Welfare Queens
Guess who's next! The car companies, of course, speculates The Wall Street Journal:
Earlier this month, the Detroit Free Press reported that the top dogs at Ford, GM and Chrysler had a meeting of the minds and decided that the way out of their current losing streak would be to ask the feds for a lifeline. They figure they'll need $40 billion or so to ride out their current troubles until they reach the promised land of hybrids, the Chevy Volt, and, who knows, maybe even profits....The plan is for the government to lend some $25 billion to auto makers in the first year at an interest rate of 4.5%, or about one-third what they're currently paying to borrow. What's more, the government would have the option of deferring any payment at all for up to five years. Meanwhile, Barack Obama recently signaled that he's open to federal money to help the auto makers invest in "renewable" technology, and Michigan Senator Debbie Stabenow and Mr. Dingell are supporting the $25 billion in loans to the not-so-Big Three as part of a second-round economic "stimulus."
Detroit's political calculation is plain: Having seen the way Washington has bowed to rescue the mortgage industry and Wall Street, why shouldn't auto makers give it a try? Michigan is up for grabs in the election, so now is the time to strike with a goal of getting the Bush Administration and both Presidential candidates to agree.
The car makers can also claim with justification to have been hurt as badly as anyone by Washington's policy blunders. The weak dollar has contributed to the spike in oil prices that has socked their most profitable vehicles. And the nonsensical way that fuel-economy standards force Detroit to subsidize cars that consumers won't buy has helped put the Big Three in this hole.
Then again, the car makers saddled themselves with a cost structure in flush times that has proved unsustainable as their market share has eroded. They have made great strides of late in shedding legacy pension and health-care costs, but they took decades to do so. The fact that GM's lending arm, now 51% owned by the owners of Chrysler, dipped its toes in mortgage lending hasn't helped either.
There also happens to be a thriving U.S. auto industry outside of Michigan. These plants are owned by foreign companies, but they employ 92,000 Americans and build and sell cars here. Tens of thousands of their shareholders are Americans. Would these companies and plants get equal consideration under any bailout plan? And if Toyota and Honda get help, why not Delphi and other auto suppliers? We're told the low-interest loan proposal would give priority to the "oldest" plants -- which is another way of saying those plants organized by the United Auto Workers.
Somebody should've started investing in "renewable technology" in the 70s, during the first oil crisis. But, I suspect carmakers know, deep down, that the Feds will always be around to bail them out. I only wish I had the same sort of leeway.







Welcome to the Corporatocracy!
deja pseu at August 23, 2008 6:24 AM
My husband left Ford 4 years ago because their idiot management was running the company into the ground. There was no place for an engineer interested in better fuel economy or improved emmissions. We won't buy Ford again when my old minivan stops running. Let the top level people who insisted they could be 'fast followers' and not develop new technology themselves reap the results. Free markets means free to fail.
Ruth at August 23, 2008 8:05 AM
I forgot to bookmark it... But somewhere out there this weekend there's a blog post from someone noting that Washington is eager to bail out anyone who gets into trouble, whether by malfeasance or incompetence.. If you pay your taxes, pay your mortgage, save your money, and prepare for retirement, government figures there's no limit to the elasticity of your compassion.... So you're going to get fucked.
Crid [cridcridatgmail] at August 23, 2008 8:25 AM
I say we let them go under, much like we should've let the mortgage companies. One of the car companies already here building will take on most of the market share and workers. And americans would (maybe) learn a valuable lesson about staying at the forefront of tecnology, and responsibility.
Of course, that'll never happen. Not when we taxpayers can bail out their idiocy.
momof3 at August 23, 2008 8:37 AM
All of this stuff is going on because people are afraid to change the economic models they're used to.
But no one is yet discussing the most important model change there will be: a shift in the treatment of some "durable goods" away from their being a long-term consumable.
More of a '66 Buick LeSabre is rebuildable than any modern car, which depends on scrappage to recycle its components into new vehicles. Lest you think the car itself is inefficient, that's not a function of the car itself so much as it is that of the priorities of its construction 42 years ago. Hot Rod magazine demonstrated that the 6-passenger LeSabre, a 1966 model, got 23 MPG with the original 340-inch (~5.5L) engine after it was carefully rebuilt and a modern 4-speed automatic was installed, and its output was boosted as well.
The scrapping process consumes much more energy.
Manufacturers aren't going to like the idea of selling you just one car for your entire lifetime. They depend on your hunger for something "new". They've even lobbied for legislation to force you to bring your car to their dealer for service.
You've just been exploited by your love of pretty colors and the smell of clean vinyl. We all pay for that.
Radwaste at August 23, 2008 9:01 AM
Look, if they're gonna mug me for transportation via my tax dollars, I just wish to hell that they'd put the damned money where I need it -- on the bus.
What pisses me off is not only that they keep putting it into trains and planes (and now cars) that I don't even use, I get a roll of the eyeballs whenever I say I'm willing to pay a higher fare on the bus for decent service and more buses on the street where I need them to get about the city. I might point out, my city hasn't had a fare increase in the 13 years since I returned from Denver. You wusses, raise some revenue and raise the fare.
Meanwhile, every place else on earth between the gas crisis and global warming (real or not) is trying to improve public transportation and encourage its use but guess what one of the things our new governor is cutting in his clean up the budget mania? I can't comprehend, even with the high cost of gas and parking problems, why anyone in Albany would choose the bus if they had a car. If we didn't have snow to worry about in winter, I'd buy a bike myself at this point.
Yes, it's that bad.
Oh, and no wonder my blood pressure's dangerously high. I keep getting mugged to bail out irresponsible assholes but, because I wasn't and haven't been one, no one gives two shits about me. Don't really expect them to just stop stealing from my meager income to bail out the assholes.
T's Grammy at August 23, 2008 9:32 AM
Buses aren't the solution, because even though they are confined to fixed routes, they must share streets with "undisciplined" vehicles. Their direct energy costs are huge relative to rail.
Please don't think "high-speed" when you think of trains. Please encourage the education of people on the issues if you're going to talk to people about urban transportation of any kind, including trains. Don't forget to follow the money, and to bark loudly when it's working to its advantage but NOT to the advantage of moving people.
And then, ask yourself: what's so damned important that I have to go somewhere in person?
-----
There are only two ways of getting out of an enormous trap - the expense of moving people to and from work: bring them to the work (everybody lives near work), or bring work to them. If you're a "knowledge worker", you flatly do not have to go anywhere except for the egotistical bosses who think they have to have you in an office. Most companies haven't figured out how to control their workforce, but they'll have to in order to use distributed resources. There is a lot of legal nonsense to be figured out, too.
You are going to be trapped by an increasing difficulty: getting energy to go somewhere. It might not be soon, but there are already 6+ billion people coming to want the same thing you do. It's past time to start thinking about that, because eventually rationing energy at the home WILL follow.
-----
Here's an exercise for the reader.
Imagine two seperate cases, both of which are unlikely to the point of absurdity, but which serve as decent boundaries for the issue.
In the first case, a worldwide epidemic reduces the human population by nine-tenths. Pick the demographic you want to survive. What happens to oil availability and prices, the disposition of radioactive and hazardous materials and the mechanics of energy supply?
In the second case, all oil rigs worldwide go dry at the same moment. Suppose any amount of warning you like, under ten years. What happens to the world population? What happens to you?
I suggest these because people immediately start talking about themselves in energy discussion, but they can't seem to remember that a second, third, etc, wave of effects will touch every part of their lives.
Go.
(Yes, you know how to find the answers. No, I don't expect you to type out reams of results for me.)
Radwaste at August 23, 2008 6:17 PM
Well, the likelihood of the remaining tenth surviving the second-order effects of all the decaying bodies is minimal. And those that do survive will be spending too much time figuring out how to survive to care much about energy production. A disaster on that scale changes the priorities a little. That small a number of people, assuming the Earth itself isn't toxic, could survive as subsistence farmers. Sure, it would represent a loss of 200+ years of tech, and a lot of those would starve for lack of basic knowledge on how to grow and hunt food.
In the second case, we have the ability to get oil from other sources (oil shale, etc) which are too expensive if oil is available elsewhere for under about $80/bbl. A known "end date" for cheap, easily extracted oil would cause the futures markets to respond accordingly. The oil companies would work on ways to deal with coal->oil, oil shale, tar sands, etc. There would also be a major push for nuclear to replace combustion for electricity production.
Any non-catastrophic change we can weather. It won;t be cheap or painless, but like Y2K, we'll find a way to survive it intact. Catastrophe is a different story.
brian at August 23, 2008 6:31 PM
Pardon me, but I just arrived from another blog where things are getting hot and heavy.
Allow me to say that I think the Big 3 automakers are going nowhere with this hydrogen/electric/low emission stuff. After all, global warming is way over-blown. In fact it is a simple matter to reduce greenhouse gases. Below is my 4-step plan to do this:
1)Stop building greenhouses. Seal exhaust from existing greenhouses. This will take care of greenhouse gas.
2)Stop building green houses. Paint all existing green houses a different color. This will solve the problem of green-house gas.
3) Do not emit green gases from houses of ANY color. This will put an end to green house-gases.
4)The only thing worse that greenhouse gas is White House gas!
Norman L. at August 23, 2008 11:09 PM
Hilariously, the Sadly Pathetics, on my entry about Biden being a plagiarist, contend that I am both an idiot and a plagiarist. Here's the the latest from the tiny little thugs who are being sent over to post here:
Hey, loser -- plagiarism is copying without attribution. If that word ("attribution") is too big for you, it's using somebody else's writing or creative work without giving them credit.
See above, the words "speculates The Wall Street Journal"? This is attribution.
Also, I was careful to use only a part of the editorial (it's unsigned, and from their editorial board, which is why I didn't post a byline) and link to the original, because my intention in posting this or any link is for people to go to the original. In other words, I'm not only attributing the work, I am, I hope, driving readers to their site.
Hint: People who brag about their IQs are usually doing so in the context of trying to convince you they aren't idiots -- and usually because it's quite obvious that they are.
Amy Alkon at August 24, 2008 6:31 AM
If intellect were dynamite, the sum total of the sadly pathetics haven't the brainpower to blow one nose.
brian at August 24, 2008 7:41 AM
What I love is the fact that there's a presidential election on, yet they think I'm important enough to blog about and then comment on. I just went over and looked -- they have yet another blog post about me, and have yet another Photoshopped photograph of me. This takes time -- to find the photo, to fiddle with it, etc. And then there are all the tiny little fascists sent over here in hopes of disrupting my comments section (they're trying make it as inane as theirs as a way to punish me for speaking in a way not approved by "progressives").
I am IMPORTANT to these people. I find that kind of amazing.
Amy Alkon at August 24, 2008 7:46 AM
Well, The FDL idiots are at it again.
They want the AP to remove some guy from the presidential beat because he said that the Biden pick shows that "Obama lacks confidence".
"We have found a witch, may we burn her?"
It would be funny if they weren't so fucking serious.
brian at August 24, 2008 11:58 AM
FDL? Ohhh, Fire Dog Lake.
At first glance, I thought it was feminine deodorant spray.
And perhaps that's most appropriate.
Amy Alkon at August 24, 2008 12:07 PM
Yeah, Brian? Maybe actually read some of their complaints. Do you not think it's at all problematic that Fournier was in talks to join the McCain campaign?
alex at August 24, 2008 9:39 PM
I think that anything that FDL, Kos, or S,N! don't like is something I need to be supporting.
I can't read the crap that spews forth from Jane Hamster's keyboard. She, and the rest of you ass-clowns on the far left are so far beneath me intellectually that it hurts my brain trying to think down to your level.
I get the same thing when I read anything written by a 9/11 troofer. That much concentrated stupid causes me physical pain.
brian at August 25, 2008 6:00 AM
Rad, I meant Amtrak. They keep giving CDTA money to Amtrak then using the lack of money to excuse not being able to meet the increased need for street buses. I don't even think they lack the money, they just don't have clue one about managing it. And that's coming from me -- not exactly a whiz at money management.
Christ, light rail isn't even on the horizon here but something needs to be done. What they're talking (where light rail should be because the need is that great) is talking about running a bus with limited stops between Albany and Schenectady. Central Avenue here could have a bus every five minutes and it'd still be full, no lie. Right now, the Albany-Schenectady bus is overloaded to the point of being dangerous to the passengers' physically. People two and three deep standing squashed up to one another and stepping on the toes of seated passengers and the bus having to turn down any futher passengers.
I've already witness one outburst because an asshole in a wheelchair not only pulled ADA on a packed bus, forcing passengers to get off to make room for his chair but berating fellow passengers so badly upon boarding that he wound up with the whole bus yelling at him. He was so bad (and he and his handler came equipped with digital cameras, thought I was gonna wind up on You Tube as they claimed they were going to but the bus company confiscated the tape) that he had an agenda, probably bucking for a lawsuit or something. Caught the bus halfway up Central Avenue where he knew it'd be packed and came all prepared (wouldn't be surpirsed if he was a regular blogger on Sadly Pathetic) to asshole it up and document the anger at the bears he poked. I mean, he got on and berated us and start taping when we protested, screaming all the while about us having no right to expect not to be because we dared open our doors that morning and walk out them placing ourselves in the public domain. The one thing the bus company has done right was beg to differ with the asshat.
It is all too obvious from where I sit (only because I catch a bus that gets me to work over an hour early and only because going home, I get on on the second stop) that we are in definite trouble energy wise.
As for living by work, I love living downtown but downtown Albany has become so overrun with mice, rats and roaches that you ain't gonna get a place without at least one of the three. (Well, my friend does but that's only because he has five cats.) I can abide the noise (especially since there's some low rents down here where I work) but I can't abide having a rat sitting and watching TV with me (as I did last time I rented down here). No, I don't think so. Even if I do wind up having to bike 10 miles in the snow with my arthritis. If I had $5,000 to plunk down on a Segway with snow tires, I'm desperate enough to do it at this point. (And, yes, go ahead and laugh; that's quite a humorous picture, trust me.)
T's Grammy at August 25, 2008 7:59 AM
Amy wrote "Somebody should've started investing in "renewable technology" in the 70s, during the first oil crisis. But, I suspect carmakers know, deep down, that the Feds will always be around to bail them out. I only wish I had the same sort of leeway."
No kidding. The problem is, the cra companies didn't make profits on smaller cars (like my Focus), only on SUVs and pickups. So they claimed they "can't" make fuel-efficient small cars because it's just not possible, oh boo hoo. They meant, it wasn't PROFITABLE. All three American car companies have miraculously and successfully been able to manufacture small fuel-efficient cars in Europe for decades.
Yep, someone will always bail them out. Hell, look at Detroit's mafioso, um, mayor. ow many zillions of time is he excused?!
MonicaM at August 25, 2008 11:34 AM
Monica - here's the problem for the "Big 3"
The UAW got them to agree to pay the health-insurance benefits for retirees until they die.
That adds (as of the last time the number was floated) $1500 to the price of the car.
Which means they have to either sell the cars for a much smaller margin than their competitors, or sell them below cost to compete against the Hyundais of the world.
Which is why the car companies were so hip to have the government go for a full nationalized healthcare system - it'll save them BILLIONS.
brian at August 25, 2008 12:30 PM
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