Automotive News - November 17, 2008 - (Page 12) 12 • NOVEMBER 17, 2008 opinion If the Detroit 3 had received some sort of bailout in a day and a half, they might have received their billions without any strings attached. That possibility is gone, and it is gone for good. Even though the need is desperate for General Motors and Cerberus Capital Management, the chances of a quick, no-stringsattached deal are just about zero. Congress will give the domestic automakers something. No one has figured out whether it will be a bailout or a loan or a gift, but one thing is certain: There will be plenty of caveats attached to those billions. I’m not sure Cerberus will get anything. Since Cerberus is on the verge of getting rid of its stake in Chrysler, the government might hold off on help for Chrysler until there is a new owner. Certainly Cerberus hasn’t demonstrated commitment to the auto industry. It appears all Cerberus wants is the rest of DAILY AUTO NEWS >> You can get the news you need every day. Go to www.autonews.com/signup and sign up for our daily e-mail newsletter. How to revive Get ready for more government rule the industry and help it thrive The federal government must do several things to help resuscitate the domestic auto industry and ensure its long-term health. In the short run, Congress must move quickly on an aid package for General Motors, Ford Motor and Chrysler LLC. The package ought to include sufficient loans — maybe even direct equity investment — to help the companies stay afloat. President-elect Barack Obama should encourage Congress to include a direct boost to Detroit 3 vehicle sales as part of the broader economic stimulus For the long-term package. A good starting point for the discussion might be a proposhealth of the al by industry executives Don industry, nothing Runkle and Hal Sperlich, who suggest a $3,000 federal payment is more important to buyers of new Detroit 3 vehicles that also carry a factory than a reasonable, incentive of at least $3,000. sustainable national For the long-term health of the industry, nothing is more important than a reasonable, sustainenergy policy. able national energy policy. That must be a top priority of the Obama administration. Easing up on federal fuel economy standards would be the wrong thing to do because consistency is important. It also would be a mistake to let states enforce their own greenhouse gas standards, which are backdoor attempts to usurp federal authority to set consistent fuel economy rules. With the economy in chaos and the price of gasoline in temporary free-fall, Obama faces a unique opportunity to raise the federal tax on gasoline in reasonable increments as part of his energy policy. By allowing the price of fuel to rise, such an increase would spur consumer demand for more fuel-efficient vehicles. That would permit automakers to develop products that consumers want to buy, here and in overseas markets. Any additional federal revenue generated by the tax hike could help pay for the industry aid package. Many critics say the Detroit 3 have caused their own problems by relying on big SUVs, but automakers were just meeting consumer demand for the vehicles. That demand was the result of cheap gasoline, which has been the nation’s de facto energy policy for decades. It is encouraging that Obama seems to understand the need for a strong domestic auto industry as an economic engine and a linchpin of the U.S. manufacturing base. But unless the Obama team moves quickly and decisively, one or more automakers could fail. That would be catastrophic. GMAC Financial Services so it can turn the finance company into a bank and get some of the banking bailout funds. Ford must decide whether to borrow billions from the federal government and take the restrictions that inevitably will accompany the money. Ford might be wiser to go it alone and keep more of its independence. On the other hand, GM says it is desperate for money. GM executives suggest the company is running out of money and might have to do something desperate in the very near term, such as declare bankruptcy. GM needs help, they plead, and it needs it now. If GM is that desperate, it probably will agree to anything the federal government demands as a condition of a bailout. Inevitably, that will mean changing the If anyone thinks the domestic automobile industry is going to get a free pass on money from the government, he has the wrong idea. executive team that got GM where it is today. That’s a change GM would resist at its own peril. If anyone thinks the domestic automobile industry is going to get a free pass on money from the government, he has the wrong idea. The government will extract its drop of blood. And when you look at the composition of Congress, you can only imagine in your worst nightmare what might be demanded. For the auto industry, there is no such thing as a free billion. Delay regulations; help the industry To the Editor: Regarding a government bailout of the auto industry: Perhaps instead of giving the car companies billions of dollars to retool for future fuel economy and emissions regulations, we should simply declare a moratorium on new regs so the industry does not have to spend those billions. How about a 10-year hiatus? That would not only save billions for the industry but also forestall the price increases to consumers that Automotive News predicted in the Nov. 10 issue’s Green Car section (“Boosting mpg will bump up stickers, too”). ROGER MEINERS Milford, Mich. The writer is an auto industry consultant. Give American car buyers $5,000 How Obama can save the industry To the Editor: Here’s how President-elect Barack Obama can save the U.S. auto industry: Consumers: Create immediate tax incentives for consumers to purchase any U.S.-built 30-mpg vehicle today, regardless of the type of powerplant. Include motorcycles and scooters as well — just like Europe. Easing restrictions on diesel emissions also would help. Manufacturing: Rather than pouring up to $50 billion into a failed U.S. auto industry, create a new one by consolidating the manufacturing of American brands into one global car company. Ford can have trucks; General Motors can have cars; Chrysler gets commercial and military vehicles. Energy: Eliminate index speculation on crude oil; mandate price controls at the retail level and adopt an energy tax on passenger vehicles with engines larger than 2.0 liters to fund the tax incentives to buy 30-mpg cars today. It’s a start. But without radical thinking, $25 billion to $50 billion in bailout money will be burned as quickly as a tank of gasoline in an SUV, only next time around there will be no federal roadside assistance. ROBB LoFORESE Warwick, N.Y. The writer, a dealer, is a former vice president of Volvo Cars of North America. To the Editor: I keep reading that the Detroit 3 want the federal government to help them with a bailout. Why should the government let the CEOs of the Detroit 3 decide what to do with the money? They have mismanaged things for several decades. I think the government should give American consumers $25 billion. I propose that each of the next 5 million American citizens to buy an American car gets a $5,000 credit toward the purchase. The Detroit 3 would have to continue to offer incentives to help sell new cars and trucks. With those combined incentives, people would buy American cars. That would help not only the Detroit 3 but all the people associated with the car industry. ARON VAN HOUTEN Finance Manager Saturn of South Holland South Holland, Ill. THE WEEKLY NEWSPAPER OF THE INDUSTRY Established in 1925, published every Monday by Crain Communications Inc. Keith E. Crain, Publisher and Editor-in-Chief Peter Brown, Associate Publisher and Editorial Director David Sedgwick, Editor Edward Lapham, Executive Editor HOW TO REACH US Web site: www.autonews.com Editorial staff autonews@crain.com Phone: 313-446-0361 Fax: 313-446-0383 Circulation Advertising subs@crain.com rgreer@crain.com Phone: 888-446-1422 Phone: 313-446-6050 Fax: 313-446-6777 Fax: 313-446-8030 Editorial data/research To locate information that has been published in Automotive News, call 313-446-1662. 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Table of Contents Feed for the Digital Edition of Automotive News - November 17, 2008 Automotive News - November 17, 2008 Automotive News - November 17, 2008 - (Page Intro) Automotive News - November 17, 2008 - (Page BB1) Automotive News - November 17, 2008 - (Page BB2) Automotive News - November 17, 2008 - (Page 1) Automotive News - November 17, 2008 - (Page 2) Automotive News - November 17, 2008 - (Page 3) Automotive News - November 17, 2008 - (Page 4) Automotive News - November 17, 2008 - (Page 5) Automotive News - November 17, 2008 - (Page 6) Automotive News - November 17, 2008 - (Page 7) Automotive News - November 17, 2008 - (Page 8) Automotive News - November 17, 2008 - (Page 9) Automotive News - November 17, 2008 - (Page 10) Automotive News - November 17, 2008 - (Page 11) Automotive News - November 17, 2008 - (Page 12) Automotive News - November 17, 2008 - (Page 13) Automotive News - November 17, 2008 - (Page 14) Automotive News - November 17, 2008 - (Page 14a) Automotive News - November 17, 2008 - (Page 14b) Automotive News - November 17, 2008 - (Page 15) Automotive News - November 17, 2008 - (Page 16) Automotive News - November 17, 2008 - (Page 17) Automotive News - November 17, 2008 - (Page 18) Automotive News - November 17, 2008 - (Page 19) Automotive News - November 17, 2008 - (Page 20) Automotive News - November 17, 2008 - (Page 21) Automotive News - November 17, 2008 - (Page 22) Automotive News - November 17, 2008 - (Page 23) Automotive News - November 17, 2008 - (Page 24) Automotive News - November 17, 2008 - (Page 25) Automotive News - November 17, 2008 - (Page 26) Automotive News - November 17, 2008 - (Page 26a) Automotive News - November 17, 2008 - (Page 26b) Automotive News - November 17, 2008 - (Page 27) Automotive News - November 17, 2008 - (Page 28) Automotive News - November 17, 2008 - (Page 29) Automotive News - November 17, 2008 - (Page 30) Automotive News - November 17, 2008 - (Page 31) Automotive News - November 17, 2008 - (Page 32) Automotive News - November 17, 2008 - (Page 33) Automotive News - November 17, 2008 - (Page 34) Automotive News - November 17, 2008 - (Page 35) Automotive News - November 17, 2008 - (Page 36) Automotive News - November 17, 2008 - (Page 37) Automotive News - November 17, 2008 - (Page 38) Automotive News - November 17, 2008 - (Page 39) Automotive News - November 17, 2008 - (Page 40)
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