Thursday, October 1, 2009

What’s Wrong with this Picture? Saturn vs. Finland

Former Vice President Al Gore gets a $529 million dollar U.S. government loan for a car company in Finland to build an $89,000 (green car) hybrid. The loan comes from a $25 billion program established by Congress in 2007 to help automakers meet a congressional mandate on fuel efficiency.

Usually companies go to private venture capitalist to finance projects such as this. Did the company approach any private venture capitalist companies for financing? Could it be that no private company was interested in the project?

How is loaning money to a Finnish car company going to help Americans and the economy?

Chrysler and General Motors received government bailout money, even though Chrysler was a privately held company. Saturn was a unit of GM and was in talks to be acquired by Penske. Saturn was named Car of the Year in 2007 and Best Family Car in 2008.

When the Saturn Penske deal fell through GM announced it will be shutting down the Saturn unit and closing over 400 Saturn dealerships, putting more Americans out of work. One of the reasons for the deal not going through was Saturn did not have a plant to produce the cars.

What is wrong with this picture? The U.S. is loaning money to a car company from Finland, yet the Saturn car company is being closed.

There is a closed Chrysler auto plant in Fenton Mo. Did the Saturn representatives contemplate getting a loan from the above fund and open up the Fenton plant? Wouldn’t it be better to loan the money to an American company, to build cars by Americans in America?

Greg Zotta

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