Stalemate dims light for Big 3's $25 Billion Loan/Bailout

[96_impala_ss]

http://news.yahoo.com/s/ap/20081117/...ngress_returns

WASHINGTON – Prospects dimmed Monday for enactment of a $25 billion bailout for the faltering auto industry before year's end, as congressional Democrats and the Bush administration seemed headed for a stalemate. Help for Detroit's Big Three, which have been battered by the economic meltdown that has choked their sales and frozen their credit, is falling victim to a partisan fight over where the money should come from.

Senate Democrats said they would press ahead with their plan to carve out a portion of the $700 billion Wall Street bailout to pay for the loans, but aides in both parties and lobbyists tracking the plan acknowledged they did not currently have the votes to do so. The White House and congressional Republicans insist that the automaker bailout money instead come from redirecting a separate $25 billion loan program approved by Congress to help the industry develop more fuel-efficient vehicles.

n addition, besides opposing the use of any of the $700 billion for the automakers, the administration has told top lawmakers it does not plan to ask for the second half of that huge fund that Congress approved this fall to aid the financial industry, congressional officials said Monday.

The Treasury Department said its message on not tapping half the fund applied only to the next few days and that no decision had been made for the rest of the administration's two months — but officials stopped short of saying the funds would be used before Bush leaves office.

Majority Leader Harry Reid, D-Nev., said he would hold a test vote this week on a broad economic aid plan — including spending on public works projects, aid to cash-strapped states, an extension of jobless aid, and the carmaker loans — that most now concede has virtually no chance of passing.

If that fails, he will seek a vote on the auto industry bailout and the unemployment benefits, Reid said. It could come as early as Wednesday.

[96_impala_ss]

"For the auto industry to completely collapse would be a disaster in this kind of environment," Obama said in a "60 Minutes" interview aired Sunday night on CBS.



That goes out for all of you who think GM, Ford and Chrysler should fail.

[rvj]

When the Big 3 are gone and we need someone to make military vehicles and equipment at an enormous rate of production, Do you really think Japan or Korea will be dropping everything to help out Our military. Even if they did, would you feel safe using their tin can technology? If for no other reson, this is why the Big 3 have to succeed and be there when needed.

[PhishPhood]

Originally Posted by rvj

When the Big 3 are gone and we need someone to make military vehicles and equipment at an enormous rate of production, Do you really think Japan or Korea will be dropping everything to help out Our military. Even if they did, would you feel safe using their tin can technology? If for no other reson, this is why the Big 3 have to succeed and be there when needed.

This is another fear-mongering flag waved to justify a concept that no longer exists. For a number of reasons it is no where near reality..

• ..it assumes that we will be in some massive world war in the future needing the entire resources of the country; this is not the situation in this day and age of nuclear weapons and small local conflicts. If we do get into a world war we are not going to attack nuclear installations in armored HUMVEE's or troop carriers. Hell we are not even going to be attacking them with human beings.
• ..it assumes that such a war would be akin to WWII; it won't. The wars of the future will be airstrikes followed by airstrikes followed by nuclear missles followed by 100's of years of trying to regain our sense of humanity.
• ..it assumes that if such a need arose that the existing vehicle plants in the continental US would NOT produce vehicles if they weren't owned by a US Company. This is just silly. If such a war demanded it then the US Govt would just arrive at the front door and take over the plant. 'We need this plant - GET OUT!'

This justification for the survival of poorly run, poorly organized institutions from the last century is bogus.

[96_impala_ss]

Its not really about the factories if we go to war. I assume that the govt will take the American factories as they need them from their owners, domestic or foreign.

The real reason Big 3 should be saved is because if one of them fails, it will leave MILLIONS without jobs. Lets say around 3 million or 4 million if GM fails, Ford fails, and/or Chrysler fails. Thats not the way to get out of a recession if theres millions more unemployed in 2009.

[rvj]

Originally Posted by PhishPhood

This is another fear-mongering flag waved to justify a concept that no longer exists. For a number of reasons it is no where near reality..

• ..it assumes that we will be in some massive world war in the future needing the entire resources of the country; this is not the situation in this day and age of nuclear weapons and small local conflicts. If we do get into a world war we are not going to attack nuclear installations in armored HUMVEE's or troop carriers. Hell we are not even going to be attacking them with human beings.
• ..it assumes that such a war would be akin to WWII; it won't. The wars of the future will be airstrikes followed by airstrikes followed by nuclear missles followed by 100's of years of trying to regain our sense of humanity.
• ..it assumes that if such a need arose that the existing vehicle plants in the continental US would NOT produce vehicles if they weren't owned by a US Company. This is just silly. If such a war demanded it then the US Govt would just arrive at the front door and take over the plant. 'We need this plant - GET OUT!'

This justification for the survival of poorly run, poorly organized institutions from the last century is bogus.

We're using Humvees in a war as I type. It was followed by weeks of guided missile and tons and tons of bombs. In the end an assault vehicle was needed. I suppose a Prius would be just as good a target as a Humvee.

[Ach]

What I don't get is why some of the same people that supported the financial sector bailout oppose this. This would not require any new funds, only the re-allocation some of the $750B already earmarked for the financial folks. Will anyone really argue that they are less culpable for their current state of affairs than the Big Three? (BTW, I don't think Chrysler qualifies for assistance at this point, but that is another story).

The national security argument is valid IMHO, but not necessarily for the reasons given (manufacturing capacity). I believe that having at least one, if not two, viable American automakers is necessary to ensure our energy independence. In the event of an energy crisis, I believe that we will need the infrastructure and expertise of domestic auto companies to find a solution, even if it is done in conjunction with the government and other industries. I would not feel comfortable having our transportation future being held solely in the hands of foreign companies, no matter how friendly they have been heretofore. It is not that difficult to contemplate an "every man (or every country, as the case may be) for himself" energy crisis in the not-to-distant future.

[silvergoat2k6]

Originally Posted by 96_impala_ss

"For the auto industry to completely collapse would be a disaster in this kind of environment," Obama said in a "60 Minutes" interview aired Sunday night on CBS.



That goes out for all of you who think GM, Ford and Chrysler should fail.

Why don't you post the rest of what he has said about GM and their request for money?

[emh]

Originally Posted by Ach

What I don't get is why some of the same people that supported the financial sector bailout oppose this. This would not require any new funds, only the re-allocation some of the $750B already earmarked for the financial folks.

The financial companies have the benefit of friends controlling the bailout. Does anyone really think the bailout is about who needs support? I'm not big on conspiracy theories, but it's a bit much to think all of the following are coincidences:

Paulson is an ex Goldman Sachs guy
Goldman Sachs is AIG's largest business partner
Goldman was the only firm involved in early meetings on the bailout
Neel Kashkari, who is administering the bailout, is an ex-Goldman guy

Of course, there's also the minor issue that Paulson doesn't seem to have a clue as to how to use the money now that he has it...

[96_impala_ss]

Originally Posted by silvergoat2k6

Why don't you post the rest of what he has said about GM and their request for money?

GMI rule is that I cant post all the article on the thread. I can only do 75% of it. Im going to see if I can find a youtube video of the interview though.

[silvergoat2k6]

I'll save you the trouble...here's basically what Obama said:

1. He wants to see a plan (from management and the union) that ensures future viability (beyond just laying off people).

2. GM will not be given a "blank check", if they're getting money they'll have to meet certain conditions yet to be determined.

[96_impala_ss]

Originally Posted by silvergoat2k6

2. GM will not be given a "blank check", if they're getting money they'll have to meet certain conditions yet to be determined.

AKA the death of RWD 2.0 (all of it dead) and the death of the BOF SUV and hello 1.0 liter engines FWD on anything that has a engine and microcars that you are told can fit 5