Monday, August 25, 2008

General Motors demand for a low interest loan from Congress

It is hard to accept the brazen request of the corporate heads of this company to demand a bailout to be given by taxpayers so that they can more easily convert from the behemoths they have been producing and promoting for so many years now for sale to Americans.
This is the company that only a few years ago had designed and built an all electric car that was leased to several thousand Californians. They loved the car. Public officials started placing plug in facilities to assist. It was well designed and attractive. The battery life was not long but for commutes around the cities it was acceptable. It of course had no emissions which was extremely important to reduce the smog problem which is so severe in California. All that was needed was further research on extending battery life. General Motors was ahead of all other companies.
There was a documentary produced entitled, “Who Killed the Electric Car”. It is quite evident that the executives in charge of the company at that time realized the impact on profit if these were mass produced. The drop in sales at auto parts stores alone would drastically decrease profit as there were few operating parts to drive this vehicle. General Motors corporate leaders together with the petroleum industry with the continuing aid of our federal government ended this program. The leases were revoked and all the cars were crushed to destroy all evidence that they had ever been produced.
Now they entice us with their new car to be released in a few years called the Volt. They proclaim it will go for 40 miles before the gasoline engine kicks in. It, of course, would be a gigantic step forward. In order to speed up development they want billions from the federal government in low interest loans.
While recognizing the importance of General Motors to our economy and the importance of providing well paying jobs to Americans in development and in the factories, I do not favor granting this bailout. This is not the same as when Lee Iacocca asked for a loan to save Chrysler. He was not responsible for their dilemma at the time. To his credit he paid back every penny loaned to his company and resurrected Chrysler to a profit making entity once more.
General Motors did not emulate foreign manufacturers with hybrid designs; instead they pushed the Humvee, huge pickup trucks and SUV’s. Now they have been exposed for their deliberate delaying of the inevitable need to reduce dependence on foreign oil and the need to reduce emissions.
The rapid rise in the cost of oil caught them flatfooted. Americans have responded out of necessity by purchasing the most energy efficient transportation available. I have always believed that demanding increases in CAFÉ standards would not be necessary if the cost of fuel escalated. I am alone in believing that this wake up call, as devastating as it has been was necessary. What the Congress should do now is set a floor price and increase gasoline tax to keep it at a level price so that we don’t return to craving the largest and most powerful autos as we did in the 80’s. We cannot keep repeating this cycle which only benefits OPEC, Russia and Venezuela.
Either of the Presidential candidates and Congress will of course grant General Motors request regardless of what I may think. They bail out hedge funds, Bear Sterns, Freddie Mae and Fannie Mae, so why wouldn’t they continue the trend. After all it is only we long suffering tax payers who are stuck with the bill while the corporate heads continue receiving gigantic salaries and benefits.
What I would support is making grants available to speed up research into battery research, the results of which to be made available to all producers here and abroad. After all, the whole world needs to reduce emissions. Just doing it here will not suffice.

Just another lost cause.

Jack B. Walters
3961 N. Hillwood Circle
Tucson, AZ 85750
(520) 722-2958
August 25, 2008

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