TTAC’s Edward Niedermeyer called it in yesterday’s round-up: Congress will fork-out bailout bucks to “tide” Chrysler, Ford and GM over until… later. Reuters dots a few i’s and crosses a few t’s: “Congressional Democrats and the White House have reached agreement on emergency aid for U.S. automakers of between $15 billion and $17 billion, two senior congressional aides said on Friday.” How Congress will apportion the money between the three supplicants is something of a mystery. But look for GM to get the lion’s share, Chrysler to get some and Ford to get a token amount (“token” as in more money than its workforce earned in the last ten years). Congressfolk are working through the weekend to attach strings to the money– likely to include an oversight board and a deadline for Round Three (March?). So from whence cometh this largesse? From your taxes obviously. More specifically…
“Earlier on Friday, U.S. House of Representatives Speaker Nancy Pelosi dropped her insistence that aid come from the $700 billion financial services bailout fund the Bush administration had refused to use for automakers. Rep. John Dingell, a Michigan Democrat and long-standing ally of the auto industry, said in a statement the money would come from a $25 billion Energy Department loan fund approved in September to help auto companies meet new fuel-efficiency standards — an idea the White House has promoted.” The environmentalists will go mental! Or not.
In a statement, Pelosi had suggested she could agree with that source of funds under certain conditions. “We will not permit any funds to be borrowed from the advanced technology program unless there is a guarantee that those funds will be replenished in a matter of weeks so as not to delay that crucial initiative,” she said.
Politics as usual. These dolts are arguing out of which pocket to GIVE the D3 their blood money… Money they couldn’t earn through selling their products.
It seems like we as Americans should have been buying GM cars all along. In the end, we bought them anyway, but we don’t have the metal in our driveways to show for it.
I’ve come up with a great business model, though. I’m going to put a building on a farm and call it a factory. I should be able to get a subsidy to not grow corn and a handout for not selling any cars.
I wonder what will happen to GM sales from here. You’ll have the crowd that won’t buy from a bankrupt automaker. You’ll have the crowd that won’t buy from an automaker on the verge of bankruptcy. You’ll have the crowd that is angry about the bailout and will buy a Honda instead. You’ll have the old “never again” “once bitten twice shy” former owner crowd. You’ll have the crowd that never had a domestic on the radar screen anyway.
And you’ll have the remaining eleven Americans, ten of whom can’t qualify for a loan.
And the last man standing is me. But I won’t buy until a 4×4 Silverado hits $8000.
So long, GM. The mid-sixties A-bodies were awesome. Try not to suck up too much of my tax money on your way out.
Yay! We’re one step closer to GeneralChrysler-Leyland.
It is ridiculous how far down the river our “representatives” have sold us. Where do I sign up for the revolution?
Hah. This is multibillion dollar political game.
For Bush, this puts the ball in Obama’s court. As much as I like his other plans, I worry that he’s going to throw more tax money after bad.
This interim plan also pays for another potential scenario. The other scenario is that next time around, Congress says: “That’s it, no more” from bailout fatigue and things transpire as they should. By paying this interim cost Congress will be able to say next time “Hey, you got the money last time and you blew it.”, making it politically more acceptable to usher them into bankruptcy.
Actually Robert I believe I called it on the 4th under the opwning round in the second set of hearings.
Bubba Gump :
December 4th, 2008 at 11:42 am
Heres my opinion for GM. There will be a government sponsored reorg outside of a C11. That will be the endgame and GM will shed its liabilities outside of the courts.
Under Bailout watch 238 Hearings begin.
Man the Government and Society in general are being so untrustworthy. Society seems to ignorant that congress can just BS with little or no consequences. WOW, I feel so betrayed. Life is hard work. Growing up is a difficult and painful experiences some times.
NickNick. You said it very well. I am one of those who actually does have GM metal [err polymer] in my driveway, but I won’t buy from them ever again after this bail out foolishness.
It’s my choice to spend my money on GM cars for whatever reason. But I won’t pay twice when everyone else has to pay to keep me supplied with products bought out of mindless brand loyalty or sentiment for days of greatness gone by from a mismanaged company.
Amazing seeing that collection of toxic, crooked twats at those hearings the other day. I despise them all.
I’ve been a cynic from watching this story unfold over so many years I’ve stopped counting, but TTAC has really opened my eyes to seeing the sort of PR claptrap that has been passed off as automotive journalism since I picked up my first Motor Trend at the age of ten.
American Leyland, stay away from me
American Leyland, GM let me be
Don’t come hanging around my door
I don’t wanna see your cars no more
I got more important things to do
Than spend my time going broke for you.
With apologies to Randy Bachman
It’s simple, the Dem’s need to pay off the UAW and keep their enviro buddies happy at the same time. Since the payoff is extremely unpopular with the US public the Dem’s care not to vote on this in the Democrat controlled House or the Democrat controlled Senate. So the Dem’s are trying to find a way to provide the money to the UAW without a vote and without totally angering the enviro’s.
These same Manufactures want 7 Million Canadian from us, amazing. it will put both Ontario and the Federal Government into Deficiet!
Schwartz:
Burton Cummings just called… He wants his song credit back.
I apologize to Burton Cummings also.
Will the Detroit Brothers apologize to me?
Hey, why don’t the Big Three just pay people with IOUs like California?
I think a realistic solution would be to look at the market and see what things such as currency manipulation by japan and other unfair trade practices cost the domestic industry and fund a bailout based on a tariff on those imported vehicles. Let the big 3 straighten out there own house with regard to insane union contracts and bad product management and see if Detroit can stand on it’s own 2 feet on a level playing field. I am not generally for tariffs but the government has allowed certain inequalities to exisist in this area.
These would be temporary so that when the foreign markets quit the practices in question they would be removed.
Furthermore the Government should kill the Cafe program. If they want to have people drive small cars then let them tax gas. CAFE is just a way to make the auto makers do what they lack the political will and leadership to do. It simply passes the buck to the industry instead of making our leaders explain themselves and stand behind a decision.
Lastly, I know the big 3 is not blameless in this, but to have members of congress, who have themselves presided over the flushing down the toilet of our economy and the growing of deficits that it will take generations to repay is just surreal. Is it even possible for a company to be as bankrupt as our government and country?
It will be interesting to see the perspective this Blog takes when GM pays back its loans in a couple of years.
Don’t you realize that the Detriot 3 have been waging a war against competitors who have 3 advantages they don’t. A government willing and able to put up non tariff barriers to make their automotive industries competitive. A government willing to take the health care burden off their industries (don’t even start with me on transplants and their penchant for dehiring people as they reach the age of 50). A government willing to do the rational thing and charge a gasoline tax that in someway reflects the true cost of that form of energy in terms of the amount of national treasure that must be spent to secure the supply (IE if the gas tax had to pay for middle eastern security initiatives wouldn’t we all be driving 3 cylinder diesels by now ?).
In short it appears to me that the U.S. Gov’t is finally figuring out, when faced with the hard facts , where its’ interest truly lie and dealing with them.