Senators from Michigan, Ohio, and Missouri are working late tonight, trying to reach a compromise that would allow automakers to tap into $25 billion in government money that was set aside for retooling plants to make "cars of the future."
Funny that no one calls that an earmark. Anyway, the money was part of the bill raising CAFE standards. Detroit said they'd need help retooling factories, and Congress gave them $25 billion.
Problem is that $25 billion was for long-term projects. Now GM, Ford, and Chrysler need immediate help and their best hope is to tap the retooling money early.
This compromise is a long shot and, as such, shows the relative shift in power from Midwestern auto companies to coastal environmentalists and Southern free market conservatives.
Environmentalists are represented around the country, but are strongest in places like California and the Northeast.
Conservatives are strongest in the South where many Japanese auto plants operate.
Detroit? Well, let's just say it's not as powerful as it used to be.
All politics are local, but unfortunately for the automakers, it appears they are too local to get their way in Congress right now.
Comments
There are many reasons why the bailout of Wall street and the auto industry is wrong but most importantly because the federal government is far more powerful than it was ever meant to be. Now the government can be a stockholder? Sounds too much like socialism.
http://www.theartdeptchronicles.blogspot.com
Auto wookers have some of the highest wage and benefit packages in the world, the retiries some of the best retirement packages. Maybe these recipients of these huge benefits should set aside some of their wealth and help bail themselves out and buy stock in the auto company of their choice!
LALofDC THINKING OUTSIDE OF THE WALL STREET BOX,
TAXPAYER and the AMERICAN BAILOUT !!
Instead of the Federal Treasury ‘BAILING OUT’ Failing Banks and Financial Firms,
HOW ABOUT SPREADING THE WEALTH?
Instead of giving “All” of our $700 Billion to Failing Banks and Financial Firms,
Provide the 305+ million American taxpayers a “Bailout” of $1 million each.
To turn this failing American economy around give a “Bailout Check” of $1 million to all Working and LAID OFF taxpaying American Citizens.
Our “Bailout Check”, would help:
1. American home owners that are behind in their mortgages should be able to negotiate
with the bank and pay off their mortgages; those that have been foreclosed on should
have the opportunity to repurchase their homes or purchase a new home from their
BANK.
2. The money could only be spent in the United States of America on American made
Cars. (Ford, Chrysler and GMC) sell cars from $18,000 - $30,000 per car for 5 yrs.
this would help the Auto Industry and put AMERICAN WORKERS back to work.
ECO-friendly cars that are made will help Air pollution and Global Warming.
The Big 3(Ford, Chrysler and GMC) can use the Taxpayer’s $25 Billions to Retool!
3. Provide the Working and Nonworking families the opportunity to purchase their own
HEALTH insurance, which the Big and Small Business Owners say is a burden on
their profits.
4. Consumers could invest in their children’s College plan, and Retirement plans
5. Investments in Wall Street. Let Wall Street earn theirs the “Old fashion way”.
6. Some TAXPAYERS can go on vacations only within America that would help the
Airlines and Transportation
7. ALL AMERICAN consumers can go shopping and help the American economy.
DO THE MATH; $305 MILLION - $700 BILLION
THE BOTTOM LINE
“BAILING OUT” All Americans will ALSO help this economy.
LalofDC
It is hard to understand how so many people have bought the hype pushed by the foreign auto manufacturers and their American allies in the automotive press and the southern state legislatures. According to an NPR program on NOW titled "Taxing the Poor", the state of Alabama alone has spent hundres of millions of dollars subsidizing Mercedes, Honda, and Hyundai plants while raising taxes on their poor and cutting funds for things like education, health, and public transit. These foreign auto executives didn't have to give up their jets or grovel in front of Congress to get their millions of dollars some of which came from a 10% sales tax on food in Alabama as well as income taxes levied on working poor below the poverty line.To the folks who think there is a quality issue with American cars, I say check some new sources and quit buying foreign manufacturers' propaganda. The folks whining about gas guzzlers, I assume are not the multitude of people I see always exceeding the speed limit in their gigantic SUV's and pickups with adventurous names like Expedition or Tundra. Those guys (and gals) evidently had a gun held to their heads when they were forced to buy these giant vehicles, generally seen only carrying a single occupant. The American auto CEO's are not blameless by any means. They put too many of their eggs in one basket, the giant vehicles that American like to have to bully other occupants of the highway. The competition from smaller economies where gasoline cost more were more inclined to more fuel efficient small cars but at the same time jumped on the SUV/ big pickup bandwagon as well so they hedged their bets, the American firms didn't. The biggest mistake the American car manufacturers made was not realizing that World War II and the Civil War were being refought and this time the Japanese, Germans, and the "South" with the help of consumer greed and resentment were kicking butt.
The issue is that for decades the auto execs have been left to their own devices - they can't help themselves. The guys making the wrong decision justify keeping themselves in their jobs - Chrysler has already had one bailout, remember Iococca? If Chrysler still can't pull it off, 20 years later - no amount of bailout will encourage change and we'll be right back here again in another 20 years!
After a century of failed kick-start attempts on that go-cart cartel, they must have an astounding alternative up-sleeve. Then again perhaps we have extended to them excessive benefit of the doubt. Too late to dream now.
steve, you are so full of it. bankrupt does not mean a halt to business. in english even fish can understand, they will come up with a plan to become lean and mean. you want the feds to give a blank check to save jobs, but that is not good enough anymore. giving them more money to throw away as they have done with their own resources is not going to do anyone any good in the long term. they do not need an additional bail out from the 700 billion that is meant for the financial sector. the automakers already got their share of the pie is the form of a fund allocated for this retooling that they are claiming this "bailout" will be used for. so get off your high horse and get the facts right.
All of you posters are so full of crap you don't know what to do with yourselves. You throw out your platitudes, your un-researched half-truths. I hope your self-righteous blathering makes you sleep better. There are almost 5 million jobs connected to the automotive industry - with the vast majority of them being suppliers and dealers. Nearly 90% of auto suppliers have commonality with the Big Three. Translation: if one of the big manufacturers go down - there will be a halt in orders, which will then leave many suppliers with unsellable product on hand and a good deal of unpaid liabilities on their books. Simple English: a good deal of suppliers will go bankrupt. Very, very simple English: Almost 3 million jobs would be lost next year just from one industry (as compared to 1.1 million for this year; yeah, that's triple the job losses of the year from hell!). Almost cave-man like English: if one of them goes bankrupt the nation takes it hard!
Now, no one feels good about this bailout. No one is just lining up to do it. Our lawmakers don't get pleasure from doing this. This isn't about cozy favors. But a refusal to bail them out almost certainly would be about self-righteous posing from election-stung Republicans. This compromise is a perfect example of their pettiness. So, they don't want to eat away at the $700 billion they're giving to the banks but, in order to have this deal on their terms, they're going to take it from somewhere else in the budget? Petty, petty, petty. Trying to win small victories before they leave office.
As for you lame faux-populist posters, get over yourselves. Look at the long-haul. This is a LOAN not a HANDOUT. They will pay it back. And, if they're successful, we may actually make some money off of it.
don't you just love that when the senator asked if any of the auto execs will be going back to using airlines and giving up private jets, no one raised their hand? can you believe the audacity of these beggars? they come to the taxpayer with hat in hand, asking us to make sacrifices for them to survive, but they will not make sacrifices to their own creature comforts? then, they insist on getting a handout on their terms: no, we refuse to declare bankruptcy. that is a load of bull. everyone else has to, so do you! given the long history of failures, especially you (us automakers) since you dug your own grave.
well, we should not be coddling them. they want money? well, here are the terms. you will declare bankurptcy and restructure. you will downsize and give us a plan that you must live up to or the loan comes due when you default on those terms. you will absolutely not give bonuses to your spoiled failures that you so cherrish and fear to lose. let them join the unemployment line like the rest of us if they don't like it. the days of golden parachutes and the elite-overpaid-do-nothing-but-throw-money-at-the-problem-no leadership- or vision- are done!
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failure will not be rewarded. the government will own a majority share of the automakers until such a time as they can payback the loan. Yes it is a loan that they must payback with interest. if they can not agree to these terms, then screw them! go back to detroit and hang yourselves (figuratively of course). you will trim your fat (cats) and rip up those exhorbitant union salaries. this is a business, not a charity.
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i know damn well that there is more they can do to cut costs. the fact that they are not willing to give up classy cushy personal jets and go coach is proof of that! tell me, when it is said that there will be caps on exec salaries, does that mean instead of 100 million, they will only be getting 75 million and stock options? will they pull a banking hocus pocus and use "your own money" to payout bonuses, ala the financial institutions (those bastards!).
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you know what image "american taxpayer" conjures up for me these days? a slauter house for cattle. ensanguinated cash cow!
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below is a copy of my other post regarding this matter of injustice from another of your blogs. enjoy!
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i'm surprised that the media has not taken this to the public for polling. i would be curious to see how others feel. personally, i think anyone not working for the big 3 (lame o's) should be enraged. here comes another corporation that is banking on its "too big to fail" status to get a hand out at the expense of taxpayers. where does it end? does anyone else worry that we are setting up some precidence here? "hey corporate america, who else needs an allowance? uncle sam's got his bottomless wallet out".
the us automakers were ever trying to preserve the status quo. it is almost a mantra with GM in particular. they were slow to respond to market trends that a blind man could see. hummers, muscle power, and suv instead of fuel efficient and, this is important, QUALITY cars.
they want cash? Hey rick w. why not put your check book where your mouth is: take it out of your own bloated wallet and sell some of those summer homes and jets. hey, if your so sure that gm is a good business to back, you'll get it back in profits and bonus riiight? surrre. same with the rest of you greedy "exec talent" bastards.
i know many who struggle to make ends meet, what more save for retirement. but, we now have to give to these unworthies so that their greedy unions can have guaranteed cushy pension benefits.
where's the justice? gah!
Let the car companies figure out their troubles best they know how. I suggest they all come together as one company. Way back when, you might have purchased a 1940 Ford. You either bought a Coupe or a Truck. Right? Now look at the Big Three. I dare someone to count up all the different offerings. Must be in the hundreds. Stupid if you ask me. Probably not too cost efficient either. I am no longer a motorist, but if I were, you couldn't give me an American car. Next to a home purchase, the automobile is next in line for expense. People want quality and the best cars do not come from here. So this should all be pretty simple, make a few terrific vehicles versus too many mediocre ones.