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Published on December 10th, 2008 | by Jennifer Lance

7

House Passes Auto Industry Bailout; Oil Prices Continue to Drop


House passes auto industry bailoutOn Wednesday evening, the U.S. House of Representatives passed a $14 billion government rescue bailout for the automobile industry.

[social_buttons]This plan would provide emergency loans to General Motors and Chrysler; however, Ford has stated it will not seek out federal loans.  GM and Chrysler claim they will not be in business much longer without federal assistance.  According to GM:


From plants to parks. From dealerships to driveways. From gas stations to grocery stores. What happens in the automotive industry affects each and every one of us. In fact, the collapse of the U.S.-based auto industry wouldn’t just impact the nearly 355,000 Americans directly employed by the Big Three. One out of every 10 people in America is employed in a service that is related to the U.S. auto industry. If a plant closes, so does its suppliers, the local stores, the hot dog vendors, and the local restaurants.

The House passed the American auto industry bailout bill largely along party lines.  The final vote was 237 to 170,  with 32 Republicans from auto industry states joining 205 Democrats in supporting the rescue package.  Senate Republicans have the power to kill the measure, and the White House has failed to gain their support. In an effort to compromise with Republicans, House Democrats agreed to drop a provision in the auto industry bailout that would have forced the automakers to end their lawsuits challenging state emissions standards, such as in California.

Many people feel the American auto industry has created their own “30 years of slow suicide”, as a White House official called it, and they should be allowed to die. The Big Three has had their chance to develop alternative car technologies and increase fuel efficiencies. As Nick Chambers on Gas 2.0 explains:

In other words, Detroit missed the boat and made a fatal strategic calculation that people would continue to buy larger and larger cars without nary a second thought. Does that mean we shouldn’t bail them out at all? Maybe so, maybe not… I’m still not convinced we shouldn’t save the big three in some form.

Now that gas prices have dropped significantly to 55 cents a gallon less than last month and $1.312 less than last year, maybe Americans will start buying big trucks and SUVs again.

The price of crude oil did rise today to $43.52, a ten percent increase caused by rumors of Saudi production cuts, but that was not significant enough to raise the national average of $1.683 per gallon.

Is there even a need for an auto industry bailout with low oil prices?  Even though gas prices are lower, the pain from the pump is not easily forgotten.  Gas prices would need to continue to drop or remain low for several years before Americans would consider buying large vehicles during an economic recession.

Having grown up in the Midwest, I would hate to see American car companies completely go under.  I also don’t feel like they should be given any bailouts that allow them to continue to produce inefficient gas guzzling cars, no matter what the price of oil.

The auto industry rescue bailout does include a March 31, 2009 deadline for the automakers to produce long-term viability plans, which includes research and development on new technologies.

I would like to see more of an emphasis placed on increasing fuel efficiency and development of alternative fuel vehicles in a timely manner in any bailout package.

Image: GM





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About the Author

Jennifer lives on 160 acres off-the-grid in a home built with her own two hands (and several more skilled pairs of hands) from forest fire salvaged timber. Her home is powered by a micro-hydro turbine, and she has been a vegetarian for 21 years. Jennifer graduated from Humboldt State University with a degree in art education and has been teaching art to children for over 16 years. She also spent five years teaching in a one-room schoolhouse before becoming the mother of two beautiful children. Jennifer has a Master's Degree in Early Childhood Education and is currently teaching preschool, as well as k-8 art. She enjoys writing, gardening, hiking, practicing yoga, and raising four akitas. Jennifer is the founder and editor of Eco Child's Play (http://ecochildsplay.com) "I’ve always been concerned about the earth and our impact upon it. Now that I have children, I feel compelled to raise them with green values. From organic gardening to alternative energy, my family tries to leave a small carbon footprint." Please visit my other blog: http://reallynatural.com



  • A Edwards

    Filibuster, long and hard. -There was no bill today, guess what . . the sky did not fall. The lobbyist win, mainstreet will loose. Please for once, quit this bailout mess!

  • http://globalpatriot.com Global Patriot

    For the auto makers to ask for money, yet not agree to make "clean" cars is perplexing at best. This has been a most difficult crisis, as the auto makers have definitely caused the mess they are in, but if they fail, it will be the workers – both in the auto industry and all supporting industries – that suffer the most.

    So, do we bail out the incompetent executives in order to save the jobs of the workers?

    And yet, part of the problem lies in the fact that wages in the domestic auto industry are out of line with international wages, and that is also a big part of the problem.

    So, do we let the companies fail and let the jobs transition to the foreign auto makers?

  • sm hudson

    A timely and well balanced article. The question of jobs going to foreign auto makers will be a public consideration. A large percentage of cars now on U.S. roads are made by "foreign" car makers (Honda and Toyota being the most represented). The truch is that many of these cars are produced right here in American factories. Toyota has manufacturing plants in Mississippi, Kentucky, Indiana and California (although, their most lauded environmental effort, the Prius, is manufactured in Japan). Not surprisingly, the large truck portion of their business has found its profits in the U.S.A. The Toyota Avalon, Solara, Matrix, Secoya and Sienna are manufactured here in the U.S. Honda has plants in Greensburg Indiana, Marysville, Ohio and Torrence, California. A visit to Honda's website indicates their investment in the U.S. facilities at $10.6 billion. They are also moving to increase their R&D in environmentally responsible vehicles at a commendable pace. A visit to their web site news articles is worth the time.

    One positive result of the current "auto industry crisis" is that the health care industry costs are being pointed to as major stumbling blocks to profitability. President Elect Obama is poised to take this opportunity to push for a more nationally responsible health care system. I see no reason for not utilizing any opportunity to bring a desperately needed equitable health care system to this country. I also wonder that the monies allocated for this bailout couldn't be better utilized in supporting any workers being laid off while they are retrained and/or rehired either by leaner, more environmentally geared production facilities of their current employers, or their better run competitors who do, indeed hire American workers right here in the U.S.A.

  • http://climateconcerngroup@yahoo.com Gary Kirkland

    Why is it illegal for any Gasoline Powered Vehicle from 1996 to the Present to Emit too little Polluting Exhaust Emissions ? It is entirely possible to safely convert Gasoline into a clear dry Vapor that is 100 Parts of Air to 1 part of Fuel.Even the largest SUV could easily get 50 + MPG, with a marked decrease of Emissions, and an actual increase in Power, as well as much longer Engine Life.But, when a Vehicle is connected to an OBD II Emissions Analyzer for it's Annual Emissions Inspection, it's On Board Oxygen [O2] Exhaust Sensors must detect a sufficient amount of Polluting Exhaust Emissions that would indicate that the Vehicle is operating at 14.7 parts of Air to 1 part of Fuel.With Vaporized Gasoline, O2 Sensors will detect nothing.Thus, a Vehicle can fail it's Emissions Test for not emitting enough Polluting Exhaust Emissions.O2 Sensor Exemptions are allowed for Vehicles that have legally been converted to operate on Natural Gas, Propane, or Hydrogen, and are Registered as such.But again, not for safely vaporized Gasoline.I'm not the first to know this.far from it ! Just do a search on [the late] Tom Ogle.He was offered $25 Million to keep his Vaporizer off the Market, refused it, and died of "A Mysterious Death" soon after, and was totally discredited, as was Charles Nelson Pogue.Then, go to http://energy21.freeservers.com/bookrep.html and read through at least the first page.Even if it is not to be believed that Safe Vapor Fuel Technology is possible, the Fact remains that it is illegal to even attempt to do so with any Vehicle 13 Years old, or newer.And this insane Law, that only benefits Big Oil, and Vehicle Manufacturers, was passed during the Clinton Administration, with Al Gore's enthusiastic support ! Go Figure ! And since the vast majority of Vehicle Manufacturers want to sell their Vehicles in the U.S.A.,they tend to be made to conform to this EPA-OBD II Mandated 14.7 / 1 Air / Fuel Ratio, all over the World.If I could somehow send a Photo, i could easily prove my Point.I'm not trying to sell anything, I just want to get the Word out about the Suppression of Vapor Fuel Technology.

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