LexFather

http://www.autonews.com/apps/pbcs.dl...309259920/1193

German carmakers attack U.S. help for rivals


September 25, 2008 - 11:00 am ET

HANOVER, Germany (Reuters) -- The German auto industry attacked U.S. politicians on Thursday over plans to give $25 billion in low-interest loans to Detroit's crisis-stricken carmakers.

"We are opponents of subsidy contests," the head of the VDA automotive industry association, Matthias Wissmann, said during the IAA truck show in Hanover.

The CEO of German heavy truckmaker MAN Commercial Vehicles, Anton Weinmann, said:

"That results in a distortion of competition...In the manufacturing industry, one should leave things to the free market."

The U.S. House of Representatives agreed on Wednesday to fund a $25 billion loan package for troubled automakers as part of a mammoth spending bill. It is expected to pass the Senate as well.

The bill sets aside $7.5 billion in taxpayer funds to guarantee loans to help struggling General Motors, Ford Motor Co. and Chrysler LLC pump out more fuel-efficient cars and trucks.

Lawmakers led by Democratic Representative John Dingell of Michigan said at a news conference that they would begin work on another $25 billion auto loan provision, possibly for next year.

German carmaker Daimler AG still owns a 19.9 percent stake in Chrysler but is in talks to sell it to Cerberus Capital Management, which bought the rest last year.

"If the U.S. car industry does not resolve its structural problems, then all the subsidies in the world won't help," VDA's Wissmann said.

FKL

VW is 1% of the US market and the 3rd largest player in the worldwide market, still. Watch out.

Lsportline43

Isn't the parent company Porsche now?

As for the issue, I would say that the American car companies are not playing fair game. They expect that Americans bail them out when they have been concerned about themselves for decades. Profit was behind every move that they made. In the end it didn't work and now they are paying for it. Rather we'll be paying for it...

If they take the money does that mean they are in debt to the American people? Do we all get a free car? Do we get free roadside assistance? Do we get shares in the company? Do they promise to make cars/vehicles that are not dependent on fossil fuels?

I don't think American car makers can make any promises of that nature. So why should the Americans pay $25 billion dollars to them? Why not invest in areas that have proven to be more effective in their ability to turn a profit?

spwolf

When some other country does that, EU and USA attack them for subsidizing their inudstries.

As not being American, i dont really care - in fact, increased competition will help us all, but yeah there is a lot of irony there. If I lived in USA, I probably would be p/o that my tax money goes into private industry instead of education, healthcare, and other things that matter to all of us.

MoLexus

What's new.....I'm 100% against government intervention for several reasons but one main one is when they start setting a limit of how much a CEO or any other corporate executive can make a year then your getting too close to a communists policy. I don't mean to sound like a pessimist but look around its happening.

-J-P-L-

I'm not enthusiastic about this plan since the government is already trillions in the hole which is a very dangerous depth that we can never dig out of.

That said, if it is truly a "loan" that has to be payed back in a set time period like Chrysler in the early '80's, then perhaps it's OK. The big 3 need to only except it if they know they can pay it back. But since neither of them seem to be able to turn a profit, they would need a significant change in product, profit margin, and sales to even think of paying debt back. Hopefully $25 billion is enough to change their model portfolio around.

Indio

iTrader: (1)

Anyone here that spends time worrying about a 25 billion dollar loan to the big three should be in the streets protesting the impending 700 billion dollar bailout with no guarantees of return or results.

MarkW2005

you know what. They are right. The German carmakers are 100% right on this issue.

MoLexus

$25,000,000,000 (I have to put the zeros) is a lot of money but think about it for a second for three multi-billion dollar companies thats not much. Hell GM just pulled $3.5 billion off a credit line.

spwolf

its a lot of money... it is combined R&D of BMW, Lexus, VW and Hyundai for one year...

spwolf

bailout of the banks is different - because if it doesnt happen, whole economy will go into chaos... i think whole world is doing that one right now and that is fine.

leedogg

A capitalistic market only works if you let the successful succeed, and the failures to fail.

flipicanez

iTrader: (1)

So well put!!

I say what goes up, must come down. American car makers depended on Patriotic Loyalty to sell their cars and then relied heavily on manufacturing their cars with cheap material to cut down costs, and then to break down over an almost set amount of time to sell parts or an entirely new car. It was a deal with the devil and they deserve whatever heartache they brought upon themselves.

-J-P-L-

GM reported $38,700,000,000.00 in LOSSES in 2007 alone. So in that perspective, $25 billion really may not be a whole lot, amazingly. Hell, the way things are going for 2008, GM (and others) may and probably will lose even more than they did in 2007.

So the loan package is suppose to be used for R&D into more fuel efficient vehicles. But $25 billion won't even balance GM's budget for one year under normal operating costs. Not good at all.

insider

+1 absolutley right. Unfortunately, with more and more democrats getting elected, the whole country is just going to get more socialistic.