The Corner

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California vs. Detroit


I report in the Detroit News today on how Silicon Valley automakers like Tesla are tapping the $25 billion in auto retooling money. The article exposes the tensions between powerful California and Michigan lawmakers over whether startup automakers are eligible for bailout monies is holding up passage of billions in loans for the Detroit Three.

Think the $25 billion is to help save the Big Three automakers and preserve manufacturing facilities essential to national security? Think again.

Detroit automakers’ best hope for Washington aid is a bipartisan plan to speed the release of $25 billion in already-approved loans under the Energy Independence and Security Act (EISA). But long-simmering hostilities between the California and Michigan delegations on auto issues threaten the deal. California legislators want that money to subsidize their own Silicon Valley-based auto industry, which they argue is the future of American transportation.

In fact, Tesla Motors, a struggling San Jose start-up manufacturer of electric cars in Feinstein’s back yard, has already applied for $400 million in EISA loans to build a new plant for making a luxury $60,000, battery-powered family sedan.

 – Henry Payne is an editorial cartoonist and writer for the Detroit News.