The auto industry wants 25 billion dollars and this pronto.
What they exactly need it for is unclear.
The sales of automobiles has dropped dramatically.
Hence, is the 25 billion dollars intended to continue to build cars nobody buys?
The other vital question is what will happen when the 25 billion dollar has been spend by the auto industry.
Will they suddenly have become profitable because of this financial injection?
Ford alone burns now 1 billion dollar a month from its reserves.
Hence, 25 billion dollars obtained by the three car companies will have evaporated within a year and then what?
Will they have suddenly car models to offer everybody wants after this loan of 25 billion dollars?
Ford makes a fuel-efficient car in the U.K. doing 65 MPG running on clean diesel and is unable to market this vehicle in the USA.
Unable to start a factory in the USA or Mexico to build them there for the American market.
25 billion dollars is not going to change that.
President Bush this week wanted to donate 5 billion dollars to the auto industry from a fund to develop more fuel-efficient cars.
Cars that already exist in Europe and Japan.
Where they have started developing fuel-efficient cars decades ago.
The American auto industry has always refused to go into that direction and if they suddenly would do now, it will take years and years before they come up with something that makes sense.
Meanwhile the fuel efficient cars are already there and while the Americans are learning how to design a perfect circle, the Europeans and Japanese advance even further, getting even more far ahead than they already are.
Meanwhile a stunning development has been taking place.
The ban on importing fuel-efficient cars running on diesel in the USA has been lifted!
The first car now available is the German Volkswagen Jetta.
Equipped with a 2 litre, 4 cylinders, “common rail” direct injection turbocharged diesel engine running on ultra low sulphur fuel.
Doing in town 30 MPG and on the highway 41 MPG.
A very nice car.
No strong sound coming from the engine and no smell nor fumes.
Fast and quick.
Costing $ 21.990.
$ 2.000 cheaper than a Toyota Prius Hybride.
Truly amazing is that any American that buys this Volkswagen Jetta TDI imported from Germany, gets a Federal Income Tax Credit of $ 1.300
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1 comment:
Michael, the main reason U.S. car companies do not produce small fuel efficient cars is that they cannot make a profit making them. Their costs per car for each union employee with all benefits is around $73 per hour. The per hour costs of Toyota, Nissan, and Honda is around $43 per hour, which is why they can make the fuel efficient cars and make a profit. The only vehicles the U.S. manufacturers make a profit on are the SUV's, Trucks, and larger passenger cars. These per hour costs are locked in due to Union contracts. The unions will not agree to lower benefits, so unless those costs change, none of the big 3 auto makers can produce a fuel efficient small car and make a profit. So, giving them a loan, or money to "burn" will change nothing in a year, unless the union renegotiates.
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