Find News by Subject:
Category: News Blog
And now, a few decades and several tens of billions of dollars later, we have southern politicians with automotive manufacturing facilities in their backyards. And, for some reason, they’re not feeling a particularly strong desire to spend federal taxpayers’ money on bailing out Detroit. As The Atlanta Journal Constitution puts it, “For behind the philosophical back-and-forth over government intervention, scheduled to begin Monday in the U.S. Senate, is a cut-throat, economic reality: the South has ambitions of becoming Detroit’s rival. And a federal dollar that artificially props up manufacturing on the northern end of I-75 is a dollar that hinders the creation of new economic models downstream, some Southern politicians maintain.” Par example? “Georgia’s Kia plant is scheduled to open next November, employing as many as 2,500 workers. The site is located within U.S. Rep. Lynn Westmoreland’s 3rd District. Westmoreland, like other House Republicans, voted against the $700 Wall Street bailout. He’ll vote against a Detroit rescue as well – on the grounds that it would create a slanted field of play for the workers he’ll soon represent. ‘One of the things we have constantly said is we can’t compete with some of these foreign businesses because the government has intervened in those businesses, and it makes an unfair advantage,’ Westmoreland said. ‘What we’re doing here with the auto industry is basically the same thing.'” Fine words. And the way the AJC takes him to task is classic…
The weekend talkers are going all-Motown all the time, as Dems talk up their bailout plans and Republicans show off some freshly-developed backbone. And if you talk about Detroit long enough, some nasty things are going to be said. “They’re not building the right products,” Alabama Senator Richard Shelby told Meet The Press (via AP). “They’ve got good workers but I don’t believe they’ve got good management. They don’t innovate. They’re a dinosaur in a sense.” And Shelby, the senior Republican on the Senate Banking, Housing and Urban Affairs Committee, doesn’t give money to dinosaurs. “Companies fail every day and others take their place. I think this is a road we should not go down,” he said. The second ranking Republican in the Senate, Jon Kyl (R-AZ), agrees. “Just giving them $25 billion doesn’t change anything. It just puts off for six months or so the day of reckoning,” Kyl told Fox News. Isn’t it amazing what losing a few elections will do to a party’s sense of principle? Of course, the Rs are running downhill on this issue too. All they have to do is delay bridge loans until Obama is sworn in, and the question will become moot as the automakers run out of cash. And they’ll be scoring populist points (at least with us) every step of the way.
Guess who will be at the 2008 Los Angeles auto show, November 21-30? A Volkswagen Passat. But it won’t be just any Passat. It will be a Passat produced by Shanghai VW. As if this is not shocking enough: The thing will be powered by a hydrogen fuel-cell. Shanghai Security News humbly reports that this might be the “first China-made new-energy car model of the Volkswagen brand to be displayed at an auto show.” It for sure is the first Made-in-China VeeDub ever to enter a US show. And it runs on hydrogen. How about that. The powertrain was jointly developed between SVW’s SAIC, Tongji University and Shanghai Shen-Li High Tech Co., Ltd. The car, veedubbed “Lingyu,” will reach a top speed of 150 km/h and should be good for more than 300 km at one hydrogen charging, albeit “with further innovation and maximization,” say the Security News via Gasgoo. SVW had built 500 fuel-cell hybrid sedans already for the green Olympic fleet, and wants to mass-produce the hydrogen fuel-cell Lingyu by early 2010. But will it sell?
Holman W. Jenkins Jr. is not a happy camper. The Wall Street Journal columnist begins his broadside by taking on the Hail Mary-shaped plug-in hybrid gas – electric Chevrolet Volt. Jenkins reckons it’s what the Brits call a “non-starter.” “Even as GM teeters toward bankruptcy and wheedles for billions in public aid, its forthcoming plug-in hybrid continues to absorb a big chunk of the company’s product development budget. This is a car that, by GM’s own admission, won’t make money. It’s a car that can’t possibly provide a buyer with value commensurate with the resources and labor needed to build it. It’s a car that will be unsalable without multiple handouts from government.” While Jenkins’ anti-Volt tirade isn’t especially accurate (you could even call it inaccurate), at least his rhetoric is a moving target, as he changes targets.
Back in the day, I wrote one General Motors Death Watch a week and that was pretty much that. Now that GM’s hit the buffers, begging for bailout billions with loquacious (if louche) lobbying, you can’t click on a news source without encountering an editorial or news piece on Motown’s meltdown. And it IS an important and fascinating story, the first real litmus test of politics-as-usual versus America’s bedrock belief system. [NB: I’ve promised some of our Best and Brightest that I’d alternate bailout articles with car stuff.] One of the most amazing aspects of these revolting developments: how GM’s lobbying campaign has unleashed a wave of anti-bailout pistonheads. Normally, the GM FastLane blog is home to home team boosterism of the most sycophantic “Top of the morning Guv’nor!” variety. But now, after Christopher “You Guys Hate Us” Barger (a.k.a. Director, GM Global Communications Technology) posted the Peter Hart study claiming America supports a GM bailout (debunked here), the shit has hit the fans. While there are still GM gadflies flitting about, there are a LOT of pissed-off posters. If anti-bailout posters have stormed this bastion of BS, GM’s claim on the public purse is, shall we say, “challenged.” I suggest you head over there before Barger tidies it up.
I don’t like rumors that no one wants to substantiate, but I think this one is not of the Sasquatch-got-me-pregnant variety. The scuttlebutt: banks still willing to make new car loans are more so when the make is foreign. The meme has been traveling around for a while by net, got an unsupported mention on NPR this week and spurred me into making a few phone calls. Off the record, wink-wink, nudge, nudge, it’s easy to get you bought on a car from a company not headquartered in Detroit. In other words, the gangrene of bankruptcy has already set in. Now it’s a matter of how far the powers that be let it spread.
I’m in tears. Back in 1972, Stewart Udall, interior secretary in the Kennedy and Johnson administrations, proposed that the auto companies branch out into “exciting new variants of ground transportation” to produce minibuses, “people movers,” urban mass transit and high-speed intercity trains. Instead of expanding the Interstate highway system, he suggested that the road construction industry take on “huge new programs to construct mass transit systems.” And he called for building “more compact, sensitively planned communities” rather than continuing urban sprawl.” We all know what happened. Detroit, today desperately seeking a miracle, worked hard to ensure that this would never happen. Even today, while screaming and begging for tax dollars, Detroit is lobbying against California’s stricter emissions laws that dictate smaller cars. Here’s the thing: people don’t want cars, we want mobility. And the reason I’m in tears is that lots of people saw this, almost FIFTY years ago.
It pains me to write this. The Dallas Morning News scribe Terry Box has long been one of my favorite automotive journalists. He may not return my phone calls, but, unlike a number of reporters, he doesn’t hang up when he hears my voice. He’s been known to take automakers behind the woodshed for their failures, both administrative and vehicular. And I’m told he’s armed (as in fire-armed). But mine is not to question why; it’s to ask WTF? When I read the headline of Terry’s piece, I nearly ejected Clover coffee on my keyboard: “Enclave could ride to GM’s rescue.” Surely Box means an Enclave in the foil hat wearing sense of the word; you know, like Dan Qualye, John Snow, Nancy Pelosi, Rick Wagoner and some Rothschild or another. Nope. Buick. “I don’t know that the Enclave can save GM, which as you know is in deep, deep, uh, distress. But the Enclave and its jeans-wearing cousin, the ’09 Chevrolet Traverse, may be two of GM’s best shots at driving out of the ditch it’s in.” Uh, I think we’ve already past that point, Terry. A loooooong time ago. Anyway, his rational: the Buick Enclave and its twin-under-the-skin Chevy Traverse are better than the GMC Yukon. It’s this automotive relativism that’s got GM where it isn’t today. I’m surprised to see Mr. Box living in same.
Washington Post automotive reviewer and Detroit apologist Warren Brown is black. While I couldn’t care less about Warren’s skin color, his latest appeal on behalf of his benefactors’ bailout billions is beyond the pale. It focuses exclusively on his ethnicity, suggesting that The Big 2.8 deserve federal money because they’ve put Warren’s “people” on the “road to success.” “I am a black child of the Deep South who watched legions of neighbors and relatives flee economic apartheid in pursuit of opportunity in the automobile factories of Michigan and Ohio and in the steel plants of Pennsylvania and Indiana… The American Three — General Motors, Ford and Chrysler — largely have been responsible for the development of a black middle class in this country. Many children of factory workers followed their parents onto automobile assembly lines. But many others went to colleges and universities, medical and technical schools, thanks to good UAW salaries and educational benefits.” His point being? “People make mistakes. But redemption is found in the good that they do, and the domestic automobile industry has done a lot of tangible good for this nation.” And now, the close: a suggestion that not bailing out Detroit would lead to class warfare (implied: a return to racism). “An America that manufactures nothing, or an America that owns nothing it manufactures, is an America with a frightfully vulnerable middle class — an America that threatens to become a society starkly divided between haves and have-nots, a throwback to the Deep South of my segregated youth. That is not the America I want.”
Did we miss something? After repeating the inherently suspicious Center for Automotive Research stats on the impact of a Motown meltdown, and sharing the history of the federally-sponsored Chrysler comeback, AutoLine Detroit apologist and Autoblog columnist John McElroy is ready to share the upside of another federal bailout for Detroit. “Most people seem to miss the fact that they are on the verge of a massive turnaround. If the Big Three get a government bailout this time, I see history repeating itself. Most people seem to miss the fact that they are on the verge of a massive turnaround. I’m not trying to be a rah-rah cheerleader here [as if!]. I’m persuaded simply by the facts.” McElroy is laboring under the impression that the eventual savings from the last United Auto Workers’ contract is The One. Less cost, less over-production– less means more! “That means they’ll be able to slash their incentives. Every $1,000 that General Motors cuts from incentives will drop roughly $4 billion to the bottom line. And GM has an average of $3,500 in incentives!” Huzzah! Where do I sign? “What this means is that when the economy finally starts to recover and the car market begins to grow again, GM, Ford and Chrysler will be in an extremely competitive position, one they haven’t been in for more than 40 years. And that’s why those who say giving them a bailout is just throwing good money after bad are dead wrong. The Big Three are not only on the verge of a roaring comeback, I predict that in the next decade they’ll go on to hit record profits.” I wonder if John’s a betting man?
Recent Comments