Give Detroit the money, but....
Toyota's very fuel efficient Tundra?The Big 3 continue to increase their efforts to acquire as much as $50 billion in loans from the US government - $25 billion of which was written into CAFE increasing legislation, and momentum is gaining in Congress.
Thus far, I've been against this bailout, but I think I've changed my mind. Perhaps the bailout can be the impetus for desperately needed change.
Finish: Give Detroit the money, but....
Labels: CAFE, Congress, diesel hybrid vehicles, fuel economy
posted by Dahcredyns at
7:28 AM
2 Comments:
FULL STORY
The Big 3 continue to increase their efforts to acquire as much as $50 billion in loans from the US government - $25 billion of which was written into CAFE increasing legislation, and momentum is gaining in Congress.
Others, such as Ralph Nader, the iconic third party candidate for President, have come out against this 'bailout'. According to the DetroitNews, Nader "lambasted Detroit automakers Sunday for what he called decades of poor decision-making and said they do not deserve a federal bailout to save their hemorrhaging industry."
And hemorrhaging is an apt description.
In the 2nd quarter of this year GM lost about $15.5 billion, and about $70 billion since 2004. Can 1/3 of $50 billion really help? If GM couldn't make smaller, more fuel efficient vehicles for profit 10 or 20 years ago, why can it today?
Yet, what happens if GM and the rest of the Big 3 go bankrupt?
Does fuel economy increase greatly? Does the economy suddenly strengthen?
Also, can foreign automakers fill the gap with much more fuel efficient vehicles at prices that Americans are willing to shell out? Would they want to fill it with much more fuel efficient vehicles, or just the same stuff they are already selling? It's not as if foreign automakers are knocking down the doors with significantly more fuel efficient vehicles than US automakers.
All about the Economics?
Let's say that the bailout is denied and the Big 3 slowly go into bankruptcy. How much money is left on the table?
Much more than $50 billion I assume. And who will pay? The executives? The rich people of America? No. Middle and working class America will pay.
More lost jobs. Huge pension and health care expenditures. And an even weaker economy, which will only cause even more problems for average Americans.
Can America afford this?
Yes, Detroit has screwed up, royally. So did consumers. So did the government. America has become a culture of 'screwed up'. Everything is about today without any regard to how it affects tomorrow. This has to change, and maybe the bailout can be an impetus for that change.
Thus, perhaps this 'bailout' is an opportunity for Congress, industry and consumers to change, to evolve in a way that can rebuild America.
Detroit wants more than the $25 billion than CAFE legislation suggests. Fine. Give it to 'em, but with caveats, such as even higher CAFE requirements. Or, demand that a certain percent of vehicles must be hybrid vehicles.
Plus, give the Big 3 a contract to convert all government fleets to hybrids or some other alternative that helps push momentum towards change. Give the postal service, for instance, incentives to upgrade to much more fuel efficient vehicles, but they have to do it NOW.
Let's be honest. We don't have time to watch Detroit sputter a few more years, then fail, then wait years longer for others to pick up the pieces and fill the void. Besides, do we really want GM to fail and then have private equity from Saudi Arabia come in and buy GM's Volt technology, and have them sell us the technology to end dependency on their oil?
Maybe that wouldn't be so bad, but we need change now. It needs to start yesterday.
I say give 'em the money, but guarantee that money is a vehicle for change.
According to the latest news coming out of Washington, the Energy Department is working on rules that will ensure that monies given to the Big 3 are tied only to raising fuel economy.
That's at least a bit of good news.
Unfortunately, since the House is trying to rush this legislation, massive loopholes seem inevitable.
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