How would you feel about a car that knows—and stores—everything about you, including how often you speed and whether you’re a seatbelt scofflaw? What if that technology could one day lower your insurance bills?
There are now more than 100,000 electric vehicles on U.S. roads. A new report from the boosters at the Electrification Coalition hails increasing -- if still small -- EV sales and lays out some optimistic projections.
Driving is stressful. To MIT researcher Kael Greco, piloting an automobile falls somewhere on the anxiety scale above giving a class presentation and below sky diving but just barely.
The rental car company Enterprise continues to expand into car and ride sharing through acquisition. This time, the industry giant picked up five year-old Zimride that helps people carpool on longer distance rides.
New York is trying a new tactic to stop teens from texting and driving: suspend their licenses after a first offense.
In less than a week, the first round of gas tax increases takes effect in Maryland. Supporters claim the new revenue will help fund new mass transit, road and bridge projects, but advocates of one road-widening project in Montgomery County hope it's not getting lost in the shuffle.
There are 66,405 "structurally deficient" bridges in the U.S., about one in every nine, according to a new study from Transportation 4 America. That's down from just shy of 70,000 two years ago, but the pace of repair is slowing and many more bridges are reaching the end of their intended 50-year lifespan. Recent funding changes in Congress are exacerbating maintenance problems, T4A concludes.
(Paul Kiel, ProPublica) Quick, how many billions in the red are taxpayers on the bailout of GM? AIG? Fannie and Freddie? Is it true that the government has reaped a profit from bailing out the banks?
It should be easy to find answers to such questions. But while it's a snap to find rosy administration claims about the bailout, finding hard numbers is much more difficult. That's why, since the bailouts began in 2008, we've maintained a frequently updated site to provide them. Now we've retooled our database to make it even easier to find these sorts of answers.
So you can effortlessly discover that it's $27 billion for GM, $23 billion for AIG, $91 billion for Fannie, $51 billion for Freddie, and yes, the bank investments have so far returned a profit of $19 billion.
We also make it easy for you to see which investments have resulted in losses (39 so far in total) and to sort bailout recipients by how far in the red or black they are. As always, our scorecard page adds it all up and shows where both bailouts — the Troubled Asset Relief Program, better known as TARP ($55 billion in the red) and Fannie and Freddie (negative $142 billion) — stand right now.
Ultimately, the bailout of GM seems likely to result in the TARP's single biggest loss. But since the government still holds about a third of the company's stock (currently worth about $10 billion), we don't include it on our list of losers yet. It's possible the government will sell the stock for more than it's currently worth, recouping more of its investment.
For now, the reigning bust is the $2.3 billion investment in the bank CIT, which landed in bankruptcy less than a year after its bailout. Second on the list is Chrysler, which resulted in a $1.3 billion loss.
"The government's financial stability programs are expected to cost far less than many had once feared during the crisis, and we're continuing to make significant progress recovering taxpayer investments," said a Treasury spokesman.
Over time, that list of losing investments is likely to grow far beyond 39, because many of the smaller banks that have yet to repay the government are struggling. Although more than 300 banks have exited TARP (often repaying with money from another government bank program), nearly 400 remain. Of those, 162 are behind on their dividend payments to the Treasury Department. According to the GAO, the banks that are languishing in TARP tend to be weaker than those that have left, and at least 130 appear on a secret "problem bank" list kept by regulators.
The TARP's main bank program was supposed to be reserved for healthy banks, but among the losing investments are banks that were troubled even when they first received the money. Central Pacific Financial, a Hawaii bank, got its $135 million in early 2009 despite regulators having just ordered it to raise additional capital. As we reported then, the approval came two weeks after staff for Sen. Daniel Inouye, D-Hawaii, who had helped establish the bank and owned a large amount of the bank's stock, inquired about the bank's application for funds. Both regulators and Treasury denied that the inquiry affected their decision. Taxpayers ultimately lost $61 million from the investment.
Also notable among the failed investments is South Financial Group. The bank received a $347 million government investment in 2008 about a month after its former CEO, Mack Whittle, retired with a $18 million golden parachute. Taxpayers ultimately lost $200 million while the CEO kept his package. Contacted by ProPublica, Whittle said, "I founded [South Financial Group] in 1986 and take offense that anyone would imply that retirement benefits were not warranted." He added that the benefits had been negotiated long before he announced his retirement in the summer of 2008 and that he'd retired by the time the bank applied for TARP funds.
Of course, the government has already turned a profit on its bank investments overall, because the biggest bailouts — particularly Citigroup and Bank of America (each received $45 billion) — resulted in large profits. None of the banks remaining in TARP have net outstanding amounts over one billion dollars.
The Treasury wants to get rid of those remaining bank investments as soon as it can — even when that means selling stakes in apparently healthy banks for a discount, as ProPublica's Jesse Eisinger reported last month.
What defines a profit? So far, the Treasury has allowed many banks to exit TARP after receiving most, but not all, of the amount owed. But in cases where the Treasury received enough other revenue (e.g. through dividend payments) from the bank to result in a net gain, we label that investment as a profit. So far, that's been the case for 26 banks.
The final cost of the TARP, the Fannie, or the Freddie bailout isn't possible to know.
For the TARP, it depends on the biggest remaining investments: AIG and the remains of the auto bailout, GM and GMAC (now called Ally Financial). The net outstanding amount of those three companies together is about $61 billion. At this point, it seems likely that Treasury will ultimately recoup its bailout of AIG. The auto companies, on the other hand, seem likely to result in a loss approaching $20 billion, according to both Treasury Department and Congressional Budget Office estimates.
Another big factor is the TARP's housing programs, its mortgage modification program chief among them. Although Treasury set aside more than $40 billion for its various initiatives, less than $5 billion has been spent so far, a testament to the limited reach of the programs. Since those are subsidies, none of that money will be repaid, and any spending ups TARP's tab. Earlier this year, the CBO estimated that ultimately $16 billion would be spent.
Of course, all of these numbers benefit from being put in a broader context. The Obama administration argues that the TARP should be credited with blunting the force of the financial crisis and saving "more than one million American jobs." Critics like former TARP inspector general Neil Barofsky say the program may have stemmed the damage from the crisis, but it did so by largely preserving the broken too-big-to-fail system that caused the crisis. It's also worth mentioning that the Federal Reserve played an enormous role in supporting the biggest banks and allowing them to exit TARP.
The fate of the Fannie and Freddie bailouts is even harder to figure, although the Treasury recently announced that all of the companies' profits from now on will be handed over to Uncle Sam each quarter. Their tabs should decrease, but how quickly and for how long they'll be allowed to exist is unclear.
For now, our site provides a snapshot of the two bailouts as they actually stand. We've been at it since 2008, and we'll continue to update it frequently.
The recovery has been very good to the U.S. auto industry.
General Motors said Tuesday its August sales were double the company's expectations and are up 10 percent over 2011 numbers. Ford reports its numbers were up 13 percent. And Chrysler had its best August in five years, posting gains of 14 percent.
These numbers come at a fortuitous time for President Obama, who is making the $85 billion bailout of the auto industry a key talking point of his re-election campaign. Speaking Monday at a United Auto Workers rally in Ohio, Obama told the crowd: "If we had turned our backs on you, if we had thrown in the towel like that, GM and Chrysler wouldn’t exist today."
Read more about auto sales at NPR.
The United States filed a complaint against China with the World Trade Organization over what it says are unfair trade practices for imposing new duties on American-made cars.
According to the complaint, which was filed by the United States Trade Representative on Thursday, "the United States has requested dispute settlement consultations with China at the WTO in an attempt to eliminate these unfair duties."
Last year, Beijing imposed import tariffs ranging from 2 percent to 21.5 percent on larger cars and SUVs exported from the U.S. In 2011, the U.S. exported more than $3 billion of these automobiles to China.
China has argued that General Motors and Chrysler have benefited from government subsidies, enabling the companies to sell cars at less than fair market value -- thereby hurting the Chinese auto industry.
Word of the complaint came as President Obama kicked off a two-day bus tour of Pennsylvania and Ohio. Ohio, a swing state, is home to thousands of auto workers.
"Americans aren't afraid to compete," said the president, speaking at a campaign event in Maumee (OH). "We believe in competition. I believe in trade...so as long as we're competing on a fair playing field instead of an unfair playing field, we'll do just fine. But we're going to make sure that competition is fair."
White House spokesperson Jay Carney noted that this is the seventh such action taken against China, and denied the timing behind the announcement was politically motivated. "The fact is this is an action that has been in development for quite a long time." he said. "It simply can’t suddenly be a political action because it happens during the campaign."
China's once-booming auto industry is decelerating due to its slowing economy -- and its government's own efforts to get a handle on traffic. Earlier this month, Guangzhou became the third Chinese city to put a cap on annual car sales to combat growing traffic jams and pollution.
You can read a copy of the letter the USTR sent the WTO here.
There's optimism in Detroit. Back from bankruptcy the "Detroit Three" of GM, Chrysler and Ford are all making money and they're pouring money into engineering and designing cars that can go head to head with the best in the industry. The 2012 North American International Auto Show kicks off this week in Detroit.
Later today, President Obama plans to announce a major agreement between the White House and the nation’s top automakers. By 2025, cars sold domestically will have to drive 54.5 miles to the gallon. The president hopes this move will dramatically decrease the country’s need for foreign oil, but this agreement may also dramatically change the face of the American highway as we know it.
Toyota announced that it would suspend U.S. production for one week beginning today. The car maker's decision in part due to problems with the Toyota supply chain, which was disrupted by March’s Sendai earthquake. However, it is unclear exactly what is causing the shutdown. To get to the bottom of the announcement, is Paul Eisenstein, publisher of website TheDetroitBureau.com.
(Detroit -- Jerome Vaughn, WDET) Ford Motor Company says it is adding 7,000 jobs to its workforce by the end of 2012. Ford President of the Americas Mark Fields made the announcement during the North American International Auto Show in Detroit on Monday.
“This year alone, Ford is adding nearly four thousand jobs at our U.S. plants. And we plan to add another 750 salaried jobs.” Fields says the Dearborn automaker plans to add another 2,500 additional manufacturing jobs in the U.S. next year.
General Motors has announced its second quarter earnings of $1.3 billion. There had been much anticipation surrounding this report, as many were speculating that GM, which came out of Chapter 11 bankruptcy last year. This means that they earned more than $2 billion dollars in the first six months of this year. This is a major turnaround for the company, even though they have a long way to go to make up for the losses that forced them into bankruptcy.
Blind people and advocates for the blind liken it to walking on the moon: The National Federation of the Blind has joined forces with Virginia Tech to create a car that could be driven by passengers who do not have the use of their sight. The car, slated at this point for a 2011 release, uses hand sensors, speaking computer directives and other forms of cutting-edge technology to aid their visibility-challenged drivers.
A California man claims that while driving on a freeway near San Diego, his Toyota Prius took him for a 94 mph joy ride. Although nobody was injured, the incident immediately prompted a new investigation into the safety of the vehicle. Louise Story, Wall Street and finance reporter for The New York Times, estimates what this latest PR blow will cost the embattled Japanese automaker.
Advertisements for extended auto warranties are everywhere on television and in mailboxes, but some customers have been complaining that when the repair bills come due, the warranty guarantors are nowhere to be found. Consumer watchdogs are looking sharply at some of the warranty companies, and reporter Scott Graf, from WFAE in Charlotte, NC, says it looks like the boom times for bogus insurance may be ending.