Bailout of Sellout?
There’s little else that’s been occupying automotive news for the past few days than the $15 billion deal brokered between Congressional Democrats and the Bush White House to bail out General Motors and Chrysler. (Ford wants a $9 billion line of credit, but isn’t asking for loans at this time.) In the end, although Speaker Nancy Pelosi didn’t want it that way, the money will be drawn from a loan fund previously established to speed up the development of fuel efficient vehicles.
And get this, the Democrats also wanted the bailout provision to stop automakers from challenging emissions and fuel standards laws on a state-by-state basis, but the Bush end of the equation says “no go” unless that idea is struck from the bill that should go before the House of Representatives within hours. (Gotta get that last dying gasp in there, don’t you W.?)
Of course, it’s obvious that all concerned took seriously GM and Chrysler’s assertions that they would go under before the end of the year without federal help. The effects of such a collapse on the broader economy would be catastrophic and no doubt plunge us into a depression. Would it be as bad as 1929? Hard to tell. With unemployment currently hovering around 7%, we’re about where we were when John Kennedy was elected. When FDR took office, unemployment was at 25%.
But one thing is obvious in all this. Going green and questing after fuel efficiency gets tossed pretty fast when oil plummets and gasoline is selling for around $1.53 a gallon. (It was at $1.25 when Bush took office.) The ramifications for the exciting trends in automotive development we’ve been discussin here for months are frightening unless President-elect Barak Obama makes good on his pledge to marry environmentalism with job creation.
To my mind, we have to have both — a viable American auto industry and petroleum independence. This measure, which will carry the companies through March under the strict supervision of a “car czar” is obviously an emergency measure to stave off disaster. Let’s hope that Obama gets things back on track for those of us who believe in alternative fueled vehicles, because right now, that cause — at least in the hands of the Detroit Big Three — is down by $15 billion.