Bailout Watch 8: Senate Dems Back Bailout
When the new energy bill mandating higher CAFE ratings came out last December, it didn't offer automakers any kind of financial assistance to meet those goals. Since then, we've been treated to a parade of industry types wailing that with times so bleak, CAFE will kill Detroit unless the government bribes assists the domestics with following the law developing more efficient cars. Perhaps sensing John McCain's weakness with the industry, Senate Democrats are rushing to position their party to take advantage of the now free-floating "bailout vote." The Detroit News reports that Democrat leadership has agreed to support $6b in loan guarantees to domestic automakers, and is considering a further industry stimulus for plant retooling. All told, the package will total some $25b in loan guarantees that would cost taxpayers $3.75b. Tellingly, $300m of the initial $6b is earmarked for advanced battery development. If that sounds familiar, that's because it's a pretty handy preemption of John McCain's "Project Lexington." And since McCain seems happy to stick to his Nancy Reagan (just say no!) on bailouts, Obama and the Dems are going to go after the weird industry-worker alliance that wants bailout. It's populist, it's patriotic, and (post-Bear, Fannie and Freddie) it's principled. Best of all, it only costs the taxpayers a few billion. Game on!
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In a reaction to this I hope the EU is going to give Airbus some more get out of jail free money as well. Better yet though, I hope this bailout doesn't happen at all. If the US car industry manages to make desirable products at a profit than fine, if not, let a company who can build some factories in the US where the people can still be employed and don't poison the market any further with crappy products. And ask Mr Wagoner if he wants to give some loan guarantees for say, about 100MM he must have skimmed of GM.
If McCain opposes bailouts, then he's just handing Michigan over to Obama. That's my two cents.
I never imagined gas prices could go over $0.50 cents per gallon when I bought my Ford Excess SUV which is now only worth its scrap value - where's my bailout?
So, we're supposed to bail them out with a mercy f*** rather than do it through the government? Hah. No thanks, rather pay a bit extra on the tax bill. It's GMs responsibility to sell cars that are worthy of the American people. They don't. 2/3rds of Consumer Reports Worst of the Worst Used Car list is GM product. 2/3rds. 22 out of 32 Worst of the Worst is from GM. They had 1 car on the Best of the Best. Out of 64 cars. Not a single Toyota or Honda on the worst of the worst list; their entire lineups on the Best of the Best. I don't believe GM makes good products. Every 5 years they say "We've finally caught up, this time its for real". 5 years later they'll say "Sure, the cars 5 years ago were piss, but this time we mean it! We really caught up." I'll take the Malibu seriously once they get some serious miles on them and don't turn into a money pit. If you really car about American car companies, go buy a Ford. They really are a (relatively) solid company, and they actually have a chance of making it through this. Some extra support from ex-GM buyers would help to make sure there was an American company left standing once this automotive Ragnarock is over.