Big Three Bailout Imminent, Car Czar to Oversee the Rescue

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CarDealers-06-ER.jpg by EricReedPhotoThe White House and Congressional leaders announced that a bailout of the carmakers was imminent. The House signed on, but the Senate opposed the deal. The Big Three and the U.A.W stood united. The final breakdown in negotiation with the Senate occurred when Senator Corker of Tennessee and the U.A.W. came to an impasse. But the bailout will happen. Apparently, Bush will do it with some of the money from the financial bailout.

According to the latest proposal, a “Car Czar” would be appointed to oversee the rescue. It’s unclear how this “Czar” could be more effective than a U.S. trustee appointed by a Chapter 11 Bankruptcy judge. A trustee might be more likely to be free of special interest and partisan bickering. There are strong special interests in the Congress over the automotive industry.

T. Boone Pickens represents an auto special interest. He appeared on the Hill and was applauded by Senators Harry Reed and Joe Lieberman. House Speaker Nancy Pelosi owns stock in Pickens’ Clean Energy Fuel Corp., which wants the government to subsidize natural gas fueling station and natural gas vehicles.

The Farm Lobby represents another auto special interest. It likes FFVs (flexible fuel vehicles) that run on more than one fuel, especially E85 – 85% corn-ethanol. Neither natural gas nor corn-ethanol is a renewable energy source. Natural gas is a fossil fuel. Corn-ethanol competes with food crops and boosts commodity grain prices. While the West was complaining about high oil prices, much of the world was facing famine from grain scarcities.

Strong partisan division exists in both the House and Senate over labor unions. Conservatives represent Right-to-Work states where union shops are banned and most of the foreign owned domestic car companies reside. Tennessee is a Right-to-Work state and Senator Corker is a strong advocate for foreign owned car companies. Nissan has two plants in Tennessee and Volkswagen recently opened a plant there. Corker blames the Big Three’s failure in part on the union.

Beside resisting special interest, this Car Czar must be able to comprehend the complex interaction of the car companies with the economy and the environment. Such an individual must be able to visualize a very different future. In that future companies may form and dissolve partnerships rapidly, benefit will be nationalized, the workforce will be more mobile and professional, and labor relations may be very different. His or her vision must be beyond one particular industry and he or she must be able to communicate this vision to the public and their representatives.

This Car Czar must realize that the electric car is here and the electric grid needs to be redesigned to effectively integrate the power from renewable sources such as photovoltaic and wind with transportation. 

Related bailout stories:

$50 Billion CalCars Plan to Jumpstart Detroit Could Save Planet
Big Three Beg Billions
Lets Pay Detroit to Bring Their Gas Sipping Cars Home To the USA

Photo Credit:  EricReedPhoto via Flickr’s Media Commons

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