• Oct 5, 2008
This week, Detroit got its $25B bailout loan approved by Washington, and according to The Wall Street Journal, European carmakers are making like this is a game of "Simon Says." The Journal reports that Fiat has proposed the idea of hitting up the European Commission for €40 billion ($55B USD) to help the European auto industry make the move to cleaner, greener cars ahead of the strict new emissions regulations currently being bandied about. Like we said, this rationale is very similar to the one Motown used to get its money.
Fiat's grand idea was presented to other automakers at the ACEA meeting on Friday, and according to a spokesman for the automaker, "All European carmakers agree on the [€40 billion] demand." What a shocker. Said demand hasn't been formally made to EC bigwigs yet, but the lobbying is obviously well underway.

[Source: The Wall Street Journal]


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  • 27 Comments
      • 6 Years Ago
      Well, funny thing is that the press is full of rumours about European Manufacturers buying one of the big 2.8. That will be a smart move. In addition to the EU loan, a European manufacturer that would buy US car company would now also get part of the US bail out loan :-) This gives out a new mean to the term Grand Theft Auto.
        • 6 Years Ago
        I am pretty sure there are clauses for that sort of thing to not happen...

        I mean.. why should the US government help an EURO company?
      • 6 Years Ago
      call me crazy...but if governments are demanding that auto manufacturers clean up their vehicles and get better mpg at a pace that is faster than what the free market would normally allow them to do. what else would you expect? to keep up w/ those standards, and by doing so go under? the consumers will normally direct what they want the free market to do as far as improving their cars (mostly on a timely basis) but i say if you're going to demand that auto manufacturers double that pace, maybe you should give them some dough to help them get into double time mode. low rank me if you will...
        • 6 Years Ago
        That's a foolish way to think of it. Because the government gets involved forcing car companies to do things that they themselves can do on thier own, they disrupt the market. Government intervention on any scale like that always makes things worse.

        Where do you think the money comes from Simba? You? Me? Our taxes? No. It's completely fabricated in the form of 'credit'. It doesn't exist. So when you say they should finance these forced regulations, I say no. That hurts me. I suffer under inflation so those same companies can sell me a car. So I pay for it many times over. If you are going to require car manufacturers to increase fuel mileage, let them decide how not government. They only screw things up.

        Don't believe anything I've said? How often has your income perfectly matched a rise in your cost of living? Never has and never will. We are all suffering more and more because of these 'loans' big companies are granted.
        • 6 Years Ago
        sorry about double comments. this crap comment system.

        What about europe? do you think they print money too?
        • 6 Years Ago
        But it was just a tactic they used to get the money. They are in trouble because the Big 3 have made horrid autos for too long ontop of lying about quality issues.
        • 6 Years Ago
        @ Ray

        Are you SURE the fed is just going to print money? They can reduce the budget for something and shift it to the car loans, they can issue t bills and sell the country to china and japan.
        But printing money? yes that will destroy the states. It will also cause inflation the world over, and the poor will suffer.

        I disagree about interventation. Goverment should intervene, but just not in this way
        • 6 Years Ago
        ok...thanx for the clarification. your statement is correct as far as the fed just printing more money to finance this, thus causing inflation and killing the dollar...same thing they're going to do w/ the bailout. i was trying to think after reading your first post what it had to do w/ my first, but it seems like you went on a tangent w/ the whole inflation issue when i was talking about market intervention. thats what i didn't understand at first.
        • 6 Years Ago
        @ Ray

        Are you SURE the fed is just going to print money? They can reduce the budget for something and shift it to the car loans, they can issue t bills and sell the country to china and japan.
        But printing money? yes that will destroy the states. It will also cause inflation the world over, and the poor will suffer.

        I disagree about interventation. Goverment should intervene, but just not in this way
        • 6 Years Ago
        I guess I was being confusing. Sorry. Government intervention in any capitalistic environment is a bad idea. I think where I'm unclear what you are saying is that taxpayers are paying it in taxes. If that is inded what you are saying, you are completely and utterly wrong. Doing that would mean they would raise our taxes, which they are not doing. That's a clever ploy to divert attention to the fact that the money for this didn't exist until they created it. That is NOT paid with by taxation. If they raised taxes to get the money for this, it would never pass. The outrage would be immense. So they (the US Government) ask the Federal Reserve to "loan" (create out of thin air/print) them the money to do these things. It's a failed and unecessary plan from the start. All of this is done by inflating the money supply. That's why nothing, no good and services, has gone down in price and stayed there since the Federal Reserve was illegally formed.

        It doesn't hurt us in the form of taxation, it does in the form of inflation. The banks assume no risk, the Federal Reserve creates money where it doesn't exist, and the car companies are getting a free ride while WE BUY the products that inflate our money. Everyone wins except the people like you and me. So it doesn't matter what 'needs' to be done, this is the wrong way top do it and it only serves to further devalue our dollar and keep the ultra wealthy wealthy while us poor Joes pay for it with reduced purchasing power and the sweat off our brows. A completely free market is the only true way for the economy to thrive.
      • 6 Years Ago
      Doesn't change the fact the american car companies did not deserve the money.
        • 6 Years Ago
        i agree with you 100%...They didnt deserve it, they put themselves in this situation because they make utter crap. They still do, people! If you put gold (yes, their cars look pretty good) around crap, it still has crap for insides...... Yeah sure, Toyota ain't doing very hot in initial quality, but im curious how long the cars will last. Probably longer than a Ford.. Transmissions arent supposed to be changed at 100, 000 kilometers(60,000 miles) Ford!
      • 6 Years Ago
      Funny how people aren't extremely bothered by the fact our near-socialist government handed 3 worthless companies $25 billion.
        • 6 Years Ago
        We just gave Wall Street $700B in capital so they can loan it out for mortgages, despite them proving they are incompetent at it. $25B seems refreshing in that light.
      • 6 Years Ago
      I can't believe what is happening right now! How could you let a banking system get so complex, that it came down like a house of cards!!
      • 6 Years Ago
      The reason why these "worthless" companies were handed $25 billion is that they were happy doing what they did best--building large vehicles that America wanted. YES, America wanted them.

      Some say that the auto manufacturers somehow "convinced" people to buy huge SUVs that they didn't need. Oh yeah, the auto manufacturers convinced people to drive SUVs as much as the auto manufacturers convinced people over the years to buy bigger houses, bigger TVs, and carry bigger mortgages that they couldn't afford with shrinking wages out in the suburbs. It's human nature to value bigger things over smaller things. When you buy strawberries in a store, you tend to gravitate towards the bigger ones, right?

      Back to the subject at hand. Once gas prices suddenly shot up (not slowly over time as anybody manufacturer would have expected) people's appetites for SUVs understandably dwindled fast. Due to government red tape, American manufactuers couldn't quickly bring perfectly good smaller European vehicles to America due to differing crash standards, ridiculous emissions laws, etc.

      And in the meantime, what does America do when buying a car? They read Consumer Reports, and are convinced by a series of deceptive little red and black circles what to buy. Deceptive because people generally think that the difference between red circles (good) and black circles (bad) is 0% chance of breakdown, and 100% chance of breakdown. If you actually look closely at the Consumer Reports ratings system, the difference between the red and black circles is about 5% give or take. Whooptie-doo.

      So because of these minimal reliability differences, people who have no idea about how the financial system works, willingly go out and buy foreign cars. This, in turn, pumps money out of the country. Then these people wonder why the American financial system is in a mess.

      P.S. I'm not an American.
        • 6 Years Ago
        "Due to government red tape, American manufactuers couldn't quickly bring perfectly good smaller European vehicles to America due to differing crash standards, ridiculous emissions laws, etc."--------------Hold on there a second sparky. So we all have to breath dirty air just so the car industry can generate some sales. Those "ridiculous emissions laws" are there to protect people, air, environment.

        I said this here before a few times and i'll tell you this again "government of the people, by the people, for the people" NOT "government of the automakers, by the automakers, for the automakers"


        If you can't make good enough of a car that meet all the standards and regulation...................go out of business.
        • 6 Years Ago
        So you're saying Americans should buy cars they don't want because it's "good for the country?"

        I look forward to the day GM, Ford and Chrysler are memories. I hope to use them as a life lesson for my children. When you're ahead, you've gotta work harder to own the market. The American car companies didn't act like they might lose their lead...so now they await bailouts from a government hell bent on socializing everything.
      • 6 Years Ago

      Surprise, surprise!

      People will always line up for free money. The more money, the longer the queue.
      • 6 Years Ago
      This is a loan to lower euro emissions, not to keep euro manufacturers from bankruptcy.
      Which means the EU WILL get their money back, plus interests. They'll actually make an almost guaranteed profit off it.
      Can you imagine FIAT, BMW, VW and Merc being unable to pay a debt? Yeah, that's not gonna happen, even despite crappy market.
        • 6 Years Ago
        GM asked for money to develop the Volt.

        How is that different?

        You don't think Euro automakers are in trouble? Just wait a little but until the figures start coming out. There will be plenty of requests for "loans". And "loans" is what GM and Ford got.
        • 6 Years Ago
        No. They wont. It has nothing to do with making emission standards easier for the car companies. Have you noticed that there are big banks in the EU that are failing right now? Where do you think the car companies get the loans from to finance a car? Banks. They want illegal and worthless money to improve thier cars. They should spend thier PROFITS on R&D. Not 'loaned' money. Next thing you know when the run through this cash they'll want more.

        This all has to do with currency not backed up by anything with value. When you start printing money and your economy is based upon debt, it crashes. It crashes hard. None of this economic climate has anything to do with bad decisions, CEOs getting paid too much, or low quality vehicle interiors. It has everything to do with currency that has no value. The more you print, and the more you make up as 'loans' the closer you get to complete failure. You guys arguing about who makes better cars, or whos bailing out who really upsets those that understand what's really going on.

        The global economy is collapsing rapidly. You see it everyday, yet most of you don't know it when you do.
      • 6 Years Ago
      The rationale may be same, but European manufacturers are NOT in the same position as the Big 2.8. They are making profits, they are technologically years ahead of the 2.8. Still, even they play up a catch-up games with the Japanese.
      • 6 Years Ago

      Remember that German auto guy who criticized the American government for approving the loan for the big three just a few days ago? Wonder if he will change his mind now.
      • 6 Years Ago
      where do i sign up for one of these billion dollar loans?
        • 6 Years Ago
        Why not sign up for a billion euro gift instead?
      • 6 Years Ago
      You don't call all of these...a global ("New World Order") community for nothing.
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