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By Siding With Trump, Automakers Are Guaranteeing They’ll Need Another Government Bailout

Because General Motors, Fiat Chrysler and Toyota will be building cars in the U.S. they cannot sell anywhere else in the world, since most other countries already have stronger pollution and fuel efficiency standards.

So if something bad happens to the U.S. economy again: BAM! BAILOUT!

We’re not saying they’ll necessarily need a fistful of taxpayer guaranteed cash like they got when the U.S. government bailed out the auto industry at the end of 2008. Nor are we saying the government will again have to use taxpayer money to buy up auto industry stock.

We are saying it makes this Tweet from Trump utterly absurd:

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Carmakers didn’t mess up because California was putting undue pressure on them. Nor were they a first-line victim of the financial crisis. They got into trouble because they made products that weren’t fuel efficient enough, so when people became poorer as a result of the Recession, and gas prices went up at the same time, people stopped buying them.

So what does Trump want to do? Let them do it all over again if they want. And GM and Fiat Chrysler are cheering him on. They recently said they’d back the President’s plan to challenge California’s stricter rules on car emissions.

Even after all the federal government’s help to get them out of the hole in the first place. But for Trump’s plan to work, they’re going to need a hand with something else from the government. Protection.

Something to keep more advanced cars from overseas out of the U.S. market, or make them too expensive for most Americans to buy. So some form of tariffs or other import bans. Trump’s almost always on board with those, though. (Even though it’s Socialism.) Also, Trump’s been pushing hard for lower tariffs on U.S.-made cars exported to countries like China. But what’s the point if no one there or elsewhere will want to or be allowed to drive them?

And it isn’t just U.S. automakers that are weighing in on the Trump/California dispute: you may have noticed Toyota says they’re on Trump’s side too. Although they might have a strategic interest in keeping Trump happy, especially since BMW and Volkswagen have already sided with California, so are on the ‘wrong’ side as far as Trump’s concerned. (Honda is with California too, although recently it’s been wavering.)

Ford (which was the only U.S. carmaker that stayed strong enough not to need a bailout), has also already sided with California, and faces a Justice Department investigation as a result. The automakers who made the earlier deal with California were ready to accept standards similar to those worked out during the Obama administration of 51 mpg average by 2026. (Seem out of reach? We just rented a mid-size Toyota hybrid which averaged exactly 51 mpg for us. Already.)

On the surface, it looks like the automakers trying to curry Trump’s favor are trying to preserve their ability to sell lots of gas-guzzling SUV’s, which wealthy Americans seem to love.

Dig deeper and you’ll find it also amounts to a tax on poor people. While rich people might be more likely to buy gas guzzlers, they’re also often willing to pay more for safer, more technologically advanced, less polluting, more fuel efficient cars because, well, they can afford to. And they want all the latest gadgets and safety options and can afford to pay for those too.

So the cheaper cars Trump wants to put America’s drivers into will be for less wealthy consumers, who then won’t be able to afford the gas they need to operate them.

That isn’t our opinion. That’s the government’s. Although Trump never lays it out that way, it’s a big part of the reason behind his argument that less fuel efficient/more polluting cars will save consumers money. It’s in the EPA’s own “Fact Sheet”. (Which as we’ve pointed out before, actually contains no facts, only predictions. But never mind that.) The EPA predicts a big chunk of Trump’s promised savings to consumers (which — typical Trump — keeps becoming bigger and bigger), comes from the fact that auto insurance rates should go down because with less fuel efficient cars on the road, people won’t be able to afford to drive as much, so they’ll get into fewer accidents. That part of it (which is a big part) has nothing to do with supporting or making things fairer for consumers. In fact, it’s making things less fair for consumers.

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