CAPAF Letter on Automakers
So despite what I’ve blogged here, CAPAF is putting out a letter supporting the idea of a carmaker bailout subject to the following conditions:
To ensure that the managers who helped create this mess are not unduly rewarded, the loans must disallow excessive executive compensation. In addition, the auto companies must fulfill their commitments to provide both health care and retirement security for their employees and retirees. The companies must commit to continue their research and development of advanced, clean-vehicle technology and energy efficient manufacturing. A loan oversight board should ensure the companies develop a long-term business plan based on the production and sale of fuel-efficient vehicles.
The auto companies should embrace—not resist—the transition to less polluting vehicles. They should assure Congress that they will cease their legal and lobbying opposition to the imminent new fuel economy standards, and the California motor vehicle greenhouse gas standards that President-elect Obama said he would allow. These measures will reduce oil dependence, increase national security, save families money, and reduce pollution. In addition to harming the nation, continued opposition to these standards would keep the companies on the path that got them in this mess in the first place.
Please support the $25 billion loan for U.S. auto companies and include the aforementioned safeguards. This will help protect American jobs and ensure progress toward significantly more efficient vehicles. Thank you.
At a minimum, I would go further on the lobbying stuff. If progressive politicians are going to be giving taxpayer money to carmakers as part of a transition to our bold green future, we should expect them to cease all lobbying against progressive environmental legislation, not just fuel economy standards.
27 Responses to “CAPAF Letter on Automakers”
Register
RSSLogin
Topic Cloud
ArchivesBlog RollAbout Matt YglesiasContact Me
Donate
November 17th, 2008 at 2:25 pm
If progressive politicians are going to be giving taxpayer money to carmakers as part of a transition to our bold green future, we should expect them to cease all lobbying against progressive environmental legislation, not just fuel economy standards.
As a practical matter, how do you do that? Do you flag certain pieces of legislation as “progressive” and say those are the ones the industry can’t lobby against?
November 17th, 2008 at 2:27 pm
we should expect them to cease all lobbying against progressive environmental legislation, not just fuel economy standards
No. Handing out taxpayer money to lobbyists and their clients is part of so-called progressive politicians’ agenda. Progressive environmental legislation is not. Until you realize that, you won’t understand the politics of bailout, whether it’s Wall Street or Michigan.
November 17th, 2008 at 2:28 pm
Cut management pay, do absolutely nothing for labor costs, then go for an extremely capital-heavy retooling towards green cars? Exactly whatin this plan will come remotely close to making the big three into solvent, going concerns? I know it brands you as some sort of labor hater but if you can’t acknowlege that the workers are somehow gonna have to take less let’s just directly pay their salaries and let the car companies go. Otherwise you’re just buying a couple more years of losing money then the same problem all over again
November 17th, 2008 at 2:40 pm
That plan won’t change a thing. Retirees who are eligible for Medicare need to be yanked off private healthcare. If they aren’t willing to go there, they can count on GM going bankrupt, bailout or no.
November 17th, 2008 at 2:48 pm
“…the auto companies must fulfill their commitments to provide both health care and retirement security for their employees and retirees.”
Quick, somebody tell CAPAF, the automakers don’t pay for these benefits, the car buyers do, which is why Detroit keeps losing business.
“These measures will reduce oil dependence, increase national security, save families money, and reduce pollution. In addition to harming the nation…”
Then tax the phucking gas. With low gas prices, the problem isn’t getting automakers to build fuel efficient cars, it’s getting people to buy them. How many times do we have to go through this nonsense anyway? What’s more, the gas tax could help finance the bailout, which the taxpayers are going to have to pay for anyway.
“A loan oversight board should ensure the companies develop a long-term business plan based on the production and sale of fuel-efficient vehicles.”
With what technology? Turbo diesels, hybrids, ultracapacitors, fuel cells, etc. Does CAPAF know which will emerge as the “right” choice. Would an oversight board?
November 17th, 2008 at 2:56 pm
this sort of corporatism is ridiculous. CAPAF should just endorse nationalization and be done with it!
November 17th, 2008 at 3:12 pm
This press release makes CAPAF sound like they are trying very hard to come up with some tough-sounding strings to attach, but they don’t really want to attach many strings. To wit:
1. No “excessive” executive salaries. I guess if someone expects that a car exec’s salary is excessive, they can fill out some excessive executive compensation complaint, and file it with the feds?
2. Make sure the companies fulfill commitments they have already made, and continue to implement business decisions they have already taken.
3. Car companies should commit to doing some some important “embracing” and “assuring”.
November 17th, 2008 at 3:16 pm
…”we should expect them to cease all lobbying against progressive environmental legislation, …”
Whoa, now we got a horse race. This is a great idea that should be expanded to all lobbying. If our elected officials receive our tax dollars, shouldn’t they have our best interests in mind?
November 17th, 2008 at 3:31 pm
If progressive politicians are going to be giving taxpayer money to carmakers as part of a transition to our bold green future, we should expect them to cease all lobbying against progressive environmental legislation, not just fuel economy standards.
Fine by me!
Something like this was proposed as a precondition for the Wall Street bailout too, though whatever happened to that?
Personally, I think all corporate lobbying should be banned, period. Maybe retroactively banned even, with an eight-year lookback to see what companies get their lobbyists and executives thrown in jail.
However, I don’t see how, as a practical matter, you make a lobbying ban (even a non-retroactive one
) part of a legislative package. I would imagine lobbying is protected by the First Amendment somehow? I mean, I hope not, but isn’t it though?
November 17th, 2008 at 3:41 pm
I’m with the moron @3:31. Wouldn’t there be constitutional issues to any kind of restrictions on lobbying?
A more clever approach might be to couch it in financial terms. One of the loan conditions could reasonably be (and probably should be) dramatic cuts in non-essential spending by GM. Lobbying would surely fall in that category (and might even be specified as such, but then you get closer to the constitutional issues, if any).
Just a thought.
November 17th, 2008 at 4:11 pm
we should expect them to cease all lobbying against progressive environmental legislation, not just fuel economy standards.
Hilarious. Who gets to decide what counts as “progressive” environmental legislation? Is that center-left progressive, or progressive progressive?
November 18th, 2008 at 12:31 am
I was–and still mostly am–in the “let them file for bankruptcy” mode. If capital markets are still too frozen to allow sufficient debtor-in-possession financing for the automakers while they’re in Chapter 11, then there’s a way around that (limited loan guarantees, for example).
But the problem is unlikely to be solved by business-as-usual in the auto industry. The problems, as I see it, are twofold.
First, the US-based firms have an unsustainable cost structure, part of which comes from the health-care-retiree plans. I have not understood, dating back at least to the mid-1990s (and the failure of the Clinton health care plans) why major US manufacturers have not bee in the forefromt of lobbying in favor og haelth-care finance reform. (An article in Fortune in early 2007 estimated GM’s health care costs per vehicle, for active and retired workerd, at $1,635. Per car. Toyota’s, in its US plants? $215. Per car.) They need it about as badly as anyone does. But part of the problem, which the automakers and the unions have begun to address, is that direct labor costs for the Middling Three (GM, Ford, Chrysler–can’t call them the Big Three anymore) seem to be around $2,000 per car, nearly $1,000 more than the transplant car factories. So far, we have a $2,400 per car cost disadvantage.
The second problem is what a friend of mine calls the GM problem–Gross Mismanagement. They are designing and building less desirable cars. And selling them. How? With huge incentives to buyers. According to that same Fortune article, the revenue difference per car is about $2,600 for GM, Ford, and Chrysler, compared to the transplants.
So the cost and revenue disadvantages are about equal. Part of the cost disadvantage can be addressed by health care reform. The revenue side can onlybe addressed by building cars that people are willing to pay for. And why should we expect the management that got GM, Ford, and Chrysler into this hole to be the ones who will get them out? A bailout leaves the management in place. Why should we expect that to solve anything?
November 18th, 2008 at 7:40 am
Just for the record: July 1st GM sent a letter to its management retirees and their spouses informing them that retiree health benefits would end on the 1st of January 2009. GM is providing some transition assistance and has bumped pension payments up $300/mo but what is available on the market costs far more than that.
Cranky
March 22nd, 2009 at 6:21 am
tramadol
Incredible site!
April 3rd, 2009 at 4:18 am
It is the coolest site,keep so!
cheap brand pfizer viagra
April 9th, 2009 at 6:38 am
thanks !! very helpful post! viagra