Is this for real?!! Did they really sneak in a $25 billion loan that will never be repaid under the cover of the $700 billion bailout debate. This is disgusting, and funny.. But I have to admire their creativity. It’s like my 8 year old son who sneaks into the fridge for chocolate while I’m in the bathroom.
Yes, it’ real. In fact I am surprised it the Feds so long to do this: the US auto industry is in terrible shape and has been clamoring for a bailout for quite some time now. GM is a particular sad state since its stock had already been artificially propelled by Federal Reserve intervention (they set up a fund in the Carribeans to buy GM stocks to show how healthy the company was). But they cannot be allowed to fail. It’s not about the right of every American to own a US-built car or saving the motoring heritage, it’s all about avoiding a wave of laying off which would hurt the very powerful (and influential) trade unions. The US should look carefully at what happened to the UK motoring industry in the '60s and '70s to see where they are headed.
But it’s not just the US, the whole car industry is in a deep crisis. There hasn’t been a single great innovation in many years and all manufacturers are doing right now is chocking full their cars of useless gizmos (often developed under the ridicolous Project Prometheus), adding weight and reducing reliability. The hydrogen chimaera, despite generous government funding, is getting us nowhere and fast: it’s a technological and economical dead-end. H2 cars are still very frail and very dangerous and, what’s more important, we cannot find an economical source of hydrogen. Seawater? Great, but look at how much energy it takes and how pathetically low efficiency is. Hydrocarbon cracking? It’s nice and it’s a proven industrial-scale technology but what’s the point is to junk hydrocarbons altogether? The hybrids may look like a nice way forward but are heavy, expensive (25.000 Euros for a bloody Prius, are you joking?) and complicated, hence very frail. No, the only car brand who had a nice idea is Renault: they bought the Dacia brand and factories in Roumania for chips and now are manufacturing very cheap, and very successful, no thrills, no gizmos cars.
Of course governments will see to bail out their good mates, and some are already doing this, but that’s something we’ll discuss another day.