Bailing Out the Automakers: 35 Years of Government at Work

By Bobby

We hear about the bailout proposals of the US Big Three automakers, but I have seen some of the information, and the real culprit here is, once again, the liberals in the United States Government who have been aiming at, and destroying, the automakers themselves in 35 years of bad government regulations that forces Americans to be like the Japanese.

And there is enough evidence of it. Corporate Average Fuel Economy rules requiring a 27.5 MPG fleetwide (cars) and 20.5 MPG fleetwide (trucks) was the first stroke of government regulations against automakers. This forced automakers to produce smaller cars or face a severe tax for making vehicles Americans want but not the eco-weenie athorities.

The National Energy Act of 1978 increased the ante, as automakers were forced into vehicles to have a minimum 22.5 MPG or face severe taxation. This tax was increased a few times to the point that manufacturers are having to produce trucks instead of large cars to avoid the taxation penalties of 22.5 MPG. Under current rules, a car that makes under 12.5 MPG will be taxed $7,000 for violating fuel economy standards. A car at 15 MPG will be taxed at $4,500. Even a car that makes 20 MPG average will be taxed at $1,700.

The Energy Security and Independence Act of 2007 was the third, and worst, of all implications. The automakers were forced into a 35 MPG universal standard (cars and trucks combined). The problem is GM, Ford, and Chrysler’s major profit bearers are trucks, not cars, because of the nature that the 1978 National Energy Act does not apply to these heavy-profit trucks. These trucks are sold to secondary manufacturers for customisation, who then sell their customised trucks to the dealers. Furthermore, the Big Three can usually tack on extra options on these trucks that draw huge buyers because they can seat up to nine.

The government, run by Nancy Pelosi and Harry Reid, was in bed with environmental activists, who used the law to ban light bulbs, strong appliances that could wash clothes well, and other “inefficient” devices that did their jobs better than what the eco-weenies want. In fact, for the ceremony to make it into law (it could not be vetoed because of the supermajority), the liberal Congressional leaders drove to the ceremony in a Toyota.

When the automakers were told they had to make vehicles the government demanded (in the microcars), instead of what made the most money and was best for families, they started crying foul and stating that the government should be forced to foot the bill for the retooling as mandated by the outlandish government regulations. The simple truth is if you are forcing the automakers to make Trabants when they want Suburbans, and the plant is designed for the big trucks because of their profit margin compared to the microcars, yes, there is a problem with the unions. But the real problem here is the government is forcing automakers into Trabants when they want Suburbans.

It seems the automakers are telling the government this: If you are going to force us to quit making our Suburbans, Hummers, Rams, and Expeditions, and force us to make microcars just like Japan and Europe, it’s a federal mandate. You’re causing the problems, so you must pay for forcing it down our throats. Our buyers won’t tolerate you messing with the market to force us away from vehicles people want and into vehicles that please only the government.

The automakers should do everything to wean themselves off the union thugs. But the government needs to seriously do away with every government fuel-economy regulation and the gas guzzler tax that created this government mess in the first place. When automakers and consumers prefer the safety of a larger car over the troubles of a government-mandated microcar, the feds want the automakers to listen to them. They would rather see a Michael McDowell-type crash end up with the occupants trapped and injured in a tiny car than to be walking away.

I have been involved in a vicious crash in a full-size sedan, and was able to walk away. Is the government thinking that we should be forced into microcars where we’d be trapped and need the ambulance to free us or face a bad car fire?

The real issue with the government bailout is this: we have had an excess of government regulations on the automobile industry that created this mess; Americans do not want to be forced to drive microcars like what is seen in Europe or Japan. If you are going to force the automakers to make these vehicles you want them to make, you should be responsible for it. These unfunded mandates are finally coming home to roost for the automakers and the government. Either eliminate these anti-automaker rules or pay for the changes you demand.

As for me, I’d kill the CAFÉ and Gas Guzzler Tax rules. Automakers can succeed without government regulations if they reform labour laws and eliminate these anti-business regulations.