Bailout Watch 76: VW To Taint All-American Bailout

Edward Niedermeyer
by Edward Niedermeyer

Speaking to reporters at the Paris Auto Show, VW CEO Martin Winterkorn revealed that his company would seek a portion of the $25b in bailout loans recently passed into law. Automotive News (sub) reports that Winterkorn hopes his firms new Tennessee plant would qualify for loans. “We will raise our hand when the time comes,” said Winterkorn. But has Piech’s hatchet man had time to read the fine print between rounds of anti-Porsche pugilism? A quick look at Section 136 (g) of the Energy Independence Act of 2007 reveals that “The Secretary shall, in making awards or loans to those manufacturers that have existing facilities, give priority to those facilities that are oldest or have been in existence for at least 20 years.” It’s great that Mr Winterkorn would like his brand new plant to qualify for the loans, but he fails to understand that their rules have been written to exclude nearly everyone other than the Detroit 2.3. And with the regulatory rules still to be written (with help from Detroit lobbyists), the likelihood of VW getting a penny in government loans is only going to shrink.

Edward Niedermeyer
Edward Niedermeyer

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  • Vega Vega on Oct 02, 2008

    200k-min: And the last time I checked taxpayers don't fund anything for VW Also, Mr. Winterkorn doesn't need a baylout or a golden parachute, because VW is producing two very exotic (at least for US automakers) things: Positive earnings and cash flows. Crazy, isn't it?

  • Adam Adam on Oct 02, 2008

    Sigh. Yet another reason why VW is my most hated automaker by a country mile. I wish they would just go away.

  • Demetri Demetri on Oct 02, 2008

    Good, I hope they get it. They deserve it just as much as the D3 does, which is to say, not at all.

  • Mark45 Mark45 on Oct 02, 2008

    Vega: Google "incentives to VW from Tennessee and you will see where they got $577mil from the Tennessee government.