by David Shepardson, Detroit News Washington Bureau

Michigan delegation makes nonpartisan effort for billions in tax credits, subsidies, loans.
Michigan's congressional delegation is mounting a major push to help Detroit's Big Three automakers get about $27 billion in federal aid over the next 5 years.
The behind the scenes efforts come amid growing concerns about the fate of the struggling domestic automakers. General Motors Corp., Ford Motor Co. and Chrysler LLC are paring back salaried staff, closing plants and dramatically cutting expenses at a time when the economy is in turmoil and auto sales could hit their lowest level in 17 years.
Many Michigan congressional members think that if they dont start a concerted effort now to win significant financial support for automakers, it will be harder to do so later.
The chiefs of staff and top auto policy aides to most of Michigan's 17 member congressional delegation met privately Friday to discuss a broad set of policies to help the industry. The meeting was organized by the office of Rep. John Dingell, D-Dearborn, chairman of the House Energy and Commerce committee, which has jurisdiction over many auto issues. Topics included subsidies to cover one third of automakers losses, government issued loans, loan guarantees and bigger tax credits for the industry and consumers.
A summary of the proposal discussed at the meeting calls for $5 billion in direct loans over 5 years, $3 billion a year for 5 years to help speed the retirement of 1.5 million older, less efficient vehicles; and $2 billion over 5 years in tax breaks for advanced vehicles.
Also $800 million over 3 years to develop an advanced battery trust fund to help build 3 domestic battery manufacturing facilities and for working in 2009 to block California from being able to impose its own emissions standards.

 

We give away a lot more money to a lot worse causes overseas

I wouldn't be against interest free loans, especially is they go to more battery researd and development.

 

Last I checked this country has a deficit of 480 billion this year. The give away programs need to stop some day.

 

GM could easily run through 27 billion by itself.

 

I'd like to see any gov't auto money going into a "manhattan project" style effort on battery development. Throw some federal funding at it, get the big 3 in on it, and keep it to the domestic industry once it starts getting results.

The resulting hybrids and pure electrics would do a lot to change some of the image/stigma against the domestic industries, catch them up/put them ahead of foreign competition.

 

R&D should be a priority. The government sponsored the transistor, the integrated circuit, and internet after all.

There's been some discussion of the feds picking up some of the Big 3's legacy costs to improve their economic competitiveness with foreign competition. That might not be a bad idea, but the perhaps it should be extended to industries beyond automotive. We need to improve our economic competitiveness across the board.

However throwing money down the black hole of the Big 3's operating budgets doesn't seem all that wise.

 

Assuming they get this money and it cures most of their current issues:

What happens in another 10 years when they get soft and dig themselves right back into the same hole? Do we continue bailing them out?

Government's job should NOT be to bail out every business that continues to make stupid decisions (Big Three, Home Loan Companies, etc). I am not going to focus on the Union thing, as it will just melt down to a pissing match and cause the thread to be locked. I will however mention things from a product perspective. The big three should have seen what Honda, Toyota, etc were doing in the small to midsize car segments years ago and tried to make an effort to stop the bleeding.

Instead they kept producing crappy cars and banking on trucks and SUVs to make their money. Consumer preference shifted (as it ALWAYS does) and now they are playing catch up. Its only been within the last few years GM and Ford have they really been producing small to midsize passenger cars that I have been wowed by. I still haven't seen anything from Chrysler in small to midsize categories that I would say blows me away (or even gives me hope).

 

We could do that by restructuring our tax code - well really burning it to the ground, then droping a nuke on it while colliding whats left with anti-matter would be a minute if useful start.

Yes, we have bills to pay, but our current system is a boondoggle and really only benefits the clowns in DC while giving the rest of the world (save Japan last time I checked) an economic edge.

Now on to the shortsidedness of the Big three, thats american business practice in general, it seems as a country we are focused on the immediate - making as much money as possible in as little time as possible - I really think we would get a meaningful restructuring in the tax code before the suits that rule this country would start taking the long view on business matters. In short the problems we face today are the same ones we will face down the road time and time again as companies placate Wall Street and shareholders with feel good financial reports.

My 2¢

 

Decreasing our dependency on oil also reduces the revenue that government collects through pump taxes. Why would it want to slit its own throat?

 

I do not agree with bailing out the big three automakers. Whatever they dug for themselves, they should deal with. We have years upon years, even decades, of just bonehead decisions. The only way for them to learn is to come close to death (yes, GM, that's you especially).

The mortgage companies Fannie Mae and Freddie Mac should not have been bailed out either, however, I think there was a risk that the economy would go into the drain deeper and faster if those companies were not bailed out. Whether it's true, accurate, I don't know.

Bottom line - people need homes more than cars.

 

Isn't that a bit like saying, "A bicycle needs pedals more than a chain."

???

 

Aren't some of these idiot lawmakers wanting the bailout the same ones that voted to increase MPG standards? Aren't they the same ones that don't want to biuld more refineries and do more offshore drilling?

 

If Fannie and Freddie went under, it would kill our economy. All of these entities getting bailed out are too important to let go under. Its not fair that they get bailed out for making stupid decisions, but what are you going to do, let the US economy collapse?

 

My point was that fannie mae and freddie mac probably have a bigger impact on the economy than the big 3. They do hold $12 trillion in mortgages.