should not stop there.
Le the domestics rot. Whatever comes back from the dead will be much stronger and WISER.