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Do you think Ford or GM's bailout plan is better?

Ford notes that their company has sufficient liquidity to survive the economic recession as long as it doesn't last too long, but requests a $9 billion "stand-by" line of credit in case they need it. Ford's plan focuses on plug-in hybrids and electric vehicles, not mentioning hybrids and only briefly mentioning biofuels (flex-fuel vehicles). "The next major step in Ford’s plan is to increase over time the volume of electrified vehicles, as battery costs improve and as the transition from Hybrids to Plug-in Hybrids to Battery Electric Vehicles occurs. Next month at the North American International Auto Show in Detroit, we will discuss in detail Ford’s accelerated vehicle electrification plan, which includes bringing to market by 2012 a family of hybrids, plug-in hybrids and battery electric vehicles. Our work will include partnering with battery and powertrain systems suppliers to deliver a full battery electric vehicle (BEV) in a van-type vehicle for commercial fleet use in 2010 and a BEV sedan in 2011. We will develop these vehicles in a manner that enables us to reduce costs and ultimately makes battery electric powered vehicles more affordable for consumers." http://online.wsj.com/public/resources/documents/Ford_Motor_Company_Business_Plan122008.pdf GM asks for an $18 billion term loan, including up to $10 billion by March '09. "GM will launch the ground-breaking Chevrolet Volt in 2010. As indicated in Table 8, GM is investing over $750 million in the Volt and its propulsion system, prototypes of which are currently on test at GM‘s Milford Proving Grounds. An extended-range electric vehicle, the Volt will deliver up to 40 miles on a single electric charge, well within the daily commute of approximately 80% of Americans." "General Motors will also continue to invest in hydrogen fuel cell technology" "The Plan includes further increases in flex-fuel and hybrid-equipped vehicles. In 2012, over 50% of GM‘s new vehicle sales will be flex-fuel capable. Regarding hybrids, GM offers six models today – more than any other manufacturer – and will introduce the VUE Two-Mode hybrid, along with the Silverado and Sierra hybrids in 2009. By 2012, GM will offer 15 hybrid models." http://gmfactsandfiction.com/wp-content/uploads/2008/12/restructuring-plan-for-long-term-viability.pdf http://climateprogress.org/2008/12/02/bailout-plans-ford-drops-hydrogen-cars-while-gm-remains-confused-about-ethanol/#more-4345 What do you think of these plans, and whose bailout plan do you prefer?

Public Comments

1. in my opinion they are both rubbish... if i wanted a loan on a business plan that resolved around the market recovering and emerging technology becoming more affordable the bankers would laugh me out of their bank.... but we accept this from a car company because they are big? the car companies have been in trouble for the last decade... although they are blaming the current economic meltdown.. that is simply an alibi.. not the root cause of the problem
2. I think the auto industry leaders of these united states are idiots-less than that. Why allow them room to destroy the taxpayer further? These idiots are the laughing stock of the world! Have you any common sense left? Are you an american ass with no morality? Get your ass out of the fire and stand up for what this country was founded on. If you wont-many around you will! Stand-up or wither-this is the choice.
3. there will be no choice in plans, it's all or nothing. I'd tell GM and Ford to stop researching cars and just build them. They already have fuel efficient cars made under Mazda, Opel, and in other foriegn plants. We do not need no H2 fuel cell cars, they make no logical thermodynamic sense. Tell them they can both build only 20,000 stupid SUV's and trucks, they auction them off to highest bidded. This will pay down and load quickly, a Cadallic escalade will run $80,000 and only cost $30,000 to build. This is 1 billion per year in added revenue.
4. Hydrogen is a dead-end for the foreseeable future but both companies offer compelling alternatives. Flex fuels and plug-in hybrids are good interim steps until we have better batteries or capacitors to power our cars and the infrastructure to keep them powered. The Chevy Volt is very promising but it's going to cost so much that a large tax rebate or other incentive will be required for it to be widely adopted in a short time. We need to stop using prime farmland to produce fuel, it's among the stupidest ideas ever, especially when you can use switchgrass or algae on marginal land and produce several times as much ethanol per acre as you can from corn. Alas, the politicians are in charge of this so I don't expect much insight to be shown. Overall, I like Ford's plan better because it's cheaper and seems to bypass the folly of hydrogen (which will probably only be a good energy source when we have fusion reactors). The GM plan costs more but offers flex-fuel options and talks about the new for hybrids. In reality we have no choice, politicians simply won't let millions of manufacturing jobs (all union jobs) go away. In either case this is just a down payment on what it will cost to transition from fossil fuels but since the auto makers need loans the government can exert pressure they would otherwise never accept. Such as mandating electric, hybrid and flex-fuel cars. The next problem is getting people to give up their gas guzzler but once the world economy rebounds gas prices will skyrocket higher than ever, and that might help change minds. Both plans seem to overlook the fact that even with loans, it may be years until car sales recover to last year's levels so they may need to do some major downsizing until then. With the unions involved that's unlikely so I expect more loans to be requested unless they find a way to force us to buy cars when we're not sure we'll have a job next month.