Drowned out by the din of Beltway big shots and Wall Street haggling over their financial package this weekend, Congress managed do something constructive. They passed a $25 billion loan package to the Big Three on Saturday. The automakers are going to use the money to retool existing factories for the production of fuel efficient vehicles.
Of course, the bureaucratic red tape involved in such a move may take up to 18 months before any money sees the light of day, especially after the fiasco regarding the Wall Street bailout vote.
Still, the news is a bright ray of hope in an otherwise gloomy landscape that is now southeastern Michigan. In fact, the Detroit City Council thought enough of the impending loan prospect that they voted to give General Motors a $136 million dollar tax break, in return for the company which has promised to upgrade the Hamtramck plant for the manufacture of the Chevrolet Volt, an all-electric car scheduled to roll off the assembly line in 2010. In addition, with the loan, Ford and Chrysler will push forward with their own versions of fuel efficient vehicles.
At first, I was wary of the government giving any money to any large corporations, much less ones in my own backyard. We've all seen the chaos that unchecked greed, mismanagement and corruption engenders, and it's not a pretty picture. In my thinking, if you don't have the foresight to predict trends and if you don't have enough money to expand towards the future, then perhaps you don't have any right to be in business at all.
However, for the first time in a very long time, I'm excited about GM and the Chevy Volt. And let me be the first to add, "GREAT! What the hell took you so long?"
It's been fairly obvious to me for a long time that gas prices are only going to go up and will never go down or stabilize. Until we drill for oil on our own turf, something I think we can do with minor impact on the environment, this country will forever be a slave to OPEC.
My car of choice for the last three years has been a hybrid Prius. Even though my fuel usage hovers around the 45 mpg mark, I still wince every time I have to fill up at the local gas station. I love my car, and can see driving it until it falls apart. From the looks of things, that's going to be a very, very long time from now. But with news of the Volt finally coming to fruition, I promise to take a look. GM has long built good cars, classy cars, albeit fuel guzzling cars. Pre-Prius, I drove a Monte Carlo, which I also loved for its look and power. Unfortunately, driving it was a costly venture.
On the other side of this weekend's Congressional mess, most of Michigan's members of the House of Representatives voted against the proposed Wall Street bailout. These included both Democrats and Republicans. For the most part, I don't believe the "nay" votes were a matter of political posturing. Local news has reported that the men/women on the Michigan streets were firmly against giving tax dollars to aid the financial markets, and they let their voices be heard by deluging their Congressmen with phone calls and emails that let the opposition be known.
One can say that "Main Street" doesn't understand the complicated underpinnings of Wall Street. The hot shots can argue that the common folk just doesn't get it. After all, we're not Haah-vard graduates, and our share in the world economy doesn't hold a candle to the billions and trillions of dollars traded every day on the NYSE.
However, there's a huge difference between the bill that passed and the one that didn't. One, the automakers are receiving a LOAN, one which will be paid back. While there is some talk of a payback from the "Street," the details are tenuous and there is no guarantee that any of the money will be returned to the government. In fact, the $700 billion dollar figure may be one floated on the low side.
The second difference is that in lending the money to the Big Three, there is a positive change on the horizon, one that includes some jobs and a product that makes sense. True, this is just a baby-step, but it's a step in the right direction. This is a change that is tangible, that the people on Main Street can touch with their hands. Try grabbing the concept of "credit" with both hands these days.
Perhaps if Wall Street had something to show as collateral, or a product to offer in return, the people on Main Street would not be up in arms over what amounts to a give-away.Powered by Sidelines