Tesla Says Money Shouldn’t be Diverted to Bailout Car Makers
After the big three Detroit auto makers essentially had their rear-ends handed to them in a bag by Washington politicians last week, they have been scrambling to find ways to get the money they feel they need to stay alive — and their proposed solutions are making Tesla cringe.
Last year, when the US congress passed the Energy Independence and Security Act (EISA), a $25 billion fund called the “Advanced Technology Vehicle Manufacturing Incentive Program” (ATVM) was established to help new and existing auto makers re-tool their operations to bring next generation car technologies to market quickly. Just this month, the program started accepting applications for funds from interested parties.
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But in all the hubbub surrounding the downfall of the established American auto manufacturers, one of the ideas apparently being floated by the CEOs of GM, Ford and Chrysler is to convert some or all of that $25 billion into what amounts to a bailout.
Needless to say, car makers like Tesla aren’t happy about this strategy. Tesla has applied for funding from the ATVM to undertake two projects — an Advanced Battery and Powertrain Manufacturing facility and a manufacturing facility to build their upcoming five-passenger electric sedan known as the “Model S.”
So, in a Thanksgiving blog post, Diarmuid O’Connell, Tesla Motors’ Vice President of Business Development, categorically outlines how shifting any of the ATVM $25 billion into a bailout “would be an enormous mistake,” adding that “the original spirit and intent of the program is critical for the nation’s economic security – and the importance of the program is even greater given the harrowing economic climate.”
I happen to fully agree with Tesla on this one. That money is intended to rectify the problems that got the big three into trouble in the first place — that being their lack of foresight and desire for change. As New York Times contributor Micheline Maynard has said, “Detroit [has] proved yet again that it [has] not understood the psyche of American consumers.”
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.
As Mitch Albom said in a Detroit Free Press article last week, if we let the big three die we let our “national spine collapse. America can’t be a country of lawyers and financial analysts. We have to manufacture. We need that infrastructure. We need those jobs. We need that security. Have [we] forgotten who built equipment during the world wars?”
Nonetheless, I don’t think the ATVM money should be used for anything other than bringing our car technologies into this century. So on this point Tesla is right. I take it a step further though and say that perhaps we do need to save Detroit, but we need to do it in a way that doesn’t penalize the car companies that have been doing it right.
Image Credit: Tesla Motors
Yeah, If GM, Ford and Chrysler go under, everyone will shell out the $80K+ for a Tesla. Right, boys? Frankly, I’ll go but a ‘54 Chevy and convert it to run on CNG or LNG.
I’ve been following what Tesla Motors is doing, and I’d have to say that they are one of the car-makers that is “doing it right.” I have been ranting to all my friends that if the government wants to make an investment (and that’s what the bailout is: an investment) that they should invest in companies like Tesla (and maybe Aptera or ZAP). I want to see them starting to increase production and decrease prices very soon on electric cars. If any of the Big 3 go under or have severe layoffs, it is a prime moment for a smaller company to step in and pick up the newly available mechanically skilled workers.
Detroit could have, should have, been producing efficient vehicles for years. Today, chips, air intake, exhaust, carburetion, fuel additives, ignition, systems, etc. are available AFTER MARKET. Why not by the auto makers ? Can’t imagine the number of dollars spent changing little body styles instead of efficiency items. In the ’60s Mondays on the assembly lines were bad news for the poor sole who purchased the vehicles assembled on those days. The factory workers with hangovers from the weekend were absent from their station so that particular function just didn’t get done. Unbelievable that Detroit was so negligent and without character to allow vehicles go off the end of the assembly line knowingly without all the steps having been performed. CRIMINAL. Detroit chooses to underperform Japan in reliability-not because they lack the talent and skills- they lack the character and pride to do their best. Meet the quotas of sales with planned obsolescence and poor quality vehicles to insure “the parts and service business”. I contend that Americans can and should be on top with quality and efficiency. We have produced more vehicles in history than any one else by far. We can and must do it-Go America. sat 29 n0v 08
Tesla’s not exactly representative of the future automotive solution for the masses. I think they’re crying more because they’ve had such struggles with finances and production and it burns them to think of other auto manufacturers getting a huge handout (as it does many taxpayers).
We all have feelings about the errors and production choices of our car industry. President Elect Obama has sent the industry reps. back to their desks to come up with a viable and acceptable plan of how they intend to use any moneys given to them. People from all over this nation are fed up with irresponible business and manufacturing decisions of our corporations. We tend to talk a lot about what we are unhappy about and what we feel corporations and government should do. Please take the time to write to your Congressional representatives (www.writerep.house.gov gives a full listing). Send a copy and/or write to http://www.change.gov, which is the official site of President Elect Obama and V.P. Joe Biden. We, the American taxpayers and workers, are going to be the financiers of any and all bail-outs. It’s time for all of us to seize this moment to start the process of taking responsibility for our democratic way of life by interacting with our elected officials to participate in the changes we want to see in our country.
Tesla is complaining because the ‘Big 3′ have failed to see the changes in what consumers want, and are being rewarded for it, and taking money that was supposed to be set aside for new technologies for vehicles so they can continue to make big, bloated cars, trucks, and SUVs that a majority of people don’t want.
I think the solution to this is very simple. GM, Ford, and Chrysler need to make fuel efficient cars that don’t look like go carts
I WOULD have agreed with Tesla’s argument as in theory it is what it is supposed to be used for.
BUT, in actual terms… If those companies don’t actually get some bailout money, its the less financially secure Americans who are going to suffer in the form of pay cuts or worse, job cuts!
As the economy is at a downturn, thats when PEOPLE need their jobs the most! Unless Tesla is willing to provide jobs for the ones who get laid off (And since the funding is going to be for R&D, the engineers might get jobs after having to move from their homes but the others in factories and skilled labor area’s who’s jobs are going to be the ones that are at risk the most) are going to be biting dust.
Better to think this through from the point of the people rather than the big shot companies since the hard times effect THE PEOPLE, much more than the companies.
People must see the History Channel Documentary “Mad Science” about the life & inventions/patents of Nicklolas Tesla before they’d believe it, but this genius inventor held the first solar energy patent in 1901 and invented the electric induction motor a few years later. The USA could have had an electric car
100 years ago if they were on their game. Instead we’ve had to endure the World Big Oil Monopoly’s maintenence of an inferior technology made obsolete only 33 years after it was invented. And the Extortion that followed was exactly what Tesla commented on: “If we allow ourselves to spend all our Capital on the burning of fossil fuels, instead of
constantly renewable cheap electric energy, we will
ultimately exhaust all our resources, and eventualy bankrupt all the World’s nations.” This month, BMW has
leased a ltd.electric version of its mini Cooper subcompact which has a 150kw lithium battery, and can travel 137 miles on a charge, in a test lease program.
At a National Grid cost of $.067 a kw, that would amount to a little over $10 a week for an urban commuter’s budget. I’ll wager that if you asked the average American what THEY wanted produced,it would be a car like this. But then who likes to admit that for the past 100 years people have been treated as though they were orphans too intimidated to complain
about the bowl of slop shoved in their faces or risk getting nothing at all ?
Let the guys running Tesla take over General Motors and the rest. Let them have the money, but kick out the greedy idiots who took GM over the cliff.
Fire all management and put these Tesla guys in charge, and give them all the money and backing to take these companies where they should have been. Don’t give money to the current management. Fire their asses.