Bail out the auto industry – with strings
Ian | 25 November, 2008 | 09:00You probably know by now that The “Big 3″ American auto companies want money. Actually, they want a lot of money. Guess they’re jealous of the banks?
Now, it’s easy and quick to find opinions saying “let them die” or just plain no’s. But I don’t think it’s a simple issue.
The Canadian auto industry employs roughly 150 000 people, mostly in Ontario. I don’t think we can fathom the (negative) impact on our economy of even a third of those people not having work (for a reasonable period of time – few companies are going to be massively expanding while others close).
However, with Canada coming out of the Liberal reign, and moving into Harper’s rule, we’re seeing a shift from the care about paying down our debt and balancing budgets (despite the rhetoric) in favour of cutting taxes (usually while maintaining spending levels). This gives our federal government very little room to wiggle if it wants to balance the books.
Now, it’s somewhat obvious we won’t be balanced in Canada for the next little while, but a multi-billion dollar (or even few hundred million) bailout would be a rough pill for our country.
I think there’s a giant opportunity here.
A lot of parties (I believe all except the Conservatives) talked about a “Green Economy” during the past election. Now here’s the chance to create it.
Give the industry the money. But tell them its conditional. With some research we could get some good restrictions on the Canadian auto industry (that wants to accept public money, they are not obligated to take the money however) such as:
- Require research into all-electric vehicles with a set date for production models
- A blanket maximum on emission rates for production vehicles
- Discounts on hybrid and fuel efficient vehicles to spur consumer purchasing (this also promotes spending at the consumer level which stimulates the economy like a 14-year old boy glimpsing some side-boob)
- No layoffs of currently employed workers
Now, these are suggestions at best, and undoubtedly we could work for some better ones, but I think it’s a start.
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But But telling the industry what to do… thats… COMMUNISM!!!
You’re not the only one pointing out the use of green conditions on potential bailouts. Similar bottom-up ideals have found their ways from the New York Times bestseller lists (Van Jones’ Green Collar Economy is based entirely around bottom-up green packages as an economic stimulus) to the incoming White House (Obama’s transition site has similar ideals permeating throughout it; on the bailout itself, it looks like it’ll go through with major strings and oversight attached).
The ironic part is, it doesn’t need to be as totalitarian as people think such control often is. According to some, a complete retooling of the economy to get the US completely off of oil in a short span of time can be done, led almost entirely by business for profit. (Summary here, warning, large video but well worth it.)
Of course, this assumes that conservative thought doesn’t dominate business. If that continues, I think we all know the result.
Nope sorry.
I’ll vote with my spending dollar’s not my tax dollars. If the Big 3 can’t make a car I want or can afford, they should go out of business.
Period.
I want to by a Volt. Why are they waiting until 2010? I want more cars like the Prius or the Smart car. Where are the locally made, cheaper domestic alternatives to these?
But you know, I have my pick of about 10 models of SUV, eh?
Sorry, no tax money. Cut out the middle man here. I’ll happily give my money to Ford, GM and Chrysler when they make a product I want to buy.
No bail out. If they can’t cut it, let them fail.
Or do you plan to go after Circuit City and bail them out too? Cuz I would get a lot more use out of that…
Mike,
You really don’t want a Volt. They’re a terrible example of a plug-in hybrid fraught with problems even in the prototyping phase (when they brought demo Volts out to showcase them on a promotion tour, they literally broke down on suburb-grade slopes!).
The Volt is also designed to be hydrogen-compatible, which is a big dead end that essentially delays production and ramps up the price with no benefit to the consumer.
There are other plug-in hybrid techs being developed by other car companies — and not just the big ones, either (example: AFS Trinity). Virtually all exceed the Volt already in performance and very likely will in price as well.
If you want a plug-in hybrid, buy one from a company that isn’t one of the Big Three. If you vote with your dollars, don’t send them to a company that had full electric cars a decade ago and then prevented them from going to market in favor of Hummers.
The problem is that GM, Ford, and Chrysler are simply too big to fail. No, really. If they fail, then auto parts suppliers fail, too. And auto dealers, for that matter.
That said, there’s bailouts and then there’s bailouts. A loan (with interest) would be a reasonable way to spend tax dollars: the companies stay afloat, they keep the related industries up and running, and the taxpayers make a return on their tax dollars. Everyone wins, right?
[...] It seems I beat the Edmonton Journal to the punch. Their newest editorial calls on Canadian innovation in green vehicles to reshape the auto industry. Sounds familiar. [...]
Canada gives money to US auto industry…. US gives more money to US auto industry… who loses the jobs? Canada of course.
Govt has no business here, nor do they have right to give tax dollars to private companies to keep them in business… thats called a loan and it should be handled within our banking system. If they cant get a loan they declare bankruptcy protection and maybe another auto company takes them over (or not). Otherwise people need to move on.. yeah its hard but life isnt always supposed to be easy.
Anarchy VS Socialism…. I choose anarchy because Canadians are smart enough to look after ourselves and our loved ones.. I dont need Harper or Iggy or any other stooges to feed me my pablum.
That’s the point of the strings, so the jobs don’t get lost.
And why the false dichotomy? It’s not anarchy vs. communism, there’s plenty of options for how we can organize our society such that everyone has the chance to look after themselves and their loved ones.