We have been talking a lot about GM and what BOHO's Car Czar has been doing to sink another $70B - $80B into them and Chrysler has fell off the radar screen. However it is not like Steven Rattner (BOHO's auto czar) has given up on them. He has a plan to save Chrysler. Of course it comes with a price tag to tax payers and this time it also comes with a price tag to the banks who happen to hold Chrysler's notes. Rattner (under investigation for other activities) is asking banks to forgive $7B that Chrysler owes them. The banks were not real happy with this deal but it is critical in a deal with Fiat to take Chrysler over. If that deal fails the czar will "loan" Chrysler another $6B to stay in operation.
....and you wonder why people were upset when Bush and BOHO got involved in the car business.
I was lamenting to a liberal friend of mine about the possible demise of the Corvette and possibly the Camaro production lines in the upcoming GM restructuring. It was his position they should of course stop making them. When I asked why GM should stop making a successful model he said the company should only make 2 or 3 models and they should be fuel efficient and cars for the future. When I pointed out that those types of cars are not what consumers may want to buy he looked at me with one of those "what's your point" expressions.
Not that it mattered but I also pointed out that in the auto manufacturing world deciding what cars to make years in advance is one of the major headaches for the auto industry. Significant market research goes into trying to read the auto tea leaves and determine trends. Not to mention weaving in emissions standards and average mileage regulations. The practicality that a czar might be able to figure this out from his desk in Washington one has to laugh. Some people do not quite understand how the free market makes it possible for me to buy a Hummer or a Prius based on my wants or needs. They think it would be better if I had limited choices.
Once again it is clear that the hold the government now has on the auto industry will result in the cars being built that they want us to buy - not the cars we want to buy. When the dust settles we will buy those cars. Even if we don't like them they will lure us with enormous tax incentives. These tax incentives will of course be subsidized by taxpayers. So look forward to not only paying your neighbor's mortgage but also his "green" car.
Gene (Hangar Dogs)
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I heard an interesting piece on NPR the other day. A senior VP of production for Jeep was commenting on how Jeep was continuing to manufacture the big SUv the "Commander." The Commander gets 17/22 mpg and was targeted by the BOHO administration as a vehicle to can. But Jeep is producing the Commander because the market demands it. The make money on the Commander even though its not a weenie gas sipper with a toxic battery. Funny, how the market works.
Toyota dealers have to basically give Prius's away with gas prices so low. Prius sales plummetted when gas dropped below $2/gallon. You can pick up a Prius for less than $25K now and walk away the same day rather than wait a month on a waiting list. I guess the driving factor (no pun intended) for Prius sales is price at the pump rather than evironmental conciousness. Read it and weep Al Gore.
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