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Elections have consequences. A consistent narrative re the auto industry? Not so much.

Or, why John Dingell is now a member of the Blue Dogs.

Looks like we’re up for a bit of a power struggle in the House Energy Committee:

Oversight Committee Chairman Henry Waxman has been coveting Energy Committee Chairman John Dingell’s job for, well, decades. But never before has Waxman so directly challenged Dingell – who has sat atop the committee for 28 years – so directly.

It’s hard to believe Waxman would make this bid without the support of Speaker Pelosi, a fellow Californian who tried quasi-successfully, to do an end run of her own around Dingell when she created the Special Committee on Global Warming – an issue that normally falls within the purview of the Detroit-loving Dingell’s committee.

While Obama hasn’t weighed in yet on the challenge, it’s interesting to note that his top congressional liaison is Phil Schiliro, until recently Waxman’s long-time chief-of-staff.

More discussion under the fold, but let me make a really quick statement here: if Waxman gets Energy, I’d appreciate it if Congress doesn’t bail out the auto industry. The Democrats are just going to kill it in this country anyway, which means we’d get more use out of the money if we took it out to a field and set it on fire.

It’s like this. John Dingell (who represents Detroit) and Henry Waxman (who represents Beverly Hills) are in a bit of disagreement over what’s more important for the country right now. Waxman wants heavier global warming palliatives; Dingell wants a functioning auto industry. As both of the above links note, Waxman is a particular ally of Speaker Pelosi, who has been more or less sparring with Dingell over this issue for years; and as the Swampland link notes, Obama’s new congressional liaison is former Waxman chief of staff Phil Schiliro. So Dingell’s kind of exposed, here.

What makes this fairly bizarre is that the Democrats are also calling for a bailout of the auto industry – while plans to reverse an executive order protecting the auto industry from California’s desire for stricter environmental controls continue apace. So we’d end up with the government handing an industry about to fall apart a bunch of money for a bailout… which would end up not being used to actually bail out the industry; it’d be used to comply with restrictions that don’t actually exist yet.

Now, I understand that a lot of people are going to want to argue that we need heightened CAFE standards. Fine, fine: as I recall, both Presidential candidates were down with that, so we’d hear that argument either which way. What’s really at issue here is that the government is not so much sending mixed signals as it’s sending pureed ones. If we’re going to bail out the auto industry, then why are we wasting time on global warming restrictions, which are a luxury in this context? And if we’re going to throw the auto industry to the wolves anyway, why are we giving them money?

And before you argue that you can have both a bailout and increased regulation of auto emissions, let me remind you: General Motors is on the verge of going bankrupt. Let me repeat that: General Motors is on the verge of going bankrupt. They are rapidly running out of margin:

“In this world, you don’t go Chapter 11 reorganization,” Maryann Keller, an independent auto analyst and consultant based in Greenwich, Connecticut, said in an interview. “You go Chapter 7 liquidation.”

Which means: no, you can’t.

COMMENTS

  • LoneApple

    I suppose I consider myself a capitalist in the purest sense because I think if a company does not do a good job then they should fail. Of course, the unintended consequence is that suddenly a very large number of people are unemployed and quite possibly unemployable unless retrained.

    The unfortunate things about the alleged brain trusts that run some of America’s biggest corporations is that they have absolutely zero foresight beyond the quarter they are in.

  • Han_Pritcher

    GM, Ford, and what’s left of Chrysler have done a bang-up job of killing themselves. Yes, yes the UAW and so forth have contributed to that (though the auto companies contracted with them in good faith. The horrendous consequences are manifest, but they DID make those concessions), but the fact is that the “Big 3″ seem almost completely incapable of making cars people want to buy and trust to work reliably.

    Yes, there are a handful of exceptions. A handful. I still don’t understand why anyone would buy a Chevy Aveo over a Toyota Yaris.

    I think we’re in a state of complete and willful denial, all of us, about GM and Ford. They cannot function as they are. Either someone other than those companies meets their legacy health care and (heaven forfend) pension obligations or they die. And even if someone else does, they still might die anyway.

    It’s sort of a perfect storm of stupid.

  • charliej

    No personal offense intended towards you Han but the D’s are living and breathing this “perfect storm of stupid” as Moe pointed out.

    You cannot bail out an industry and at the same time further restrict them in such a way as to kill them.

    D’s have a big problem here; the working class may finally realize they really don’t have their best interests at hear. They say they’re for the worker but yet they want to regulate these companies into non-existence; which one is it?

    This does not exclude the terrible way these companies have been run; there’s plenty of “stupid” to go around..

    jmho

  • izoneguy

    Forecast rattles auto industry

    He noted that the 1980 bailout of Chrysler Corp. by the U.S. and Canadian governments meant that excess assembly capacity in North America was kept in place and “zombie-like” auto makers continued operating for another 25 years.

  • crankycon

    It’d be fun to let them die since they’ve worked so hard for this day. But the plants and the workers are fundamental to national defense. Oh, silly me! “Hey, China, can you send over some tanks so we can have a war?”

  • crazy

    Rather than a bailout is a better path to follow. A bailout preserves a failed business model that will require protective measures by the government to prevent market forces from further eroding the government investment. Bankruptcy would allow for restructuring into a competitive form but would leave another financial mess for the injured debtors and pensioners for the government to deal with.

    It’s time for these once upon a time big fish to be swallowed by bigger fish who can run these businesses profitably and productively with GM/Chrysler/Ford’s assets and liabilities on the balance sheet.

    As long as Washington and Detroit act like the taxpayers are going to keep Detroit’s hope of staying alive, the bigger fish will just keep circling the tank waiting for a better opportunity.

    There are plenty of bigger fish who could keep this industrial capacity alive and potentially flourishing if the government would stop feeding the minnows at GM/Chrysler/Ford.

  • Moe_Lane

    One hopes that they don’t solve it by destroying the domestic auto industry.

  • liberalrepublican

    Socialism – Just Say NO