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Automotive News & Views Do You Favor A Government Loan To The Detroit 3?
3958 messages, Last post on Oct 02, 2009 at 4:52 PM
You are in the Automotive News & Views Forum. Your Hosts are steve_ & claires
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Replying to: lemko (Dec 02, 2008 9:57 am) Ford, Rivals Stress New Parsimony to Congress GM's plan will surface later today. |
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Replying to: dave8697 (Dec 02, 2008 8:29 am) Two words - Turbo Charged |
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| The Big Three's solution to downsizing and its never-ending job losses? For the past 24 years, all three U.S. automakers had tens of thousands of "workers" sitting in job banks, watching TV, playing cards and collecting 90 percent of their pay. Asks University of Maryland business professor Peter Morici, "Why should a waitress in Indiana have her tax money sent to Detroit to subsidize that?" | |
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if closing Oldsmobile only cost $1 billion, then the bailout could go to closing five brands at GM (assuming Hummer is already sold as had been hinted at earlier this summer) and two at Ford. That's only $7 billion. Cerberus is private, NO taxpayer money to them, no way. Spend another $1 billion closing down 2000 each of the excess Ford and Chevy dealers (both currently near a count of 4000, possibly higher for Chevy, if I am correctly informed). Lay off all the corresponding Ford and GM hourly employees and 2/3 of the executive staff, pay them a year's severance (that's for hourly employees only, who would be barred from claiming unemployment, salaried executives get only 3 months), there's another $10 billion. We've only spent $18 billion and we have right-sized GM and Ford! Trickle out the remaining $7 billion propping up suddenly beleaguered suppliers for 2 years.
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Replying to: nippononly (Dec 02, 2008 12:47 pm) Now the problem with a small GM and Ford is that they still have the commitment to LARGE # of retirees. The reduction in size has not reduced the $'s going to the pension funds. So this gets passed on to the cost of each car, increasing the cost of each car, which increases prices and make them even LESS competitive, which decreases sales more ... no profits in sight, at least $25B spent, and they close it up in the spring or early summer '09. I'm against any loan even as you describe though. Why spend $25B in taxpayer money to give it to well-paid people who screwed up for many years, to leave a company that otherwise would fold up? Why should Joe the Plumber who only gets his unemployment check if laid off, put up his tax-money to give all this money to someone else? Forced charity?! I definitely agree even if a loan is approved somehow; that not 1 cent should go to privately held Chrysler. Cerberus and their family of companies can transfer the $ to Chrysler. |
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Replying to: kdhspyder (Dec 01, 2008 6:21 am) I'm not necessarily talking about them moving back to Japan, but what about India??? China??? South America??? With all the "billions" that Sony, Panasonic, Samsung, etc. make IN THIS COUNTRY, why aren't they made here??? BECAUSE THEY HAVE NO INCENTIVE TO DO SO. Greed: When the Big 3 are gone, the only incentive others will have is to go with the lowest bidder, no matter where in the world that is. |
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Ford tells Congress profit may be restored in 2011 Amy Wilson Automotive News | December 2, 2008 - 10:25 am EST DETROIT -- Ford Motor Co., the first of the Detroit 3 to submit its plan to qualify for federal aid, says it doesn’t expect to make money until at least 2011. That’s when Ford expects global and North American auto businesses to reach break-even or be profitable on a pretax basis, according to a news release summarizing its plan to Congress. In May, Ford abandoned a previous pledge to post a profit in 2009. The automaker has lost money every year since 2005. Ford also said it is asking Congress for access to as much as $9 billion in federal loans. The company stressed that management hopes to complete its turnaround without accessing the loans. “For Ford, government loans would serve as a critical backstop or safeguard against worsening conditions as we drive transformational change in our company,” Ford CEO Alan Mulally said in the release. Selling the jets Mulally said he would work for a salary of $1 a year if Ford draws money from a potential federal loan pool. Ford also said today that it would sell its five jets. Those moves are responses to widespread criticism of the Detroit 3 after Congressional hearings in November on federal bailout money for the automakers. The CEOs of Ford, General Motors and Chrysler LLC were lambasted for traveling to the hearings in separate corporate jets. Mulally plans to make the nine-hour drive to Washington in a Ford Escape Hybrid for another round of Congressional hearings this week. The high pay packages of the Detroit 3 CEOs also came under scrutiny during the hearings. At that time, Mulally declined to work for less than his $2 million salary, saying “I think I’m OK where I am.” Mulally’s total compensation package was $21.7 million in 2007. Ford reiterated that it would continue the turnaround plan Mulally implemented after arriving from Boeing in September 2006. A key tenet of that plan is to accelerate the development of new products that customers want. As part of that, Ford has said it will introduce several small European-developed cars in the United States beginning in early 2010. Mulally's YouTube video Technology spending Today, Ford said it would spend $14 billion in the United States on advanced technologies and products to improve fuel efficiency during the next seven years. That includes a plan to make available for sale a family of new hybrids, plug-in hybrids and battery electric vehicles by 2012. Ford said it will partner with suppliers to deliver a full battery electric van for commercial fleet use in 2010 and an electric sedan in 2011. Ford also said it is discussing with the UAW ways to further reduce costs and eliminate the remaining labor cost gap existing between Ford and import-brand automakers. Ford said it doesn’t anticipate a liquidity crisis in 2009 barring a bankruptcy by General Motors or Chrysler LLC -- or a more severe economic downturn that further hurts auto sales. It expects U.S. industry sales of 12.5 million vehicles in 2009, bouncing back to 14.5 million vehicles in 2010 and 15.5 vehicles in 2011. Ford finished the third quarter of 2008 with $18.9 billion of cash and another $10.7 billion in available credit lines. The automaker burned through $7.7 billion in cash during the third quarter, a rate of $2.57 billion a month. 'Home improvement loan' Ford wants to convince Congress and U.S. taxpayers that it should be seen as “different” from GM and Chrysler. To that effort, Ford today launched a new web site, www.thefordstory.com. It includes a youtube.com video of CEO Alan Mulally talking about Ford’s turnaround vision. In the video, Mulally said Ford is asking for access to federal loans in part because the failure of GM or Chrysler could have a “domino effect” on Ford. “I like our position today, as tough as it is,” Mulally says in the video. He talks about the $23 billion “home improvement” loan Ford took out two years ago to finance its turnaround and the development of new products. “Now we have in the pipeline what arguably everybody believes is the best product lineup we’ve ever had at Ford,” he said. “I’m just so glad that we all pulled together early so that we are ready to take on the worst of times. And we’ll get through this and we’ll come out the other end as a turbo machine.” |
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GM offers cuts in brands, salaries, debt, payroll Harry Stoffer Automotive News | December 2, 2008 - 3:17 pm EST WASHINGTON -- The General Motors of 2012 will have fewer brands and nameplates, thousands fewer dealers and employees, and much less debt on its balance sheet, under a restructuring plan GM gave Congress today. GM will focus on its "core brands" of Chevrolet, Buick, GMC and Cadillac, the plan says. GM will sell Saab, shrink Pontiac to a niche brand and consider selling or closing Saturn, GM President Fritz Henderson told reporters at a briefing today. GM also plans to trim its U.S. dealerships from today’s 6,450 to about 4,700, Henderson said. It will cut about one-third of the nameplates from its vehicle lineup. GM executives say the plan will enable the company to be profitable even if the U.S. new-vehicle market makes only a modest recovery. GM, like Ford Motor Co. and Chrysler LLC, submitted its plan in an effort to persuade Congress and the Bush administration to approve $25 billion in emergency loans to the Detroit 3 this month. In the starkest acknowledgment GM has made of its financial condition, the company says it needs $4 billion in federal aid by the end of the month. Henderson, in a briefing with reporters today, refused to say what would happen if GM does not get the immediate aid it seeks. But without government support, he warned, "the company cannot fund its operations." Request: $18 billion GM’s plan asks Congress for $12 billion in loans by the end of March. It seeks another $6 billion in revolving credit if market conditions don’t turn around. The total request is higher than the $10 billion to $12 billion that GM CEO Rick Wagoner requested of lawmakers during congressional hearings two weeks ago. Henderson called the GM plan “a blueprint for creating a new General Motors -- one that is leaner, profitable, self-sustaining and fully competitive.” Among its key features: • Reducing the number of GM brands and nameplates, a step GM critics have demanded for years. Henderson said GM will seek a buyer for Saab. Pontiac will be shrunk to a “specialty, niche” brand, Henderson said. GM already has put Hummer up for sale. Under its franchise agreement with Saturn dealers, GM will seek a new course for that brand, Henderson said. Asked whether GM would sell or fold Saturn, he said he would not eliminate any options. The brand “is just not successful,” Henderson said. The number of GM nameplates would drop from 63 today to about 40 by 2012, Henderson added. • Trimming GM’s 6,450 U.S. dealerships to about 4,700. Most reductions would occur in metropolitan areas, Henderson said. • Reopening talks with the UAW to cut manufacturing costs further. Henderson declined to identify the additional concessions GM will seek. But he said GM expects to be fully competitive in labor costs with Toyota Motor Corp. by 2012. Henderson estimated GM’s total U.S. head count would drop from today’s 96,000 employees to between 65,000 and 75,000. • Negotiating with lenders and bondholders to remove about $35.6 billion in debt from GM’s books. At the end of September, the company owed $66 billion. Henderson said that debt load is too heavy. GM aims to achieve through negotiation the kind of debt reduction that otherwise might occur in bankruptcy, Henderson said. The plan probably will involve some exchange of debt for stock. Breakeven: 13 million sales Under its plan, GM would break even if U.S. light-vehicle sales recover to just 12.5 million to 13 million cars and trucks a year, Henderson said. Over the past few months, the annualized U.S. sales rate has been less than 11 million units. From 1999 to 2007, the industry sold more than 16 million new cars and trucks each year. In its plan, GM also agreed to have a government oversight board monitor use of the federal money. Taxpayers would get a stake in the company in exchange for the loans. After last month’s congressional hearings, House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., chastised the Detroit 3 CEOs for failing to make an adequate case for federal aid. The leaders demanded that the Detroit 3 tell Congress in detail how they would use federal loans and how they would make themselves viable for the long term. Reacting to lawmakers’ complaints that the companies’ CEOs came to Washington last month in separate corporate jets, Wagoner is scheduled to return to the capital this week in a Chevrolet Malibu Hybrid. Wagoner has agreed to accept a salary of $1 next year. The GM plan includes cuts in pay for other senior executives, and the company says it is ceasing use of its jets. Committee hearings on the Detroit 3 loan requests are set for Thursday in the Senate and Friday in the House. As they did last month, the Detroit 3 CEOs and UAW President Ron Gettelfinger are expected to testify. Reid and Pelosi have promised to call Congress back into session next week to consider the companies’ aid pleas if the viability plans are acceptable.
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Replying to: kernick (Dec 02, 2008 9:47 am)
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Replying to: kdhspyder (Dec 02, 2008 7:44 am) No, YOUR lack of knowledge of lemko is showing. He's being faceitious |
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