Editorial: Between The Lines: Barack Obama's Shot Across Detroit's Bow

Robert Farago
by Robert Farago
We’re committed to finding, researching, and recommending the best products. We earn commissions from purchases you make using links in our articles. Learn more here
editorial between the lines barack obama s shot across detroit s bow

Senator and president-elect Barack Obama held his first post-election press conference on Friday– the same day that Ford and GM revealed their respective arterial sprays of red ink and third degree cash burns. Rather than highlight those stats and go for the close, bailoutwise, Obama played his political cards close to his chest. The exact text of his remarks are extremely revealing, in that politicians don’t really reveal anything unless they absolutely have to kinda way. “The auto industry is the backbone of American manufacturing and a critical part of our attempt to reduce our dependence on foreign oil.” Translation?

Obama’s opening salvo reveals that America’s next President expects Detroit to stop messing with Democratic promises to improve America’s vehicular fuel efficiency, buckle down and build fuel sippers.

The implication doesn’t exactly plow new political ground. Lest we forget, Detroit and Washington have been at loggerheads regarding Corporate Average Fuel Economy (CAFE) regulations since they were first introduced in 1975. For CAFE’s most recent update, Motown [once again] lobbied Democrats to keep the standards as low as possible, then cried poverty when it was clear they’d lost the fight. The Department of Energy loans were designed to assuage Motown’s sore-headed losers by providing access to $25b to do what they’re legally obliged to do.

Bottom line: any new federal money for The Big 2.8 will come with the same old strings attached. In case you missed the point…

“I would like to see the Administration do everything they can to accelerate the retooling assistance that Congress has already enacted.”

Retooling = building more fuel-efficient cars. As TTAC has highlighted, federal foot-dragging is not Detroit’s enemy. The regs for the $25b Department of Energy loans have been written with unprecedented haste. In fact, they’re more or less done. The more part is that they’re done.

The less part is that Detroit can’t use the money for anything other than which it was intended (fuel efficient cars not corporate liquidity). What’s worse, GM, Ford and Chrysler don’t qualify under strictures regarding financial viability. Obama’s message was code: tacit clearance for Congress, the DOE, President Bush, someone, anyone to pervert the legislation’s original intent and current restrictions.

Does Barack Obama know that the situation is well beyond retooling? If he does, he ain’t admitting it. And if he doesn’t, his economic advisers might want to write a memo on that one. STAT.

“In addition, I have made it a high priority for my transition team to work on additional policy options to help the auto industry adjust, weather the financial crisis, and succeed in producing fuel-efficient cars here in the United States.”

Weather the economic crisis. Now that’s what Detroit’s talking about! The first part of the statement is a not-so-clear signal to Motown (plausible deniability rules) that financial assistance will arrive via the Troubled Asset Relief Program, another economic relief stimulus bailout pork barrel package, and whatever clever shit the Obama administration and Congress can devise (tax credits for loan interest, etc.). But the second part of that statement… again with the fuel-efficient cars.

Clearly, Obama doesn’t want to be seen using taxpayer money to help Detroit build more SUVs, pickup trucks or automotive gas guzzlers. Which puts Motown in even more of a bind than before. Before, they could meet CAFE regs by balancing production of small, relatively fuel-efficient, uncompetitive, unprofitable small cars with sales of large, gas-guzzling, competitive, profitable trucks. Reading between the lines, Obama’s not going to let one red cent of public money sustain that mix.

So Detroit’s being painted into a corner: build competitive, fuel-efficient cars or fuck off and die. But what are the chances that GM can build these fuel-efficient machines and sell them in enough quantity at enough of a profit to make enough money to pay off their existing loans PLUS the federal assistance? Teen-tiny. Ford. Slim. Chrysler. None.

“I have asked my team to explore what we can do under current law and whether additional legislation will be needed for this purpose.”

Translation: Obama is not throwing the weight of his political victory– assured in no small part thanks to Motown/UAW-friendly states– behind a wider Detroit bailout (under some sort of new economic stimulus passage). Not yet.

For Detroit, that’s an industrial-size mixing bowl of not good. Without Obama’s unqualified support, and soon, they’ve got a real PR mountain to climb. On a more general level, the same “lack of urgency” that put GM, Ford and Chrysler where they are today could ruin their chances in the political sphere. If so, it’s game over.

Robert Farago
Robert Farago

More by Robert Farago

Join the conversation
2 of 133 comments
  • Bozoer Rebbe Bozoer Rebbe on Nov 11, 2008
    But I did see Intelligent Design being defended there, and that easily invalids a researcher’s credibility as it is one of the most intellectually bankrupt ideas of our times. I'd say that marxism is somewhere ahead of ID on that list. ID advocates haven't killed millions of people. To its credit, marxism is arguably the most successful intellectual idea ever in terms of its spread. In terms of everything else, it's pretty much a failure or worse. I didn’t see it on his site, and a web search only mentions one as a “systems engineer”, quite a stretch. People do have multiple competencies. Nathan "Gunner" Myhrvold, former CTO of Microsoft has published papers in paleontology journals. Okay, so maybe a polymath genius is an exceptional example. Still, don't disregard someone just because their primary discipline does not immediately appear to be relevant. When Dan Rather got fired over what was almost certainly a forged document about GWB's Air National Guard service, his defenders dismissed Charles Johnson and other critics as bloggers in pajamas, ignoring the fact that CJ makes his living as a web designer and coder and has a lot of experience working with fonts.
  • U mad scientist U mad scientist on Nov 11, 2008

    The best policy when you're digging yourself into a hole is to drop the shovel. Attempting to divert the topic into irrelevance is a waste of time at best.

  • Carsofchaos The bike lanes aren't even close to carrying "more than the car lanes replaced". You clearly don't drive in Midtown Manhattan on a daily like I do.
  • Carsofchaos The problem with congestion, dear friends, is not the cars per se. I drive into the city daily and the problem is this:Your average street in the area used to be 4 lanes. Now it is a bus lane, a bike lane (now you're down to two lanes), then you have delivery trucks double parking, along with the Uber and Lyft drivers also double parking. So your 4 lane avenue is now a 1.5 lane avenue. Do you now see the problem? Congestion pricing will fix none of these things....what it WILL do is fund persion plans.
  • FreedMike Many F150s I encounter are autonomously driven...and by that I mean they're driving themselves because the dips**ts at the wheel are paying attention to everything else but the road.
  • Tassos A "small car", TIM????????????This is the GLE. Have you even ever SEEN the huge thing at a dealer's??? NOT even the GLC,and Merc has TWO classes even SMALLER than the C (The A and the B, you guessed it? You must be a GENIUS!).THe E is a "MIDSIZED" crossover, NOT A SMALL ONE BY ANY STRETCH OF THE IMAGINATION, oh CLUELESS one.I AM SICK AND TIRED OF THE NONSENSE you post here every god damned day.And I BET you will never even CORRECT your NONSENSE, much less APOLOGIZE for your cluelessness and unprofessionalism.
  • Stuki Moi "How do you take a small crossover and make it better?Slap the AMG badge on it and give it the AMG treatment."No, you don't.In fact, that is specifically what you do NOT do.Huge, frail wheels, and postage stamp sidewalls, do nothing but make overly tall cuvs tramline and judder. And render them even less useful across the few surfaces where they could conceivably have an advantage over more properly dimensioned cars. And: Small cuvs have pitiful enough fuel range as it is, even with more sensible engines.Instead, to make a small CUV better, you 1)make it a lower slung wagon. And only then give it the AMG treatment. AMG'ing, makes sense for the E class. And these days with larger cars, even the C class. For the S class, it never made sense, aside from the sheer aural visceralness of the last NA V8. The E-class is the center of AMG. Even the C-class, rarely touches the M3.Or 2) You give it the Raptor/Baja treatment. Massive, hypersophisticated suspension travel allowing landing meaningful jumps. As well as driving up and down wide enough stairs if desired. That's a kind of driving for which a taller stance, and IFS/IRS, makes sense.Attempting to turn a CUV into some sort of a laptime wonder, makes about as much sense as putting an America's Cup rig atop a ten deck cruiseship.