Let Big Oil Bail Out the Auto Industry

Seems like such a simple solution, doesn't it? After all, who has influenced the US Auto Industry (USAI) to keep MPG low and fight CAFE standards? Why does the rest of the developed world have advanced technologies that the USAI can't seem to bring to the US? If we have had the ability to make cars that get better gas mileage and even make gas-less (electric) cars, why haven't we done it? Who benefits from the USAI's refusal to implement maximum fuel efficiency in cars? Only Big Oil and their stockholders. If you currently own stock in GM or Ford, you can certainly agree.

Even if the Oil industry spends about a third of its after-tax profits on exploration, the rest of the profits they've made just this past year could effectively provide the USAI with a better package than the government is handing them. Consider it a payback for keeping MPG so low for so long, so that Americans used more gasoline for so many years. This is not a windfall tax so much as a payback for years of doing their bidding. Keep those fuel standards low! Make inferior product! But when you lose your business, don't look for a handout...

Though the banking and pharmaceutical industries have traditionally been the nations most profitable, the oil industry has had a banner year in 2008. According to the Washington Post, "At its current rate of growth, Exxon Mobil will be the biggest U.S. corporation this year by revenue, bigger than Wal-Mart Stores Inc., which had $288.19 billion in revenue last year." At the same time, our Auto Industry has fallen on hard times, losing billions each quarter. Much like our failing Educational system, the American Auto Industry has lost any competitive edge in the global market by keeping innovation and reform down and, well, creating an inferior product. Of course, they would say that the American Consumer dictates the business, as they were buying all those SUV's and Hummers along the way. This has some truth, but the fact is that the deals on gas-guzzlers were highly sweetened to make them as affordable as possible and people took those deals. Then gas hit $4 a gallon and people realized the true impact of low fuel economy.

Now that the price of gas is dropping, there is some relief at the pump. However, the rest of the economy is so bad that people aren't going back to their previous gas-guzzling ways, and that is nothing but good for the country and the planet. Hell, GM may even stop making Hummers! I drive a Prius and can now fill my tank for less than $20 here in California. That gets me about 400 miles a tank and I'm happy as hell. But beyond the fuel economy, I realize that Toyota, much like other foreign car manufacturers, builds a lot of its cars here in the US and they don't seem to be going bankrupt. That means jobs for US workers making cars that outperform the USAI right here at home! Amazing. And I keep coming back to the question: why did our Auto industry fight for so long against raising CAFE standards? And why didn't our Government put the right tax relief in place to make it easy and profitable for them to use every technological advance to make the best cars on the planet? Because raising CAFE standards means using less gas, which is not good for the bottom line of "the biggest U.S. corporation this year by revenue" and their close associates. And that includes their friends in Congress.

The Republican Majority in Congress has been a major contributing factor to this problem, which isn't surprising considering their deep pocket relationship with Big Oil. One can easily draw the conclusion that Big Oil, through lobbying their friends in government and influencing the USAI, kept us from raising CAFE standards and kept the wrong subsidies in place so they'd keep pumping out SUV's and trucks that drank more gas than ever. Because when gas prices went up, so did their profits (during wartime!) as millions of Americans who could previously somehow afford to fill their humongous gas-guzzling tanks got hit hard at the pumps- right as the economy took a turn for the worst. And a loss of jobs means a drop in consumer spending, which affects cars. And gasoline.

Let's face facts: if people can't afford cars, they can't fill them with gas. So it behooves Big Oil to give the USAI some help, as it has helped them sell so much gas in the past. True, the side benefits of getting people out of cars and into public transit are a huge bonus side effect to this crisis. But Americans relationship with cars runs deep and if given great vehicles with high fuel efficiency- and the tax incentives to get into them- we could see a revolution on the highways of America. Perhaps our Government can buy GM outright (for far less than the bailout would cost) and ramp up production of cutting edge vehicles that will transform transportation and get us quickly off of foreign oil. Once the company is profitable, sell it off and give taxpayers their money back. Or maybe we've nationalized one too many businesses already? If Corporate Socialism works for Wall Street, why not give the Auto Industry a shot, as they employ more of "Main Street" than the banks do? Who are we trying to help here?

Last point- and it's important to remember- is that for all that Big Oil and Congress have been able to agree on, it takes true leadership at the top to steer the ship. And George Bush and Dick Cheney didn't do one meaningful thing to halt this situation. Not even to rescind the massive tax breaks Big Oil was getting while they made the largest profits in American history during a Recession. Nothing. Another sad chapter from the Naked Emperor's Delusional Rule.

The buck may stop at the top but it passes through a lot of hands on the way. So come on, Big Oil~ bail out your "friends" at GM, Ford and Chrysler so they can save those millions of American jobs! I'd say it's the least you can do, but we've seen less from you. And in the end, we both know that Chinese cars will still run on gas and make your profits sizzle. And that is what matters most to your shareholders and your bottom line. You don't care if we think you're a big bunch of dicks as long as we still pony up at the pump and are enslaved to oil. It is my sincere hope that President Obama ushers in a new era of Small Oil so we have a choice (besides bicycles and foot power) to get off gasoline for good. Bring on alternative fuels!

Comments

[ballsonwheels]

Well, as you know, I live in one of the 'oil states'. That being said, I completely agree with what you've said here. Something is seriously wrong when the average American citizen is unable to get by, and oil execs are living lavish lives, taking private jets, vacations to paradise, and live in HUGE houses! Please! I live off of $637 a month. Try that for a while!

I guess what I'm trying to say is, you've yet again captured the opinion of many Americans and put it out there for the world to see.

Well done!

[gigger]

Robbie:

A lot of people are with you on this. The irony with the republican Senate goes further. It is the republicans in the Senate that voted down the 14 billion dollar package that was recently proposed. The same republicans that backed Reagan"s policy to roll back the initiatives that Carter put in place to require higher mileage standards for US automakers. The same standards that would have set the right example for the Big 3 to follow, making them a more competitive car company for the 21st century.
It is also crystal clear how little support there has been from the oil industry for the auto industry to perform in anything other than a "business as usual" manner. Consider flex fuel cars that can run on E85. If you call Exxon and ask them how many E85 stations they have in place, you will find that they do not offer E85. If the distributors have no support from the oil industry for E85, why would the auto industry ramp up production for these vehicles? What does the dealer say to the customer when asked, " where do I fillerup"?
The oil industry supporting E85 is not the answer to our energy problem or the key driver to have put Detroit on the right path, but it is a step in the right direction, a bridge if you will.
A point which I recently blogged about in:
Oil Companies Bail Out the Automotive Industry
http://banderbind.wordpress.com

[James Rotondi - Huffpost Blogger]

This is a remarkably cogent, well-informed and surprisingly practical idea; toss this one Harry Reid's way"I bet he bites. . .

[Rule Of Law]

No responses yet? I am amazed!

This is something I've been saying for a while now. If not big oil, then big banking AND big oil since they have between them most of our money.