The Senior Director of Communications for the Alliance of Automotive Manufacturers has revealed that Subaru and Nissan are applying for Department of Energy’s (D.O.E.) low-interest loans. As TTAC reported earlier, the just-released rules for the loans do NOT contain a provision limiting calls on the $25b available to American factories twenty-years-old or older– as originally thought. The door is now open for any automaker with operations within these United States that thinks it can build a vehicle that’s 25 percent more fuel-efficient than a comparable model. “For competitive reasons, I would think that any elegible automaker would apply for the loans,” Charles Territo told TTAC. “You can’t write anyone off.” That said, if the D.O.E. rules are enforced as written, you CAN write off GM and Chrysler; they don’t meet the regulations’ criteria for financial viability. Territo expressed confidence that Detroit’s automakers will “figure out a work around” for that and other stipulations. “It’s Washington. Where there’s a will, there’s a way.” Territo’s organization is also supportive of the next bailout: another $25b to $50b aimed at improving American automakers’ liquidity. “A failure will cost more than a bailout,” Mr. Territo opined, declining to provide statistics to justify the claim.
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Federal Aid to foreign companies…that’s rich. And don’t give me the hooey about that they make cars here. So what, the profits go THERE. And, they are only employing people who otherwise would be working at an American-owned plant if our Trade Dept. had any balls and said “our markets are as open to you as yours is to us”. That should be our Trade Policy. Simple, fair. Done.
golf4me: How right you are.
Wait, say it isn’t so!!! This is a GM,Ford and Chrysler Bailout!! Has to be I’ve read it all over the web for months.
Now we have the truth, and just so you knows Honda had their hand out first a month ago. The want part of it to put solar power on the roofs of all their dealers. However I don’t think that qualifies.
I guess that makes it a govt subsidized LOAN now.
Makes me all warm and fuzzy inside, my tax dollars funding the coffers of a foreign entity.
Where do I sign up for the money to make these 25% more fuel efficient cars. I can set up a “factory” out in my driveway. I’ll take some cheap 2-door cars with no factory power options, then delete the air conditioning, the radio, the sound deadening material, get rid of the spare tire and jack and provide a can of Fix-A-Flat instead, put low rolling resistance tires on it, slap on a fiberglass hood and trunk lid, add some lightweight alloy wheels, and rip the back seat out and call it a “XFE Business Coupe”.
It’d be like un-pimp my ride. I won’t be greedy either, I’ll settle for a measly $1 billion.
You’re acting like this is a surprise. I’m taking all your comments with a grain of salt. I was told in a luncheon meeting by a big 3 higher up that all domestic producers were eligble for the 25 that earmarked more than a year ago (just funded this year). This site needs more than just pandering to the “bankrupt the 2.8” crowd. The whole not with my money routine gets old. Any deduction given to you is taken and probably more.
“So what, the profits go THERE.”
How many times do we have to go over that this doesn’t mean anything?
Read this thread:
https://www.thetruthaboutcars.com/editorial-in-defense-of-bailing-out-detroit/
Pay heed to the comments from psarhjinian and pch101
I’d rather see the money go to Subaru and Nissan. They might actually put it to good use and build something that people want to buy, and they’ll build it in this country. You give it to the D3 and they’ll just piss it away, just like the rest of their money.
This is very upsetting. I currently lease a Nissan and was looking at a Nissan and Subaru as a possible replacement (in addition to a number of other vehicles). Forget it.
The door is now open for any automaker with operations within these United States that thinks it can build a vehicle that’s 25 percent more fuel-efficient than a comparable model
That’s fair, and a good idea to boot: you’re basically encouraging the development and manufacture of sustainable, fuel-efficient vehicles within the US, possibly for export. No matter how you slice it, that’s a net influx of money into the economy. I’d like to see the Canadian government do something similar and soon.
And please, don’t bring up “the profits go to Japan.” Just don’t. I’m getting really tired of explaining why it doesn’t matter where the profits go on low-margin, high-volume products.
States routinely give tax breaks and other financial benefits to companies which invest inside their borders. The national origin of said companies is a non-issue. Countries like Ireland have gone out of their way to incentivize multi-national companies to build and expand in country.
The question comes down to: What behaviors are you trying to promote? If adding jobs and building more fuel efficient vehicles is the purpose, then where HQ of the parent company is doesn’t matter. In fact, under the Constitution I believe every company has to be treated equally, no matter what the geographic distribution of shareholders might be.
“our markets are as open to you as yours is to us” Ergo, you are OK with VW, Mercedes Benz and BMW getting in on the federal money but not Toyota, Nissan, Subaru, Honda or Mazda, right? But wait, Mazda is controlled by Ford, so can Mazda play? Ford sells far more vehicles in Europe than all of the European based companies together sell in the US.
The whole where the profits go argument has a flip side. GM sells more vehicles outside of the US than it does inside. Should all those foreign GM purchasers wise up and stop supporting what to them are foreign companies?
It is not fair to give taxpayer money to car companies and allow them to do what they want with it without oversight or regulation. It is simply theft from the public going into a black hole.
If they really really have to throw money away, give it to the taxpayer in the form of a tax deduction for buying such pipedream vehicles. If taxpayers buy more, the automakers sell more. Therefore, the automakers benefit and recover their investment.
The money itself goes directly back to the taxpayer whose money it is in the first place.
Ronin,
The reason government is looking to some form of aid to automakers is because they currently have a hard time comming up with funding for their operations including R&D. You need money before you develop anything, cannot wait for the consumer to pay for it.
Just from the above short description this looks like an industrial policy that actually makes sense and might accomplish something. Not by Detroit mind you but Nissan, Subaru proved that they can produce desirable vehicles.
See, the Washington politicians were too spineless to label the $25 in loans as a _bailout_. Instead, they earmarked the money to help the automakers to “retool” their factories. The language suggested that the ultimate goal was to accelerated the production of fuel efficient cars. So, now go ahead and cry me a river. I don’t see a reason why Subaru or Nissan shouldn’t apply for the same loans. I’d rather have many tax money loaned to solvent companies that might indeed use it to retool domestic factories instead of the big 2.1 who simply need some cash to burn for a few more months (does anyone believe any of that money will be used on retooling?)
As a aficionado of the absurd I am delighted. I think we are entering the golden age of stupid.
Mikey, don’t YOU work for a foreign car company? I mean, you’re up here in Canada, right?
Well said, John Horner
well, if they want to be clever they could target the high value components inside a car, and make sure those are being built in the US. Or at least designed. Electronics, control systems, batteries? Not sure what they are in a hybrid/high-mileage vehicle. I can’t imagine engines are high value anymore.
dpeppers :
November 6th, 2008 at 9:29 pm
You’re acting like this is a surprise. I’m taking all your comments with a grain of salt. I was told in a luncheon meeting by a big 3 higher up that all domestic producers were eligble for the 25 that earmarked more than a year ago (just funded this year). This site needs more than just pandering to the “bankrupt the 2.8″ crowd. The whole not with my money routine gets old. Any deduction given to you is taken and probably more.
It’s not that I want to see the 2.8 bankrupt, I just don’t want to encourage bad companies from not improving themselves and competing as they should since this is America (plus as well to break unions that support socialist politicians).
What we need are more manufactures like Honda. It shouldn’t matter where investment money comes from (as said above). Frankly if I had a billion dollars to invest, I certainly wouldn’t do so with anyone tied to the UAW. I’ll also say that as a Jeep guy, I will never again buy any more UAW built vehicles. The Big 2.8 needs to be set free. Of course I’m sure the UAW will be receiving pay back from the Messiah and Ms. Pelosi for their votes. (sigh)