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

Robert Farago
by Robert Farago
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.

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  • Jkross22 Jkross22 on Dec 12, 2007

    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.

  • EJ_San_Fran EJ_San_Fran on Dec 12, 2007

    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.

  • Praxis Praxis on Dec 12, 2007

    "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.

  • Landcrusher Landcrusher on Dec 12, 2007

    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.