Auto industry to press Congress for $50 Billion in loans

[Hum]

WASHINGTON (AP) -- Auto industry allies hope to secure up to $50 billion in government loans this month that would pay to modernize plants and help struggling car makers build more fuel-efficient vehicles.

With Congress returning this coming week from its summer break, the industry plans an aggressive lobbying campaign for the low-interest loans. The situation is growing dire after months of tumbling sales, high gasoline prices and consumers' abandoning profitable trucks and sport utility vehicles.

Lawmakers authorized $25 billion in loans in last year's energy bill to help the companies build fuel-efficient vehicles such as hybrids and electric vehicles. With credit tight, automakers and suppliers now want lawmakers to come up with the money for the program -- and expand the pool of money available to $50 billion over three years.

Industry leaders have argued that the loan guarantees are not a government bailout because it would hasten production of fuel-efficient vehicles and reduce dependence on imported oil.

''This is not about benefiting Wall Street,'' said Ford Motor Co.'s President of the Americas Mark Fields, referencing recent federal support for the investment firm Bear Stearns and troubled mortgage companies Fannie Mae and Freddie Mac. ''This is benefiting Main Street, the working men and women. The auto industry is part of the backbone of the U.S. economy.''

The low-interest loans, at rates of about 4 percent to 5 percent, would pay for up to 30 percent of the cost of retooling plants to build hybrids, plug-in hybrids, electric cars and other alternatives.

Ford and General Motors Corp.'s credit ratings have fallen below investment grade, making it difficult for the companies to borrow money at affordable rates. Chrysler, which has been heavily dependent upon truck sales, has been privately held since last year and faces similar problems accessing capital.

''This industry could fall down, literally, or be absorbed if they don't get something in place very soon. I think it's that severe,'' said Rep. Joe Knollenberg, R-Mich. ''Something has to happen pretty quickly because they can't compete paying 15 to 20 percent (interest).''

Industry lobbyists pressed the issue at the recent presidential conventions in Denver and St. Paul, Minn., and members of Michigan's congressional delegation have talked to legislative leaders and the Bush administration about the program. Discussions surround a three-year plan that would make $25 billion in loans available in the first year, followed by $15 billion the second year and $10 billion in the third.

To provide $50 billion in loans, Congress would need to set aside about $7.5 billion to guard against a loan default.

Automakers want to secure the money for the loans before November's election because a new president and Congress could delay the companies' ability to access the loans.

The White House said last week it was talking to members of Congress and the industry about the financing. The issue, meanwhile, has gained a foothold in the presidential campaign in states with many auto workers such as Michigan and Ohio.

Democrat Barack Obama has criticized Republican rival John McCain for not supporting the full $50 billion loan program. McCain said last week he supported fully covering the $25 billion loan program in the energy law.

Congressional leaders have said they are open to an expanded program. But the industry will face a compressed schedule in an election year when many lawmakers will push to leave Washington so they can campaign for re-election this fall.

''We're hopeful that we're making an effective case to get this done between now and the end of this session,'' said John Bozzella, Chrysler's vice president of external affairs and public policy.

The loans would be available to foreign automakers, but the companies are not expected to seek the money because they are in a better financial situation and priority would be given to companies with plants 20 years or older.

source

[mspeak]

f-them. Let them fail.

Congress needs to stop bailing out failures.

[Hurmoth]

f-them. Let them fail.

Congress needs to stop bailing out failures.

Amen to that!

[+SOOPRcow MVC]

Don't worry! We can borrow more money from china so that we can reward bad behavior! Really though, I fail to see why or how it is the duty of the government (and in tern the tax payers) to bail out a company that failed to properly manage its own business. How could they not see well ahead of time, along with everyone else, that the future of gas prices was going to change the market. No company is too big or important to fail.

Edited September 8, 2008 by SOOPRcow

[EduardValencia]

Amen to that!

Cmon Hurmoth you must be kidding,don't care about the U.S automakers? it doesen't matter if the japanese-chinese control the auto-industry?

Globalization has more consequeneces than benefits my dear friend.

U.S is falling far behind other countries in the world,year by year your country produce less and less and consume more and more.This means that in a near future you guys will depend tecnologically from China,besides that ,imports will triple exports making the U.S the most debt nation in the world by far,more than it is now.Mcain and Bush had almost assured the doom of U.S in the next 10 years.Obama perhaps might change that.

Measure the consequences my friend.

[Hurmoth]

Have you thought that the reason the US Automakers are having such a tough time is because they make crap. People want good fuel economy and Ford and GM aren't producing it. Toyota, Honda, etc. are though. They are giving the people what they want.

My tax dollars shouldn't go to fixing a businesses problem. No, I don't want overseas companies to take our jobs away, but I also believe in a free market where the market decides who wins and who loses, not the Government.

[+SOOPRcow MVC]

The problem with that Eduard is that giving the US automakers 50 billion isn't necessarily going to change the current dominance the asian's have in the auto industry. They, unlike the US automakers, correctly predicted the changing landscape of the auto market and are now benefiting from it and as the consumer so are we. There will still be assembly jobs here in the US because it is just plain cheaper for them to assemble the cars here. A free, world, market is in the best interest of all consumers.

[EduardValencia]

Have you thought that the reason the US Automakers are having such a tough time is because they make crap. People want good fuel economy and Ford and GM aren't producing it. Toyota, Honda, etc. are though. They are giving the people what they want.

My tax dollars shouldn't go to fixing a businesses problem. No, I don't want overseas companies to take our jobs away, but I also believe in a free market where the market decides who wins and who loses, not the Government.

You are wrong Asian countries,have something that Western nations doesen't "Workforce" This means that they can produce more units and for less price,giving them more profits ,this money can be invested in quality products,otherwise a company that can't have that "Cheap workforce" have to struggle bteween this wall and spade.

If you don't want foreign companies to take your jobs away,that in the end,it will benefit you personaly,don't support scrapping the last 2 american companies that remain,this companies haven't gone broke because of incompetence,the got broke because the bad goverments that didn't protect them.Hey The japanese goverment protect their companies always.

[Kojio]

Cmon Hurmoth you must be kidding,don't care about the U.S automakers? it doesen't matter if the japanese-chinese control the auto-industry?

Globalization has more consequences than benefits my dear friend.

U.S is falling far behind other countries in the world,year by year your country produce less and less and consume more and more.This means that in a near future you guys will depend technologically from China,besides that ,imports will triple exports making the U.S the most debt nation in the world by far,more than it is now. McCain and Bush had almost assured the doom of U.S in the next 10 years. Obama perhaps might change that.

Measure the consequences my friend.

The Japanese and Chinese control the markets because they are not idiots like the American companies. It's in fact an old Chinese proverb "Give a man a fish, feed him for a day. Teach a man to fish, feed him for a lifetime."

Our government is simply feeding the failures of bad American business, instead of teaching them to pay for their own mistakes. This move for even more borrowed money, is just another mile down the hill as this snowball of debt and bad bailouts gets bigger and bigger. Ten years ago our dollar was stronger than the Canadian and the euro, and now our dollar is a joke to the world economy. It's big bailouts like this that drive our dollar down even deeper, and gas prices even higher.

Companies like GM, Ford, and Chevrolet deserve to go bankrupt. They developed ZEV electric vehicles over 20 years ago, then they buried the prototypes in the desert and destroyed them. Other inventors and startup companies that tried to pioneer alternative fuels either were sabotaged by illegal patent practices, or bought out entirely and disposed of. European and Asian markets have had fuel-efficient vehicles for over a decade, and it was the American automakers that stonewalled their vehicles from being imported into the states, with the help of the American government.

The downfall of the American auto industry began when the USA sold its soul to the Asian markets, and then tried to make up for it by stagnating automotive technology and sabotaging outside competition and advancement. The thing the Asia did right, and we did wrong, was that they embraced change, instead of fighting it tooth-and-nail. It's only a matter of time before our government and economy pitfalls into a chaotic depression and sparks a new revolution in this country. Neither Obama nor McCain are going to turn things around.

If I were you, I'd learn to speak mandarin. It's the #1 language in the world after all.

[+SOOPRcow MVC]

If you don't want foreign companies to take your jobs away,that in the end,it will benefit you personaly,don't support scrapping the last 2 american companies that remain,this companies haven't gone broke because of incompetence,the got broke because the bad goverments that didn't protect them.Hey The japanese goverment protect their companies always.

It is not the governments job to protect yours or any business's finances.

[TruckWEB]

U.S is falling far behind other countries in the world,year by year your country produce less and less and consume more and more.This means that in a near future you guys will depend tecnologically from China,besides that ,imports will triple exports making the U.S the most debt nation in the world by far,more than it is now.Mcain and Bush had almost assured the doom of U.S in the next 10 years.Obama perhaps might change that.

What would happen if China decided to place an embargo on the USA..... Nothing from China going to the States. TONS of goods are now made in China, stores are filled with them, from clothes to electronics.

On the back of my Sharp LCD HDTV, it's written "Design in Japan, Made in China" ....

[gnuman]

But you are forgetting the point here and I agree with Hurmoth, why should tax dollars be spent for something the US automakers saw coming?

They saw gas prices going up and why did the big 3 not retool to start producing smaller cars/trucks? Don't get me started on ethanol garbage we'll leave that out.

$50bln bailout? It is ridiculous to request such an amount for an industry that is all about lining its pockets with more green than a forest. You want to help the industry? Stop the unions, why you think Honda and Toyota are doing so well? Their workers are not money grabbing unionists and still get the job done.

I am not anti-union but these problems are traced back to the unions which puts an additional cost on each car of about $5000 and also the lack of response. We won't talk about the GM Volt as its a specialty car but not everyone needs a truck and cars will do fine.

The reason things are made in China is that its much cheaper. Would you prefer to pay for your Sharp LCD TV $3000 or $1200 if it were made in China? Walmart accounts for 10% of all exports from China to the US and how do you think they keep prices so low?

[C4ff31n3_H4x0r]

I would usually try think of many a different witty comments about how much congress shouldn't bail these sinking dyeing corporations out of the **** their in. But whats the point it will probably happen and GM will keep putting out hateful cars. We, the people are once again being rapped of our hard earned money to corrupt bureaucrats. Let GM go the way of Rover and Austin. let the people decide the fate of corporations. Its GM's fault for making cars that are ten or twenty years behind any other company. It's appalling.

[Hum]

Well, on the other hand, if the USA automakers go under, we working people will be supporting the laid off workers thru unemployment & welfare. ;)

[Lowdown]

''This industry could fall down, literally, or be absorbed if they don't get something in place very soon. I think it's that severe,'' said Rep. Joe Knollenberg, R-Mich. ''Something has to happen pretty quickly because they can't compete paying 15 to 20 percent (interest).''

First of all I agree with some of the other posters above about not paying this huge amount of money from taxes payers pocket. I'm driving a brand new Hyundai and I'm loving it. Has all the stuff I want, lots of features, great gas mileage and a better price and warranty then any American or Japanese car company. I love what the Senetor has to say in the quote, that the auto industy essentially can't afford to take credit out and paying 15 to 20 persent in interest when that's what us normal folk have to pay (or more) in interest, deal with it.

[Elessar]

The government should have required the auto industry to produce more fuel-efficient vehicles about 10 years ago. None of this 5-10 years to improve fuel-efficiency crap. The Geo GM produced back in what...1990? Well i believe it got 30 MPG. No reason cars should be sold today without getting AT LEAST 40 MPG...

Sad that GM and Ford might not be around in 10-20 years but hopefully Toyota and Honda will have moved in by then.

[matt4pack]

The main problem the whole time has been the unions and not the automakers. US automakers can't make a profit on anything except trucks and SUV's so that is all they have been promoting all these years. Both Ford and GM make many fuel efficient cars like the Aveo or Focus but it's hard for them to make any profit on those cars here at competitive prices. All the foreign car makers who are building plants in America don't have to deal with the overhead from the Unions as they can find plenty of people who are more then happy to have a job and be working. Unions should be for miners and people with dangerous jobs and not for people who work in high tech factorys.

[revvo]

It's easy to just say "screw them" and not loan them anything. The problem is over half a million Americans work in these companies. They're huge and as much as they failed to compete with the Japanese, they are essential to the car market.

Don't think of short run effects, sure 50B in taxes is a lot, but think of all the Americans working there, think of the competition between them and other auto car makers. These things are essential.

GM and Ford are very active and actually successful in Europe and Australia. Here at home they pretty much suck because their products are no good! They gotta stop getting the idea that we want uglier and less performing cars. We want what we're giving the Europeans. The problem is not many will shell out +$30,000 for a Focus because of what the Focus is here today.

[39 Thieves]

It's easy to just say "screw them" and not loan them anything. The problem is over half a million Americans work in these companies. They're huge and as much as they failed to compete with the Japanese, they are essential to the car market.

Don't think of short run effects, sure 50B in taxes is a lot, but think of all the Americans working there, think of the competition between them and other auto car makers. These things are essential.

GM and Ford are very active and actually successful in Europe and Australia. Here at home they pretty much suck because their products are no good! They gotta stop getting the idea that we want uglier and less performing cars. We want what we're giving the Europeans. The problem is not many will shell out +$30,000 for a Focus because of what the Focus is here today.

I'm very much not into paying taxes to what is essentially a charity for companies that couldn't compete and innovate.

[revvo]

I'm very much not into paying taxes to what is essentially a charity for companies that couldn't compete and innovate.

Fine, if you don't care about your country and only care about yourself.

As if you guys don't already have enough economic problems with people losing homes everyday and the trillions that you own to China, let's trouble the Big Three who employe more than half a million Americans even more and push America closer to what will be an actual recession.

I'm not saying America should be socialist and bail companies out, but these are loans and not bailouts and far too many Americans work in the auto industry, America can't risk losing them.

[Andy44512]

Domestic Vehicle Quality Regins Supreme PDF Print E-mail

Message

"Domestice Vehicle Quality Reigns Supreme"

If you have noticed all the bad news the last 3 years regarding the falling sales of the domestic auto industry, you might be interested in the following questions, possible answers are listed alphabetically.

The correct answers, along with source, are given below.

1. Which country can boast that their brands occupy 2 of the top 3 spots for long-term reliability?

a. Germany

b. Japan

c. Korea

d. United States

2. As of August 2007, which manufacturer had the most recalled vehicles in the U.S. for that year?

a. Chrysler

b. Ford

c. GM

d. Nissan

e. Toyota

f. Volkswagen

3. Pick the brand from each group that has the highest initial quality.

a. Acura, BMW, Cadillac (all luxury makes)

b. Honda, Mercury, Nissan (all non-luxury makes)

c. Acura (lux), Chevrolet (non-lux), BMW (lux), Mazda (non-lux)

4. Which midsize sedan has the highest initial quality?

a. Accord (Honda)

b. Altima (Nissan)

c. Camry (Toyota)

d. Malibu (Chevrolet)

5. Which large sedan has the highest initial quality?

a. Avalon (Toyota)

b. Grand Prix (Pontiac)

c. Sable (Mercury)

6. Which midsize pickup has the highest initial quality?

a. Dakota (Dodge)

b. Ranger (Ford)

c. Tacoma (Toyota)

7. Which car is the most economical overall?

a. Aveo (Chevrolet)

b. Fit (Honda)

c. Prius (Toyota)

8. Which car did the LA Times describe as ?a better car than BMW or Mercedes or Lexus or Infiniti??

a. A6 (Audi)

b. CTS (Cadillac)

c. RL (Acura)

9. Which company makes the winner of the 2008 ?Green Car of the Year? award?

a. Chevrolet

b. Honda

c. Toyota

10. Which car was selected by the North American automotive press corps as the ?North American Car of the Year? for 2007?

a. Aura (Saturn)

b. Camry (Toyota)

c. Fit (Honda)

11. Which car won the same award for 2008?

a. Accord (Honda)

b. Altima coupe (Nissan)

c. Malibu (Chevrolet)

12. Which company had a luxury vehicle, a midsize sedan, and a large truck removed from the Consumer Reports recommended vehicles list in October 2007 because of mounting quality problems?

a. Chrysler

b. Ford

c. General Motors

d. Hyundai

e. Toyota

f. Volkswagen

ANSWERS:

1. Which country can boast that their brands occupy 2 of the top 3 spots for long-term reliability?

Answer: United States.

Per J.D. Power Vehicle Dependability Study, Mercury and Cadillac are in the top 3, along with Lexus. And in 2007, Buick was tied with Lexus for the top spot.

http://www.jdpower.com/corporate/news/rele...aspx?ID=2008115

2. As of August 2007, which manufacturer had the most recalled vehicles in the U.S. for that year?

Answer: Volkswagen.

According to Business Week, Volkswagen had the most recalls at this time a year ago. The second worst was Toyota.

http://www.businessweek.com/autos/content/...0810_455098.htm

3. Pick the brand from each group that has the highest initial quality.

a. Answer : Cadillac (better than both Acura and BMW)

b. Answer: Mercury (better than both Honda and Nissan)

c. Answer: Chevrolet (better than Acura, BMW, and Mazda)

This is according to J.D. Power?s Initial Quality Survey.

http://www.jdpower.com/corporate/news/rele...aspx?ID=2008063

4. Which midsize sedan has the highest initial quality?

Answer: The Chevrolet Malibu has better initial quality than any competitor, including the Honda Accord, Toyota Camry and Nissan Altima. The Ford Fusion also beat all 3 Japanese competitors.

This too is from the J.D. Power Initial Quality Survey, which also reveals that above average are American brands Mercury, Ford, Cadillac, Chevrolet , Pontiac, Lincoln, and Buick. Below average are import brands Acura, Kia, Nissan, BMW, Mazda, VW, Subaru, and Scion (and several others).

http://www.jdpower.com/autos/articles/2008...-and-Large-Cars

http://www.jdpower.com/corporate/news/rele...aspx?ID=2008063

5. Which large sedan has the highest initial quality?

Answer: Again per J.D. Power, the highest quality large car is the Pontiac Grand Prix, beating the Toyota Avalon. Two other Detroit cars that beat the Avalon are the Mercury Sable and Mercury Grand Marquis.

http://www.jdpower.com/autos/articles/2008...-and-Large-Cars

6. Which midsize pickup has the highest initial quality?

Answer: The Dodge Dakota has the best quality for midsize pickups, proving that Chrysler too can beat the imports. Both the Dakota and the Ford Ranger beat the Toyota Tacoma.

http://www.jdpower.com/autos/articles/2008...ickups-and-Vans

7. Which car is the most economical overall?

Answer: Per Edmunds.com, the premier automotive analysis site, the most economical car in America, taking into account not only mileage but all costs, is the Chevrolet Aveo. The Honda Fit is #3 and the Toyota Prius is a distant #34.

http://www.edmunds.com/help/about/press/127806/article.html

8. Which car did the Los Angeles Times describe as ?a better car than BMW or Mercedes or Lexus or Infiniti??

Answer: ?Cadillac makes a better car than BMW or Mercedes or Lexus or Infiniti, and that car is the 2008 CTS. No other car in the mass market dares so much as this expressive and audacious bit of automotive avant-gardism.? Dan Neil, LA Times.

http://www.latimes.com/classified/automoti...33.photogallery

9. Which company makes the winner of the 2008 ?Green Car of the Year? award?

Answer: The Chevrolet Tahoe Hybrid is the winner of this award. How could a full-size SUV defeat the media darling Toyota Prius? Read the link below and you will discover, ?What?s equally eye-opening is that the Tahoe?s 21 mpg city fuel efficiency rating is the same as that of the city EPA rating for the four-cylinder Toyota Camry sedan. ?

Did you catch that? A huge, full-size SUV from Chevrolet that gets the same city mileage as a 4-cylinder Toyota Camry!! Chevy obtained this remarkable achievement through the use of its 2-mode hybrid system, a technology that Toyota does not have.

http://www.greencar.com/features/2008greencar/

10. Which car was selected by the North American automotive press corps as the ?North American Car of the Year? for 2007?

Answer: Not only was the Saturn Aura picked by the automotive press corps as better than the Honda Fit and the Toyota Camry, ?When a panel of 47 journalists named the Saturn Aura the North American Car of the Year over the Toyota Camry, the vote wasn't even close, 205-89.? Chicago Tribune, 1/15/07

http://www.northamericancaroftheyear.org/news.html

11. Which car won the same award for 2008?

Answer: GM again crushed the Japanese competition in 2008 when the Malibu received 190 votes to the Honda Accord?s 95. The Accord actually came in 3rd since GM?s other finalist, the Cadillac CTS, received 165 votes.

http://www.northamericancaroftheyear.org/news.html

12. Which company had a luxury vehicle, a midsize sedan, and a large truck removed from the Consumer Reports recommended vehicles list in October 2007 because of mounting quality problems?

Answer: Toyota?s much publicized quality problems resulted in Consumer Reports actually removing from their recommended vehicles list the Lexus GS luxury car, Camry V6 sedan, and Tundra pickup. This demotion occurred in October 2007.

If you are one of the many Americans who gave up on Detroit?s cars because of a bad experience many years ago, it?s time to rethink your position. Rethink Detroit.

Detroit automakers: 79 U.S. jobs per 2,500 cars sold in America.

Foreign automakers: 33 U.S. jobs per 2,500 cars sold in America.

http://levelfieldinstitute.org/

Last Updated ( Monday, 08 September 2008 14:13 )

oh and i`m one of those greedy UAW union thugs who works for a supplier to gm. next time get your facts straight .