Jalopnik: automaker loans

Map Of Every Domestic Automaker Manufacturing Site Reveals The Extent Of The Carpocalypse

Ben Wojdyla — Wed, 10 Dec 2008 19:30:00 EST

People say "Detroit" deserves to fail. Maybe, but as you can tell by the map below of every manufacturing facility from the domestic automakers, they'll take pretty much the entire Midwest with 'em.

Since it seems like half of the punditocracy, Republicans in Congress and every anti-car hippie with a blog seems to be interested, even giddy, at the prospect of a couple of the not-so-Big Three going under, we thought we'd try to put a little perspective on just what that means. It's easy for people to say "Detroit" deserves to fail, but it's not really just Detroit that would fail, it's pretty much the entire Midwest. We've put together a Google Maps overlay of all US manufacturing facilities currently in operation by one of the big three. Peruse at your leisure, then imagine all of those factories across the US empty and silent.

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Government May Delay $25 Billion For Automakers Until Mid-2010

Andrew Stoy — Fri, 26 Sep 2008 15:30:00 EDT

Apparently the Department of Energy is really slow when it comes to writing checks, as the Detroit News now reports that Detroit automakers may not get their recently approved loan packages until mid-way through 2010. DOE spokesperson Healy Baumgardner said "there are a number of legal and administrative requirements with which the Department must comply, such as the National Environmental Policy Act, we anticipate it could take at least 6 to 18 months or more, after necessary funds are appropriated." Which, of course, is a bureaucratic way of saying "red tape." Not surprisingly, the news didn't sit well with Michigan lawmakers and representatives from the Detroit Three, who had been laboring under the impression that checks would be cut as early as January 2009.

US Representative John Dingell of Dearborn, chairman of the House Energy and Commerce Committee, said, "It appears that DOE is making excuses for its own anticipated failures. If DOE is asking for vigorous oversight to ensure it performs its duties, we will be happy to oblige." Snap!

As it turns out, though, Dingell has a basis for frustration. The Detroit News also reports that the loan program was authorized in the Energy Act passed in December 2007, but the Energy Department didn't begin writing the regulations until late August. Additionally, DOE has yet to provide any funds for a $2 billion advanced energy program approved in 2005, despite picking 26 finalists almost a year ago. Your government at work, folks: Filling out forms in triplicate while automakers wait for funding that's already been approved. [Detroit News; Photo Credit: AP]

Automakers To Hit Congress Hard This Month For Loans That Aren't A Bailout

Andrew Stoy — Mon, 08 Sep 2008 08:30:00 EDT

After a nasty summer of sliding sales and eroding market share, domestic automakers are planning to lobby the US Congress for $50 billion in low-interest government loans. The companies claim the money would allow them to modernize plants and develop new fuel-efficient vehicles; ordinarily, automakers would have tapped existing lines of credit for the required cash, but rising interest rates combined with debt ratings reduced to junk status have rendered their options severely limited. But, the important thing to note here is that this is NOT a bailout. No sir.

Jalopnik Snap Judgment: While we'd rather see the Detroit Three stay afloat on their own, government-backed low-interest loans, properly repaid in a timely fashion, seem to be about the next best option. Particularly when said loans are viewed in the light of subsidies and other assistance quietly offered to foreign automakers by their home governments. And, technically, these government loans would also be available to non-US manufacturers, though most are expected to decline the assistance.

We do think that the automakers are going to have to be more honest about what they're asking for: Said Ford's Mark Fields, "This is not about benefiting Wall Street. This is benefiting Main Street, the working men and women. The auto industry is part of the backbone of the U.S. economy." We take issue with two of Fields' inferences: First, that Wall Street isn't part of the backbone of the US economy — it is, like it or not. And second, that a series of government-funded loans benefiting "Main Street" somehow isn't a bailout. It doesn't matter who reaps the benefits; if the gub'ment pumps a bunch of money into an industry to keep it afloat despite market conditions, it's a bailout. [Yahoo; Photo: Markfive]