Bailout Watch 165: Captain Carl Writes Home for Money

Edward Niedermeyer
by Edward Niedermeyer
bailout watch 165 captain carl writes home for money

Dear Secretary Paulson:

We are writing to urge you in the strongest possible terms to use your authority under the Emergency Economic Stabilization Act (EESA) or other statutes to immediately address a significant and systemic threat to the U.S. economy and provide emergency assistance to the domestic automobile industry.

The U.S. auto industry represents almost four percent of U.S. gross domestic product and represents ten percent of U.S. industrial production by value. One out of every 10 U.S. jobs is auto-related. General Motors, Ford and Chrysler account for roughly 70 percent of U.S. auto production and are estimated to support around five million jobs across all 50 states. According to a report released last week by the Center for Automotive Research, the failure of even one US automaker would mean the loss of millions of jobs and cost our economy hundreds of billions of dollars. Inaction is not an option

These last years have seen the domestic automakers pursue an unprecedented restructuring that has put them in a very competitive position with respect to product quality (Ford has tied Toyota and Honda in quality according to Consumer Reports), fuel efficiency (GM offers 17 models achieving 30 MPG or better – twice the nearest competitor), and advanced technology vehicles (Chrysler has announced the launch of electric vehicles beginning in 2010 and all three companies have extensive hybrid offerings).

In addition, the three domestic automakers spend a combined $12 billion annually on research and development. This R&D capacity is a national asset that would be put at risk if we do not restore the health of our auto industry.

This vital role that the domestic auto industry plays in our economy is broadly recognized. Congressional Leaders in both the House and Senate have met with representatives of the industry and its workers at the most senior level and have expressed to you that A healthy automobile manufacturing sector is essential to the restoration of financial market stability, the overall health of our economy, and the livelihood of the automobile sector’s workforce.

On Friday, President-elect Obama said, The auto industry is the backbone of American manufacturing and a critical part of our attempt to reduce our dependence on foreign oil… 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 of America… I’ve asked my team to explore what we can do under current law and whether additional legislation will be needed for this purpose.

As you know, both General Motors and Ford released 3rd Quarter earnings last week that make clear the severity of the strain the auto industry is experiencing. It is our view that providing emergency assistance to this uniquely important industry, which is struggling to meet the challenge of a severe financial crisis that has spread far beyond Wall Street, is consistent with the authority granted to you by EESA, and indeed well within the broad mandate of the Treasury Department to promote stable economic growth.

Given the urgency of the situation, we ask that you work with us in the coming days to provide immediate loan support to the domestic auto industry, including, if necessary, amending EESA.


Senator Carl Levin

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  • Kendahl Kendahl on Nov 11, 2008

    Dear Senator Levin: Rather than tell Hank Paulson to bail out GM, Ford and Chrysler, you should be telling Wagoner, Mullaly and Nardelli to build cars I would prefer over foreign brands.

  • Bozoer Rebbe Bozoer Rebbe on Nov 11, 2008
    Hey you guys all saw Jenny G up on the stage with the Prez Elect. And don’t forget Dingell’s wife is a GM unclassified level exec. Throw in “combover Carl” and you’ve got the Michigan Big 3 I don't think that Debbie Dingell still works for GM communications, though the fact that she did doesn't pass the smell test. Though I'm generally opposed to term limits, Rep. Dingell is a good argument for them. Spousal conflict of interest and nepotism is the way things apparently work in Washington and the media. The wife of NBC's David Gregory was a high level executive at Fannie Mae, which he's never mentioned while reporting on the financial crisis. Mrs. Dingell would have never gotten a high level job at GM if she wasn't married to a congresscritter. As for Levin, while points of his letter can be argued, he's doing his job, representing his constituents. Would people rather he disregarded them? For the most part, Michigan's congressional delegation, Dems and Reps alike, has done a piss poor job of representing our interests in Washington. All but one of the military bases here have been closed and Michigan is near the bottom of the list in terms of return of federal tax revenues back to the state. Michigan, unlike California, has a net loss in terms of federal tax dollars. Our taxes end up going for projects and pork in the other 49 states. I'm no fan of Robert Byrd but he does bring home lots of bacon to WV.
  • Tassos Neons, new, used, or junk like this one, were the right car to own if you wanted it advertised what a lame loser you were.
  • Damage My mother had a 78 with the FI motor. If you wound it out in first (not that she ever did) it would reward you with just a little tickle of torque steer. It was pretty reliable until water leaks from below the windshield found the fuse block. Once that was fixed, it was good for several more years. Eventually it got rusty and was sideswiped by a snowplow, and she sold it to my coworker who got several more years out of it. She traded it for a Mk2 Jetta, which was a fun little car. I don't miss the Rabbit but I'd love to find a clean Jetta again.
  • Tassos in the same league as Tim's so-called "used deathtrap of the day" today.Both emiently junkworthy,
  • 3SpeedAutomatic IIRC, the Deutschmark has appreciated significantly against the US dollar in the mid 70’s due to Nixon taking the US off the gold standard. VW was looking at any angle to reduce costs (cheap interior, broken door cranks, crappy carburetors) to hold the prices in line. That’s why it opened the US assembly plant. Yet, it alienated its clientele by Americanizing the Rabbit. To me, it never recovered in the US from the cost cutting and Americanized vehicles. I have never entertained the notion of buying a VW since.
  • Tassos worthless pile of crap econobox. THe bottom of the barrel, and 20 years old.I'd take $100 to drive it to the junkyard.Tim goes back to his old ways...