The Democrats are pushing for money for the Big Three automakers, but a poll shows that 7 out of 10 Americans say they oppose such a move. The Democrats are not impressed:
Pelosi said the auto industry funds would come with many strings attached, including restructuring company finances, meeting new standards for gas mileage and requiring advanced technologies “to compete in the domestic and global market.” The speaker’s office offered no specifics about what the new fuel efficiency standards would be and what types of technologies would be required for the auto industry.
Democrats also said they would include new limits on executive pay at the Big Three auto companies, but offered no specifics on that idea either.
How absurd. The Queen of Congress thinks the way to turn the auto companies around is to impose MORE restrictions on what they can produce, coupled with limiting compensation for producing it.
Maybe if the unions allowed the companies to build cars in the most cost efficient manner, and the government stopped telling them what they had to build, they could turn a profit.
What Pelosi is talking about here is lunacy.
And where are they supposed to get this “advanced technology?” What does that even mean? A flying DeLorean that runs on your garbage? If they had “advanced technology to compete in the domestic and global market,” why wouldn’t they just use it? Why would they need Congress to make them? That makes no sense to me.
On the other hand, Ford has a car that gets 65 miles per gallon, and it isn’t a hybrid. It’s a diesel:
If ever there was a car made for the times, this would seem to be it: a sporty subcompact that seats five, offers a navigation system, and gets a whopping 65 miles to the gallon. Oh yes, and the car is made by Ford Motor (F), known widely for lumbering gas hogs.
Ford’s 2009 Fiesta ECOnetic goes on sale in November. But here’s the catch: Despite the car’s potential to transform Ford’s image and help it compete with Toyota Motor (TM) and Honda Motor (HMC) in its home market, the company will sell the little fuel sipper only in Europe. “We know it’s an awesome vehicle,” says Ford America President Mark Fields. “But there are business reasons why we can’t sell it in the U.S.” The main one: The Fiesta ECOnetic runs on diesel.
Automakers such as Volkswagen (VLKAY) and Mercedes-Benz (DAI) have predicted for years that a technology called “clean diesel” would overcome many Americans’ antipathy to a fuel still often thought of as the smelly stuff that powers tractor trailers. Diesel vehicles now hitting the market with pollution-fighting technology are as clean or cleaner than gasoline and at least 30% more fuel-efficient.
Yet while half of all cars sold in Europe last year ran on diesel, the U.S. market remains relatively unfriendly to the fuel. Taxes aimed at commercial trucks mean diesel costs anywhere from 40 cents to $1 more per gallon than gasoline. Add to this the success of the Toyota Prius, and you can see why only 3% of cars in the U.S. use diesel. “Americans see hybrids as the darling,” says Global Insight auto analyst Philip Gott, “and diesel as old-tech.”
Meanwhile, the automakers are spending millions of dollars to get billions. I’m not talking about investing the money in a way that will reap rewards in the market. I’m talking about lobbying:
In the first half of 2008, GM spent $7.3 million on Washington lobbying activities. Ford shelled out $3.8 million, and Chrysler another $3.3 million in gaining the ears of those who redistribute taxpayers’ wealth.
As the table below shows, in the last 10 years, Detroit’s Big Three have expended $228.4 million in lobbying costs in Washington. Out of this quarter-of-a-billion dollars, GM spent $92.9 million, Ford spent $78.6 million, and Chrysler, $56.9 million.
In 2007 alone, the automakers “spent a record $70.3 million lobbying Congress.” Now they want those to whom they have given millions, to reward them with billions. Your billions. Billions we have to borrow so these companies can stagger and limp a few more years into the future.
I say that if we bail these companies out, there need to be restrictions. Not on the automakers, but on government. Government will be restricted from telling them what kind of cars the need to make. The market will force them to make the best car. The government will restrict themselves on how much taxes they collect on diesel. The government will just get out of the way and let these guys build what they used to build: great cars that move the world.
If the government won’t do that, then no deal. What do you think?
Photo by Dr. Keats.
