Obama Administration announces $1.6B bailout for Nissan; money to be used to build cars in Japan.

[Romulox]

WASHINGTON (AP) — The Energy Department is lending money to the Ford Motor Co. and two other automakers from a $25 billion fund to develop fuel-efficient vehicles, congressional officials say...

Nissan is developing an all-electric car with 100 miles of pure battery range for release in late 2010. The car will be made in Japan initially but company officials have said they eventually want to build the vehicle at Nissan's plant in Smyrna, Tenn.

http://www.google.com/hostednews/ap/article/ALeqM5g6oX6lRgmi3TpK7RPDQSTaQWSYpgD990B18O1

http://www.freep.com/article/20090623/BUSINESS01/90623026/Ford+gets+$5.9-billion+loan+to+retool+plants

:wtf:

[thunder rising]

1. I love it. Really. We need to reduce our oil consumption and US mnfg won't dev the cars

[sakabatou]

2. WTF indeed.

[rug]

3. What do you have against an economic stimulus

in Japan?

[konnichi wa]

4. Suits me. Let's get 'em built...somewhere.

...

[Statistical]

5. In the same article....

General Motors has requested $10.3 billion in loans from the program, while Chrysler has asked for $6 billion in loans. Energy officials have said the loans could only go to "financially viable" companies, preventing GM and Chrysler to qualify for the first round of the loans.

Ford has sought a total of $11 billion from the loan program and has previously said it would invest $14 billion in advanced technologies over the next seven years. The loan application, which was submitted by the company late last year, would help Ford finance the investment.

Tesla is seeking $350 million in loans for an assembly plant to build its Model S four-door sedan, which is scheduled to go on sale in 2011. The San Carlos, Calif.-based company is also seeking $100 million to finance an advanced battery and powertrain manufacturing facility.

Giving low interest LOANS to various car companies to spur the development of next gen hybrids and electric vehicles.
Sound like a good idea to me.

[Romulox]

6. How much Japanese taxpayer yen is Ford set to receive?

:hi:

[Statistical]

7. How many Ford vehicles are built in Japan? n/t

[Romulox]

9. This money is being used to build cars in Japan. Please see the OP. nt

[Statistical]

11. I didn't say it wasn't. The question was how many Ford vehicles are built in Japan? n/t

The US has a vested interest in ALL car companies producing more efficent and electric vehicles for US CONSUMPTION.

Nissan builds many vehicles in the US. They do it because it is MORE profitable to do so.

If the seed money (which is a loan) results in a profitable and popular EV vehicle Nissan will sell it in the US and eventually build it in the US.

They won't do it for any love of American they will do it because it makes economic sense.

Having 5,6, 10 companies competing for high efficency products is far better use of taxpayer funds than handing 1 or 2 companies the money.

[Romulox]

14. You're positing a bogus symmetry. Japanese taxpayer money = you must build cars in Japan

US taxpayer money = you may build cars in Japan.

There is no symmetry here.

[Statistical]

16. No US taxpayer money for companies that build cars in US.

Nissan does build vehicles and engines and transmissions in the US.

Does Ford build anything (even a single vehicle) in Japan?
Is Japan trying to increase fuel efficiency of its vehicles?

[Romulox]

These funds are earmarked for building a vehicle in Japan. It's all in the OP. nt

[Statistical]

27. No your wrong.

INITIAL PRODUCTION = Japan
EXPANDED PRODUCTION = Worldwide (to produce close to consumption market)

http://www.washingtonpost.com/wp-dyn/content/article/2009/06/23/AR2009062301444.html?hpid=moreheadlines
Nissan will retool its Smyrna, Tenn., plant to build electric vehicles and build a battery manufacturing facility.

http://business.timesonline.co.uk/tol/business/industry_sectors/engineering/article6560456.ece
Nissan Motor has belatedly waded into the worldwide battle for dominance of the “green” car market by unveiling plans to produce 100,000 electric vehicles per year at its plant in Tennessee.

http://www.guardian.co.uk/business/feedarticle/8571883
Nissan Motor Co said on Tuesday it expects its electric vehicle output in the United States to have an initial capacity of more than 100,000 vehicles a year. Nissan had chosen a site in Tennessee to make electric vehicles and batteries, Carlos Ghosn, chief executive of Nissan and French partner Renault told reporters after Nissan's annual shareholders' meeting.

So once again how many vehicles does Ford produce in Japan? 100,000+ electrics? 900,000+ total? Oh yeah. 0.

[Romulox]

44. The plans as it exists today is to spend 100% of the money in Japan.

"So once again how many vehicles does Ford produce in Japan?"

And again, how much taxpayer money is Japan giving Ford? :hi:

[blue_onyx]

46. Ford produces 0 there because

Japan doesn't allow them to make vehicles in their country. On top of that, Japan has high import taxes to protect Japanese companies from competition.

[WI_DEM]

8. Yep, sounds good to me. This why people should read the whole article and not some

blurb.

[Romulox]

10. Umm, you can't conceive of someone reading the article and STILL opposing this?

Ummm.... :eyes:

[WI_DEM]

13. No I said it's good to read an entire article and not just a blurb

don't put words in my mouth and no need to reply to this.

[Romulox]

15. The Fair Use rules applied to posting limit the amount one may put in an OP. nt

[WI_DEM]

19. the article also says they are hoping to eventually make them in the U.S. in TN

it may be that they have to start in Japan and will expand here. Do you want everybody just to agree with you on your thread or what? I think it's a good thing and it will be a better thing once they start doing it here in the US.

[Romulox]

20. LOL. You said "Hope"! nt

[Horse with no Name]

28. Hoping, eventually, maybe, try

That is a LONG way from "Yes We Can".

[Statistical]

34. Other articles seem to indicate Nissan intends to build them in the US.

Likely first year production will be very small (to work out production issues). It makes sense to only have a single location building 5-10K units instead of 20 around the world making 500 each.

However everything indicates Nissan will be building them in the US (plant capable of building 100,000 units annually).

http://www.washingtonpost.com/wp-dyn/content/article/20...
Nissan will retool its Smyrna, Tenn., plant to build electric vehicles and build a battery manufacturing facility.

http://business.timesonline.co.uk/tol/business/industry...
Nissan Motor has belatedly waded into the worldwide battle for dominance of the “green” car market by unveiling plans to produce 100,000 electric vehicles per year at its plant in Tennessee.

http://www.guardian.co.uk/business/feedarticle/8571883
Nissan Motor Co said on Tuesday it expects its electric vehicle output in the United States to have an initial capacity of more than 100,000 vehicles a year. Nissan had chosen a site in Tennessee to make electric vehicles and batteries, Carlos Ghosn, chief executive of Nissan and French partner Renault told reporters after Nissan's annual shareholders' meeting.

[Romulox]

39. "Intends" = the bailout is NOT conditional on using the money here. nt

[Statistical]

47. Its not a bailout. It is an INCENTIVE loan.

US wants more electric vehicles.
Most auto companies are UNLIKELY to take the risk to produce electric vehicles.
status quo = nothing changes.

US spends $25B in loans to cause multiple competitors to make electric vehicles = more green choices for consumers.

Nissan building the vehicles here is only a bonus.

Nissan will build here the same reason they build other vehicles here.... it makes economic sense. shorter supply chain, local production, cheaper final destination all are ECONOMIC reasons to produce here.

If/when Nissan has an economically viable EV they will produce it here simply because it lowers the per unit cost and thus higher profit per vehicle. Why wouldn't they? To sell more expensive vehicles or make less vehicle for profit or be less capable to adjust to supply chain issues or have longer delays on restocking dealerships?

Luckily most car companies aren't run by protectionist like you. You likely would never build a plant outside the US and thus be at a competitive disadvantage. The Japanese learned long time ago that plants in the US HELP the bottom line.

[Romulox]

50. It's a gratuitous transfer from the US taxpayer to a foreign corporation, spin notwithstanding.

"Nissan building the vehicles here is only a bonus."

There is no present plan to build this vehicle here. You are taking Nissan's stated intentions and pretending they're already committed to doing so.

"Luckily most car companies aren't run by protectionist like you."

LOL. You cannot explain why Ford isn't getting any money from Japan (or Germany, Korea, etc. etc.) I guess it's OK for Japan to be "protectionist".

[anigbrowl]

64. No it isn't. Loan = repayment with interest.

Gratuitous transfer = here's the money, enjoy, no need to pay me back. Your headline is misleading, intentionally or not.

[Romulox]

68. A loan at less than market rates is a subsidy, which is, by definition, a partially gratuitous xfer.

"Gratuitous transfer = here's the money, enjoy, no need to pay me back."

My mortgage rate is 6%. If the government refinanced my home at 2%, (let's say 6% is a fair market rate), then they have subsidized me to the extent of that 4%. That 4% is a gratuitous transfer.

[blue_onyx]

51. Are you serious?

"Luckily most car companies aren't run by protectionist like you. The Japanese learned long time ago that plants in the US HELP the bottom line."

Japan has a protectionist economy. They won't allow US companies to build plants there and then charge high import taxes to protect their companies.


"You likely would never build a plant outside the US and thus be at a competitive disadvantage."

So you'll be fine if GM starts building cars in China and shipping them back here?

[Statistical]

59. Yes.

Nissan IS ALREADY building cars in the US.
With or without this incentive loan they will CONTINUE to build cars in the US.

They can either build oil burning cars or electric cars.
We can use these funds to encourage the cars that are built are more green.

Reducing foreign oil imports is a national security issue.
Electric cars can be powered by a variety of sources and decouples the link between oil prices/oil instability/oil empire with transportation.

So we are spending money to encourage companies (all companies, any companies wishing to participate) in making greener vehicles for American consumers.

[blue_onyx]

65. Let Nissan get loans from their own country.

BTW, Care to answer the second part of my previous post?

[Statistical]

67. If GM produces vehicle in China for Chinese citizens I see no problem n/t

If GM produces vehicles in China and exports them to the US and loses money on tarriffs, tansportation, poor supply chain managment ect and it is only slightly cheaper than building them in the US then I think that is stupid.

GM sells a lot of vehicles to the Chinese and if they are build by China I see no problem.

[Romulox]

70. These loans will be used to produce vehicles in Japan. You keep overlooking this. :) nt

[blue_onyx]

80. It not only "slightly cheaper" to build some cars here.

There's a reason subcompact cars aren't made in the US. I believe the replacement for the Chevy Aveo will be the only sub-compact made in the US.

It's odd that you think it's wrong to ship cars back to the US from China but it's perfectly ok to give Nissan money to build vehicles in Japan to ship back to the US.

[Statistical]

92. Nissan builds vehicles in the US.

Nissan builds more vehicles sold in the US IN THE US then they do in Japan.
The initial batch of vehicles will be built in Japan but they are building a 100,000 vehicle plant in the US.

Play all the games you want. In 3 years we will see if Nissan is building EV in the US. If they are and the consumer has a green choice then I guess the investment was a good idea. Agreed? If they aren't then we got suckered and you were right?

Interested in a friendly wager? I doubt it.

[blue_onyx]

99. Only person playing games is you

One second you're criticizing protectionism and then you're saying it's bad for companies to bring Chinese produced vehicles to the US. It's not ok to bring Chinese made vehicles to the US but it's ok to import a partially US tax-payer funded vehicle from Japan? Makes no sense.

You don't KNOW that Nissan will eventually build the car here:

"Nissan is developing an all-electric car with 100 miles of pure battery range for release in late 2010. The car will be made in Japan initially but company officials have said they eventually want to build the vehicle at Nissan's plant in Smyrna, Tenn."


Wanting to do something and actually doing it is something completely different. If it is financially better for Nissan to continue producing the vehicle in Japan and shipping it to the US, I guarantee you, they'll do so. Unless you're psychic (which, if you are, can I have the Mega Million numbers), you don't know that this will benefit US workers. You are advocating loaning money to a company to develop a vehicle in the hopes that it will have a pay off.


As for a friendly wager, as a long term unemployed person, I never bet on anything. When you don't have much, you can't risk losing anything, no matter how sure you are.

[Statistical]

109. Friendly wage say

3 years from now exactly. If Nissan is building EV vechiles in the US you change your signature to a pro Nissan one of my choosing for 1 month.

If Nissan is not building EV vehicles in the US I change my signature to a pro union, or pro GM signature of your choice.

Cost nothing.

Also regarding the benefit to American consumers:
Americans buy Nissan vehicles. Without this loan American will still buy Nissan vehicles. This loan will help ensure the choices are greener.

[blue_onyx]

113. what's a signature?

I was unaware that I had one.

Anyway, if Nissan is not building that vehicle in the US by June 23, 2012, then I'll make my signature "pro Nissan." BTW, I'm not all that anti-Nissan. I support the US companies but Nissan would probably be one of the foreign brands I like most. My main objection is providing loans to foreign companies, particularly since I know that Japan would not do that same in return.



"Americans buy Nissan vehicles. Without this loan American will still buy Nissan vehicles. This loan will help ensure the choices are greener."

Couldn't the same be said for Japan? Wouldn't opening their market to US companies provide more options, including greener options such as the Volt or any other future US products? It bothers me that our country abides by "free trade" but other countries don't follow those same rules.

[Statistical]

115. Then lets pressure the admin to force FAIR TRADE with Japan.

Rather than restrict choices for Americans we should be making sure we have FAIR TRADE not FREE TRADE agreements.

Not sure what Obama stance is on that issue but he should be pressured to make sure Japan opens their markets in return for fair access to US markets.

Regarding signature it is appended to each of your posts. Most people use them for clever saying etc.

OPTIONS > MANAGE MY PROFILE > SIGNATURE.

[Romulox]

125. Taxpayer money to foreign corporations from protectionist countries, FIRST..."fair trade"...later?

:shrug:

[Telly Savalas]

112. Weren't you bleating on about how "it's a LOAN not a BAILOUT"

when money was shoveled towards the CEOs at GM and Chrysler.

How is this different, with the exception of the fact that Ford and Nissan are considerably more likely to pay the loan back? And don't try to feed me shit about Nissan being foreign, because GM was closing down production in the US while expanding overseas while they were taking their bailout.

[MadHound]

12. Sounds like standard R&D LOANS to me

Something that happens all the time, in all industries, across the world.

Hell, you want to be outraged, go check out the outright GRANTS of R&D money that goes to pharmaceutical companies, both foreign and domestic.

[Romulox]

17. How much in "standard R&D loans" is the Japanese government extending to GM, Ford, Chrysler?

:hi:

[MadHound]

22. Don't know,

However I do know that foreign government actually do dole out millions and billions in R&D loans to various industry sectors on a regular basis, including many US companies:shrug:

[Romulox]

23. Zero. nt

[HamdenRice]

75. Oh along with the Chinese and for American bailouts in general, several hundred billion to trillion?

After all, since the US does not run either trade or budget deficits, where do you think the money comes from that the US is lending in this program -- as well as in the larger stimulus?

When you consider that the stimulus, most of which will be spent here, is financed through the sale of treasuries and that most of those treasuries are being purchased by Asian and oil country savings and recycled trade surpluses, in this seed loan for hybrid cars, we are in effect, acting as an intermediary, lending the Japanese their own money.

It comes from savers in China, Japan and Korea.

[Hannah Bell]

78. and will be repaid by american savers.

[HamdenRice]

82. No it won't. It will be repaid by the borrower, which is Nissan.

That should be glaringly obvious even to someone who can't read a spread sheet.

[Hannah Bell]

88. US borrowings, source of funds being loaned by the US to nissan, will be repaid by US savers.

go soak your head.

[HamdenRice]

95. So you're saying a loan to Nissan will not be repaid by Nissan?

Care to explain that whopper?

Or is assertion enough for anything that could come from the world whacky trotskyite website brigade?

[Hannah Bell]

117. red-baiting isn't pretty.

us borrows money from japan.
us loans money to japanese manufacturers at subsidized rate.
japanese manufacturers repay us.
us taxpayers repay japan at higher rate.

us borrows money from japan in order to lend it to japanese manufacturers.

someone is minting money on this deal.

[HamdenRice]

120. "someone is minting money on this deal." -- Jesus on a stick -- can you multiply fractions & %

You wrote, "us taxpayers repay japan at higher rate."

What abject ignorance. US taxpayers repay Japan AT A LOWER RATE. If someone is "minting money on this deal" it's the Treasury.

And, btw, I'm not red baiting. I have nothing against socialism. It was, however, a socialist leader, August Bebel, who coined the phrase "socialism of fools" for a certain fanatically incoherent ideology, and although I'm not accusing you of espousing the particular "socialism of fools" Bebel was talking about, The World Socialist Whackjob Website is aptly described as full of "socialism of fools."

[Hannah Bell]

121. "US taxpayers repay Japan AT A LOWER RATE"

prove it.

[HamdenRice]

122. No, why don't you prove that they repay at a higher rate

After all, the newspapers have been full of reports about t-bills have an effective zero interest rate because of the flight to the dollar.

While your at it, why don't you prove that the sky is red, rather than blue.

[Hannah Bell]

130. I see, you can't.

The loans are at below market rates.

Currently 8-9% of federal budget = interest on debt.

[Hannah Bell]

123. oh, & btw, this is red-baiting.

"Or is assertion enough for anything that could come from the world whacky trotskyite website brigade?"


To start with, the content of the post had nothing to do with wsws.

To finish with, the content of the remark is wholly crude personal red-baiting smear.

[Romulox]

79. Your response has almost nothing to do with the question. I asked if Japan was subsidizing Detroit

The answer is, of course, 'no'.

[HamdenRice]

84. Sure it is. Haven't you been on a jihad about low interest rates being a subsidy?

If you believe that, then the below market rates that Japan is charging the US must also be a subsidy, right?

And that money is being used to finance the stimulus and the auto bailouts.

Or do your wacky theories only work when applied to certain parties and not to others?

[Romulox]

90. That's quite a stretch. Japan doesn't manipulate exchange rates for the benefit of US workers.

[Hannah Bell]

118. he was for the bankster bailout too.

[Romulox]

127. You kidding me? He was first chair in the "thank GAWD it passed!" chorus!

:rofl:

[Hannah Bell]

131. that's what i said.

[ContinentalOp]

18. It's not a "bailout" it's a loan. It doesn't sound like it's even finalized yet.

And the idea I believe is to get electric cars on the road in America, not create new jobs (we have other funding for that). From that point of view it makes sense. Nissan and Tesla appear to be the only two companies that are actually serious about making an electric car available for consumers to purchase.

[Romulox]

21. A loan at below market rate = a subsidy. nt

[ContinentalOp]

24. That doesn't change the fact that your subject line is inaccuate flamebait.

It's not a bailout because Nissan is not in danger of going out of business. It's a subsidy targeted toward the manufacturers of electric cars. It sounds like the money has already been earmarked. So what's your solution: give Ford and Tesla more money than they asked for, or give money to companies that are not financially viable (GM, Chrysler)? If the goal is to actually get electric cars into the hands of consumers and onto U.S. roads, then frankly I think giving all of the money to Nissan would be the best bet.

[redqueen]

53. And that's the crux of it right there.

It's one thing to discuss and criticize policy... but this twisted bullshit? Hahahaha

[Romulox]

55. Please identify any inaccuracies in the OP, else your post is itself a contentless flame.

[redqueen]

57. Why waste my time? Others have done so repeatedly. (nt)

[Romulox]

60. Just as I suspected. You have no point other than to flame. nt

[lukasahero]

116. Consider the source

'Nuff said.

[Romulox]

126. Honest question:

What have I ever said to you that would make you respond in this way? If you don't care to answer, I'll understand.

But it's always odd when someone you don't know comes out and makes a knowing comment about you. :shrug:

[lukasahero]

128. You don't have to speak directly to someone for them to be aware of you

Let's just say my one of my prime interests here on DU is women's rights. I recognize your name because I pay attention and I am not surprised to see which side of the discussion you are on in this thread.

[Romulox]

129. You think support for domestic industry places one in opposition to women's rights?

I'm at a loss. Nor do I recall being an opponent of women's rights. But at least I tried.

[lukasahero]

132. Wow - whatever

I'm done here.

[Deja Q]

58. *DING* *DING* *DING* We have a winner!

:thumbsup:

[Political Heretic]

31. A subsidy isn't a bailout.

Nor is the funding going to just Nissan.

Nor... well basically your entire subject line is dishonest.

As I said below:

The article has almost no resemblance to the implications suggested by the OP title.

We can debate the best ways for the government to pursue and promote a green agenda, but certainly one approach is going to include incentivising car makers to develop clean cars.

Nissan is one of several companies to get such subsidy, despite the fact that the OP title makes it sound as though Nissan is getting a "bailout."

None of this has anything to do with bailing out a company. It's part of administration effort to push the transformation of the automotive industry, which involves more than the "big three" automakers by the way.

I'd welcome some discussion about the merits of this spending on its face, but trying to present it the way the OP has done is unhelpful.

[Romulox]

37. Of course it is. It's a transfer of funds from the US taxpayer to a foreign corporation. nt

[Statistical]

48. So is it a bailout for taxpayers when they pay it back with interest? n/t

[Romulox]

54. When that interest is less than they would've paid on the open market, of course it is.

This is not a difficult concept.

[Political Heretic]

105. That's not the definition of a bailout.

[blue_onyx]

32. No, Nissan and Tesla

are NOT the only companies "serious about making an electric car available for consumers to purchase." You may have heard of the Chevy Volt that will be out next year.


"It's not a "bailout" it's a loan."

If it's GM and Chrysler, it's a bailout. Nissan and Ford, it's a "loan." I see.... :eyes:

[ContinentalOp]

33. Volt is a hybrid, not a fully electric car, no matter how much spinning GM and their fans attempt

Take away the gas generator and it only has a 40 mile range. Nissan is working on cars with a 100 mile range. The Volt has also seen numerous delays while the Tesla is in production now. And Nissan has showed a unique dedication to electric cars by announcing that they are going to bypass hybrids entirely and make a complete lineup of electric vehicles.

And yes, if a company is on the verge of bankruptcy and needs a loan to simply continue day to day operations that's a bailout. Particularly if it looks like the company will go under anyway and not repay the debt. On the other hand it makes no sense to call a targeted industry wide subsidy that is meant to promote a specific technology a "bailout" when the companies in question are not on the verge of failure. In fact companies that need a bailout are explicitly restricted from taking advantage of this funding!

[blue_onyx]

35. The government will get it's money back

from GM and Chrysler, making it a LOAN.


"Nissan has showed a unique dedication to electric cars by announcing that they are going to bypass hybrids entirely and make a complete lineup of electric vehicles."

Fine. Nissan can dedicate its money and Japan's money to the development of the electric car.

[ContinentalOp]

36. I was under the impression that we were given stocks.

We're not going to be paid back in cash right?

[blue_onyx]

38. Yes, the government was given some ownership

When the companies are back on their feet, the government can sell it ownership back to the company...possible for a profit. Like Lee Iacocca said, the companies will likely want to "get the government out of (their) business as soon as possible."

http://washingtontimes.com/news/2009/jun/22/iacocca-tells-chrysler-gm-to-repay-loans-quickly/

[Statistical]

52. Except the original bailout money has already been lost.

Nobody really expects GM stock to recover anytime soon.

Taxpayers traded billions in cold hard cash for nearly worthless stock that someday may be worth slightly more so the company wouldn't cease to exist.

That is a BAILOUT.

$25B in loans given to a variety of financially stable companies for the purpose of spuring the development of EV and create consumer options and competition is an INCENTIVE LOAN.

[blue_onyx]

56. No, the money isn't lost

The government will be paid back in full.

[Statistical]

62. No they won't.

GM received 2 sets of funding.

GM received an unsecured bridge loan.
Then GM filed for bankruptcy and received DIP financing.

The DIP financing is protected funds and taxpayers will receive stock based on the value of the DIP funding.

The original bridge loan was unsecured and was wiped out along with all unsecured creditors. It is already gone and would be illegal for taxpayers to seek a claim. That is why it is called Bankruptcy protection.

Given the bridge loan was MORE than the DIP funding the stock owned by taxpayers would need to nearly TRIPLE to recover those loses (i.e gain on the DIP stock > loses on bridge loan).

The US govt will likely sell its stake in GM shortly after GM goes public again maybe in 2-3 years. If you think the value of GM will triple in next 3 years I have a bridge loan to sell you.

Taxpayers lost out big. They will recover some on GM but Chrysler is an even worse deal. Given the further dillution of taxpayer share and Chryslers tiny marketshare nearly all of that will be written off.

[Romulox]

63. You're characterizing what ALL amount to gratuitous transfers of taxpayer $$$ to private equity

in fairly self-serving ways. There is no conceptual distinction between a subsidy to Nissan and a subsidy to GM (DIP financing at favorable rates, e.g.). You have merely put what amounts to a flow of monies from the taxpayer to private equity in separate boxes and claimed they are in no way similar therefore.

[Statistical]

69. The purpose of GM funding was to keep GM alive.

The purpose of the Telsa, Nissan, Ford funding is to encourage development of EV vehicles.

[Romulox]

71. The purpose of the funding does not change the reality of taxpayer dollars going to private concerns

"The purpose of the Telsa, Nissan, Ford funding is to encourage development of EV vehicles."

The definition of "subsidy" does not turn on the financial condition of the recipient.

[Statistical]

49. No they won't. That is already settled.

The original debt was written off as unsecured loan.

The dip financing will give US taxpayers ownership of a highly dilluted (aka nearly worthless) stock.

The original bailout money is gone. It has been discharged as part of BK process.

The tazpayers never got a single cent and never will (they can't unless BK protection).

[blue_onyx]

61. According to Obama

there's a "reasonable probability" that the federal government will get its money back. Just for PR purposes, I see GM/Chrysler completely paying back the government.

[Statistical]

66. GM can't pay the govt back.

The govt doesn't own ANY GM debt. There is nothing to pay back.

The govt owns shares and the value of those shares at the time they are sold will determine how much taxpayers recover.

GM can't control what price the stock will be at the time of the sale. Given that the govt has expressed interest to sell GM shortly after it goes public again it is unlikely the stock will appreciate enough to recover loss of bridge loan funding (which has already been lost when they created a new GM and old liabilities split).

GM also can't gift money back to taxpayers for PR or otherwise. GM sole responsibility will be to shareholders (of which taxpayer is only one) and doing so violates fiduciary responsibility.

[blue_onyx]

74. Can I ask

How do you know all this? You're saying Obama is wrong that the government will be paid back?

[Statistical]

93. If you read Obama words carefuly he is clear to not say the taxpayer will 100% be repaid in full.

It is common knowledge that GM debt was wiped out as part of the restructuring.

Unsecured debt was erased.
Secured debt got pennies on the dollar in stock and the secured debt erased.

This is routine (business as usual) in any bankruptcy and there are dozens of stories about the GM bankruptcy that confirms this.

If GM could pay its debts...... IT WOULDN'T BE IN BANKRUPTCY.
It is utterly foolish to think GM would emerge from bankruptcy with the very debts it couldn't repay BEFORE bankruptcy.

So taxpayers lost on bridge loan and got pennies on the dollar on the DIP funding. Unless GM sees a giant apreciation in stock price due to some magical super margins or major gains in marketshare the taxpayer will be repaid but they will never be repaid in full.

Even worse is the fact that there is no guarantee the "new GM" will be sucessful. Since all the debt has been traded for stock the taxpayers are now unprotected class of investors. Shareholders are third in line behind secured and unsecured creditors. In almost all BK (including the current GM bankruptcy) shareholders are simply erased. If "new GM" were to fail in 3-4 years due to a slow economy or damaged brand and file for BK protection again before taxpayers shares are sold those shares will go to 0.00.

[TreasonousBastard]

25. Just to set the record straight...

Nissan is largely owned and almost completely controlled by Renault, unless Carlos Gohn was recently forced to dump much of it. You may have heard that's a French company, and it took control when Nissan was going broke. French and Japanese gummint money was involved in that "bailout" but under great protest.

Ford owns, or at least once owned, 25% of Mazda, which makes no difference since neither Ford nor Mazda is involved in this, but it might be of interest.

Continue on with the bickering.

[PVnRT]

26. Ford is getting 368% more than Nissan

Plus, they're loans, not bailouts. Nice try.

[Romulox]

40. 100% of the money to Nissan set to be spent in Japan.

"Plus, they're loans, not bailouts. Nice try."

So was the money extended to GM, Chrysler. Didn't see you objecting to the characterization of THAT transfer as a "bailout". :hi:

[PVnRT]

72. Except that these are R&D loans

Not emergency loans to keep companies from going under. And, no, I didn't object to that at all, as I don't object to this, either. There's still $16 billion or so yet to be earmarked, of which GM and Chrysler can get plenty if they present a good case.

But I guess it's really all about the nationality of which executives get rich, so I imagine you will simply ignore this and all of the other arguments that have pretty much blown your original premise to shreds in favor of nonsense.

[Romulox]

76. They are taxpayer monies being used for the benefit of a foreign corporation, full stop.

"But I guess it's really all about the nationality of which executives get rich"

Um, did you not see the repeated emphasis in this thread about where the cars are going to be produced (it's in the OP title, for example.)? :hi:

[ContinentalOp]

85. Actually the money is being spent for OUR benefit.

The goal is to get electric cars on the road in America for our own benefit in terms of reduced fuel costs, reduced reliance on foreign oil, and for the environmental benefits. You may disagree with the goal and you may disagree with the approach but it's highly dishonest to pretend that money was somehow earmarked specifically to benefit a Japanese corporation.

[Romulox]

91. Umm, the money WAS specifically earmarked to benefit a Japanese corporation.

Did you read the OP? :silly:

[ContinentalOp]

97. That's a flat out lie. The money was made available to any financially viable company...

that is developing an electric car. Nissan, Ford and Tesla were the 3 companies who could take advantage of the offer. The subsidy was designed to help get electric cars on the street in the U.S. and it will do just that. It was not, as you imply, designed to offer financial help to a troubled foreign corporation.

[spoony]

96. Speak for yourself.

I don't see how subsidising the competition of American companies helps anyone but Nissan. And I include Obama in that "not helped" category, as it flies in the face of his statements that he wants US automakers to succeed.

[ContinentalOp]

100. I'm speaking for the entire world.

If a company in North Korea developed the cure for cancer and needed a trillion dollars to get it off the ground I sure as hell would be in favor of giving it to them. When we're talking about the fate of the entire world I'm not worried about petty nationalistic protectionism.

[HiFructosePronSyrup]

29. This really pisses me off.

I haven't been so upset since anti-malarial drugs developed with U.S. taxpayer dollars went to help sick children in Africa who were totally unamerican.

[Romulox]

41. Money sent to a Japanese corporation is equivalent to taxpayer dollars to fight malaria?

You centrists are too much! :rofl:

[Political Heretic]

30. The OP title seems pretty misleading.

The article has almost no resemblance to the implications suggested by the OP title.

We can debate the best ways for the government to pursue and promote a green agenda, but certainly one approach is going to include incentivising car makers to develop clean cars.

Nissan is one of several companies to get such subsidy, despite the fact that the OP title makes it sound as though Nissan is getting a "bailout."

None of this has anything to do with bailing out a company. It's part of administration effort to push the transformation of the automotive industry, which involves more than the "big three" automakers by the way.

I'd welcome some discussion about the merits of this spending on its face, but trying to present it the way the OP has done is unhelpful.

[Romulox]

42. It's 100% accurate. The Obama admin will forward $1.6B to Nissan to build cars in Japan. nt

[HamdenRice]

81. Surprise, surprise! When has that OPer ever written a non-misleading headline on economics?

I might add to your critique that in effect the money is coming from China, Japan, Korea and the oil producing countries as recycled trade surpluses they have run up, since we run neither trade nor federal budget surpluses.

Considering how intertwined the economies are, and the fact that our entire stimulus is being financed by foreign countries it seems a bit churlish for the OPer to get upset that some of the Asian countries' money might be loaned back into Asia.

[izzybeans]

83. The OP is 100% hystrical tripe.

http://www.atvmloan.energy.gov/

Not only is this not a bailout program, it's a huge green initiative.

[Romulox]

43. I am SHOCKED that all the DUers who opposed the GM, Chrysler bailouts won't touch this!

No I'm not.

[w4rma]

45. They probably support it since their goal is to bust the American automobile unions. (nt)

[PVnRT]

73. Did you keep lists?

How very Nixonesque patriotic of you.

[Romulox]

77. No list. I remember past discussions on DU. Don't you?

:shrug:

[spoony]

94. If money goes anywhere besides domestic industry, they're cool with it.

This thread is just another example of that. They're satisfied with banks being in bed with the administration. They whine when it does anything that "helps" automakers (debatable to put it mildly). They hate unions. They trash domestic autos any chance they get (one is currently doing so in a thread about teachers, of all things). This is a continuation of the same attitude. They're phonies, through and through.

[ContinentalOp]

101. I see quite the opposite at play.

Anyone who buys a foreign car is a traitor, but 50,000 union teachers getting losing their jobs in CA? That's CA's problem. Entire states going bankrupt? Eh, fuck em, they're not heroic Detroit corporations.

[Romulox]

103. You're not thinking clearly. Line workers in Detroit didn't cause teachers to be laid off in Ca.

I understand why you're angry, but it makes zero sense to vent on working people in the state with the worst economy in the US. :hi:

[ContinentalOp]

110. I didn't say line workers in Detroit caused anything.

Simply pointing out the double standard. The so called "union supporters" here only support certain unions when it's in their personal interest to do so. You don't call me an unpatriotic, anti-union traitor for buying a foreign car and I won't call anyone an unpatriotic anti-union traitor the next time they're trashing Hollywood movies. Deal?

[Romulox]

124. What double standard? The UAW doesn't set California tax policy. OR lay off teachers.

They have no control over the California budget. Why would you think that "union supporters" (not sure why the scare quotes are needed) don't support California teachers? It's a bizarre accusation. What are you basing this on?

"You don't call me an unpatriotic, anti-union traitor for buying a foreign car"

Who called you these names? Certainly I did not, so why are you telling me not to call you this? :wtf:

[blue_onyx]

104. Yes, it is California's problem

Just as Michigan's budget is Michigan's problem. California isn't the only state seeing teachers lose jobs. Most states have to make painful cuts. If Obama wants to help states, fine but he should help all states...not just California.

[ContinentalOp]

111. Thank you for proving my point.

PUBLIC union employees are in trouble? Not our problem.

PRIVATE corporations are in trouble? OMG! The sky is falling! Why do you hate the unions? Give us billions for our failed business!!!

[blue_onyx]

114. You have no idea what you are talking about

THE WORLD DOESN'T REVOLVE AROUND CALIFORNIA. There are other states. California's problem are not unique. I would be ok with Obama providing assistance to the states. But the idea that California should get special treatment is absurd.

[Political Heretic]

107. Money IS going to the domestic auto industry. Everyone conveniently leaves that piece out.

[Hannah Bell]

119. they liked the bankster bailout though.

[Political Heretic]

106. I didn't oppose GM, Chrysler bailouts. And this isn't a bailout by definition.

The company in question isn't requesting money to avoid collapse.

You're problem is that we're making a deal with a foreign company. Okay, but this isn't the first time we've made deals with foreign companies. Are you against any deal with a foreign company in all cases?

If we want to move towards a sustainable green economy or seriously address climate change, its going to be a global effort. And one of the two biggest hurdles is going to be getting automotive companies to stop fighting and embrace a market model that is green. (The second big hurdle is the Oil industry, but those two are linked, and I think its very smart to start with incentivising (sp?) automakers, which decreases demand for Oil and places pressure on Oil to develop alternative energy programs to supply new demand.)

The deal you are talking about today involves several companies, including American companies - a detail you have willfully ignored. It is an investment, in the form of loans on which the American tax payer will earn interest, and the result is a collaborative effort among this car manufacturers to start developing truly marketable alternative vehicles. This is big, and for America to be leading on this investment is also big.

You have not really made it clear what exactly your objection is, and you've lied about the entire frame. So I'm not sure what your point or agenda is at the moment.

[treestar]

86. The only statistic that would matter is how many American jobs are

involved - just because one of those horrible foreigners gets a job out of it does not make it bad for the entire American economy.

I suppose we're supposed to get on soapboxes and scream that Obama sold us out to the Japanese?

[Political Heretic]

108. That's right.

[and-justice-for-all]

87. Sounds fine to me...

"Nissan is developing an all-electric car with 100 miles of pure battery range for release in late 2010. The car will be made in Japan initially but company officials have said they eventually want to build the vehicle at Nissan's plant in Smyrna, Tenn."

They are investing in Nissan's EV which they want to eventually build in Tenn. Its is not a bailout, it is an investment in an EV that Nissan will release in 2010, I have no issue with this.

[david13]

89. Sounds good to me too. Ford seems never able to do anything

right. They have the lowest fleet fuel efficiency of all companies. I have had enough Fords to never want one again as long as I live. If someone gave me one, I would sell it as fast as I could, which oddly enough, actually did happen last year.
I like Nissan's. They are good cars. I had several, all super good, and made in Tennessee. Nissan will do the job right. Ford will screw it up.
dc

[JVS]

98. While I consider your claim that this is a bailout to be an exaggeration, I am against this.

It is a subsidy and I'm against corporate welfare, be it to the banks, the big 3, or now foreign auto firms.

[ContinentalOp]

102. Green subsidies are some of the only subsidies I support!

There are so many other useless corporate handouts to complain about.