By on December 12, 2007

1032621-lg.jpgSince 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. 

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6 Comments on “Bailout Watch 1: Energy Bill Earmarked $25b for Big 2.8 “Re-Tooling”...”


  • avatar
    210delray

    It looks like this bill may go down in flames, with insufficient votes in the Senate to break a filibuster and W threatening a veto.

    Just as well, even though I think fleet fuel economy should be better. But it looks like market forces may take care of that anyway.

  • avatar
    Von

    This is a shame. US engineers can compete with anyone in this world, but we are getting hammered in the auto industry.

    Although the auto execs are the first ones we point fingers at, a lot of it is the American corporate culture. Wall St is a world driven by quarterly profits, and they hold the execs captive. But with the level of engineering resources involved in designing and building cars, you have to look ahead at least 3-5 years. Now, if the execs have the balls to stand up to Wall St and let the engineers do what they are best at doing, we’d be in a lot better shape. At the end of the day though, Wall St and the 2.8 needs to understand they have to be run more like Intel and less like Walmart. And Wall St, not the Fed, are the ones that have the biggest impact on the auto industry. Subsidies might feed the hungry for a while, but there’s no substitute for teaching them to fish.

  • avatar
    jkross22

    GM, Ford, Cerebrus,

    Please go F*** yourselves. Maybe someday you’ll be run by people who care enough to create compelling products. Then you wouldn’t need to beg the government for money. Stop trying to game the system in your favor and just get to work making the cars that your fellow citizens want to buy.

    You make me want to cheer for the AFL-CIO. That’s how much I loathe you. Jerks.

  • avatar
    EJ

    That’s a big number.
    Those $25B would make for a nice retirement fund. Why not set it aside for helping dislocated auto workers?
    After all, a subsidized factory may not be a successful factory in the long run.

    More stoically, I say: if this is the pay-off that gets the bill to pass, so be it. That sum is still pretty small if you look at the big picture.

  • avatar

    “After all, a subsidized factory may not be a successful factory in the long run.”

    They may lose money on every car they assemble with these neoteric innards but I hear they plan to make it up with volume.

  • avatar
    Landcrusher

    The bill is nothing but theft. Pure and simple. They are taking money from hard working Americans and giving it away to conmen, liars, and thieves.

    It would be too much if it was a single dollar.


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