I'm flabbergasted. Presidential hopeful John McCain (or someone on his staff) pens an opinion piece for The Detroit News and the paper doesn't make ANY mention of the Arizona senator's bespoke opus on their on-line home page OR the Autos section. In fact, I would have missed McCain's rant entirely if not for an article in… The Detroit Free Press. WTF is that all about? Anyway, John is holding fast to his "no federal bail out for losers" position. Per se. "With a transition to alternative-fuel vehicles, we can rejuvenate the auto industry, drive cheaply and cleanly and be more secure. I will bring customers to the showroom with up to $5,000 in tax credits to encourage the purchase of these cleaner cars." Did he say American cars? No? Shit! Chill Motown; McCain's left himself some mighty fine wiggle room. "I will continue to meet with the leaders and workers of the Big 3 automakers. If the industry should need federal assistance, I will consider any reasonable proposal they develop that moves the industry to a more stable and prosperous future." So I guess that means McCain still considers it unreasonable to suggest that a federal bailout is reasonable. Or the other way around. 

When the new energy bill mandating higher CAFE ratings came out last December, it didn't offer automakers any kind of financial assistance to meet those goals. Since then, we've been treated to a parade of industry types wailing that with times so bleak, CAFE will kill Detroit unless the government bribes assists the domestics with following the law developing more efficient cars. Perhaps sensing John McCain's weakness with the industry, Senate Democrats are rushing to position their party to take advantage of the now free-floating "bailout vote." The Detroit News reports that Democrat leadership has agreed to support $6b in loan guarantees to domestic automakers, and is considering a further industry stimulus for plant retooling. All told, the package will total some $25b in loan guarantees that would cost taxpayers $3.75b. Tellingly, $300m of the initial $6b is earmarked for advanced battery development. If that sounds familiar, that's because it's a pretty handy preemption of John McCain's "Project Lexington." And since McCain seems happy to stick to his Nancy Reagan (just say no!) on bailouts, Obama and the Dems are going to go after the weird industry-worker alliance that wants bailout. It's populist, it's patriotic, and (post-Bear, Fannie and Freddie) it's principled. Best of all, it only costs the taxpayers a few billion. Game on!

Ignorance is a bankable commodity. When Bear Stearns stepped-up to the federal begging bowl, the average U.S. taxpayer had no idea who the Hell they were, why they needed money, and whether or not they should get it. Still doesn't. But if/when Ford eventually asks Uncle Sam to open your purse, it may not have what you'd call a winning plot line. Ford's good will with the public has often gone up in smoke (Pinto) or rolled over and died (Explorer). There's another PR debacle looming over the horizon: Flash of Genius. The movie paints a bleak moral picture of the artist once known as the inventor of the working class hero-mobile. We'll be sure to explore whether or not it's accurate in future posts. Meanwhile, make no mistake: it doesn't matter. Except that it does. And will. [thanks to katiepuckrick for the tip]

In his most recent GM Deathwatch, RF raised the specter of "Bailout Fatigue." The Detroit News' Gordon Trowbridge agrees. Their man in Washington says to the government's preference for financial sector bailouts like Bear Stearns, Fannie Mae, Freddie Mac and Indy Mac will queer the pitch for Motown. Rep. John Dingell cries foul! "If Freddie Mac and Fannie Mae ask for a bailout and they get it, [automakers] should be able to ask and get it, too," says the Dearborn democrat. Former Michigan governor James Blanchard agrees: "government  seems to treat financial services with special care, and not care about manufacturing until the last minute." President Bush begs to differ: "If your question is, should the government bail out private enterprise, the answer is, no, it shouldn't." According to the Chief Excutive, the Fannie/Freddy "rescue" isn't a bailout because "the shareholders still own the company." And now a word from someone without a horse in the race. "Fannie Mae and Freddie Mac are fundamentally sound businesses," says University of Maryland economist Peter Morici, implying of course that the D3 aren't. Besides, Fanny and Freddy hold 91 percent of America's mortgage debt on houses under $470k, while Detroit only employs about as many workers as Chrysler did when it was bailed out in 1979. 

Does that include big-ass tax credits for Chevy's plug-in hybrid electric – gas Volt? Federal loan guarantees? I'm thinking… yes. But Barack ain't saying nothin'– other than it's all the republicans' fault, vote for me and I'll sort this shit out. As Reuters reports, "Democratic Presidential hopeful Sen. Barack Obama said today that the job cuts at General Motors Corp. were 'a sober reminder of the difficult economic times we're facing,' and said the U.S. auto industry was facing a 'perfect storm' of trouble." Yes, "when a mainstay of the American economy is forced to make a restructuring decision like the one General Motors is announcing today, it is a sober reminder of the difficult economic times we're facing and of why we need change and a new direction in Washington." Uh, did I miss something? What restructuring? Anyway, "My heart goes out to all the workers and families in Michigan and across the country who will be affected as well as those who have been impacted over the last few months and years of turbulence in the auto industry." FYI McCain has come out against a federal bailout for Detroit. Barack… isn't so sure. 

Whatever else you can say about White House hopeful John McCain– and you're going to say lots– the guy's got a set. Followers of our E85 coverage will recall that McCain was the only candidate to come out against ethanol-related subsidies for corn farmers before the Iowa primary. While in Iowa. Yesterday, the Arizona senator toured Lordstown (home of "high mileage Chevrolet Cobalt and Pontiac G5 economy cars"), and then came out against a federal 911 for any of Detroit's ailing automakers. Speaking at a town hall meeting, McCain was all about putting government dollars into "research" into alt propulsion (a $300m prize for anyone who can guess how much money he'd send Motown's way). But a bailout? Automotive News [sub] provides the money shot: "A bailout, I don't think works." In fact, The Detroit News quotes McCain's antipathy to bailouts in general. "Frankly I just don't see a scenario where the federal government would come in and bail out any industry in America today." Over to you, Barack.

The Toledo Blade reports that Hillary Clinton has gone on the record saying that "if confronted with the prospect of a bankruptcy by General Motors or Ford, she would extend the resources of the federal government to help keep them afloat." The quote comes from a meeting between Clinton and the editorial board of Pittsburgh Post-Gazette, in which manufacturing policy was widely discussed. When asked about her views on a Chrysler-style bailout of major American automakers, the Senator from New York said that "for both economic and national security reasons, the next president should be aggressive in taking steps to protect and nurture the nation's manufacturing base." Of course, politicians say lots of things on the campaign trail, and the worse-off the campaign, the more aggressive the sound bites. Had the Michigan primary been rescheduled, this blank check could have gone over well for Clinton, who is seen by auto execs as "anti-car." As things stand, however, this quote will accomplish little more than pointing out the desperation of the Clinton campaign, and the obviousness of Detroit's woe.

After stripping-out an alt energy directive to America's power providers, removing new taxes on oil companies and upping the ethanol mandate to 36b gallons by 2022, the Senate passed the Energy Bill. Huzzah! While the bumper sticker remains the same– 35mpg by 2020!– all the loopholes, subsidies and devious rule changes remain as well. As The Detroit News reports, we're still talking about $25b in federal loan guarantees to The Big 2.8 for "re-tooling"– in addition to a provision funneling 50 percent of fuel economy fines back to (domestic?) automakers. We're still looking at a switch to footprint (vs. fleet-wide) Corporate Average Fuel Economy (CAFE) calculations and separate numbers for cars vs. light trucks– which help protect the automakers' SUV heavy "blended families." [NB: the sticker mpgs you see are NOT the figures used for CAFE.] We're still going to see E85 "credits" for vehicles that raise their [theoretical] mileage figures. But most ridiculous of all, the Senate failed to establish whether the National Highway Traffic Administration (NHTSA) or the Environmental Protection Agency (EPA) controls federal fuel economy standards, placing any and all such regulations in legal jeopardy. Oh wait, that wouldn't be the most ridiculous rider of the day. If Porsche got its exemption from CAFE regulations, THAT would be the icing on this saccharine cake. President Bush is set to sign this mishegoss next week.

Since the [now stalled] Energy Bill was first mooted, TTAC warned its readers to read the fine print. Detroit's support for the legislation was a sure sign it contained enough loopholes to maintain the status quo and enough sweeteners to make Hemlock a palatable potion. On the former point, we've learned that the bill maintained the distinction between light trucks and passenger cars for Corporate Average Fuel Economy (CAFE) calculations. (The system that made SUVs a roaring success and allowed Chrysler's PT Cruiser to be classified as a truck.) We also discovered that the CAFE regs were switching from a fleet-wide average to a footprint-based system– which bases mpgs on vehicle size and allows automakers to finagle the bagel (so to speak). And now, thanks to WardsAuto, we finally hear the number for the federal loan guarantees that the United Auto Workers helped arrange, to keep production stateside. It must be said that $25b is a lot of billions– especially when its your tax dollars on the line. That's doubly true given that the money was earmarked for companies retrofitting factories built before 1987. That means virtually all of the cash would go to The Big 2.8, as the transplants (Toyota, Honda, Hyundai, Nissan, Mercedes, BMW, etc.) built the lion's share of their domestic production facilities after that date. A federal bailout by any other name would still smell so rancid.