While prospective Democratic nominee Senator Barack Obama was in Detroit talking about as much as $4 Billion in loan guarantees for the nation’s top automakers, Freep dot com details how, behind the scenes, they’ve already begun lobbying for $40-with-a-B Billion dollars to survive current market conditions.
Top lobbyists for GM, Ford and Chrysler followed up Sunday with phone calls to leaders of Michigan’s congressional delegation — including U.S. Sens. Debbie Stabenow and Carl Levin, plus Reps. John Dingell and Sander Levin — to drive the point home. All three Detroit companies are hemorrhaging cash and having trouble borrowing.
On Monday, Democratic presidential candidate Barack Obama proposed $4 billion to help Detroit’s automakers build the cars of the future. Obama’s advisers called it a first step. Stabenow told me some of the money would go to battery research, but a big chunk of it could be used to help leverage loans of more than $10 billion for retooling plants.
As I was recently discussing in a phone call with blogger friend and Examiner Editorial page Editor, Mark Tapscott, there’s a bit of a conundrum here for conservatives like me who pretty much oppose these kinds of bail-outs - especially as the Bush Administration prepares to up mpg standards by as much as 25% for 2015.
For the most part, I prefer allowing the market to decide who lives and dies in business. Unfortunately, through fleet mpg standards, the government has been mandating the spending of capital by the auto makers in less profitable car lines for years. Passenger vehicles are considered pretty much a loss leader within the American car manufacturing community. They built light trucks because that is what the bulk of the population wanted. That was a market driven decision, not one designed to trash the environment, or use up as much fuel as possible.
Now, when business plans, at least in part mandated by DC intervention crash and burn, it becomes much harder for conservatives like me to argue for a hands-off approach.
Why not consider backing down some on any loan guarantee number, but couple it with a scale back in regulation, thereby setting auto makers free to control their own destinies - hold them accountable for it, not American taxpayers … and start to get the government out of business decision-making, in which it has never truly excelled, or belonged to start with.
In any event, it’s a complex issue no doubt destined to be coming to a hearing room near you sometime this Fall.
As for Obama - he seems determined to give all kinds of our money away. What a surprise:
Obama proposed $4 billion in federal loans and loan guarantees to help the automakers meet his goal — a figure he first mentioned last month in a letter to United Auto Workers leaders — and a $7,000 tax credit to drivers who buy plug-in hybrids.
If someone requires a $7,000 kick-in from American taxpayers to purchase a new vehicle of any type, well, … maybe they can just do without.