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
PLease do not give good money to GM. They will waste it and be broke in a year. Do not bail out GM, etc.
Tesla has taken a triple hit. They can’t launch an IPO to build capital, hence the governor’s free rent deal is sort of moot without said capital, buyers probably can’t finance the cars anyway, Lehmann Bros. pissed away a great deal of local municipal investments in this state and the legislature spends most its time in anger management…
And then we have those boys from Detroit wandering around a cow pen searching for Liberace’s piano? Theses are the same folks that thought up the fine print on your warranty. Mao might have been right when he decided to send all the managers back to the rice fields for a little ‘quiet time.’
No one forced anyone to buy big SUVs. You bought them because you wanted them. So if anyone is to blame it is YOU. With gas prices falling NO ONE will be standing in line to buy more expensive electric cars. People and investors will soon be yelling at the US automakes for NOT GIVING THEM THE CARS THEY WANT, which is MORE BIG SUVs and TRUCKS.
As much as America hates the idea of big government socialism, some of the best pieces of America are nationalized. Why can’t we have a nationalized car company?
You can read the rest of my opinion here:
http://optimism.thorscave.com/?p=55
Post (GRD) great republican depression, the remaining working population of America will drive Buick LeSabres and Cavalier-like cars made in China. These cars are a current-day reality on the streets of China, and await export to the U.S. on the docks of Shanghai as we speak! The elitist uber-rich shareholders of GM had GM America teach GM China how to build these cars using 85 cent and hour, Chinese peasant women, the supply of which is unending and self-regenerating in China. The Uber rich chose these women over the North American car builders for quite apparent economic reasons! The current “bail-out bullshit” is a smoke-screen devised by the Uber-rich bastards, to foist liablility for the large number of unemployed they intend to create, from the private sector, over to the public sector to relieve themselves of any undue expenses, before they collapse expensive North American operations in favor of highly profitable Chinese and Asian operations. Remember, they now own both, are dumping the American white elephant, and the workers, liabilities and all, for more profitable Asian production centers, so that they can be truly competitive with Honda, Hyundai and the like! It is a good, sound business strategy for the uber-rich shareholders, and by selling American stock and buying Asian stock, they slide away to new fields of immense profits, liability free as they collapse American corporations, and Yankee doodle gets it up the brown spot, hard, once again, and is left, smarting and holding the bag! Any truly innovative and advanced ideas will be incorporated into the new Chinese built, highly profitable for shareholders, cars. The “Volt” is a 1969 chevelle body, complete with sheet metal and hydraulic support, engine removed, battery pack added, nightmare of 1930’s greasepit engineering - no servo’s, no drive by wire, no plastics, no carbon fiber, no magnesium parts, no aluminum, no advanced polymer composites - Hell, even Hyundai is trying to make better lighter bodies from recycled soda bottles, and Henry Ford did a number with Soy-plastics way back when! There is no way in Hell, that a major corporation in the country that put a man on the moon can be so backwards, unless they have other motivations.
The big 3 need to stop getting hand outs and let the weak die off and the strong survive. They have mismanaged money and let the unions screw them over long enough. Let those idiots making 60 bucks an hour go broke and stop paying high school drop outs to put a bolt here or there. They pay the union’s retired work force as much or more then workers on the line. Let em go broke and break up the unions which are the greedy bastards that won’t budge.
Survival of the fittest… let em go broke and see who rebuild a car company that can make money vs producing pc of s@#t vehicles that cost $40k. Giving them more cash is just feeding the same idiots that are going broke over and over. If 300,000 workers lose their jobs so be it, use the billions to help pay to get them an education to do a “skilled” job, the economy will recover and skilled workers will be needed. If they don’t want to help themselves we shouldn’t have to bail em out.
Unions have long been in power for waaaay to long. Let GM go broke and the UAW will break up, people will see that you really shouldn’t get paid 60 or 70 bucks an hour to sit on your ass all day while 3 other people do the same job. Then when you retire your pension shouldn’t be 95% of the pay you had when you were sitting on your ass pretending to be working.
I’m sorry if your one of those union workers being over paid and watching your pension about to vanish, but guess what…. if your so damn skilled/smart etc… getting another job being paid that kind of money should be easy right?? oh wait.. that type of hourly pay doesn’t work… in ANY OTHER INDUSTRY. Now your seeing the truth. The corrupt unions killed the automakers not the economy. Selling 20,000 vehicles for 45,000… because they have to overpay union wages.
Let em burn…
I AGREE, LET THE CAR COMPANIES DECLARE BANKRUPTSY, ESPECIALLY WHEN THEIR LOWEST PAID WORKER GETS $49.00 PER HOUR, IT WAS ON THE NEWS AWHILE AGO. THATS GMC, CHRYSLER MIGHT BE BOUGHT BY FIAT AND FORDS DONT NEED IT. AS FOR THE 3 COMPANIES WE BAILED OUT, IF OBAMY WANTS TO BUY THE FORECLOSED HOMES, INSTEAD OF SPENDING MORE MONEY, JUST SUBTRACT THE FORECLOSED HOMES FOR AMERICANS FROM THE DEBT FROM THE BAILOUT MONEY. YOU MAY WANT TO CHECK A NEW LAW REGISTERED FEBRUARY 4, 2009. IT MAY WAKE YOU RIGHT UP. HAVE A NICE DAY. MIKE