The Worldwide Race To Save The Car Industry

As we race our trading partners to see who can disguise their subsidies more adeptly, here is a rather neat compilation from the Guardian as to the efforts so far.

USOn top of a $17.4bn (£12.4bn) lifeline handed to GM and Chrysler, the government has pledged $6bn to support General Motors’s finance arm. GM has agreed to restrictions on dividend payouts and executive pay.

Germany has offered an “old banger bonus” – a €2,500 (£2,344) bounty for owners of cars of nine years or older willing to trade them in for new or nearly new models. The government has put aside €1.5bn to finance the scheme – enough to buy 600,000 cars.

FranceThe government has offered its carmakers up to €6bn. The pan-European carmakers’ body ACEA, demanding €40bn in aid, fears sales could drop by up to 20%, with as many as 200,000 jobs at risk. Included in the French deal is an offer of €1bn to the finance arms of Renault and Peugeot Citroën.

JapanMore than 2,000 managers at Toyota have been “encouraged” to buy the firm’s cars in an attempt to boost morale, as Japan’s biggest carmaker reacts to its first operating loss in more than 70 years. The company said its managers had agreed to the unprecedented move at informal meetings last month, and insisted they would not be coerced into buying or punished if they failed to do so. Toyota is to halt production at all 12 of its Japanese plants for 11 days in February and March.

This compilation is part of a story about new British measures to fortify their auto industry. The rationale that they offer may resonate with you.

Defending yesterday’s move Mandelson said the industry was “not a lame duck”; this was “no bail-out”.

The loans are designed to help a “high technology” and potentially green industry, two of the key criteria for state aid under Mandelson’s brand of industrial activism. The pharmaceuticals industry is probably next in line for help.

Yes, indeed, they can’t stand on their own two feet but wrap it in the “green” flag and it passes muster. Note that Lord Mandelson did not defend his actions with any sort of business case, rather he asserted, as U.S. politicians are wont to do when faced with no other justification, that the action was for the collective greater good.

They are the same all over the world.

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