Here comes the $25 billion automakers’ bailout
The bailout binge continues apace. I’ve pointed out to you already that both Barack Obama and John McCain support the $25 billion automakers’ bailout. It’s speeding through Congress as we speak. President Bush will sign it this week after both parties fall in line and pass it (vote is expected in the House tonight).
Detroit Free Press reports:
Michigan lawmakers hailed the imminent passage of $25 billion in loans for the U.S. auto industry on Wednesday as a key step toward saving thousands of jobs in the state, and vowed to press for an additional $25 billion to boost the industry’s retooling.
Under the bill expected to pass the House this evening, the Bush administration will have two months to write the rules for the loans, and Michigan Sen. Debbie Stabenow said she expected the money to begin flowing to automakers and parts suppliers by the end of the year.
“There is no bigger issue for Michigan than what we’re accomplishing today,” said Rep. Fred Upton, R-St. Joseph. “This is a testament to the strengths of every member.”
The clause speeding the loans should ease concerns of some automakers and parts suppliers that the money would not be available for several months. Officials said the U.S. Department of Energy had told them it would take a year to write the rules for the loans.
While lawmakers did not win changes that would have let companies use the loans on a broader array of projects, they said they would closely monitor the program and press for changes if the loans did not flow freely. The industry had asked for up to $50 billion over three years, but eased off after the idea met strong resistance.
“We’ve got the best deal for the industry that we can,” said Rep. John Dingell, D-Dearborn. “I think we got that which they need to go forward.”
God save us from bipartisanship:
After the push ramped up in August – and the automakers doubled their bid to $50 billion – critics attacked the proposal as a unnecessary bailout for uncompetitive companies. Yet as Wall Street’s problems worsened, and the Bush administration escalated its rescue efforts into a $700 billion bailout, the auto industry’s request came to be seen as a small step to help an industry with blue-collar roots.
Lawmakers said the support of presidential candidates Barack Obama and John McCain — whose backing was brokered in part by Upton and other Michigan Republicans — was key to getting the loans paid for.
The industry had warned that because the loans could only apply to vehicles that were 25% more efficient than direct competitors, few new models would qualify. Those rules still apply, as do restrictions limiting the loans to covering no more than 30% of the costs for a single project.
“It’s been a struggle here in Washington to secure an acknowledgment that a domestic-based auto industry is vital for America,” said Rep. Sander Levin, D-Royal Oak. “What this does is to embody that idea, and to help it continue to be.”
The loans were included in a budget resolution that held several other spending measures to keep the government open through March. The Senate was expected to pass the bill on Thursday, and the measure should get a signature from President Bush shortly thereafter.
What was that I wrote last week? Oh, yeah: Death of fiscal conservatism, R.I.P.
Dead again.
The road to serfdom is paved with ever more “investments” to secure “stability” in the marketplace.
As I’ve noted from the start of stimuluspalooza over a year ago, this ain’t the first one and it won’t be the last one. (Funny how you’ve heard almost nothing about the Washington Times report I blogged about yesterday on the addition of student loans and car loans to the bank bailout).
If you’re one of the foolish people out there still paying your bills on time, you might want to reconsider your responsible ways.
Got debt? The government’s got your back.
The rest of us are screwed.
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I already had my mortgage loan approved this summer and was ready to purchase something before events interveived for a few months.
Add $400K for a brand new house (I’ve decided to now upgrade)
Add $50K for girlfriends school loans (I’ll add her law school loans next year)
Add $200K for kids school loans (Im going to transfer the oldest to an Ivy league school now!)
Add $25K for my current vehicle
Add $5K for my NEW Big screen I will buy this weekend
Dont want to be greedy – so thats only $680K for me
interveived… really??? So just how much did your parents waste on that English degree after all.
You forgot two very important factors. The big three made such crap for so long they gave away their market share. Then, unions made wages so high they priced themselves out of the market. So, the Japanese bested our quality (not hard) and the foreign countries bested our wage earners (even less hard). So, an overpaid guy on an assembly line who was making union wages had no incentive to work hard or care about the product.
No, I don’t feel a bit sorry for the big three – no sir. You want to compete? Make a great quality product at a great price. That is what a capital market is about.
The problem, Lucifer, is that restraint is not exactly a strong suite for our government. Besides the “we” in “We created the mother of all moral hazards” doesn’t include me, but I will included in the “we” that gets to pay for it. Everyone that is about to lose their houses can do what I did when I lost my car because I bought one I couldn’t afford–walk. Ride the bus. Rent an apartment. Move in with your mother. Suck it up and be responsible for your own problems instead of asking everyone for a “do over”.
sonofdy I need $10k more for my “consulting work”.
co-supponsers of the “Screw you, i got mine” bill of 2008 so far
sonofdy – 300k
vickisoup – 310k
hunter – 250k
right4life – 30,000k
rightisright – free house
txskirt – 300k
cheapseats – 300k (text messaging handicap allowance.)
CantCureStupid – 300k
letget – Trumps crib +20k
Phiber0p – 22,000k
nyc123me – 2,000k + christmas
Commonsense – 300k + 3 cars
durangodarlin – 320k
fourstringfuror – 250k
John Deaux – a house, a jet, a football helmet filled with cottage cheese, and naked pictures of Bea Arthur
tamarah180 – 750k
oldpath – 500k
supersean – 100k
MBuck – 3,000k
On-my-soap-box – 110k (Inflation)
RabbidSquirrel – 900k
Times up!!!! Michelle Malkin if you would be so kind and pass on our minor requests to the correct people. Pretty Please??? Thanks
thumbs up!!!!
(we understand if the naked pictures of Bea Arthur are excluded, really)
Thanks for the work sonofdy!
checks in the mail!!!!
THANKS!!!!!!!!!!!!!!!!!
I disagree with Michelle on this. This is a request for loans, it is not a “bailout”, and they are needed in part because of mandates forced on the auto makers by Congress. As the Detroit News story says,
Detroit automakers say the loans will help them retool factories for more efficient vehicles, but Wall Street analysts have said the program could also alleviate some of the pressures on the automakers’ balance sheets. The companies are expected to burn through billions of dollars in cash through 2010, due to declining auto sales and higher costs for commodities.
The loans had been set up but not paid for in last year’s energy bill as part of the agreement to win the industry’s backing for raising fuel economy standards to 35 miles per gallon by 2020. The government has estimated that the new standards would cost Detroit automakers $30.5 billion just through 2015.
Unlike the subprime banking fiasco which can be directly attributed to corruption, the high cost of fuel is largely responsible for the current bad fortunes of the auto business (and the negative effects on the U.S. economy is not restricted to the borders of Michigan).
Everything is trickling down from the subprime crisis and the energy crisis, and we know who is to blame for both of those disasters.
The easiest way to solve this problem, caused by the Federal Government, is to recind the cafe standards that they forced into a bill for all vehicles to get at least 35 miles per gallon.
And the second thing that no one realizes, is that this will now end the generations of muscle cars, like the new Camaro, and Corvette. gone. Thanks to the Federal Government.
Buy Danish is exactly correct. Want to save a whole lot of money? Cancel the Cafe standards coming down the pike. And keep our Mustangs, Corvettes, Camaro’s and SUV’s that the government is forcing us to give up!
Otherwise the government should have to pay for what they are forcing the car companies to do. THEY should fund it. Or leave them alone.
Ok, so we’re going to give the auto makers a small loan, we’re going to bail out a failed Wall St., yet no one in D.C. has shared with those of us that’ll be paying for it how on earth they’re going to repay us – if those companies are insolvent enough to warrant anything on this scale they are simply that – insolvent. Who is going to have any money left to buy new cars or invest in anything when the tax burden hits us? There is not a chance in hades either candidate is going to be able to reduce taxes. There is not a chance in hades this is going to make anything better – only worse.
Add me onto the list for around $400,000. I’ll take the money and live happily ever after in a previously undisclosed, double-top secret location!
how about we poll each and every single registered (legal citizens that is)voter and ask them for permission to use our money!!! let’s think outside the box on this one and the others…I’m frankly tired of paying for their stupid and bad decisions….let them fail…
and just who was it that killed the electric car a few decades ago…yep the US auto makers…
Maybe the US auto industry should be allowed to succumb to it’s slow and lingering illness and quietly die. Then after a while it could come back lean and mean an able to compete without the twin albatrosses of the Union and the pensions hanging around its neck. RIP US auto industry?
I just found out that Bill Heard Chevrolet, one of the country’s largest sellers of the Chevy line just closed all 14 of it’s dealerships today.
They own(ed) 13 or 14 dealerships from GA to AZ.
GMAC cut off their access to credit on 26 August.
You can see this coming with big dealerships that depend upon anything from the US Big 3 auto makers.
You should read Lee Iacocca’s book about how Chrysler got into its mess and needed its bailout.
I’ve been watching car dealership inventories for the last couple of years and it all looks the same again!
Tax the guy making $18.50 an hour to save the $28.00 an hour assembler at GM, Ford or Chrysler with his All Pay health insurance, 90% unemployment insurance and rather generous retirement package and millions more for the front office types who let this happen. That’s fair, no?
Without Congressman John D. Dingell Michigan 15th running interference more nimble auto manufactures could arise and challenge the Japs and Big Three without the UAW sucking them dry.
The Once Great American Auto Industry
Driven to Japan by:
United Autoworkers
Lazy ass management
GreenWeenies everywhere
Congressman John D. Dingell Michigan
I’m a measley 5K. Shoorely you could help lil ol’ me…
If a U.S. nuke went off by accident and destroyed your business, is it a “bailout” to seek compensation? Carve out of the notion of “bailout” anyone forced by the Feds to make loans to deadbeats or buy securitized loans to deadbeats. Everyone else should take their medicine.
I want 400k and 2 first class tickets to Japan, one way.
WHY is MY money going to bail out lazy, bloated, ill-performing union employees and their good for nothing bosses?
Any problems in the auto industry should be laid right at the feet of those responsible for producing the garbage that passes for American vehicles – the UAW. Overpaid slugs who have managed to bankrupt car companies with wages and benefits packages untouchable by any American save your local Congressgerm. Hey – I want a job that pays me $100/hour for putting lug nuts on a car all day – and wind up missing 2.
God forbid you get stuck with a car these slugs “built” on a Friday or Monday.
If this passes, I expect a new car – or two! – out of the deal. It’s my money, I’m paying for it, so I ought to get something out of it – something besides a major league headache and a huge tax bill, that is.
Who’s going to bail out Toyota, Honda, and Subaru? They build vehicles in the USA? Don’t they need help also? Oh wait, no they don’t.
Well, with Michigan in play in the election, you KNOW they’re going to get a bailout, right? As bad as that is for the nation?
SonofDy: I’m going to need an additional $500K as soon as possible!
Things got tough last night! If you are not able to mail the check by this afternoon, my family and my entire neighborhood are going to be unemployed and thrown out of our houses. The local Starbucks will be severely impacted. (And you dont want that on your conscience do you?)
Please do not ask me to itemize my needs, because there is no time to debate the matter!