A Global Concern

By November 13, 2008Economy, Labor Unions, Trade

Reuters, “Toyota wants German bank help extended to leasing“:

FRANKFURT, Nov 13 (Reuters) – The German government should extend its rescue package for financial institutions holding banking licences to those that lease vehicles, the head of Toyota Motor Corp’s German banking unit said…”The bailout hardly helps the auto industry,” said Peter Pollhammer, deputy head of the German association for consumer lending that represents carmakers’ banking arms.

AFP, “Ford asks German government for help“:

BERLIN: US automaker Ford has asked Berlin for aid but the government is divided on how to help Germany’s key but troubled industrial sector. After General Motors’ German subsidiary Opel, a second US group implanted in Germany has thus turned to Chancellor Angela Merkel for aid. …”We sent a letter on the same day as Opel,” a Ford spokesman told the Sueddeutsche Zeiting newspaper yesterday. Both auto makers have pressed the government for tax measures that would boost the sale of new cars, but neither has received a reponse for the time being, the report said.

Ward’s Auto (subscription), “Oz Government Says Won’t Turn Back on Auto Industry“:

We’re there to stand shoulder-to-shoulder with the industry because it’s absolutely at the backbone of Australian manufacturing,” says Industry Minister Kim Carr.

The National Post (Canada), editorial, “If a bailout is necessary, make sure it works“:

[In] an ideal world, we would oppose the bailout packages for automakers purportedly coming soon from Ottawa and Washington. Did taxpayers approve labour contracts with unionized workers that make it uneconomic for the North American Big Three manufacturers to make cars? Did ordinary Canadians fail to retool auto plants to produce the smaller, more fuel efficient vehicles consumers are demanding? The answers, of course, are no. So why then should taxpayers save the backsides of those who did?

The trouble is, we do not live in an ideal world. To create the conditions that would encourage market-driven corporate governance reforms would take years of political and voter education. Politicians, workers and taxpayers would have to be shown how the short-term economic pain caused by permitting large companies to go under is actually beneficial to long-term corporate and individual success. Laws governing director and investor responsibilities would have to be redrafted. And citizens would have to be disabused of the myth they hold about the effectiveness of government regulators to prevent catastrophes. The Sarbanes-Oxley legislation — considered the most comprehensive regulations in history on corporate transparency and stock trading — introduced in the United States after the collapse of Enron, Worldcom and others, did little to prevent the current crisis while at the same time adding billions to the cost of doing business in North America.

But such a change of legislation and of mindset would take a generation. In the mean time, the auto industry accounts for just under 10% of our entire economy. According to Statistics Canada, near 20¢ of every retail dollar is spent on new cars. That’s more than on food, clothing, vacations and electronics. Well over half a million Canadians are employed by car manufacturers, parts makers, dealerships and service stations.

Read the whole thing.

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