Detroit Bailout -- Let ExxonMobil Foot the Bill
Listening to the auto execs this week, hat in hand testifying in front of Congress, you'd think it would have offered a humble moment for them to come clean and own up to their mistakes. But no, they continue to deny any responsibility for the mess they are in. Instead (oh how convenient) they blamed their problems on the current collapse of the economy! That denial alone should exempt them from any "bridge loan."
The best idea I've heard in the last few days comes from an unlikely source, the actor Ashton Kutcher on the Bill Maher show, who repeated the suggestion that the auto industry go meet with the oil industry - their partner in crime - and ask them for a bailout. At least we know ExxonMobil can afford it.
And while we're on the subject, the one piece of good news today is that John Dingell may finally be on his way out as head of the House Energy and Commerce Committee. He had what, like 30 years to get this right? And all he did, over and over again, was enable Detroit to do nothing. It's time to let Henry Waxman assume this important role, particularly since global warming and energy will be the central focus of the committee's upcoming agenda. We can't afford to let Dingell's brand of obstruction stand in the way of real progress any longer.
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I vote for the Kutcher plan.
And all the Republicans out their sharpening their knives with glee at the thought of finally busting the UAW can kiss my black ass. We need to keep helping them make it clearer and clearer that the only guiding principle of "conservatism" today is to abuse any crisis in order to give away more money and power to the rich and powerful. That's all they stand for. Nothing else.
Actually GM did pair up with Standard Oil (now Exxon) earlier in the 20th century with the goal of destroying mass transit rail lines that existed so that Americans would buy more cars & of course, gas.
Exactly, which is why their old buddy can come rescue them again!
I have no sympathy for the auto execs in this. They fought fuel efficiency (hand-in-glove with the oil industry) for years and then created the market for gas guzzlers. That was all advertising hype, my friends. Even though I live in Colorado most of the SUVs and 4WD vehicles are driven by people who never, ever, go where they are really needed. And they think 4WD means they can drive as fast as they like on snow and ice and not have a problem - which is why so many have dents in the sides and rears.
I do have sympathy for the workers, though. They have been getting the shaft for years and now will lose their jobs. For what it is worth, I am opposed to bailing out companies that don't get rid of the bozos who made the bad choices and replace them with someone who may be able to think a bit into the real future.
Yes, they definitely need to submit a business plan. Next, Congress needs to act as real stewards of taxpayer's money. Yes, gas guzzlers need to be taxed heavily and gas savers need credits and rebates. They can make cars, just try environmentally friendly ones. We should be getting 60 mi/gal - THAT would sell cars!!!
Best idea I have heard throughout this whole "bailout" process!
The idea that the auto industry and oil industry have been partners in crime may seem to make sense on the surface, but the opposite is true. The auto industry has been building millions of flex-fuel vehicles that can run on ethanol, which the oil industry sees as a huge threat. So oil (much like tobacco companies in earlier decades) has bankrolled its own "scientific" research that shows that ethanol causes food prices to go up, that it uses more energy to produce than it delivers -- bogus science bought and paid for. Also, the auto companies have wanted to bring in more fuel-efficient diesels to the U.S. (they make up 50 percent of the market in Europe). Diesels get 30 percent better fuel economy, 20 percent fewer carbon emissions. But the oil companies have successfully used their weight to write emissions legislation that makes it tougher for diesels to qualify for sale in the U.S. Diesel takes less refining and is less profitable than petrol/gasoline.
Flex fuel is petroleum based. Ethanol is ADDED to petroleum based fuels. Perhaps the solutions to our dilemma lie beyond petroleum.
If you want to see what kind of criminal partnership exists between Detroit and the oil industry, watch the documentary WHO KILLED THE ELECTRIC CAR? The film even tracks back to when the oil industry duped municipalities into swapping electric trolleys for gas thirsty buses. Why the oil companies even offered to help rip out the trolley infrastructure.
Oh, please!! The American auto makers absolutely have NOT been making fuel efficient cars, they have dragged their feet every step of the way, and have wasted decades of time and untold amounts of money (lots of it from the fortunate taxpayers) fiddle-farting around. They learned NOTHING from the problems in the seventies; can you really believe that they have done ALL THEY COULD DO to improve our oil dependency? And so, anyone with intelligence buys a fuel-efficient car from Toyota, or Honda, or some other FOREIGN automaker.I will never buy an American car until they up their quality and MPG to a really competitive level with these foreign cars. There is no way to ease the plight of the auto workers; they will suffer along with the rest of our manufacturing base until true enlightenment occurs and America recovers its once-proud status as a maker of high-quality, durable goods. Any bailout monies given the Big Three will go the way of the AIG money, paying ludicrous compensation and BONUSES to the criminal class that has brought our great nation to its knees with outsourcing of jobs and dumbing-down of the electorate! We can and must do better.
Dear Exxon,
You won't have to come up the whole 25 billion loan. Make a Call over to Dick Cheney's 'Haliburton'. Cheney has made Billions for them... they can open up their Piggy Bank and give you a few Billion in change.
Does it makes sense to feed a Banking System that has taken $Trillions in FEES AND SALARIES?
While NOT FEEDING a Honest and mislead Auto manufacturing system that has been guided by BUSH and BIG OIL to produce "Gas Guzzlers" so EXXON can make Record Historic Profits!
I guess if you are Bush & Company wanting the Rich Oil Executives to become RICHER this makes some kind of SENSE!
With Waxman we will see TOUGH Change for the Common Good!
I agree. The banks held a gun to their head and said, "Give us your money or we'll pull the trigger and destroy your economy." And they got it.
American car companies have been closing plants and slashing jobs as long as I can remember. Their answer to the Prius? A hybrid Escalade.
The government should bail them out to save the jobs of millions, but tell the top brass: "You can pay yourselves up to 20-fold what your AVERAGE line worker makes, not 300-times. Take more and we'll throw you in jail for 10 years without argument."
Like Republicans, The Big Three Automakers do not realize they are the victims of their own bad behavior. I am for helping companies that have been hurt to get bridge loans, but not with the same inept management that has brought them to disaster. They should first take a pay cut equal to the haircut their shareholders have taken. Second, let their employees vote on whether or not management stays in power.
If people need help, they should come by public transportation with hat in hand, and with a plan to justify the help. We do not need black tie and tails at the door asking for a handout.
I saw the same Bill Maher show and Ashton Kutcher's comments. I myself found this comment to be so PROFOUND...? How simple could this be and won't put US taxpayers at risk. Exxons 'profits' for just last QUARTER was 15 Billion...for just ONE company The Big 3 say this 25 billion is JUST a Bridge Loan. (Not operating capital to keep them going years down the road)
If it is a Loan.... and they have a Plan long term to be profitable... WHY wouldn't the Oil Companies go for this? Do even THEY not trust the Big 3 to do the 'right thing'. Do they know something we don't?
How about it Exxon.... Why wouldn't YOU loan them the Money?
Of course they would because the collateral will be the promise to continue to make the gas guzzlers so that Exxon et al. can continue to make obscene profits. Everybody wins, right? (sarcasm)
I have no love for the auto execs but frankly, like any business, the auto industry sells what people buy. The marketplace is fickle.
For a long time people demanded SUV's. The SUV craze began with the so-called environmentalists and nature lovers who felt that they absolutely, positively needed a Jeep to get around in the woods, on the beaches and other off-road places that help burnish the macho, outdoorsy image that they were trying to portray. These idiotic vehicles became cool, demand rose and everyone started making them.
Then came $4.50 gas and people realized how idiotic these vehicles are except for those who really needed them, like contractors and people who really do drive off-road. The problem is, people got stuck with these huge vehicle for which they paid a lot of money and they have to continue to feed fuel to these guzzlers. The fuel companies are akin to crack dealers who get you hooked on their product and keep you coming back for more.
Now the market has changed again. People want fuel efficiency. I kinda feel sorry for the auto industry. No matter what they do they get it wrong. The fuel industry is fighting back by lowering prices because their product isn't selling like it used to. Let us not be fooled. Fuel efficiency is the way to go. Drive what you want but if it were up to me, I'd tax the crap out of these gas guzzlers.
UM, We "so called environmentalists" HIKE IN.. It is the lazy a** extreme sport people who can't go anywhere without an ATV or a jeep or better still a Hummer.. Have you lo9oked into how long you have to wait to buy a PRIUS? In my neck of the woods, it is a 6 to 9 month wait. Same with the Honda hybrid. Detroit has been in the dark, are still in the dark, and the management needs to be demoted to the production line long enough to find out what the job is all about.
Ah, the Prius. Nickel for the batteries is mined in an extremely toxic environmental hazard in Ontario, and shipped to China where the batteries are made in a plant that runs on very dirty coal-fired energy. Then the battery is shipped to Japan where the Prius is assembled by "guest workers" from Vietnam and China, who are stripped of passports and forced to work at subcontractors 16 hours a day, 7 days a week at less than the legal minimum wage..And then Americans buy the Prius and feel morally superior.
Many years ago the oldest motor company in the US was bought by AMF mostly for the golfcarts and AMF was about to let Harley Davidson go under but at the last minute of bunch of employees bought the company and started building quality machines something AMF wasn't interested in. The people most directly involved took action, saved their jobs, saved their company. Maybe the auto industry can learn something from an old motorcycle company?
It's pretty clear the auto industry can't learn.
Everybody has one (an opinion). But I try to wash mine, at least. The truth is, Detroit has been trying to retool and go green and give the people what they want as of late, if only for survival. So yeah, they're slow as molasses. Yet what they say about the financial markets is also true, in that short term commercial paper dried up and left them twisting in the wind. So both is true. And Exxon undoubtedly shares in this mess along with all the other energy companies, however trying to make them pay for Detroit's woes will be like squeezing blood from a stone. Plus their is no legal precedent and once you go down that path, then government should just own everything (hey! we actually are the USSR!)
Obviously what should happen is that a few of the better off banks (JP Morgan, Citi,etc.) should combine to float this $25B bridge loan to Detroit privately, allowing them to hold on another 62+ days, until we can enact some legislation with oversight and mandates for retooling, higher MPG standards and emissions standards. If they give us what we want, then we'll be happy to keep 3 million of our fellow citizens employed. And Change will boost consumer confidence. So temporary private loans guaranteed by the government, accompanied with a restructuring package in the new congress may be a way out of this. Otherwise, in 2 years unemployment will reach 10% or higher.
i love all these people who want the automakers to go bankrupt if they do this country is done bail out wallstreet 3 miillion blue color workers union this country wants to break them if the
most people don't want them to go bankrupt because most people are human and understand that their are real lives affected by whatever happens. but they can, especially general motors, reorganize, re-group and evolve. i'm not sure how many people still use an 8-track to listen to their music. businesses need to evolve or they die, and if they refuse to evolve, the employees - with all that power of the unions behind them - can say, "hey, why are we still making 8-tracks?! they suck and even i want an iPod!"
good money after bad is never a good idea. please don't tell me that the higher than market value-paid autoworker hasn't always known the gig is pretty good and it may not last forever.
if you don't take control of your own life, mother nature has a way of stepping in and affecting change.
This desire to bust the unions started with Reagan and the air traffic controllers. When Republicans like Mitt Romney talk about the industry need to restructure, they mean they bust the UAW. It is not coincidental that, since the beginning of the union busting, the gap between average worker compensation and the rich continues to grow.
Letting Big Oil bailout the Big 3 would be a terrible mistake. The American people, through the American government, have a chance to set the rules if a bailout occurs. "We want 30% of our cars electric by 2012. We want the remaining combustion engines to get 45 MPG for cars, 25 MPG for trucks, etc, or you get seriously fined."
Allowing Big Oil to bail out the Big 3 would only allow the automobile industry to continue to be the razor to oil's razorblade.
As far as I can tell the big three are in a mess that they created, let them fail. They have no plan for recovery. In my mind it is a failure of management, they need to go bankrupt, fire all those at the top, and then start over in a new direction.
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