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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 , 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: 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: Chevrolet , Ford , GM , UAW/Unions Until Detroit automakers signed landmark deals with the UAW that shifted retiree health care costs to the union, it was cheaper to make vehicles in Canada. Government health care saved automakers about $6 per work hour, a savings of over $12,000 a year per worker. Since Ontario produces more vehicles than any state in the Union, that represented huge savings for the Detroit Three. However, after the new deals were struck with the UAW, that advantage has disappeared. To make the situation worse, the loonie has made huge advances over the dollar. At one point you needed $1.61 in Canadian cash to equal one greenback, but new oil wealth for our northern neighbors coupled with a growing US credit crunch have brought the two currencies neck and neck. With Canada's higher taxes and unfavorable contracts, the northern frontier could soon be the world's most expensive place to build cars and trucks. Wards Automotive thinks the CAW will soon...
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