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Filed under: Government/Legal , Chrysler, LLC. , Ford , GM , Earnings/Financials No matter how you slice it, a proposed $25 billion loan from the Feds is a bailout, and that's exactly what Detroit's Big Three automakers are after, according to a report by the Wall Street Journal. Lobbyists for General Motors, Chrysler and Ford have met with White House officials, Rep. John Dingell and a smattering of Michigan Democrats to discuss the loan, with plans to unveil the proposal after Labor Day. The plan includes lending $25 billion to automakers in its first year at an interest rate of 4.5 percent (about one-third of what the companies are currently paying), with the government having the option to defer any payment for up to five years. Details are scarce, and naturally, GM, Ford and Chrysler reps aren't saying much, but if the automakers and the Feds are serious, expect more information to leak out before the proposal is officially announced. [Source: WSJ , Photo by Tracy O | CC2...
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Filed under: Chrysler, LLC. , Ford , GM After years of incremental improvement in customer satisfaction, a study from the University of Michigan shows that overall, Detroit automakers have declined versus their Japanese and German rivals. The study, which polls customers with six-month-old to three-year-old vehicles, shows that U.S. automakers have stalled in their quest to improve satisfaction. The problem? Rising gas prices have made truck and SUV customers very unhappy with their vehicles, which reflects negatively in the overall score. The Chevrolet brand was hit hardest, with scores dropping 3.7% versus last year's score. The bow tie brand was ahead of only Dodge and Jeep. The news isn't all bad for General Motors, though, as truck and SUV-less Saturn posted the industry's largest gain of 4.9 points to get within one point of Toyota and Honda's score of 86. Buick and Cadillac also performed very well in the survey, with each GM brand scoring an 85. Ford was flat year...
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Filed under: Government/Legal , Chrysler, LLC. , Ford , GM After nearly eight years of getting little or no attention from the White House, it seems as though Detroit's automakers will be a major focus the 2008 Election. With the economy looking worse by the day, lawmakers in Washington have been kicking around the idea of a second economic stimulus package to get people shopping again, and Mowtown's lawmakers want in on the money. Michigan's two Democratic senators are attempting to use the prospect of such a bill to include federally-backed loans to help automakers and suppliers build new factories and engineer new models. The $4B would be used to offset the costs associated with the Treasury Department giving automakers $25B in loans at a discounted rate. Automakers have been against such a loan in the past, but with worsening conditions and tighter lending practices the idea is likely to sound much more exciting this time around. Presumed Democratic Presidential candidate...
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Filed under: Government/Legal , Chrysler, LLC. , Ford , GM In the wake of GM's Tuesday press conference detailing its plans to have enough cash on hand through 2009, politicians have been eager to voice their thoughts regarding the possibility of a government bailout. President Bush gave the possibility a strong no , but the two guys in line for his job have taken a different route. Senator Obama has said that he supports automaker's attempts to restructure without outside help, but says he's willing to work with the companies on fuel saving tech. Republican Senator John McCain took an even stronger pro-automaker stance, saying "if it looks like it is approaching that, everyone has to consider every option." The Arizona Senator and presumed Republican nominee has stated in the past that he wouldn't support a buyout, but would instead provide tax breaks and infrastructure support to create more fuel efficient vehicles. McCain's "every option" comment...
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Filed under: Government/Legal , GM In the wake of GM's restructuring announcement , some observers are beginning to talk about government assistance to get automakers through tough times. President Bush has quickly shot down the idea of assitance for US automakers, saying that the government shouldn't be "bailing out companies." GM spokesman Greg Martin said the General isn't looking for a free pass from Uncle Sam, instead insisting the company is going to take care of itself. While it's nice to see GM taking care of its own problems, there really isn't much else the Detroit automaker can say. Admitting that it needs help would be an admission of doom, which would further deplete its stock while signaling to customers that bankruptcy is near. A company in bankruptcy protection can go under, and companies that expire don't (theoretically) honor warranties or have parts available for repair. As for President Bush's comments, it deserves noting that few...
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Filed under: Chrysler, LLC. , GM , Earnings/Financials Despite recent rumblings to the contrary, both General Motors and Chrysler claim that they will not be going bankrupt any time soon. Still, as much as the two American automakers would love to quell fears of unsustainable liquidity, questions remain, especially as the pickup market in the United States continues to dwindle. In a note sent out to dealers, Chrysler's Jim Press and Steven Landry say that the automaker will focus its efforts on small cars for the rest of this year, though the current pickings from the automaker's stable seem a bit slim. Chrysler is surely banking on its alliances to bolster its line of small car offerings, which could help to dampen the blow of lost truck profits -- somewhat. General Motors , for its part, has invested heavily into its upcoming Delta platform vehicles, which will include a compact Chevrolet-branded car known as the Cruze as well as the Chevy Volt electric vehicle. [Source: Automotive...
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Filed under: Detroit Auto Show , Etc. The North American International Auto Show is by far the largest auto show in North America, but the small, aging facility that houses the new car party is prompting automakers to ditch the event all-together. In response to news that Suzuki has joined Porsche in bowing out of the 2009 show, the city of Detroit is rushing a $90M plan to increase floor space by 80,000 sq. ft. The move is seen as a stop-gap measure, with other more grand plans still on the way at a later date. With far superior facilities in New York, Chicago, and LA, Detroit may not have long to act. For people in the Detroit area, the Cobo expansion has been a hot topic of conversation, but one that typically doesn't get beyond the talking stage. If area executives continue to try to one-up each other, argue and get nothing done, more automakers are likely to bow out in the future. [Source: Detroit News ] Read | Permalink | Email this | Comments
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Filed under: China , Government/Legal , Plants/Manufacturing , Chrysler , Ford , GM , Earnings/Financials American automotive companies have been doing rather well for themselves these last few years in China. Still, the majority of manufacturing those vehicles is done in China using locally sourced parts. For this reason, the Chinese government has been facing pressure to ink more deals with American companies for the export of goods there, which is apparently now beginning to take place. Ford, for instance, has announced that it will be sending 30,000 complete vehicles (no word on which ones) to China along with other various auto parts. General Motors has also signed on with about $1 billion in vehicles and parts for export to China. Chrysler too will get in on the trading, though its deals will likely be smaller than either Ford's or General Motors'. All in all, the automotive sector will make up about $2 billion of the recently announced deals, which total more than $8.3 billion...
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Filed under: Government/Legal , Chrysler , Ford , GM Barack Obama has been less than friendly with Detroit automakers in the past, but he's promised to meet with them both during his campaign and afterwards if he makes it into the Oval Office. The presumed Democratic nominee told a crowd in Flint, MI that he would meet with executives to discuss how "we're going to build the cars of the future right here in Michigan." Obama also criticized President Bush not meeting with automakers until his sixth year in office, which actually isn't true. President Bush met with automakers in 2003, though his second meeting with industry execs was delayed several times in 2006. Obama has also promised to deliver $150 billion in funding over 10 years and 5 million jobs in the "green sector." Some of the money is being promised to automakers to retool older plants for plug-in electric vehicle production, which would be welcome news to the financially struggling automakers...
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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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Filed under: Car Buying , Auction Action , Marketing/Advertising , Chrysler , GM , Lexus Way back in February, General Motors announced it would be listing all of it Certified Pre-Owned vehicles on eBay Motors, and it took until now to actually make that happen. To go along with GM, Chrysler and Lexus have also joined up, with eBay Motors making a special section of its website specifically for CPO vehicles. The new site, which can be found here , went live yesterday and is sponsored exclusively by Lexus. It's also provided at no cost to any dealer looking for another outlet to advertise its inventory. A quick check of the new hub shows that both eBay's classic auction-style listings and regular classified ads are listed together. The site's search functionality allows users to find vehicles located near their zip code, meaning it should prove awfully easy to find that brand-spanking-used Chrysler Sebring you've been foaming at the mouth for. [Source: Automotive News - sub...
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Filed under: Hybrids/Alternative , Government/Legal , Green , Chrysler , Ford , GM , Earnings/Financials Click above for more shots of the Ford Escape PHEV In what seems like a convenient answer to Mark Fields' request just yesterday for government assistance for the development of plug-in hybrids, the Department of Energy has just announced that it will be granting up to $30 million for just this type of vehicle. Not that thirty-mill is a small sum or anything, but that amount of money will be spread rather thin, being divided across three separate projects from three different manufacturers. Ford is one of them, while General Motors will receive funding for battery development and Chrysler, in partnership with General Electric, will also get some love. The end-goal of this funding is a plug-in hybrid vehicle that is capable of traveling 40 miles on electric power alone. The DOE hopes that these specifications can be cost-effective by the year 2014 with vehicles on the road around...
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Filed under: Podcasts , Hybrids/Alternative , Minivans/MPVs , Trucks/Pickups , Wagons/Estates , Crossovers/CUVs , Cadillac , Chrysler , Ford , GM , Mercury , Saab For three weeks in a row, now, we've brought you a new Autoblog Podcast courtesy of the B-Team. Here's episode #96 of the Autoblog Podcast, where Chris Shunk, Sam Abuelsamid, and Dan Roth kibbitz over some morsels of recent news. There's the requisite trip to the Autoblog Garage to start things off, then we move into actual discussion points like the CTS Wagon, a gasp of life on the Ford Ranger front, the massive confusion around Cerberus and Chrysler, and Hyundai's nose-thumbing at Toyota's hybrid technology. Remember to send in questions, comments, and suggestions for ways to mark the passing of upcoming episode #100 to podcast at autoblog dawt com. See you next week! SUBSCRIBE to the Autoblog Podcast in iTunes ADD the Autoblog Podcast feed to your RSS aggregator DOWNLOAD the show now Permalink | Email this...
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Filed under: Plants/Manufacturing , Chrysler , Ford , GM , Toyota A few years ago, high(ish) gas prices and fierce competition had Detroit automakers talking about the "perfect storm" that the domestic industry was facing. Fast forward to 2008 and the entire auto industry, not just U.S. automakers, is in a full-blown tsunami. Gas is $4 per gallon, the U.S. is muddling its way through some seriously wobbly financial times, and now the price of steel has nearly doubled in five months to $1,035 per ton. Since just this January, the cost of steel in your automobile has risen $500 per car . The reasons for the sharp incline in prices includes both the increased cost of energy for steel makers and higher demand for the strong stuff coming from rapid growth in countries like China and India. With everybody feeling the pinch of high materials, which also includes sharp increases in platinum and aluminum, suppliers are passing these costs on to OEMs, who in turn will be passing them on...
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Filed under: Car Buying , Chrysler , Ford , GM Even after posting a $3.25 billion loss , General Motors won't resort to fleet sales to ease their pain. In the automotive industry, fleet sales typically represent the lightly equipped, and heavily discounted, vehicles sold to rental companies or corporations. The numbers are significant , and fleets sales of a particular model may even exceed the volume sold at retail. Often laden with special financing incentives, the sales are less profitable for the automaker, and they hurt the used-vehicle market when a large number of the same model are dumped into the marketplace simultaneously. Last year, GM sold about 700,000 units to fleet sales. In 2008, that number is projected to drop to about 575,000 units. By 2009, it will decline even further with a sales projection of just over 500,000 fleet units. GM isn't the only automaker following this path. Ford's sales to rental companies are down 16 percent from the same quarter last year...
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