“If it were up to me, I would ban drivers from texting,” the Secretary of Transportation tells the LA Times. Happily, LaHood does not have the authority to unilaterally enact laws, so, “that’s why I have decided to convene a summit of senior transportation officials, safety advocates, law enforcement representatives, members of Congress and academics who study these matters.” The conference is expected to yield “concrete steps” to curb the threat of distracted drivers. Like an education and awareness campaign. Meanwhile, the Avoiding Life-Endangering and Reckless Texting by Drivers Act (ALERT Drivers, geddit?) has been introduced to the Senate. This bill would force states to pass texting-while-driving bans (with DOT-set minimum penalties) within two years of its passage, or risk losing 25 percent of their federal highway funding. Just like the good old double-nickel days. Meanwhile, has anyone thought about the difficulty in enforcing such a ban?
GM will receive some $241 million of the government’s $2.4 billion electric vehicle (EV) stimulus grants, most of it for the “on-time and under-budget” Chevy Volt program. Other grant recipients were Chrysler ($70m), Ford ($92.7m), JCI ($299m), A123 ($249m), Compact Power ($151.4m, on behalf of LG Chem, the South Korean supplier of Chevy Volt batteries), and the National Fire Protection Association ($4.4m). Full breakdown in PDF format here. But what makes this otherwise routine subsidizing of particular interest, it’s that GM is spending its non-Volt money on . . . get this . . .
One takeaway: CARS is good because it gets people into more fuel efficient cars, but the highway fund is running out because people are driving more fuel efficient cars. Also, apparently bolstering Ford sales is a major rationale for extending C4C. Y’know, after the whole “taking CO2 out of the air” thing. Speaking of which, former clunker detractor Sen Dianne Feinstein is on board for an extension, telling Automotive News [sub] “the original intent of the clunkers program was to encourage people to buy more fuel-efficient vehicles, and the data so far tells us that’s exactly what’s happening,
Secretary of Transportation Ray LaHood is feeling expansive. And why wouldn’t he? The man’s got the hottest stimulus on the block this summer. And even though there might be more C4C deals than money left in the program, LaHood wants to keep the sodium silicate flowing. Even though the Senate still hasn’t approved more money. “We will continue the program until we see what the Senate does, and I believe the Senate will pass this,” LaHood boasts to Automotive News [sub]. Does this mean there is definitely still money available for the deals that LaHood personally guarantees through Tuesday? Not necessarily. This is much more of a way of putting pressure on the Senate to approve another $2 billion. And LaHood’s play for more money hasn’t convinced everyone. “I take the secretary at his word, but we still urge dealers to use caution when doing cash-for-clunkers transactions,” say NADA spokesfolk. Because appointed officials aren’t actually in charge of appropriations, no matter how quickly they can make a billion bucks disappear. Unless LaHood cares to put up his $191K salary towards getting Americans into a new Cobalt.
Automotive News [sub] reports that the House of Representatives has passed a measure to inject another $2 billion into the CARS program, extending it to September 2010. The bill passed 316-109, and now moves to the Senate. There it could face a challenge from Senators led by Dianne Feinstein and Susan Collins, who argue that an extension must include measures to improve the environmental impacts of the bill. Feinstein has requested a full accounting of the measure’s alleged success from the Department of Transportation. Politico reports that Senator Claire McCaskgill has already ruled out support for any transfer of stimulus money to the CARS program. “It will be tough sledding in the Senate, but this would give it considerable momentum,” admits one auto industry source. “It’s not new money, so [it] should be more possible to get GOP support.”
The Freep reports that Congress could “shift $2 billion from an energy loan program” to replenish the maybe-tapped-out, maybe-not CARS program. This has been confirmed by the AAM’s Charles Territo who tells us that “HR 3435, would allow the President to transfer $2 billion dollars from previously appropriated Recovery Act funds in order to fund the CARS Act. Will be voted on today.”The plan is being spearheaded by the White House and Michigan’s congressional delegation. The House will vote on the extension today, the last day to do so before Summer recess. The Senate will remain in session into next week, but C4C faces more opposition there from the likes of Dianne Feinstein. Meanwhile, has round one even been used up?
The Alliance of Automobile Manufacturers’ Senior Director of Communications has informed TTAC via email that the CARS (AKA “Cash for Clunkers”) program has NOT been suspended. “All deals concluded before a suspension is announced (if that happens) will be honored,” promises Charles Territo. We’ve also heard that the President is urging Americans NOT to not buy a new car (i.e., go ahead and buy a car) under the program over the weekend.
Well that was quick. The Freep is reporting that CARS will be suspended after only 4 days due to over-subscription. NADA is warning the Wall Street Journal that demand is quickly exceeding the $1 billion available. An unofficial NADA survey shows 25k qualifying deals that the NHTSA still has yet to process. And dealers sound pissed. “Their capacity to accept the applications is not adequate,” one dealer tells the Freep. “Dealers are spending all day trying to submit the applications . . . I have not spoken to one dealer that has received approval, and or has been funded, for even a single transaction.”
Do you have a vehicle that was eligible for the government’s CARS program until the EPA revised old mileage averages? If so, your vehicle is no longer eligible for the $3,500-$4,500 incentive. If you had set up a deal before the final rule came out, however, the government will hook you up regardless. “We’ve tried to come up with the fairest possible solution under the circumstances,” CARS’ long-suffering spokesman, Rae Tyson, explains to Automotive News [sub]. But it’s hard to see what exactly is fair about that. Didn’t NHTSA specifically warn that “if a dealer chooses to structure a transaction before the final rule is issued, they will bear the risks associated with later demonstrating that the transaction meets all of the specifications of the final rule”? Why are the folks who ignored the warning being rewarded, while those who waited for the rules get the shaft? More importantly, if anyone got away with engine-melting a 1987 Alfa GTV (recently reprieved by the EPA mileage mulligan), there are going to be phones ringing in at least one congresscritter’s office. Hit the jump for a complete list of clunkers which saw their eligibility change due to the EPA revision.
The Congressional Oversight Panel, tasked with monitoring TARP expenditures, is holding hearings on the auto bailout. Even as you read, Wayne State University is home to serious CYA action. In the blue corner: the post-Rattner head of the twenty-four (now) member Presidential Task Force on Automobiles (PTFOA) Ron Bloom. Big Ron II is expected to hew even more closely to its previous proclivity for a passive/aggressive approach to GM’s non-management management. “Given the emergence of the new GM and the new Chrysler, the involvement of the Auto Task Force with the companies will now change,” Bloom told the panel [via Market Watch]. Once again, Ron proclaims that only “core governance issues including the selection of a company’s board of directors and major corporate events or transactions” will be subject to PTFOA meddling going forward. (After all, they’ve got Advertising Czar Bob Lutz to handle the little things like “crapping on advertising.”) But even though the White House is on hand to show how easy putting your best platitude forward can be, the UAW won’t be joining the testimonial fun.
File this one under the “stealth bailout” file. GM dumped a number of its own pension obligations onto Delphi when the parts supplier was spun off in 1999. Now, the Detroit News reports that Delphi is abandoning $6.25 billion worth of obligations to the Pension Benefit Guarantee Corporation, the second largest such takeover by amount. But the 70,000 affected Delphi workers and retirees will still miss out on an estimated $800 million in payments. And what does GM have to say about all this? The General’s statement (via webnewswire) betrays a guilty conscience:
There have been questions about General Motors Company’s responsibility toward Delphi’s pension plans, given that many of those covered were GM employees prior to GM spinning off Delphi in 1999. General Motors Corporation made appropriate provisions for the plans at the time of the spin-off, and Delphi became responsible for the plans from that point forward.
See how that works? Who cares that GM spun Delphi off as a means of jettisoning pensions. Once the deal was done it was Delphi’s problem. Move along now, nothing to see here . . .
Electronic monitoring of motorists is gaining legitimacy, as the federal government explores a pay-per-mile road tax and California mulls pay-per-mile insurance. But will the possibility of improved efficiency and use-based taxation convince drivers to accept on-board electronic spies? Secretary of Transportation Ray LaHood has already expressed his fondness for pay-per-mile road taxation, and the Chicago Sun Times reports that he’s willing to pay participants nearly a grand to help him test the idea.
From Reuters comes word that Car Czarlet Steven Rattner will be leaving the Presidential Task Force On Autos. The move “represents the start of a long-planned wind down of the autos panel” according to Reuters’ interpretation of an anonymous White House source. “With GM’s restructuring complete, Steven Rattner, whose leadership and vision were invaluable to the Auto Task Force’s efforts, has decided to transition back to private life and his family in New York City,” explains a statement from Treasury Secretary Timothy Geithner. “We are extremely grateful to Steve for his efforts in helping to strengthen GM and Chrysler, recapitalize GMAC, and support the American auto industry.I hope that he takes another opportunity to bring his unique skills to government service in the future.” Unique skills? Is Rattner getting blown off or is this Mission Accomplished? A little of both?
“I think it’ll go very quickly, and Congress may have to revisit it in the fall… 250,000 vehicles isn’t enough… We think there’ll be additional phases of this… It’ll probably evolve.”
Alliance of Automobile Manufacturers Prez Dave McCurdy on the CARS scheme in Automotive News [sub]. McCurdy acknowledged that greater improvements in fuel efficiency might be required for a future Senate compromise. Apparently McCurdy believes Senate won’t play ball “if it’s just a truck program for people buying F-150s“. What could have given him that impression?
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