As Americans have noted, bailouts can get costly. Europe has just decided on a trillion dollar bailout for their southern European deadbeats member states. Who’s going to pay for all that? In Germany, raising taxes is taboo (for the moment.) Lowering taxes had been one of the wedding vows of the ruling coalition. They didn’t say exactly when, but raising taxes would be politically – not very smart. So how else to raise money? Where else than from our darling piggy bank, the hapless motorist. Read More >
What, you want more context from a headline? It’s not like we’ve lied to you or anything. Technically, every word of it is true. OK, OK, here’s the fine print: CGI Holding, owners of “Old Chrysler” and Chrysler Financial paid $1.9b of a $4b pre-bankruptcy TARP loan, according to Automotive News [sub]. Though far less than face value, that payback “is significantly more” than what Treasury was expecting in return. In other words, this is great news if you thought the bailout would be a complete loss. Otherwise, it means that the various remains of Chrysler have repaid $3.9b of the $14.3 invested by taxpayers into the company pre-bankruptcy… and unless Chrysler’s IPO brings in about $100b, Treasury will still take a bath on the rescue.
Congressional lawmakers are mad at Toyota. What has Toyota done now? Their sin this time: They may have harbored a secret “attack plan against congressional testimony.” This, says the Washington Post, has “drawn the ire of the House Energy and Commerce Committee.” Read More >
Officials working with the Department of Energy tell the Detroit News that GM and Chrysler face no major obstacles in their quest for huge retooling loans from the DOE’s Advanced Technology Vehicle Manufacturing Loan program. GM is seeking $14.4b and Chrysler has asked for $8.55b in low-cost government loans. Says Matt Rogers, a senior adviser to the Energy Department
Project finance details need to be worked through, but those things are working out just fine as we work directly with the companies. It’s really a process of making sure that each of the projects that they have are in fact competitive.
A surprisingly vigorous effort is being made to urge Florida Governor Charlie Crist to veto the red light camera authorization bill passed by the legislature last month (view bill). The normally pro-camera group AAA launched a nine-page assault on the legislation in a letter to Crist last week. The group was joined yesterday by Crist’s former regional campaign chairman, state Representative Tom Grady (R-Naples). Crist has until May 14 to sign or veto the red light camera bill which would devote more money to the Wall Street giant Goldman Sachs than it would to public safety.
As expected, the Loan Guarantee Committee decided not to decide anything in their meeting at the Economics Ministry in Berlin. Opel had requested €1.3b in state aid from Germany. They are making the rounds in Europe to collect another €500m. Countries that committed money, such as the U.K., will only pay if Germany pays. Read More >
President Obama has weighed in on a crucial matter facing legislators attempting to overhaul America’s financial system: whether or not auto dealer finance should be subject to regulation by the new Consumer Protection Agency. Unsurprisingly, he has come down on the side of regulation, specifically echoing concerns voiced earlier by the Pentagon. The National Automobile Dealers Association has vowed to fight attempts to regulate dealer finance.
Statement by President Obama on Financial Reform
Throughout the debate on Wall Street reform, I have urged members of the Senate to fight the efforts of special interests and their lobbyists to weaken consumer protections. An amendment that the Senate will soon consider would do exactly that, undermining strong consumer protections with a special loophole for auto dealer-lenders. This amendment would carve out a special exemption for these lenders that would allow them to inflate rates, insert hidden fees into the fine print of paperwork, and include expensive add-ons that catch purchasers by surprise. This amendment guts provisions that empower consumers with clear information that allows them to make the financial decisions that work best for them and simply encourages misleading sales tactics that hurt American consumers. Unfortunately, countless families – particularly military families – have been the target of these deceptive practices.
The Las Cruces, New Mexico city council voted Monday to partially obey a New Mexico Department of Transportation (NMDOT) to remove red light cameras and speed cameras from the state right-of-way by May 18. State officials are concerned with the negative impact that the devices have on safety, but Las Cruces officials emphasized the need to “work around” the state in expanding the red light camera program even though the city has seen an increase in accidents where photo enforcement has been installed. Read More >
Today could be a big day for Opel. Probably, it won’t. The Loan Guarantee Committee is meeting in the Economics Ministry in Berlin. On the agenda: Opel’s request for €1.5b in state aid. The timing is not coincidental: Last weekend, elections were held in the Opel state of North Rhine Westphalia, which ended in a mess. Coalition discussions are on-going with unsure results. So let’s move quickly while Berlin can make decisions? Not exactly … Read More >
Talk about timing: While Trans Sec LaHood was in Japan yesterday, ostensibly to look a trainsets, while he toured Toyota instead and uttered dark “time will tell” threats, while he said that his people are still working on the evidence for a second $16.4m federal fine, back in Washington, the timer was set for yet another ticking 16.4 mega-tonne bomb. Read More >
State officials can punish an individual for driving under the influence of alcohol (DUI), even if they are unable to prove the accused was ever behind the wheel, the West Virginia Supreme Court ruled Thursday. The decision came in the case of Eric R. Cain who was found lying passed out on in front of his car on Route 19 by Marion County Sheriff’s Deputy Todd Cole at around 2:30am on June 2, 2007. The car had been safely parked and there was no key in the ignition.
If you listen to the commentators, you’ll believe that tax breaks and stimulus measures are the sole reason for China’s car boom. It turned the country into the #1 car market in the world. What’s more, the boom continued unabated in 2010. Wonks are worried that the market will crash when the stimuli are withdrawn. Don’t worry. There will be new ones. This time, for electric cars. Read More >
Lobbyists for municipalities and photo enforcement companies have succeeded in gutting attempts to place even the most minor of restrictions on the use of red light cameras and speed cameras in Arizona and Tennessee. For more than a year, the Tennessee General Assembly debated the wisdom of restricting the use of automated ticketing machines. A special study committee was established where state House members listened to testimony almost exclusively from representatives of cities and the private, for-profit companies that operate traffic cameras. The committee now has nothing to show for its effort.
Due to scheduling conflicts with a certain island nation’s democratic rituals, CSPAN didn’t have a channel to spare for today’s auto safety legislation hearing before the the House Energy and Commerce subcommittee. Which means your faithful blogger is at the mercy of the mainstream media’s digestive process in this matter. Regardless, it seems clear by now that the legislation has driven the industry back to the Republican bosom, after a period of post-bailout estrangement. These newly-re-allied forces collectively raised concerns about a number of key proposals presented by Rep Henry Waxman’s Motor Vehicle Safety Act of 2010, including the un-capping NHTSA fines, privacy issues relating to “black box” event data recorders, new car sale vehicle fees, pedal clearance standards, and increased regulation of an industry with state-owned competitors.
The predominant critique of the cash-for-clunkers programs that have proven so popular in the US and Europe is that they cause unsustainable demand bubbles which cause sales to collapse after they expire. Sure enough, a look at the German market’s Q1 performance shows that the OEMs who most benefited from the program (primarily firms who focus on low-cost cars) are seeing far more significant declines than US-market firms have seen. In the first three months of this year, firms like Hyundai (-40%), Fiat (-58%), Suzuki (-54.6%) and Kia (-49.4%) have been suffering mightily from a hangover caused by the world’s most generous cash-for-clunker program. But the big news isn’t this small-car bust: it’s the fact that these firms’ success last year have caused the percentage of cars on German roads with electronic stability programs (ESP/ESC) to fall.
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