Dear Secretary Paulson:
We are writing to urge you in the strongest possible terms to use your authority under the Emergency Economic Stabilization Act (EESA) or other statutes to immediately address a significant and systemic threat to the U.S. economy and provide emergency assistance to the domestic automobile industry.
The U.S. auto industry represents almost four percent of U.S. gross domestic product and represents ten percent of U.S. industrial production by value. One out of every 10 U.S. jobs is auto-related. General Motors, Ford and Chrysler account for roughly 70 percent of U.S. auto production and are estimated to support around five million jobs across all 50 states. According to a report released last week by the Center for Automotive Research, the failure of even one US automaker would mean the loss of millions of jobs and cost our economy hundreds of billions of dollars. Inaction is not an option
These last years have seen the domestic automakers pursue an unprecedented restructuring that has put them in a very competitive position with respect to product quality (Ford has tied Toyota and Honda in quality according to Consumer Reports), fuel efficiency (GM offers 17 models achieving 30 MPG or better – twice the nearest competitor), and advanced technology vehicles (Chrysler has announced the launch of electric vehicles beginning in 2010 and all three companies have extensive hybrid offerings).
In addition, the three domestic automakers spend a combined $12 billion annually on research and development. This R&D capacity is a national asset that would be put at risk if we do not restore the health of our auto industry.
This vital role that the domestic auto industry plays in our economy is broadly recognized. Congressional Leaders in both the House and Senate have met with representatives of the industry and its workers at the most senior level and have expressed to you that A healthy automobile manufacturing sector is essential to the restoration of financial market stability, the overall health of our economy, and the livelihood of the automobile sector’s workforce.
On Friday, President-elect Obama said, The auto industry is the backbone of American manufacturing and a critical part of our attempt to reduce our dependence on foreign oil… I have made it a high priority for my transition team to work on additional policy options to help the auto industry adjust, weather the financial crisis, and succeed in producing fuel-efficient cars
here in the United States of America… I’ve asked my team to explore what we can do under current law and whether additional legislation will be needed for this purpose.
As you know, both General Motors and Ford released 3rd Quarter earnings last week that make clear the severity of the strain the auto industry is experiencing. It is our view that providing emergency assistance to this uniquely important industry, which is struggling to meet the challenge of a severe financial crisis that has spread far beyond Wall Street, is consistent with the authority granted to you by EESA, and indeed well within the broad mandate of the Treasury Department to promote stable economic growth.
Given the urgency of the situation, we ask that you work with us in the coming days to provide immediate loan support to the domestic auto industry, including, if necessary, amending EESA.
Sincerely,
Senator Carl Levin
This is what we call a “protection money” racket.
“Nice auto industry ya got here; I’d hate to see anything BAD happen to it, on account of unforeseen circumstances, y’know. I mean, everything’s going well, and BAM, you gotta meet new CAFE requirements. Or maybe you’re planning a new plug-in hybrid, and maybe the batteries don’t work.
Things happen. But for a few measly billion, I can see to it that all those problems go away.”
BTW, Fitch downgraded GMAC again, to CC.
Perhaps it should be mentioned in the letter, what exactly was stopping Ford & GM to manufacture fuel efficient cars in the past.
It simply amazes me how much politicians lie, and how they just get away with it. Chrysler has “extensive hybrid offerings”? How many of GM’s “17 models” are clones and what kind of mileage do they get in the city? What’s their average MPG, not just their highway rating? And how well do those models actually sell?
It just boggles the mind that this is the kind of leadership we have.
Yeesh, $12 billion in R&D spending and all we got was the Pontiac Aztek.
It feels like blackmail the way this asshole is lieing.
One out of every 10 U.S. jobs is auto-related.
Let me guess you are including transplant job in the number.
General Motors, Ford and Chrysler account for roughly 70 percent of U.S. auto production and are estimated to support around five million jobs across all 50 states.
70% of production yet they only account for less that 50% os the market, interesting. And now it’s 5 million jobs, just last week the number I saw being thrown around was 2 million, are any of these numbers not grossly inflated. All 50 states, your joking right, I know you are including transplants in that number and it stil doesn’t pan out to make sense. So Hawaii and Alaska make cars now. And dealer and service better not be reflected in that number there is just much too much excess there, alnog with excess capacity coming from GM, Ford, and Chrysler.
According to a report released last week by the Center for Automotive Research, the failure of even one US automaker would mean the loss of millions of jobs and cost our economy hundreds of billions of dollars. Inaction is not an option
I don’t believe that CAR their numbers look made up and they have too much at stake in the industry to be unbiased. Now it’s hundreds of billions, I guess no one believes that things can recover on their own. More blackmail inaction is an option and a darn good one, that is what bankruptcy was made for.
This whole letter really pisses me off.
How come they waited until the last minute to start restructuring, especially where GM is concerned. It’s like a lung cancer patient promising to quit so he can get on the transplant list, you should have changed your ways long ago.
And GM and Chrysler’s products listed in that letter are a total crock of sh*t. If they had really made strides in fuel efficient cars they would be selling right now and not in need of money to retool. And Chrysler had ZERO product plans EV or otherwise.
I think I will send Carl Levin a little email letting him know what I think of his letter.
I nominate for Quote of the Day:
cwallace : Yeesh, $12 billion in R&D spending and all we got was the Pontiac Aztek.
Ford has great quality now! And GM and Chrysler, well hey they aren’t literally the worst in the industry. That has to count for at least a $20B hand out.
“(Chrysler has announced the launch of electric vehicles beginning in 2010 and all three companies have extensive hybrid offerings).”
Uh, Chrysler showed three concepts, one of which was a Lotus, and none of which will ever see the light of day in a showroom. I’m pretty sure Chrysler’s “extensive hybrid offerings” are all headed to the scrap heap.
Hey you guys all saw Jenny G up on the stage with the Prez Elect.
And don’t forget Dingell’s wife is a GM unclassified level exec.
Throw in “combover Carl” and you’ve got the Michigan Big 3
Dear Senator Levin:
Rather than tell Hank Paulson to bail out GM, Ford and Chrysler, you should be telling Wagoner, Mullaly and Nardelli to build cars I would prefer over foreign brands.
Hey you guys all saw Jenny G up on the stage with the Prez Elect.
And don’t forget Dingell’s wife is a GM unclassified level exec.
Throw in “combover Carl” and you’ve got the Michigan Big 3
I don’t think that Debbie Dingell still works for GM communications, though the fact that she did doesn’t pass the smell test. Though I’m generally opposed to term limits, Rep. Dingell is a good argument for them.
Spousal conflict of interest and nepotism is the way things apparently work in Washington and the media. The wife of NBC’s David Gregory was a high level executive at Fannie Mae, which he’s never mentioned while reporting on the financial crisis. Mrs. Dingell would have never gotten a high level job at GM if she wasn’t married to a congresscritter.
As for Levin, while points of his letter can be argued, he’s doing his job, representing his constituents. Would people rather he disregarded them?
For the most part, Michigan’s congressional delegation, Dems and Reps alike, has done a piss poor job of representing our interests in Washington. All but one of the military bases here have been closed and Michigan is near the bottom of the list in terms of return of federal tax revenues back to the state. Michigan, unlike California, has a net loss in terms of federal tax dollars. Our taxes end up going for projects and pork in the other 49 states. I’m no fan of Robert Byrd but he does bring home lots of bacon to WV.