Bailout Watch 1: Energy Bill Earmarked $25b for Big 2.8 "Re-Tooling"
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.