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Filed under: Etc. , Humor 2008 is at an end, and while the editorial pages of some newspapers spend the final days of December focusing on ways to further burden taxpayers and foment interstate hostility , the Washington Post Magazine has, thankfully, handed several pages over to Dave Barry who, as usual, makes the events of the past year actually seem funny. This includes car-related stuff like the farcical Detroit bailout proceedings, which often bordered on satire. Fortunately, Barry knows exactly how to handle that sort of thing, and does so much in the same way David Ortiz handles a hanging curveball with runners in scoring position. Hilarity ensues on many fronts, except maybe inside the executive boardrooms of GM and Chrysler, the latter of which earns mention in Dave's June summary with, "In economic news, Chrysler announces a plan to lay off workers who have not been born yet." This year-end recap is best appreciated as a whole, however, so if you're in a mood...
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Filed under: Government/Legal , Chrysler, LLC. , GM , Earnings/Financials President George W. Bush will doubtlessly be remembered for many things things, but his parting legacy may yet be his eleventh-hour pledge of $17.4 billion in low-interest loans to General Motors and Chrysler (Ford Motor Company has said it does not require relief at this time). The funding will reportedly come from the Troubled Asset Relief Program (TARP), the financial industry bailout package signed off on this fall. Up front, the White House will earmark $13.4 billion in short-term financing for December and January, and in February, another $4 billion will be disbursed, provided it can draw the funds from the second half of TARP's $700 billion. More details are doubtlessly coming, but the bridge loans appear to hinge largely on whether General Motors and Chrysler are deemed "viable" enterprises by the government. In the terms of the agreement, that means that the automakers must prove whether they...
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Filed under: Trends , Government/Legal , Earnings/Financials With the U.S. Senate denying the Detroit 3 relief plan, it looks like oil prices might continue to tumble. Our sibling site BloggingStocks is predicting barrel prices might drop as low as $35 as a result. This comes on the heels of predictions of higher prices in the near future. It had been thought that OPEC and possibly Russia would be curtailing production, which might have led to higher prices, but if the U.S. auto industry collapses, demand for oil could plummet. That would result in even lower oil and gas prices. In fact, oil prices started dropping Thursday night as soon as traders heard that Senate Republicans had blocked the bill, with barrel prices checking in at $44.76 as of Friday morning. We just saw regular unleaded for $1.59/gal at a station down the street this morning and thought we had woken up in 2000. Can sub-$1 gas be far away? [Source: BloggingStocks ] Oil may hit $35/barrel in wake of auto bailout bust originally...
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Filed under: Hybrids/Alternative , Etc. , Green , Tech , Chevrolet , GM , Earnings/Financials Click above for high-res gallery of the 2010 Chevy Volt Although they're a big part of the Congressional pitch to get some federal funds, green cars aren't going to make the Detroit 3 profitable on their own any time soon. Take the Chevrolet Volt for example. When GM CEO Rick Wagoner testified that the Volt is being pushed into production for 2011, he added that, "It will not be at that point fully cost competitive." That statement might seem like the understatement of the century to some. According to this CNN Money piece, GM has actually spent about $750 million to develop the Volt, much of that in battery research. Apparently GM recognizes the need to stay ahead of (or at least alongside) the competition in developing new technology and is willing to take the risk of spending that kind of money even in desperate times. Of course, some of that money will eventually be spread...
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Filed under: Government/Legal , Chrysler, LLC. , Ford , GM , Earnings/Financials , Canada What to do when you wanted $34 billion and Congress only gave you $15 billion? Try again, but this time go North young man. The Detroit 3 are now making a pitch to the Canadian legislature seeking an additional $6.8 billion from Canada where nearly 100,000 workers are employed in factories and dealerships bearing the Chrysler, General Motors or Ford name. General Motors of Canada has asked for $2.4 billion in loans, Chrysler Canada Inc. is looking for $1.6 billion and Ford wants a $2 billion line of credit on "stand-by" to be used "only if the current economic crisis worsens." GM is also seeking an immediate $800 million to make it through the end of the year. The Detroit automakers are quick to point out that these amounts are proportional to the U.S. bailout requests and that they are asking for loans, not handouts. Federal Industry Minister Tony Clement was in Washington during...
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Filed under: Government/Legal , Chrysler, LLC. , Ford , GM Having watched each of the Detroit 3 CEOs take tough questions from the Senate Banking Committee for six hours yesterday, we've returned to the couch today to watch General Motors CEO Rick Wagoner, Ford CEO Alan Mulally, Chrysler CEO Bob Nardelli and Ron Gettelfinger, President of the United Auto Workers union, visit House members of the Financial Services Committee led by Rep. Barney Frank (D-Massachusetts). We were actually surprised at how well yesterday's hearings went for the Detroit 3. There was far less grand standing by politicians this time around, due largely in part to the lesson learned by each CEO after that whole private jet fiasco . A couple of yesterday's creative solutions for the mess in Motown included a "pre-packaged bankruptcy" in which financing for restructuring would be secured beforehand, as well as a renewed interest in seeing GM and Chrysler follow through on their erstwhile attempt...
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Filed under: Opinion/Editorial We'll be hearing more about the Detroit 3 in the mainstream media this week as their homework entitled "What I Would Do With My Share of $25 Billion in Government Loans" gets turned in to Congress. While Detroit deserves much of the ribbing that's on the way, it irks our ears every time we read an op-ed piece from folks who flat-out do not know what the Hell they're talking about. Take Karen Wagner, whose opinion letter was published by the Chicago Tribune in which she claims that Ford should cancel launching the 2010 Mustang in order to receive federal loans. There are not enough appendages on the human body to count the reasons why that is a stupid idea, let alone an entirely unrealistic one. In her reasoning, she seems to believe that selling fuel efficient vehicles would equal a healthy, profitable automaker and therefore save millions of jobs, while not realizing that the Mustang has done infinitely more to help Ford's bottom...
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Filed under: Government/Legal , Ford It seems the entire world is still debating whether or not Rick Wagoner, Alan Mulally and Bob Nardelli should have carpooled, walked or taken the bus for their last trip to the Capitol, but that's all behind us now. The good news for those who like to play expert on the internet is that Detroit's got another date with Congress this week. Ford CEO Alan Mulally is the first of the three CEOs to announce that he'll be driving , though we expect the others to follow suit shortly. There's no doubt that Mulally will be driving a car from Ford's latest crop of vehicles (rather than his own Lexus), but which one would make the best impression? No matter which he chooses to drive, you can count on the fact that the choice will be dissected, so this seemingly insignificant decision could have major future ramifications. So, we ask you, dear Autoblog readers: What should Mulally drive to Washington... Mustang? Hybrid? Voting polls are now open...
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Filed under: Plants/Manufacturing , Chrysler, LLC. , Ford , GM , Earnings/Financials , UAW/Unions The president of the United Auto Workers union, Ron Gettelfinger, said in a recent CNN interview that U.S. automakers need to tell Congress they will limit corporate pay, bonuses and severance packages in return for more government loans . Gettelfinger also said that the Detroit Three only need the loans to hold them over during these tough times. While the first statement from the union's top player seems like basic common sense, the second seems highly optimistic... especially when one considers the size of the industry and the depth of its issues. While no single event (or loan, for that matter) will likely turn around the downslide, all of those affected by the auto industry's potential demise will be interested in tomorrow's events. That's because Dec. 2 is the day House and Senate leaders told the automakers that they need to submit a "credible restructuring plan"...
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Filed under: Hybrids/Alternative , Government/Legal , Green , Chrysler, LLC. , Ford , GM Remember the growing movement to caravan a few hundred of Detroit's most fuel efficient vehicles to the automaker's next meeting with Congress? Not happening. Interestingly, it wasn't for lack of support. In fact, it was just the opposite. So many people had voiced their support and announced their intentions to join in that the event's organizers just weren't able to keep up. Talk about a logistical nightmare. Organizers have not given up on the idea completely, launching a new website called TheEngineofDemocracy.com that's supposed to drum up support for Detroit and fuel efficient cars in general. Along with an outpouring of support via the interwebs, a list of 51 people from various suppliers, dealership workers and Union officials will accompany the CEOs of General Motors, Ford and Chrysler to Washington - one from each state plus one from the capital itself - to prove that...
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Filed under: Government/Legal , Videos , Chrysler, LLC. Now that the domestic industry is in dire need of cash, the American taxpayer is being bombarded with facts and figures purporting to show just how vital the industry is for the health of the overall economy. Hundreds of thousands of jobs at the automakers, millions more from suppliers and dealers -- the numbers seem to change each time, but they're always substantial. Problem is, it seems only GM and Ford ever get quoted, so Chrysler went ahead and whipped up its own little video. Hit the jump to view Chrysler's 2:42 docudrama filled with still more numbers touting the industry's importance. For example, active Ford, GM, and Chrysler employees make $22 billion per year in salaries, and the three companies pay $21 billion in retirement and health care costs. Chrysler also states that the amount of people whose wages depend on autos either directly or indirectly are equal to the population of South Carolina. [Source: YouTube...
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Filed under: Government/Legal , Earnings/Financials Some U.S. policymakers believe that the domestic auto industry needs a multi-billion $hot in the arm, but the sticking point seems to be where to find the funds. Rep. Barney Frank (D-Mass.) is calling for a portion of the financial sector's $700 billion TARP buyout to be apportioned to Detroit, but Treasury Secretary Henry Paulson doesn't like the sound of that at all. Instead, Paulson would like to see the automakers get the $25 billion they've already been promised , and suggests that it be made available as soon as possible. Of course, that money was supposed to go towards retooling the industry to make more fuel efficient cars, not necessarily as a cash-infusion to keep the Detroit 2.8 running. In any case, Frank has called for a meeting with the heads of each automaker in Washington next Wednesday to discuss whether a new loan for Detroit should be sectioned off from the TARP fund. This could get interesting. [Source:...
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Filed under: Government/Legal , Chrysler, LLC. , Ford , GM Last week, the House of Representatives passed a bill approving a $25 billion loan for the Detroit 3. Now the Senate, by a similar margin, has passed the bill, which means it needs George W. Bush's John Hancock in order for the automakers to see their funds. The process actually began last year when Congress put the language for the loan into an energy bill, but didn't allocate the money for it. Now that the actual sum has been "found" and approved, the details of the loan and repayment need to be sorted out. The energy department has 60 days to do the math once the loan becomes law, but the Energy Secretary said it could still take 18 months or more for GM, Ford, and Chrysler to get the money. Michigan Congressional reps have cried foul, especially because the bill also included $10 million for the Energy Department to hire outside consultants to speed things up. The department probably won't want to waste...
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Filed under: Government/Legal , Earnings/Financials Matthias Wissmann, current head of the Verband Deutscher Automobilhersteller (VDA, or Association of the German Automotive Industry for us non-German speaking folks), is none too pleased with the passing of a $25 billion financing package for the Detroit automakers. Under the terms of the legislation, which has been approved by the House and is expected to pass through the Senate as well, the Detroit 3 will receive low-interest loans in order to finance the cost of bringing more fuel-efficient cars to America. Of course, it's not entirely unexpected that Detroit's competitors aren't happy about the federal loans, but at least one piece of Wissmann's argument certainly makes a lot of sense. "If the U.S. car industry does not resolve its structural problems, then all the subsidies in the world won't help." Ain't that the truth. The hope, of course, is that this financial aid is just what the automakers need...
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Filed under: Car Buying , Chrysler , Ford , GM Showing great discipline amid declining sales, the Detroit 3 have held back on the temptation to dump vehicles on fleet customers in order to boost numbers. As we reported last month , selling vehicles to corporate fleets and daily rental companies has been a long-practiced method to offload automobiles when sales slow down. Unfortunately, it also results in lowered residual values in the marketplace as these vehicles are dumped in quantity at auctions at the end of their service. Over the years, some models have even earned a "fleet" or "rental vehicle" stereotype, additionally damaging their public image, and sales, at the retail level. The Ford Taurus, for instance, was only sold to fleet customers during the last generation's final year of production, which may have further damaged the brand and affected sales of the renamed 2008 Taurus. Even though the Detroit 3 are limiting fleet sales, it is still a large chunk...
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