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In case you didn’t know it, TTAC pays its contributors a token fee. They’re all motivated by an onboard desire to tell the truth about cars. So when John Horner contacted me with the idea of putting together a comprehensive list of the bailout banquet worldwide, I knew he’d leave no billion unreported. I just got the email and he’s outdone himself. (I’ve posted the resulting chart as a pdf.) Suffice it to say, I thank John for his dedication to the cause. He’s promised to update this file as the situation develops. And to those of you who’ve said “Why bother? The government does what it wants anyway,” remember that knowledge is power. Whether you agree with the bailouts or not, you can’t fight what you can’t see.
22 Comments on “Bailout Watch 359: John Horner’s International Auto Bailout Scorecard...”
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Oh good, my other copy was getting tattered and all the scratch-outs were making it rather illegible.
Japan should probably be on the list.
Jan. 18 (Bloomberg) — Japan Bank for International Corp. will lend about 1 trillion yen ($11 billion) to Japanese manufacturers including automakers operating in the U.S. and Europe, the Yomiuri newspaper said.
The government will set up the emergency financing facility this month to help Japanese companies facing funding difficulties abroad because of the global credit crisis, the newspaper said without citing anyone.
Automakers, namely Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co., have requested for such loans, the report said, quoting an unidentified government official. Makers of chemicals, electronics and steel can also tap this financing facility, the Yomiuri said.
The German version is the best. It’s fair to all makers. It’s stimulating purchases, instead of rewarding laziness.
Is anyone else having trouble opening this? Something with the helvetica font.
Darn! I was hoping for some afternoon humor.
Thank you tesla deathwatcher, I will add Japan to the list. All corrections and additions are appreciated and I will include them in follow on updates. Links to sources are always appreciated as well! John
Same here, Casual Observer. A copy of the latest Adobe reader fixed it.
Brilliant idea, now when the Government has to call the loans back at the end of March (and rightly so), they can’t claim, they didn’t know where the money all went.
Actually, I was half-expecting TTAC to lead the charge for a callback on the loans starting pretty quickly here. So enough pressure might be built up by March so that it would force Congress to recall the “loans.”
Citation for the article I quoted is at http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aNd2XY4_s4o8
The government aid being given to the carmakers in Japan is getting very little press. No Japanese carmaker CEOs are making pilgrimages to the Diet to be questioned by legislators, so that is not on the news. So it’s a little hard to know what is going on.
That leaves questions. Mazda seems to be getting some other government aid as well, but I have been unable to find much on that. And why Toyota would want a loan with 4 trillion yen in cash on hand escapes me.
But the tsunami in carmaking has clearly hit Japan with the same force as it hit the United States. And the Japanese government is reacting.
Uh…just today Toyota admitted they are down to their last $15Billion…
Bailout Watch Japan here we come-oh wait a minute they already get government help in the form of MITI, allowing a cartel to exist i.e.-the keiretsu system and the government’s never-ending manipulation of the Yen to encourage exports.
The German version is the best. It’s fair to all makers. It’s stimulating purchases, instead of rewarding laziness.
I’d agree. The only fault, and it’s a matter of perspective, is that a bail-out that doesn’t help the German makes specifically isn’t all that helpful to the German economy. Admittedly, I haven’t seen the percentages of German-branded or -made cars bought by Germans, so it might not be that bad.
It still has the problem of artificially inflating sales, potentially fueling deflation and certain stealing future sales, but it’s arguable better than flushing money down the toilet. I’d prefer to see something like it in North America, even if it’s camouflaged in green.
And why Toyota would want a loan with 4 trillion yen in cash on hand escapes me.
Toyota is huge and incredibly vertically integrated (think about a non-dysfunctional version of GM/Delphi and you’ll get the idea). A slowdown and associated crunch ripples right through the organization, touching not just Toyota Motor Manufacturing, but it’s “child” suppliers: Boshoku, Aichi Steel, Aisin, Tshusho, Denso and more. If I were a senior executive at Toyota, I wouldn’t want to deal with the ensuing complexity of having to sort all that out.
Remember what we’ve heard about how bad it would be for major suppliers to go down? Imagine if you own most of your major suppliers, as well as supply equipment (Aisin: transmissions; Denso: electronics, controls and equipment) for others.
A loan of some sort, especially on favourable terms, preserves that cash on hand and lets them weather the worst of it.
Actually, the discussion in Germany has started to check which carmakers are benefitting. There was a call that only German carmakers should benefit. However, German EU commissioner Verheugen correctly pointed out that this was against EU law, to treat the german car manufacturers preferentially. How the French are able to assist Peugeot and Renault directly with grants, is surprising to me – this normally is also against EU rules on governmental subsidies.
@John Horner: I would recommend one addition: as the German contribution is limited to 600.000 cars, the cap is 1.5 bn Euro. Adding this (“max. 1,5 bn Euro) would give additional information.
Thanks PGAero.
The significance of “billion” has now been completely destroyed. The term “gazillion” will soon become a reality.
Great point, psarhjinian. If there is free money being handed out, take some. You can always find a good use for it. (Seems a shame though that the Japanese government would spend that precious money on the carmakers.)
But if Toyota is saving its cash for a rainy day, I wonder what it thinks the weather is now?
It reminds me of Kin or Gin, the Japanese identical twins that were popular several years back. She had received a check from the government — some sort of stimulus payment as I recall. A reporter asked her what she was going to buy with it. She said “I’m saving it for my old age.” She was 100 years old at the time.
Seems a shame though that the Japanese government would spend that precious money on the carmakers.
I suspect that all of the keiretsu will benefit, eventually. Toyota is probably one of the most exposed, but they’re not alone. The incestuous relationship among Japanese companies—weaker now than it was before the lost decade—can suffer some in situations like this.
Mr. John Horner:
You forgot Brazil. The Federal government has offered 4 billion reais to the car industry. And so has the state of São Paulo. So that’s our “contibution” to the “cause”. At today’s exchange rate (2.31 reais to 1 USD) that’s roughly 4 billion US dollars.
Mr. Farago:
See, my tax-reais are being put into the melée as well. Or, in slightly less political language: I’m being robbed of my tax money as well.
And the “funny thing” is that all car makers and at least 80% of car part makers down here are “freakin’ furrin’ers”. Everybody’s worried ’bout the “jobs”. Nobody has raised that flag down here.
Now ain’t that funny?
BTW excellent job Mr. Horner.
Robert,
You should mention that GM has declined Canadian aid for now.
They don’t want to tap it until absolutely necessary; hopefully never.
http://business.theglobeandmail.com/servlet/story/RTGAM.20090126.wrgm26/BNStory/Business/home?cid=al_gam_mostview
Thanks again for the updates folks, I will add them in. You have answered the question: “Who will watch the watchers?”
Hi John, nice work.
Australia has offered A$3.2b to Ford, GM Holden and Toyota by application over the next 4 years. Toyota have accepted A$125m to build the Camry Hybrid.
GM Holden have announced they will build yet another version of the Cruze in Australia, while Ford are keeping alive the 6-inline-cylinder engine plant in Geelong with DI and Euro updates.
The banquet just keeps getting bigger and bigger!
This is just to let everyone know that I have just copyrighted the word “bailout”. Now every time a government official, media outlet or blogger uses it, they owe me one dollar. I expect to be able to buy a new car soon, thus singlehandedly saving the worldwide auto industry.