The aid package is part of an economic stimulus bill being proposed by Michigan Democrats, and would provide around $3.75 billion dollars to the auto industry in the form of low-interest loans, rather than being a strict bailout payment.
An extra $250 million would be included on top of the $3.75 billion to promote research into battery technology to make electric vehicles more practical and efficient.
Senator John McCain is opposed to the $4 billion loan package, stating that the proposals he has already made would likely achieve the same results as the loan package without adding further strain to the U.S. treasury. McCain is proposing a $300 million prize for advanced battery technology breakthroughs, as well as offering consumers $5,000 for purchasing fuel efficient vehicles, according to the Detroit Free Press.
The United Auto Workers union is backing the loan program endorsed by Obama, and the auto industry itself is becoming more eager to seek out help where it is being offered in order to boost falling profits and sales. What impact, if any, this whole affair may have on the upcoming presidential elections or on the industry's future outlook, is unknown, but the positions taken now on the industry and its tough economic position could end up being some of the defining features of each candidate's platforms.
Reader Comments
Mon Jul 21 2008 9:28 PM
SuperSkyline89 says
Lets just see if Obama is still for this if he gets elected or if this is just another empty promise or one of his flip-flop views that I hear about so much (not stating it as a fact, this is just what I've heard from others).
Mon Jul 21 2008 9:30 PM
HECTOR says
At least the *bridges to nowhere* from that Alaskan Senator were only going to cost a cheap $250 million...
Mon Jul 21 2008 9:39 PM
NoNameDenton says
Businesses that can not survive in the market on their own should not be propped up using public money coming from the government.
Mon Jul 21 2008 10:01 PM
CK says
Yeah weren't there people from the "Detroit 3" complaining about the Toyota getting money from their governement for the development of the Prius?! I am sorry but these three companies overslept the development in their branch for years. And now they should get billions from the governement for their bad management?!
Mon Jul 21 2008 10:56 PM
Chris says
CK, i can't speak for GM but ford has to lease the rights to the hybrid drive they use because they were developing it at the same time as toyota and toyota managed to get the patents filed first. I've got a question for all of you people who think american car companies sat on their butts and didn't develope hybrid drives... how many european brands have hybrids? to date? none. that's right. at least the detroit 3 have hybrids. they just don't have "fuel mileage centered" hybrids. both GM and chrysler have large SUV hybrids that will save rediculous amounts of fuel.. much more than a prius ever would. but no one ever comes back to that. ford has the kind of hybrid that people can legitimately use, and WANT. honda DROPPED their hybrids because they weren't profitable, effective, or desirable.
in the end, toyota has been able to make a car that is a fashion statement. thats all it is.
the reason why detroit is getting hit so hard is because they make the best trucks in the world, and they learned how to market the hell out of a very profitable type of vehicle.
say what you want but there are other government aid programs out there. incentives for small business owners to write off all of their expenses (yes, even those "corporate" hummers we used to see all over the place)... it's called wagging a carrot.
you dont give the mule the carrot or else he wont do anything. you dangle the carrot infront of him so that HE does the work for YOU... 4 billion is a really big carrot but you have to realize that they arent just saying "hey, GM, ford, chrysler,.. you guys are doing pretty bad... heres 4 billion." no. it goes something like "we've got 4 billion dollars in an account with your names on it. but you have to fight amungst each other. the first prize is 100 million for the first company to ________________."
Like I've said time and time again, the government will get that money back in tax revenue from taxing the steel and raw materials sold to the suppliers, taxing the land the suppliers factories are on, taxing the power they use, taxing the wages of their employees, taxing the goods they sell to the car companies,... taxing their land, their employees, and their profits, and then taxing the products they sell back to you. the government will make that 4 billion back so fast your head would spin. you're talking about the detroit three... 3 companies that combines sold at LEAST 15 million units last year, at an average MSRP of $20,000 (which is VERY conservative)... these companies GROSSED 300 BILLION? and you don't think the government will skim 4 billion off of that? HAH. fools. how do you think the US government can dump 2 trillion dollars in iraq?
Mon Jul 21 2008 11:04 PM
SuperSkyline89 says
You make a very good point chris.
Just one thing:
"how many European brands have hybrids? to date? none"
The European brands aren't about saving fuel or being for the average Joe. Though they might not have any hybrids, no one interested in buying from them cares. No one buys a Benz to save fuel. They buy one to show off their wealth, hybrids simply aren't part of the equation.
Mon Jul 21 2008 11:27 PM
NoNameDenton says
Chris, the Europeans do not like hybrids as much as they like diesels, because diesels get better milage, and can be sporty because of all the low end torque. No point developing hybrids when the majority of their sales are diesel powered vehicles in their home countries.
Tue Jul 22 2008 2:12 AM
CK says
Hell yeah they make great trucks but does everybody who buys a Ford pickup really need one? Well I would say no. Cause most people don't have to drive big easy accessable things in the back of their cars around. And well look at the rest of the world most people are mobile, safe and can haul things around without owning a truck.
The other thing is the Europeans don't need hybrids cause hybrids aren't as good as everybody wants them be. The amount of energy they safe is rediculous small compared to the energy they waste during production. The question is also when does your hybrid safes most fuel? When you are cruising really slow through the city. Well here is the thing in Europe there are't that kind of rushhours like you have for example in LA. Also diesels do get much better mileage and are as nearly as clean as normal petrol cars.
Best thing ever I saw was this Ford boost thing with the turboed V6's and everybody was amazed that the motor had as much torq and power as a V8 but with lower fuel consumption. The only thing I thought was WTF?! Quite old news for the old world.
The thing in the USA is that you didn't care about wasting ressources in the past but you learn to do when fuel costs 4$ a gallon. You wouldn't imagine that these luxury european car makers also do base models which sell really very well in their home countries and are also cheaper. But overseas there is now market for this cars cause nobody would buy a 3 series BMW with just 120 hp and a fabric interieur. Cause from these "exotics" you expect luxury: But these cars could give the camparable detroit cars a run for their money.
The irony with all these in the end is that the barrel oil will cost 200 $ next year and in europe they will still pay more for an E 400 than you do cause the manufacturers are subsidizing sales in oversea markets. Cause did you know if you buy a VW Tuareg in the US, load it onto a ship back to Germany, fiddle with the car so it is allowed to drive on German streets it is still cheaper than a Tuareg you would have bought direct in Germany?
The whole thing I don't like about it is that they point with the finger at someone and say that it isn't free competition if a governement helps a company. We had this in Japan with Toyota and in Germany with VW. These are not problems that the detroit 3 have since yesterday, they should have get prepared for them.
Tue Jul 22 2008 9:24 AM
Tokugawa says
here here Chris!
Tue Jul 22 2008 4:46 PM
Tim says
"... but ford has to lease the rights to the hybrid drive they use because they were developing it at the same time as toyota and toyota managed to get the patents filed first."
Chis that's only half true. Ford isn't "leasing" the patents. Toyota and Ford struck a deal to share technology that they delevoped independently. The hybid technologies were close enough that the Ford lawyers thought there might have been patent infringments. Ford shared some of their diesel technology with Toyota in exchange.
So, there's no lease per se.
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