First draft of Automaker Bailout Bill is out
The House of Representatives and the Senate will discuss and likely vote on the Automaker Bailout Bill (we know, it's not technically a bailout, but rather loans that will be paid back) tomorrow, and the first discussion draft of the bill has hit the internet. The discussion bill is 31 pages long, and like you we're not about to spend our Monday evening reading through the whole thing. Thankfully, some real auto journalists over at The Detroit Free Press have done that for us.
They report that the bill contains provisions for a federal official, or "Car Czar" as the position will no doubt be referred to, who would oversee distribution of the funds and have authority to yank them back if an automaker is deemed to be using them ineffectively. The bill also requires automakers to submit another restructuring plan by March 31, 2009, after which the Car Czar could use his or her powers to reopen negotiations with the company, its creditors and the United Auto Workers union.
Part of the bill also stipulates that if the Detroit 3 accepts these loans, they must promise to stop pursuing litigation aimed at striking down California's right to set its own emissions standards and other states' right to adopt them. The California Air Resources Board has created emissions standards the are generally more strict than federal standards, and so far 17 states have chosen to adopt the Golden State's measures.
Detroit is backed into a corner, however, and will likely accept any conditions that Congress attaches to the bailout bill. With that in mind, Democratic leaders in Congress and the White House say that approval for the bill is likely, which would see around $15 billion in federal loans granted to the Detroit 3 as soon as December 15th.
[Source: CNN Money, The Detroit Free Press]
Reader Comments (Page 1 of 2)
Alias 7:53PM (12/08/2008)
Ugh. Allowing CARB or any other state to set their own standards is unbelievably stupid. California needs to either reduce it's population or mandate a large percentage of it's population take mass transit. Increasing auto regulations won't help their air quality problem.
Also doesn't it seem dumb to be increasing regulations and the cost of doing business on an industry that needs relief? Oh wait...I forgot...we're dealing with the gov't here...logic doesn't apply.
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zamafir 8:11PM (12/08/2008)
Dumb? when the majority of the car buying public resides in those 17 states? When the largest car market in the country, in the current economy even, is the state who's setting the standards? Dumb when international car makers have no issues doing it, even going so far as to design incredibly complex exhaust systems just to sell their cars in California? Nope. Dumb is continuing to tow the fantasy that California and it's 16 friends aren't where most of the purchasing in this country. If a super majority of car buyers lived outside those 17 states then we wouldn't be having this conversation as sales wouldn't depend on them. The majority do. End of pointless whining.
GeoTracker 8:13PM (12/08/2008)
It's even simpler than that. All we need to do is retime the traffic lights, get rid of carpool in areas that don't need it, and make people drive correctly. I get stuck at lights for 5 minutes just for it to change. Other times it's cause a couple of idiots decide to pile into the intersection creating gridlock. Get rid of that idle time and the cars would be more efficient.
Alias 8:29PM (12/08/2008)
Zamafir - you ignore the fact that cars aren't the problem. Continuing to tighten the standards won't produce any gains. Tree huggers continue their vendetta against the auto industry because it's an easy target...not because it makes sense.
Interestingly enough...tailpipe emissions are often cleaner than the air going into the engine(in California anyway). Sorry (not really) if that messes with your cars are evil paradigm.
Randy 8:35PM (12/08/2008)
I agree! I think they should start by kicking out all illegals...That right there will save enough money to bail out the Big 3 every year without an additional cost to the taxpayers ever.... :)
jake 9:50PM (12/08/2008)
They're taking the money from the funds that are supposed to fund cleaner cars so it's logical they try to force some conditions into this bill as a result.
Yes I agree they are taking the easier target by forcing the automakers to make even cleaner cars, when they can improve air quality with simple things like geotracker mentioned like timing traffic lights properly and removing unneeded carpool lanes. Yet on the other hand please don't give the BS about mandating public transit b/c you know everyone will oppose and you obviously will be among the first to oppose it. Cars are still a significant local pollution problem in California even given the improvements we have made thus far. Ultimately every automaker who wants to sell cars in California will have to adhere to the standards so it's not anti-competitive either.
Stingers 7:54PM (12/08/2008)
Wouldn't GM be better off shedding retirement benefits in bankruptcy?
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timothyjohn 10:50PM (12/08/2008)
Quote; "Wouldn't GM be better off shedding retirement benefits in bankruptcy?".
Brilliant thought. Who then would shoulder the responsibility for the costs of caring for all the GM's retirees who suddenly wouldn't have any medical coverage or retirement income? The taxpayer. Who wins? GM shareholders. Nice! As always, follow the money
Kint 12:19AM (12/09/2008)
Don't GM retirees already get Medicare? Don't they already receive Social Security? Just reduce their pensions by 50%.. they should've been saving for their retirement anyways..
scott in ct 12:51PM (12/09/2008)
Sure ,unless your a retiree who spent a lifetime working for the pension you were promised .
Rick 12:56PM (12/09/2008)
That's like blaming seniors for the problems with social security
Kaptain75329 1:15PM (12/09/2008)
"Sure ,unless your a retiree who spent a lifetime working for the pension you were promised." - scott in ct 12:51PM (12/09/2008)
And this emotional appeal makes that scenario the public's responsibility because...?
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"That's like blaming seniors for the problems with social security" - Rick 12:56PM (12/09/2008)
Which would be a perfectly valid response to any senior voting for a politician pushing that ponzi scheme. That aside, you make it sound like there were never any alternative retirement plans available. Not everything has to be a government solution. There have been private equivalents for just about every government program out there for decades. It sucks that some seniors made the poor choice to never seriously explore what options they might have, never bothered to plan for their own futures, and feel collectively screwed because of it. Still doesn't make it the taxpayers' problem.
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"Brilliant thought. Who then would shoulder the responsibility for the costs of caring for all the GM's retirees who suddenly wouldn't have any medical coverage or retirement income?" - timothyjohn 10:50PM (12/08/2008)
Well gee, I dunno. Maybe like.. the GM Retirees. Where is it written that when a company fails, the taxpayer automatically must take up responsibility for the collapse? I'm just a tad bit fed up with this notion that people taking care of themselves is anybody's job but their own. Too many mouthbreathers out there whining that politicians - who take our money by force to piss away on bridges to nowhere, put baseball on trial, and vote themselves pay increases - must always be the solution. I guess they haven't figured out yet that incompetent government bureaucrats (redundant) and their enablers created this mess; among other things, by perpetuating this insane attitude that citizens are too stupid and weak to pull their own weight. This emotionally-based thinking in our politics has very lasting consequences for all of us; we're seeing some of the corrosive effects right now. And yet some very selfish individuals want to expand and prolong the whole thing by forcing the rest of us who aren't abusing the system to finance and subsidize this freak show. Brilliant indeed. But don't worry.. they'll get their bailout. Then watch what happens next.
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"Who wins? GM shareholders. Nice! As always, follow the money" - timothyjohn 10:50PM (12/08/2008)
Wow. This looks like it actually passes for reason in your world. When the domestics get their bailout, the shareholders will win anyway, along with the execs and especially the UAW. Should the Big 3 rebound, these guys will make out like bandits and all of that would be at our expense. Follow the money? No kidding. It's not like this wouldn't be true even if you made the symbolic gesture to remove those oh-so-evil CEOs, because we all know they always leave leave empty handed. Doubly so because congress is in the equation in the first place - those bastards couldn't keep track of a teenager's dog on a leash, much less balance his checkbook. And if the domestics do go all Heath Ledger on us after we've filled their prescription, look for FOX and NBC to slug it out over who will get the rights to nationally air the reality TV show competition featuring the most stretched-out butt holes in American history.
Bankruptcy court is the only fair way to deal with this. Among other things, it ensures that only those who spilled the milk are the ones who have to clean it up.
J 7:59PM (12/08/2008)
And everyone thought the banking industry didn't have money, just look at what they have accomplished, they bought every person remotely connected with politics in DC, including maybe the future president, they got a $700 billion checkbook from us, granted that was free, they have virtually no supervision for this money, they even got foreign (Arab) investment, oh well foreign relations already sucked, they have what appears to anyway to have bought the media and now they somehow have diverted all financial attention to the car industry that they have done something horrible by only building big trucks and suv's that we only wanted to buy to improve there companies bottom line and now need a few bucks because the banks aren't lending, imagine that, with all the money we have given them and they aren't lending it, what are or did they do with it, guess we will never know since nobody is watching them. Sad how when greed sneaks in and takes your future and blames it on everyone else.
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brendan 8:26PM (12/08/2008)
Mr Lutz If you read this please reject this offer. i realize that Gm May not go on but in fact you would be better served to take chapter 11. If you allow this to happen the goverment will control GM for ever. You are asking for a loan and they give you a Car czar. I do not know what the real details are but the fact remains if GM can shrink to a more manageable size then quality goes up cost go down and unions go bye bye. Chapter 11 is the right thing so the company can get out of where it stands now. Your right to litagate over any issue can not be signed away. Thease are trying times for country and GM. Shrink to caddy abd chevy and dont share platt forms. Be like Honda and Acura.
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Greg 8:40PM (12/08/2008)
I agree with Brendan and Alias, F this deal. Its horrible. Some chump czar who knows nothing about the auto industry is going to come in and make things worse then blame the industry again. Plus the California thing is STUPID. Why don't they try making a real difference and get some of the cars OFF the road, or at least get the old cars that spew smoke off the roads like Japan did. New cars aren't the problem anymore. And allowing individual states to set their own requirements will end up requiring too many different models if one area thinks NOx is worse and another things HC's or CO are worse. I guess the other option is to take the money and stop selling cars in California. Playing the numbers game if they're such a big market, they probably also have the highest number of default's and repo's. It'd probably be a wash.
And just for the record I'll agree with the others on how biased this is to give the financial industry free money and parade the auto industry around like a bunch of pariah's. Next question is, who or what is the next industry to ask for loans and how many hoops will they have to jump through? Probably depends if its more white collar related or blue collar related.
Mobius_1 8:26PM (12/08/2008)
A BILL
A $15 BILLION BILL
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Silver 10:34PM (12/08/2008)
This "loan" will be just like that "loan" you give your deadbeat brother who can't hold a job. Call it a "loan" if it makes him (and you) feel better, but you can be 100% certain you're never going to get that money back.
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Torrent 11:41PM (12/08/2008)
Don't be so sure on that.
asdffdsa 1:57AM (12/09/2008)
Alero! *snicker*
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Rboyett 7:47AM (12/09/2008)
It wouldn't surprise me in the least if the Ford Family outright rejected the loan because of the terms.
The fact is that Ford can survive without it anyways.
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