GOP to Detroit: Drop dead

Republicans refuse bailout; Obama wants auto czar 13

Looks like there will be no auto bailout with this Congress and this president. The NYT reports today:

The prospects of a government rescue for the foundering American automakers dwindled Thursday as Democratic Congressional leaders conceded that they would face potentially insurmountable Republican opposition during a lame-duck session next week.

Nor does it appear that Bush supports any action. What does this mean? "Some industry experts fear that one of the Big Three automakers will collapse before then." This is GOP tough love.

Again, I don't know that anybody should shed too many tears for the Big Three/Medium Two, but I would at the very least accelerate the $25 billion retooling loan to them -- only with major strings attached. It looks like Obama agrees, according to today's Washington Post piece, "Obama Ties Automaker Rescue to Regulation":

Top advisers to President-elect Barack Obama are helping to draft an auto industry rescue plan that would bring new government oversight, including the possibility of an auto czar who could ensure the money was being used wisely.

Aides said Obama is also open to an oversight board that would perform the same function as one individual. The proposals come as the estimates of the cost to fix Detroit's three largest automakers continue to mount.

"Certainly he wouldn't believe in it being a blank check," said an Obama adviser, who spoke on condition of anonymity due to not being authorized to speak publicly on the topic. "He wants oversight to be making sure the auto companies have figured out how to become viable, ongoing concerns."

But, again, none of this is going to happen until Obama is president:

"Right now, I don't think there are the votes. I don't know of a single Republican who's willing to support" the auto bailout, Sen. Christopher J. Dodd (D-Conn.), chairman of the Senate Banking Committee, said yesterday. While Dodd said he supports a bailout, he cautioned against "bringing up a proposition that might fail" and suggested that Congress wait until Obama takes office.

Not clear Detroit will survive that long, but as the NYT says, that's no big deal to the GOP:

Senator Richard C. Shelby of Alabama, the senior Republican on the banking committee, said he would not support legislation to aid the auto companies and seemed prepared to let one or all of them collapse.

"The financial straits that the Big Three find themselves in is not the product of our current economic downturn, but instead is the legacy of the uncompetitive structure of its manufacturing and labor force," Mr. Shelby said in a statement. "The financial situation facing the Big Three is not a national problem but their problem."

On Thursday, Representative John A. Boehner of Ohio, the Republican leader, also came out strongly against the idea.

"Spending billions of additional federal tax dollars with no promises to reform the root causes crippling automakers' competitiveness around the world is neither fair to taxpayers nor sound fiscal policy," Mr. Boehner said in a statement.

Representative Jeb Hensarling of Texas, chairman of the conservative Republican Study Committee, in an appearance on Fox News, said: "You wonder where bailout-mania will end."

Mr. Hensarling said American automakers should bear responsibility for their failed operations. "They are producing high-cost products that consumers don't want to buy. And so now we have Washington on the verge of giving them a bailout simply because we have all heard of them and they have high-priced lobbyists."

Again, bankruptcy is probably a better near-term option than simply handing the car companies a blank check. But helping Detroit make a rapid transition to high fuel efficiency cars and advanced hybrids would be the best option of all.

This post was created for ClimateProgress.org, a project of the Center for American Progress Action Fund.

Joseph Romm is the editor of Climate Progress and a senior fellow at the Center for American Progress.

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  1. Delay And Deny's avatar

    Delay And Deny Posted 9:12 am
    14 Nov 2008

    From the detritus...

    There is only one car among the Big Three worth saving...the hydrogen fuel cell powered Sequoia SUV.
    I would shut down all of Detroit except for the factory that makes Sequoia hydrogen cars.
    Then I would regrow the industry with seed capital money based on that single car.

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  2. leftofzen Posted 10:45 am
    14 Nov 2008

    auto maker bailoutThey took jobs away from hard working Americans for the sake of profit. Now they want those same hard working tax paying Americans to bail them out. Okay bring the factories and jobs back to American workers that bet their life on the jobs you offered. Bail out, sure but only if it puts Americans back to work. You gave away our jobs and forced us into relying on credit all the while selling fuel guzzeling high profit vehicles at an enormous profit. As U.S. Americans are we really that gullible? Third grade math will tell you if we don't have jobs, we cannot pay our debts. If the big three can't sell over priced gas guzzelers than they are out of a job!

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  3. amazingdrx Posted 3:32 pm
    14 Nov 2008

    Ashton Kutcher on Bill MaherSays!....Make the very successful, profitable oil companies bail out the auto industry.  Since they killed their business model trying to sell gas guzzlers...to benefit their oil company board room mates and fellow investors.
    He didn't say how this could be done.
    But we have an answer oft repeated on this blog.  Divert the 18 billion per year in subsidies to oil companies to contracts with the auto makers to produce 1 million economy plugin hybrids per year for government use.
    That's 18k per car, that way consumers could afford them too.  And auto companies would get the steady financial infusion they need year after year.  Taxpayers would be even.
    Majic green job revival acomplished!  At least the automyive end of it.
    Diverting coal, nuclear and fuel farming subsidies would allow similar orders of solar cogeneration, ground source heating/cooling, smart grid, and distributed cogeneration devices.

    http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin

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  4. Billhook Posted 9:16 pm
    14 Nov 2008

    Cars to burn what fuel ?Given the looming reality of Peak Oil, with its inevitable annual decline of global supply at several percent per year,

    what exactly is the point of pouring billions into renewed motorcar production ?
    And hypothetical hundreds of millions of electric cars would be using what exactly for their power supply ? Coal ? Nuclear ? Solar Thermal ?

    And what massive new grid capacity for that power's distribution ?
    Better by far to accept that the "Great Car Economy" {Thatcher, 1988) is over,

    and to put those $25 Bn of bailout funds into the launch of sustainable enterprises by redundant car-makers.

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  5. odograph Posted 11:02 pm
    14 Nov 2008

    no "additional" bailout?Don't forget they got $25B in October.

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  6. Erik Hoffner's avatar

    Erik Hoffner Posted 12:38 am
    15 Nov 2008

    transitionI highly doubt that giving these guys money and requiring them to transition to manufacturing a new fuel efficient fleet would produce any more than zippy concept cars that never get off the expo floor...
    Erik

    The Orion Grassroots Network: supporting grassroots groups working for conservation, justice, & more

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  7. caniscandida Posted 4:05 am
    15 Nov 2008

    "Drop Dead" Is Not an OptionCf. this excellent op-ed by Bob Herbert:
    http://www.nytimes.com/2008/11/15/opinion/15herbert.html? ...

    Chickens deserve our true friendship! So do fish! So do other sentient beings! Let us learn to be kind.

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  8. SMLowry's avatar

    SMLowry Posted 5:40 am
    15 Nov 2008

    Maybe notBut reborn in a new body is. Taking the setting your house on fire analogy: We certainly put the fire out and try to save lives but we don't rebuild the house and even if the owner has insurance, if they find out the fire was arson, the company doesn't pay (at least I think that's how it works). Aside from more efficient cars, there are so many ways those billions could be invested that would provide millions of jobs while manufacturing goods that we need to rebuild infrastructure, retool energy production, switch from trucks to rail, implement widespread public transportation (even out in the "boonies" like where I live, like in Europe). There are so many opportunities!

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  9. Billhook Posted 9:52 am
    15 Nov 2008

    Transformation, using what for money ?There are indeed "so many opportunities", but ironically the US is no longer in a position to invest in them on a scale to transform the society.

    Reagan's coup against Carter foreclosed on that option.
    The real wealth declined years ago, (along with the C20 protestant work ethic), and the virtual wealth, namely international creditworthyness, is next to go.
    As elites worldwide strive to maintain the tottering global house-of-cards financial structure, US treasury bills are still respected,

    but the thought of loading foreign creditor Govt.s with enough of them to fund the proposed transformation of US industry,

    well forget it.
    The transformation that America can afford is to a simpler, lower tech, lower energy, more localised way of life.
    Aiming too high is a sure way of missing the trail altogether.

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  10. amazingdrx Posted 3:28 pm
    15 Nov 2008

    Exactly CanisGood oped by Herbert. "Drop dead" is a punishment scheme devised by the bitter sore losers.  Lose millions of jobs?
    Punish the bad bad autoworkers who abandoned the Reagan GOP?  The "right to work" states want those auto jobs so they are willing to let Detroit fall.
    This is ridiculous political posturing.  Reform the auto companies, that's the key to reviving our manufacturing, job, and tax base.
    Listen to Obama and become the reform we need to see, get on with it auto industry, unions, and Michigan politicians.  A coalition is need, not a patchwork of infighting over flawed talking points.

    http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin

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  11. caniscandida Posted 5:59 pm
    15 Nov 2008

    "Reform the auto companies"Right, Amazing.  Certainly that is what Bob Herbert has in mind.  And there is no reason why Thomas Friedman should disapprove, though he is on record as being critical of the GM bailout.
    Cf. also Wesley Clark, today, along the same lines:
    http://www.nytimes.com/2008/11/16/opinion/16clark.html?re ...

    Chickens deserve our true friendship! So do fish! So do other sentient beings! Let us learn to be kind.

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  12. amazingdrx Posted 2:39 am
    16 Nov 2008

    Well Tom saysFriedman said he wanted board rooms and execs replaced with a government panel?  Really radical.  I think it was on Chris Mathews Canis.  I will try to find the clip.  
    Reich, former Clinton labor secretary and Obama advisor, says that auto unions will have to give some ground too.
    No one is talking mass production contracts funded by oil sibsidy diversion.  Yet.  Is it coming?  Kutcher has opened the mass media to the possibility.
    A good exchange with JC Winnie on my site on this topic.  Is it going viral?  Hehey.

    http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin

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  13. Wolverine Posted 8:53 am
    16 Nov 2008

    Useless DemocratsThe fact that the Republicans are on the right side on this issue (almost certainly for the wrong reason, but that's beside my point) shows how far right Obama and the Democrats have moved.  Progressives need a real choice, like the Green Party, not pro-corporate, anti-environmental parties like the Democrats and Republicans who are not willing to do anything that would substantially change the status quo.
    Obama's "change"?  What a joke!

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