Daily Auto News Foreign Automakers Angry at Big Three Bailout Bill
Daily Auto News
Foreign automakers (with one exception) aren’t happy about the help their U.S. rivals may be getting. The House of Representatives has approved $25 billion in loans to American automakers, with the Senate expected to follow suit shortly. The loans should help Detroit’s Big Three recover from a disastrous 2008, and reconfigure their operations to produce more fuel-efficient, small cars and large SUVs. But while Detroit is hoping the loans will help it survive, some of the Big Three’s rivals are steaming.
Matthias Wissmann, current president of the VDA (an association of German automakers) told Reuters, “Low-cost government loans will not save U.S. automakers unless they restructure to put themselves on a more competitive footing.” He added, “If the U.S. car industry does not resolve its structural problems, then all the subsidies in the world won’t help.”
Autoblog comments, “Of course, it’s not entirely unexpected that Detroit’s competitors aren’t happy about the federal loans,” but Wissmann’s argument about restructuring “certainly makes a lot of sense… The hope, of course, is that this financial aid is just what the automakers need to fix said problems.”
Foreign automakers have fallen on hard times just as their American counterparts have. A weak dollar has depleted the value of each sale they make in the U.S., and those companies will not have U.S. government help in transitioning to meet the demands of a more fuel-conscious American consumer.
Bloomberg reports that shares of Japanese automakers “fell as a drop in auto shipments dragged on export growth” this week. Nissan Motor Co. slipped 5 percent, leading automakers lower, after data showed U.S.-bound car exports plunged as the financial crisis weighed on consumer spending.
Honda shares dropped a little over three percent in value, but Honda is in a unique situation among foreign automakers. Language in the legislation that passed the house this week limits the loans to automakers who have built cars in the United States for 20 years. There are currently four such companies — Ford, General Motors, Chrysler … and Honda, which opened a Marysville, Ohio factory to build Accord sedans in 1982. So perhaps this is the Big Four bailout after all…
But that language could change in the Senate.
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