What's going on with the bailout? — Page 2

Obviously this will be a surprise to you, but GM has more 30+ mpg model vehicles than any other manufacturer. The domestics do make, and have always made, fuel efficient vehicles. GM is still the top annual seller of vehicles in the world.

The problem is profitibility on the smaller vehicles. Toward correcting that the domestics have already substantially restructured themselves and will realize major cost savings once the 2010 labor contracts kick in. All they are looking for is a loan to bridge the 14 months until that contract kicks in.

And the sooner the Feds realize they need to start running the country as America, Inc. so that companies based here will not be at a disadvantage in the global market the quicker that loan, with interst, will be repaid.

The auto industry is light years ahead of what's on the market today. Whenever the Fed decides to get on board and establish an energy policy the auto companies will be right there. Under Bush the oil companies have had their way and, despite all the hypocritical lip service, the American public doesn't want off oil because it's the cheapest fuel out there. It's the Wal*mart effect - everybody bitches about it but still buys.

The auto companies can build cars that run on almost anything. They do in other countries. The problem is getting the fuel distributed because the oil companies control the distribution system.

The only thing the auto companies can do without a fuel distribution system is go toward electrics, which has not only been a technological challenge but is also hindered by the fact that right now all electric vehicle batteries are supplied by Asia. The auto companies have asked the Fed to spur battery technology development here but nothing's been done.

The auto companies spend more on R&D than any other private industry, but until the Fed (or states working together as has happened with E85 in the Midwest) provides an energy policy favorable to translating alternative energy options to the marketplace it's not going to happen.

The core problem is a US problem, not an automaker problem.

Updated On: 11/14/08 at 09:33 AM

"The Fed has had to provide incentive (money) to get the American auto industries to produce fuel efficient cars."

When and how much?

"The big 3 automakers are having a hard time and are still in the 20th century."

Not at all. GM has more 30+ mpg models than any other manufacturer, has the 100+ mpg Volt hitting the market in 2010 (and early tests are showing it will beat the 2010 Prius in mpg) and the new UAW contracts will have the American manufacturers at a labor cost advantage over the Japanese.

You also conveniently ignore the fact that the American makers have been rolling out alternative fuel vehicles for over 10 years.

What really amazes me, though I guess I shouldn't be surprised, is the level of ignorance about the auto industry in this country on display these last few weeks.

Businesses fail all of the time.

These should as well.

The auto industry has no one to blame but themselves.


I say, NO BAILOUT. Let them fold and let newer business that can make greener cars start up.

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That may be true of the Volt, but I'm also interested in seeing how the air cars fare next year, and how the RR4 looks the following year. I'm really curious about the RR4 for personal reasons. I want to see how much more fuel efficient it is, if at all.
Risk of foreign control

"Air cars aren't going anywhere"

I'm not so sure of that. These have the potential for a certain kind of driving if the technological issues are resolved. They do work, up to a point. A hybrid with a gasoline engine that runs a compressor has potential. But highways will have to look a lot different if these are to be used intercity and not just intracity.

My interest in these is personal, as I said, I 'd like to own an air car and an RR4, if either or both turns out as I hope. Time will tell.

Foreign manufacturers have already made significant inroads to the American auto industry since the 1970's. There's no reason why that couldn't continue under the right conditions.

The whole point is to try to prevent a crash, either by a loan bailout as you suggest, which is facing some controversy in Congress, or by a temporary take over by government as I suggest - but isn't even being seriously considered, and the success of that would depend on who would manage the show and how long the government would want to run it. But it's only an intellectual argument because it's not being considered.

Obama has his work cut out for him. The new Congress has its work cut out, too.