WTF is Obama/DoT doing with GM?

[Lago PARANOIA]

I don't see how taking more billions in taxpayer money while firing union workers will do anything but really, really piss off people in those states.

[Username17]

Well, the government sitting on their hands has gotten the Germans to pay the Canadians to buy off GM's European assets. That seems like a smart move. At least, for America.

-Username17

[Ganbare Gincun]

It's better then just letting the company collapse and then watching the stock-holders loot the corpse.

[ckafrica]

Well as companies that have been failing for decades, they should really be left to die on the side of the road and have someone pick over the bones.

I understand why the US government feel that they can't do that but it would probably be for the best.

[Mr. Bane]

Someone is going to need to run the factories when the Bullet Train orders come in.

[PhoneLobster]

Someone is going to need to run the factories when the Bullet Train orders come in.

All the more reason for the government to buy them and the workforce on the cheap at the "crazy must sell now closing down bankruptcy sale".

That's not what is happening.

[The Vigilante]

If the Big Three fails, pretty much the whole auto industry (as in, Japanese & European companies too) is going to fall apart, because they are all dependant on parts mostly built by them and their subsidiaries. They know that, the governments know that, and so we're pretty much screwed.

[cthulhu]

Eh?

Anyway, PL, USA is picking up 40% of GM, so yeah, that does seem like they are for all practical purposes.

[Mr. Bane]

Exactly. The Gov is going to want a piece of the extreme profit going to be made off the Railroad Era 2.

Railroads/Bulletroads(?) require materials.

Trains require materials.

Materials require workers, which is great because people need work.

Companies require less expensive ways to cargo things, which is great because we've got this shiny new system to do it on.

Companies will grow bigger on the saved money, hire more people.

More people with jobs means more money going into companies, health insurance, the gov.

Larger economy means more foreign lenders.

[Absentminded_Wizard]

If the Big Three fails, pretty much the whole auto industry (as in, Japanese & European companies too) is going to fall apart, because they are all dependant on parts mostly built by them and their subsidiaries. They know that, the governments know that, and so we're pretty much screwed.

Really? You realize that Delphi is no longer a GM subsidiary. GM spun them off specifically because other automakers were reluctant to have their parts made by a GM subsidiary. They were paranoid that trade secrets would make their way to GM's R&D department. That and the fact that there's a Honda parts plant one county over from where I live makes me skeptical of your statement.

[RandomCasualty2]

If the Big Three fails, pretty much the whole auto industry (as in, Japanese & European companies too) is going to fall apart, because they are all dependant on parts mostly built by them and their subsidiaries. They know that, the governments know that, and so we're pretty much screwed.

Honestly, I just don't see the big deal. If there is a demand for whatever they produce, then someone with money will buy up the factories and churn out products.

The fact that they're failing pretty much shows that people aren't dependent on them and don't need their products.

[cthulhu]

Part of the problem is that the US approach to trying to control vehicle emissions is stupid. If you're going to make it market approach, just slap on a bit petrol tax and spend the money on the enviroment.

Taxing petrol results in a constant search for fuel efficiency in Europe.

If you're going to try and direct production, do that instead.

The CAFE standards are just weird.

[Josh_Kablack]

The thing is, automobiles have NOT been a free market since at least the Eisenhower administration The federal government spends in the ballpark of $50 billion dollars a year just on the highways that these products require. State and local governments spend additional billions ($1.3 billion just in my home state for the last year I can easily locate figures online)

That's a pretty hefty, if indirect, subsidy and it is a large part of the reason why driving is the cheapest and fastest way to travel or ship any distance between 2 and 2000 miles in the US.

Personally, I am all for an active role for governments in transit networks, but a lot of pundits are being really naive in the wake of the GM bankruptcy. The calls to let the free market solve things and for the government to take a minimalist approach really bug me in light of the amount we spend on roads - as citizens we have a duty to see that such money is spent wisely

Things would look very different if the federal government just flipped the ~$50 billion it spends on highways and the ~$10 billion it spends on rails and other mass transit - and I would really like to see some discussion of the economic and environmental reasons for choosing one over the other instead of just keeping right on doing the same thing each and every year - that does not strike me as at all wise.

[Crissa]

CAFE standards work faster, without impacting the lower end user. The average voter just wants to drive cheaply, they have no care for paying more for licensing, fuel, or cars, and CAFE was a way around that.

They seem weird, but they work. It's only been in the last couple decades that they've been manipulated by a Republican leadership and the lobbyist money they were cultivating. Take that plus libertarian pushes to subsidize roads via lowering licensing fees below that needed to pay for roads (see our Governator, for one).

It really is strange how few Republicans who were on the take have lost their jobs.

-Crissa

[cthulhu]

Yeah, as Josh points out, paying more for petrol also gives you a justifiable road tax

Anyway, they don't particularly seem to work, as Europe is the powerhouse generating the fuel efficient cars

[Crissa]

That's a really terrible point.

The population density in Europe is much higher than in the US. Fewer Europeans live in rural or play in rural areas than in the US. And those that do deal with far more oppressive regimes than are expected in the US. Freedom to be a shit and all that.

A gas tax merely pushes the difference between poor and rich. Rich people in Europe still drive gas-guzzlers.

Lastly, fuel taxes are not demonstrated to actually affect people's buying habits - the fuel efficient vehicles in Europe are often subsidized by governments which have protectionist economic policies. And smaller vehicles fit in the older, smaller towns, hence more fuel efficient.

Those same vehicles would be a poor choice for any of the places I grew up, where commutes of thirty to a hundred miles were because the towns were too small to support an entire set of things like doctors, lawyers, schools, and yet, people had business and industry there.

Of course, long commutes happen in urban areas as well as the places that people get to live are more resistant to liquidity than the places that people work - schools admit and transfer, businesses hire and fire people faster than people can buy rent or move.

In the US we built highways, because we had space. You'll see the same things in Canada, China, Australia, Russia, and other places only densely populated in recent history. That means less tiny roads and more cars.

CAFE standards have raised gas mileage faster than prices would have, could have, or do. And if you think that's wrong, you'll probably be surprised to find out that western EU countries, Japan and China had or have the same top-down standards, and don't rely upon fuel taxation alone.

-Crissa

PS: Go read a frickin' book.

[PhoneLobster]

Anyway, PL, USA is picking up 40% of GM, so yeah, that does seem like they are for all practical purposes.

No, they are effectively buying at a premium instead of a discount to prevent too great a drop in value.

And only to ward off collapse, NOT for profitable nationalization of the assets.

Don't you understand the difference?

They aren't buying and using an asset, they are giving a buddy a loan until he can "figure something out".

[cthulhu]

They are forcing massive write downs on bondholders and taking substatial equity ownership as well as becoming the senior secured bond holders.

60% equity ownership and becoming senior secure bond holders (with 35% in private hands and the remainder with the unions and the elimination of other senior secure bond holders)

When compared to what they are doing with the banks, it is certainly nationalisation.

[PhoneLobster]

When compared to what they are doing with the banks, it is certainly nationalisation.

When making comparison to determine if it is nationalization, you only get to compare it to nationalization, which it isn't.

The rest is just wank that doesn't address anything. This is NOT a for profit or for public infrastructure enterprise and is not being executed like one.

The government isn't buying this in order to own it. They don't WANT to own it. They make it a point to declare that at every opportunity.

Wetting your pants one way OR the other over them nationalizing it is premature.

[cthulhu]

That's a really terrible point.

The population density in Europe is much higher than in the US. Fewer Europeans live in rural or play in rural areas than in the US. And those that do deal with far more oppressive regimes than are expected in the US. Freedom to be a shit and all that.

Man, I live in Australia and we have a gas tax and like less than a tenth of the US population density. Two taxes in fact. I must have missed the jack booted oppression. I'll have to alert Team America to liberate us, stat!

Wait what? I know everyone has emissions standards - hurray! I'm not sure this invalidates correcting the negative externalities of giving people free roads, and you will you be hard pressed to prove that I live in a totalitarian regime it doesn't drive car size efficiencies in low density countries, what with out top selling 5 cars (to private buyers) being, in order

A) A mazda 3

B) A toyota Camry

C) A toyota Yaris

D) A Honda Civic

E) A Mazda 2

Guess what they all are? Oh yeah.. smallish hatchbacks with good fuel efficiency. (I'm selectively quoting a bit, the 6th car is a large sedan with a 4 litre straight 6 and so is the 8th or so, but yeah). Also the price of fuel efficiency small hatchbacks is much higher second hand because of.. their good fuel efficiency.

That said I drive a fuel guzzling turbo charged straight six, but hey, I'm a bogan

[Crissa]

Actually, a straight six or eight is fuel efficient on an open freeway ^-^ And the sedan that's 6th isn't all that bad.

Anyhow, statistics say that fuel efficiency just doesn't impact drivers that much. It takes a doubling of the fuel price to impact driving by a percent.

-Crissa

[PhoneLobster]

Most of the car buyers in Australia will be in the capitals anyway. So the long distance thing is a big wanky irrelevancy.

Also we actually DO have regulation covering car safety, efficiency and emissions. So I'm not sure where Cthulhu is trying to go with this.

So anyway the larger part of our car market is in Sydney and Melbourne and much of that purely inner city transit. It would do pretty well with a similar product to the European market.

And not unusually some of the biggest news in Australian car standards was the Howard government using top down regulation to prevent the introduction of cheap little electric cars perfect for that market.

Their excuse also had something to do with an irrelevant long distance wank. But they also pulled out a hilarious "this will pave the way for golf carts being registered to drive on our highways" wank. Gee those guys...

[cthulhu]

Oh, the assertion was that gas taxes limit freedoms and are unworkable outside of europe with its high population density.

Which patently isn't true because any of those factors which apply to America also apply to Australia, except more so.

Also.. afaik, we don;t have a fuel efficiency requirement. You have to display a sticker showing how much the car sucks when you sell it, but isn't that it? There are emissions requirements though.

I kinda agree about the car thing - I regularly (and by regularly, I mean every week or two) need to drive long distance or carry big things in my boot which isn't really facilitated by current generation electric cars that I could actually afford. Some of the stuff in the pipeline looks attractive though - and cracking it is critical for the success of the planet.

However, most people probably own two cars as a couple of family unit which means the small electric + bigger car for other stuff thing can work quite well, and most families have two cars these days.

Edit: Oh, I'm pretty skeptical about the better place initative's handling on battery packs. If you're only going to change on long journeys, it's going to be an issue because you're not going to want a heavily used pack back from the change. If it's all the time I guess I see that working but a bit of overhead. Cool idea though, just not sure how implementation is going to work.

[Crissa]

For the kind of electric vehicles that would meet your needs there's the Myers NMG and for carrying things there's... Umm... I know where we have two dealers here in Silicon Valley, but they're new.

Swapping battery packs would need the packs to record their charges so you'd pay the group based upon how many charges you put in and how many you got out. The electricity would be nearly an afterthought in comparison.

-Crissa

[cthulhu]

Yeah, that would make sense - may be tricky to do in practice though. And how do you get a credit for 'donating' a fresh pack and getting an old one out?

Anyway I haven't seen anything from there that has addressed the issue, hence my skepticism. It's not that it is impossible to fix, its just that they don't appear to have done it.

I looked up that Myer's thing.. a one seater car with a range of 50 miles?

Err, long distance is here to southern sydney which is about 250kms.

But anyway, someone is going to make an electric car with a ~300 kms range in a sort of Ford Mondeo sized chassis at some point soon, and that I'll buy.