Bailout Watch 20: Automotive News "Include Honda and Toyota"
For some reason, Automotive News [AN, sub] felt compelled to write an op ed on Detroit's desire to hoover-up $50b in low-interest federal loans. As you might expect, the automotive news org of record is highly conflicted. So much so, the piece descends into double negativity by the second sentence. "Much of the political buzz about the federal government providing as much as $50 billion in low-cost loans to the auto industry can be chalked up to election-year ebullience. That doesn't mean it won't happen. But before automakers and suppliers cash any checks, there must be a better understanding of the process and any strings that might be attached." Ya think? Anyway, get this: AN supports the loans as long as Honda and Toyota are included– even though "it's hard to imagine that Honda or Toyota would borrow money from the U.S. government." But if the feds don't make an offer the transplants will refuse, "the loans would be nothing more than a Detroit 3 bailout. That would be a questionable use of tax dollars, even in an election year."
The problem I have with this subject is, $4.00+ gas renders the new CAFE standards moot until 7-10 years down the road. The Detroit 2.8 would have had a really tough time with CAFE in the 2012 time frame if their product mix was still like it was last year. So the bailout, er, loan guarantees, that were supposed to allow the domestics to comply with new Fuel Economy regulations, are now turning into a handout just to help them 'respond' to market conditions. (Nevermind the fact that companies should never respond to customer needs - to be successful they have to anticipate.)
@Zoom Zoom "Which means that I have been forced to financially support something that I don’t want to support. Therefore, I think it’s not only a questionable use of tax dollars, but an immoral one. Immoral because it forces me to pay for something that I philosophically oppose. I call it theft. Immmoral also because it reduces the economic power that I and others like me wield when I/we make a CHOICE to support (what I/we think is) a deserving business with my purchase dollars." Not sure what you're feelings on this are Zoom Zoom so I'm not calling you out. But being raised as a pacifist and an American I find paying for our military exploits/excursions/snafus/misadventures/sanctioned murder to fall into the same classification as you pointed out above concerning the bailout. I'm curious if you agree with me on that...because when it comes to protecting "our way of life" (whatever the hell that is exactly) I find that US citizens RARELY find anything to be immoral. Sorry to go off topic but I thought your definitions above were ver good and important to me. As for the GM/Ford/Chryco bailout I'm disgusted how this is being framed as something to make sure they can provide the consumer alternative propulsion and cutting edge products. It's a bailout pure and simple and I think the transplants should bully their way into the landgrab until somebody calls it what it is. I have no problem (for the most part) in helping a pathetically managed organization survive to make sure the middle-American jobs exist/survive but these bailouts should have some caveats with them; specifically that Rick Wagoner and the idiots who let him survive have to have their assets frozen and they must be fired and removed from the board. I'm sure I could come up with a list of 50+ candidates to be fired in about 10 minutes.
Considering it's our tax money they are handing out I want to know if we get a lower price on the cars they make. Where is the real payback for the taxpayer?
Fewer people on the public dole will be the "reward".