Auto Bailout Aff

Auto bailout 1AC Matt Symonds Contention 1 is inherency 1. The auto bailout bill collapsed under political turmoil in the Senate last Thursday, and it’s certain to take the economy with it unless somebody does something quick! Associated Press December 11th (2008, Julie Hirschfeld Davis and Ken Thomas, “Auto bailout talks collapse over union wages”, http://www.google.com/hostednews/ap/article/ALeqM5gbjFY-o07QeryRxtFR3oC1w_v1PwD950U4OO0)

A $14 billion emergency bailout for U.S. automakers collapsed in the Senate Thursday night after the United Auto Workers refused to accede to Republican demands for swift wage cuts. Senate Majority Leader Harry Reid said he was "terribly disappointed" about the demise of an emerging bipartisan deal to rescue Detroit's Big Three. He spoke shortly after Republicans left a closed-door meeting where they balked at giving the automakers federal aid unless their powerful union agreed to slash wages next year to bring them into line with those of Japanese carmakers. Republican Sen. George V. Voinovich of Ohio, a strong bailout supporter, said the UAW was willing to make the cuts — but not until 2011. Reid was working to set a swift test vote on the measure Thursday night, but it was just a formality. The bill was virtually certain to fail to reach the 60-vote threshold it would need to clear to advance. Reid called the bill's collapse "a loss for the country," adding "I dread looking at Wall Street tomorrow. It's not going to be a pleasant sight." The implosion followed an unprecedented marathon set of talks at the Capitol among labor, the auto industry and lawmakers who bargained into the night in efforts to salvage the auto bailout at a time of soaring job losses and widespread economic turmoil. "In the midst of already deep and troubling economic times, we are about to add to that by walking away," said Sen. Chris Dodd, D-Conn., the Banking Committee chairman who led negotiations on the package. 2. Demand for hybrids has sunk with declining demand for oil due to the economic downturn Green Tech Media December 12th 2008 (Jeff St. John, Green Tech Media is an online-media company comprised of cutting-edge news, in-depth market research, and focused industry events, “Auto Bailout Dies; Will Green Pledges Follow Suit?”, http://www.greentechmedia.com/articles/auto-bailout-dies-will-green-pledgesfollow-suit-5359.html)

Beyond the immediate problems facing the Big Three, they and other automakers could face even stronger headwinds when it comes to selling more fuel-efficient vehicles. While carmakers have seen overall sales decline, plummeting gasoline prices have put an even greater crimp on sales of hybrid vehicles, Green Car Congress reported. Sales of hybrids in November fell 50 percent from the same month last year to stand at 16,571 vehicles, little better than sales volume back in November 2005. That included a fall in sales of Toyota's market-leading Prius hybrid, which fell 48.3 percent to 8,660, a low not seen since January 2007.

Thus the plan: If General Motors Corporation, Ford Motor Company and/or Chrysler LLC enter into long-term agreements to make substantial investments into the commercial production of hybrid, plug-in hybrid, and electric vehicles, the United States Congress will authorize financial assistance to these automobile manufacturers as designated in the Auto Industry Financing and Restructuring Act (H.R. 7321). We can clarify.

Auto bailout 1AC Matt Symonds Contention 2 is the Economy 1. The bailout would have led to an injection of $14 billion in loans and other forms of aid to the automakers. Without these funds, G.M. and Chrysler are doomed to bankruptcy by year’s end – Ford will follow soon afterward The Guardian December 12th (2008, Dan Milmo is the Guardian's transport correspondent, A Big Three US carmaker bankruptcy could be 'tipping point', http://www.guardian.co.uk/business/2008/dec/12/gm-chrysler-ford-tipping-point)

Auto industry experts have warned that the bankruptcy of General Motors or Chrysler will have a devastating effect on the US economy and could endanger other manufacturers including Ford. The cash needs of GM and Chrysler are the most immediate and they have asked for a total of $14bn (£9.3bn) in federal funds to prevent them going under before the month end. Chrysler, whose finances are in the most parlous state, burned through $3bn in the third quarter of 2008 and has just $6.1bn in cash remaining. Over the same period, GM used up a higherthan-expected $6.9bn and has reserves of $16.2bn. Both companies have enough cash to survive past Christmas if

they maintained the same burn rate but a dramatic slump in car sales has transformed their survival prospects, making the need for a $14bn infusion immediate. 2. A G.M. or Chrysler bankruptcy would send the U.S. economy skydiving without a parachute Bloomberg December 12th (2008, Bloomberg is a financial news and data service founded by Michael Bloomberg, current mayor of New York, in 1981, “GM, Chrysler Bankruptcies Would Cause Turmoil for U.S. Economy”, http://www.bloomberg.com/apps/news?pid=20601087&sid=aq2JHRpdTeW8)

A bankruptcy filing by General Motors Corp. or Chrysler LLC might send the U.S. economy into chaos within weeks if it led to a shutdown at the companies. Industry experts and economists say the automakers would close plants, fire tens of thousands of workers and cut production. That would cause many of their suppliers to collapse, triggering more job losses, straining the cities and states where the car and parts companies operate, as well as federal safety-net programs. It would also deliver another psychological blow to consumers and a major shock to Main Street following the crises on Wall Street. “The auto industry is a key element in the economy,” said Bob Schnorbus, chief economist at J.D. Power & Associates in Troy, Michigan. “Anything that disrupts it is going to slow the economy down more than we have already seen.” Economists say it’s difficult to estimate the full impact, given the large number of possible scenarios. The outcome hinges on which companies filed for bankruptcy and when, and whether they would be able to continue building cars and trucks while in reorganization -- assuming they don’t go into liquidation. “It would be unprecedented,” says Stephen Stanley, chief economist at RBS Greenwich Capital in Greenwich, Connecticut. “So it’s hard to say exactly what would happen.” Still, a GM or Chrysler

bankruptcy “would be the start of a cascade of failures,” says Dennis Virag, president of Automotive Consulting Group in Ann Arbor, Michigan. “The economy will be in chaos within weeks.”

4. Independently, US automaker collapse cripples world stock market and international economy Associated Press December 12th (2008, Pan Pylas, “World markets plunge on US auto bailout failure”, http://www.google.com/hostednews/ap/article/ALeqM5h3kgMAkbLwyfxBdjzw8Pc4KZ7DhQD95172S00)

World stock markets plunged Friday as the U.S. Senate's rejection of a $14 billion deal to rescue Detroit's automakers and further grim economic data stoked concerns that the recession in the world's largest economy will be longer and deeper than expected. The FTSE 100 of leading British shares was down 169.74 points, or 3.9 percent, at 4,218.95, while Germany's DAX fell 230.35 points, or 4.8 percent, to 4,536.85. The CAC-40 in France fell 181.02 points, or 5.5 percent, to 3,125.11. Earlier, Asian markets tumbled, with Japan's Nikkei 225 stock average down 484.68 points, or 5.6 percent, to 8,235.87. Hong Kong's Hang Seng index slid 5.5 percent to 14,758.39.

Auto bailout 1AC Matt Symonds

5. A collapse in the US economy collapses world economy Mead 2004 (Walter Russell, Kissinger Senior Fellow at the Council of Foreign Relations, Foreign Policy, March 1st, http://www.foreignpolicy.com/story/cms.php?story_id=2504)

Similarly, in the last 60 years, as foreigners have acquired a greater value in the United States--government and private bonds, direct and portfolio private investments--more and more of them have acquired an interest in maintaining the strength of the U.S.-led system. A collapse of the U.S. economy and the ruin of the dollar would do more than dent the prosperity of the United States. Without their best customer, countries including China and Japan would fall into depressions. The financial strength of every country would be severely shaken should the United States collapse. Under those circumstances, debt becomes a strength, not a weakness, and other countries fear to break with the United States because they need its market and own its securities. Of course, pressed too far, a large national debt can turn from a source of strength to a crippling liability, and the United States must continue to justify other countries' faith by maintaining its long-term record of meeting its financial obligations. But, like Samson in the temple of the Philistines, a collapsing U.S. economy would inflict enormous, unacceptable damage on the rest of the world. That is sticky power with a vengeance. 6. Economic collapse risks global nuclear war Mead 1992 (Walter Russell, Kissinger Senior Fellow at the Council of Foreign Relations, Analyst, World Policy Institute New Perspectives Quarterly, Vol. 9 No. 3, Summer)

If so, this new failure – the failure to develop an international system to hedge against the possibility of worldwide depression – will open their eyes to their folly. Hundreds of millions—billions—of people have pinned their hopes on the international market economy. They and their leaders have embraced market principles--and drawn closer to the West--because they believe that our system can work for them. But what if it can't? What if the global economy stagnates—or even shrinks? In that case, we will face a new period of international conflict: South against North, rich against poor. Russia, China, India—these countries with their billions of people and their nuclear weapons will pose a much greater danger to world order than Germany and Japan did in the '30s. 7. Economic decline causes extinction. Bearden 2000 (T.E. Bearden LTC U.S. Army (ret) Director of Association of Distinguished American Scientists and Fellow Emeritus, Alpha Foundation’s Institute for Advanced Study, The Unnecessary Energy Crisis: How to Solve It Quickly, 6-24-2k, http://www.seaspower.com/EnergyCrisisBearden.htm)

History bears out that desperate nations take desperate actions. Prior to the final economic collapse, the stress on nations will have increased the intensity and number of their conflicts, to the point where the arsenals of weapons of mass destruction (WMD) now possessed by some 25 nations, are almost certain to be released. As an example, suppose a starving North Korea launches nuclear weapons upon Japan and South Korea, including U.S. forces there, in a spasmodic suicidal response. Or suppose a desperate China, whose long-range nuclear missiles (some) can reach the United States, attacks Taiwan. In addition to immediate responses, the mutual treaties involved in such scenarios will quickly draw other nations into the conflict, escalating it significantly. Strategic nuclear studies have shown for decades that, under such extreme stress conditions, once a few nukes are launched, adversaries and potential adversaries are then compelled to launch on perception of preparations by one's adversary. The real legacy of the MAD concept is this side of the MAD coin that is almost never discussed. Without effective defense, the only chance a nation has to survive at all is to launch immediate full-bore pre-emptive strikes and try to take out its perceived foes as rapidly and massively as possible. As the studies showed, rapid escalation to full WMD exchange occurs. Today, a great percent of the WMD arsenals that will be unleashed, are already on site within the United States itself . The resulting great Armageddon will destroy civilization as we know it, and perhaps most of the biosphere, at least for many decades.

Auto bailout 1AC Matt Symonds Contention 3 is oil dependency 1.

3. Terrorism risks extinction Yonah 2003 (8/28Alexander, Inter-University for Terrorism Studies Director, The Washington Times, "Terrorism myths and realities,")

Last week's brutal suicide bombings in Baghdad and Jerusalem have once again illustrated dramatically that the international community failed, thus far at least, to understand the magnitude and implications of the terrorist threats to the very survival of civilization itself. Even the United States and Israel have for decades tended to regard terrorism as a mere tactical nuisance or irritant rather than a critical strategic challenge to their national security concerns. It is not surprising, therefore, that on September 11, 2001, Americans were stunned by the unprecedented tragedy of 19 al Qaeda terrorists striking a devastating blow at the center of the nation's commercial and military powers. Likewise, Israel and its citizens, despite the collapse of the Oslo Agreements of 1993 and numerous acts of terrorism triggered by the second intifada that began almost three years ago, are still "shocked" by each suicide attack at a time of intensive diplomatic efforts to revive the moribund peace process through the now revoked ceasefire arrangements [hudna]. Why are the United States and Israel, as well as scores of other countries affected by the universal nightmare of modern terrorism surprised by new terrorist "surprises"? There are many reasons, including misunderstanding of the manifold specific factors that contribute to terrorism's expansion, such as lack of a universal definition of terrorism, the religionization of politics, double standards of morality, weak punishment of terrorists, and the exploitation of the media by terrorist propaganda and psychological warfare. Unlike their historical counterparts, contemporary terrorists have introduced a new scale of violence in terms of conventional and unconventional threats and impact. The internationalization and brutalization of current and future terrorism make it clear we have entered an Age of Super Terrorism [e.g. biological, chemical, radiological, nuclear and cyber] with its serious implications concerning national, regional and global security concerns.

Auto bailout 1AC Matt Symonds

3. Plug-in hybrids and other electric vehicles get us off of oil fastest. Brookings Institution 2007 (Januray 22nd, David Sandalow is Energy and Environment Scholar at The Brookings Institution, “ENDING OIL DEPENDENCE”, http://www.brookings.edu/views/papers/fellows/sandalow20070122.pdf)

To reduce oil dependence, nothing would do more good more quickly than making cars that could connect to the electric grid. The United States has a vast infrastructure for generating electric power. However, that infrastructure is essentially useless in trying to cut oil dependence, because modern cars can't connect to it. If we could build cars that ran on electricity and plugged into the grid, the potential for displacing oil would be enormous. Fortunately, we can. Several small companies are already doing this, with a first generation of “plug-in hybrid” engines designed to run both on gasoline and electricity from the grid. General Motors recently announced plans to produce light duty plug-ins.

Auto bailout 1AC Matt Symonds Contention 4 is solvency 1. The big three automakers will agree to the terms for the bailout – they already have plans in place to produce a substantial number of hybrid and electric vehicles in the next four years – the plan gives them the money they need and holds them to their word Green Tech Media December 12th (2008, Jeff St. John, Green Tech Media is an online-media company comprised of cutting-edge news, in-depth market research, and focused industry events, “Auto Bailout Dies; Will Green Pledges Follow Suit?”, http://www.greentechmedia.com/articles/auto-bailout-dies-will-greenpledges-follow-suit-5359.html)

Automakers have seen sales crash in recent months. General Motors' sales fell 41 percent in November while Ford, Toyota and Honda saw sales drop in the 30 percent to 32 percent range. GM and Chrysler could face imminent collapse without emergency funding, analysts have warned. In seeking that funding, GM CEO Rick Wagoner had asked Congress earlier this month for an immediate $4 billion as part of an overall request of $12 billion in short term loans and a $6 billion line of credit to cope with a continued downturn in the market. In return, he said GM would "launch predominantly high mileage, energy-efficient cars" in the next four years. On the hybrid and electric vehicle front, Wagoner said the anticipated 2010 launch of its hybrid Chevy Volt would be followed by up to 15 hybrid models by 2012, as well as a fleet made up of half flex-fuel vehicles that can run on mostly-ethanol fuel. Chrysler LLC Chairman and CEO Robert L. Nardelli had asked for a $7 billion bridge loan and pledged in turn changes including a new push to make "fuel-efficient cars and trucks that people want to buy." Nardelli promised a 2009 fleet that would have 73 percent more fuel-efficient vehicles from this year, as well as the company's first electric-drive vehicle in 2010. By 2013, Chrysler wants to have 500,000 electric-drive vehicles will be on the road. 2. The right technology is here and ready to go - the economic barriers to the use of plug-in hybrids and electric cars will dissolve once these cars are put into mass production by auto makers Brookings Institution 2007 (Januray 22nd, David Sandalow is Energy and Environment Scholar at The Brookings Institution, “ENDING OIL DEPENDENCE”, http://www.brookings.edu/views/papers/fellows/sandalow20070122.pdf)

Historically, electric cars have been limited by several factors, including a short driving range (think golf carts), battery weight and cost. The driving range problem is solved by hybrid engines, which draw energy first from the battery packs and then from the gas tank when batteries are depleted. The weight problem is being addressed with new kinds of batteries made with nickel or lithium. Upfront costs are still high – roughly $5,000-$6,000 more than a standard internal combustion engine – but well within range of commercial acceptability. (Conventional hybrids cost $2,000-$3,000 more than a standard internal combustion engine and have demonstrated strong consumer appeal.) Purchase costs are expected to drop sharply once plug-in hybrid electric vehicles (PHEVs) are in mass production.

3. Renewables like solar, wind, geothermal and other clean energies will power these cars through new infrastructure coming in the status quo Fortune Magazine November 2008 (November 5th, Marc Gunther, senior writer, http://money.cnn.com/2008/11/04/technology/green_investments.fortune/?postversion=2008110508)

But, he notes, the federal financial rescue bill enacted into law last month includes tax credits for solar, wind, geothermal and fuel cell companies: "That'll be a shot in the arm for our renewable energy businesses." Solyndra, for instance, has sold more than $1 billion of its solar energy systems but nearly all to European customers. The favorable tax treatment should open up the U.S. market. Salzman is another experienced VC he is CEO of VantagePoint, and has been a successful venture investor for 20 years - who says that long-term trends all favor clean energy. VantagePoint's investments include BrightSource Energy, which builds utility-scale solar thermal power plants, and Better Place, which has a bold plan to build a global infrastructure for electric cars. "The world is industrializing, and with that comes a great demand for all natural resources - clean water, energy and materials," Salzman says. "A billion and a half people have no electricity. Do we really think that's going to continue?"

Auto bailout 1AC Matt Symonds