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Obama Administration to Dissolve Small Independent Automobile Manufacturers

by Autotropolis Contributors
April 1, 2011

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The Obama administration has thrown independent automobile manufacturers for a loop today. In an mid-morning press briefing, White House Press Secretary James Carney announced the new initiative, which is being referred to as the "Automaker Production Refinement and Improvement Legislation Act of 2011."

"The previous two years have been a difficult time for the automotive industry. After extensive analysis of the issue, the House Financial Services Committee has determined that if there are companies that are too big to fail, there must be companies that are too small to succeed. Chief amongst these small companies are those in the business of developing, manufacturing and selling automobiles. If large organizations such as GM and Chrysler cannot succeed at this business without government intervention, an independent automaker has no chance of sustained profitability. It is simple economics," said Carney. "Therefore, the Committee put forth that all automakers with fewer than 3000 employees be immediately dissolved and their assets reallocated to other entities." According to accompanying documents, the entities referred to include companies such as General Motors, Toyota, Northrop Grumman, and a small pig farm in Alabama.

Although the initial automaker recovery programs were devised under the Bush administration, the move comes as a little surprise given the Obama administration's desire to both uphold Bush-era policies (e.g. foreign intervention efforts) while at the same time attempting to enact sweeping reforms (e.g. mandated health insurance). The press release accompanying the announcement clarified the White House's position, stating that the technology, resources, and market share enjoyed by these small automakers should be used for the greater good, rather than monopolized by small firms that cannot properly bring these important technological developments to market in an expedient and affordable manner. Government spokespersons were unable to define exactly what "expedient', 'affordable", or "important" meant in relation to the new measures. The definition of those words has been scheduled for committee review in 2012.

Auto industry lobbyists immediately declared the legislation a victory for the American people and freedom, saying the technology obtained from independents would speed the process of recovery for automakers such as GM and Chrysler, which in return would aid in the recovery of billions of dollars of taxpayer expenditures related to the bailout of the automotive industry.

The auto industry lobby went on to state that they would be requesting a further $37 billion in loan funds to be made available to assist automakers with the adaptations necessary to make use of the new technologies developed by independents. A further $65,000 was requested to provide post-employment assistant packages for employees displaced by the measures, or about $12 per worker according to government figures. An additional $450 million was earmarked for costs associated with similar packages for the management of the dissolved companies.

Calls to Tesla Motors, CODA Automotive, and Aptera Motors were not immediately returned, although it is expected that announcements from these companies and many others will be made over the weekend.


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