French President Nicolas Sarkozy said on Thursday the state would put “a lot of money” into the struggling car industry.
“We are working with the car sector, car makers and their suppliers, to get out of this situation and to finalize a plan by the end of January,” Mr. Sarkozy said.
“That means that we will be ready to give the necessary support, in the form of loans or guarantees, to compensate for the blockage in the financing of companies…but we will clearly ask them for an end to offshoring, and even the reinforcement of their activities in France,” he said.
From Mitt Romney:
IF General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.
Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.
Ford CEO Alan Mulally defends the Big Three in a CNN interview, saying they’re essential to the US economy and that they deserve a bailout:
Ford and Toyota revealed their October sales today - both of which were far below average. It is expected that when the rest of the industry’s sales reports are seen, they too will be low. It is likely that October 2008 was the lowest month for sales in the auto industry in 16 years. Read more…
September was a very slow month for automakers, thanks to the slow down (grinding halt?) in the US economy. In fact, for the first time in 15 years, auto sales for the month of September fell below 1 million. Check it out:
| Automaker | Sept. 08 | Sept. 07 | Change | Automaker | Sept. 08 | Sept. 07 | Change |
|---|---|---|---|---|---|---|---|
| General Motors | 282,806 | 334,974 | -15.6% | BMW | 18,583 | 24,968 | -25.6% |
| Toyota/Lexus | 144,260 | 213,042 | -32.3% | Mazda | 16,169 | 25,098 | -35.6% |
| Ford | 116,301 | 175,361 | -33.7% | Subaru | 14,491 | 16,457 | -11.9% |
| Chrysler | 107,349 | 159,799 | -32.8% | Mitsubishi | 7,378 | 12,102 | -39.0% |
| Honda/Acura | 96,626 | 127,200 | -24.0% | Suzuki | 4,083 | 7,653 | -46.6% |
| Nissan/Infiniti | 59,565 | 94,269 | -36.8% | Volvo | 4,054 | 8,408 | -51.8% |
| Hyundai/Kia | 42,148 | 57,301 | -26.4% | Porsche | 1,458 | 2,641 | -44.8% |
| VW | 24,504 | 27,601 | -11.2% | Isuzu | 258 | 565 | -54.3% |
| Mercedes-Benz | 20,582 | 22,481 | -8.4% | Industry total | 956,160 | 1,315,402 | -27.3% |
A bill set to be passed by Congress and signed by President Bush as early as this weekend- will save the big three that have been feeling rather small.
General Motors, Ford, and Chrysler will be receiving loans that will most likely amount to at least $5 billion each. That would allow them to borrow money at interest rates as low as 4 percent—a steep discount compared with the double-digit rates they’re paying now.This means that over the years, the automakers will save hundreds of millions in financing costs.
The big three need the money and help desperately as analysts have predicted that all three domestic car companies will face a life-threatening crisis if the U.S. car market, down about 20 percent so far this year, does not improve.
Although this seems like a huge amount of money, it’s nothing compared with the massive, $700 billion bailout plan for the financial industry.
Continue for some details of the program.
The big carmakers will be begging Congress for a $50B loan, this immediately after the Government takes over control of Fannie Mae and Freddie Mac, the two mortgage giants who account for about 9 mortgages out of 10 in the USA.
Read more about the carmakers plea:
Auto industry allies hope to secure up to $50 billion in government loans this month that would pay to modernize plants and help struggling car makers build more fuel-efficient vehicles.
With Congress returning this coming week from its summer break, the industry plans an aggressive lobbying campaign for the low-interest loans. The situation is growing dire after months of tumbling sales, high gasoline prices and consumers’ abandoning profitable trucks and sport utility vehicles.
Lawmakers authorized $25 billion in loans in last year’s energy bill to help the companies build fuel-efficient vehicles such as hybrids and electric vehicles. With credit tight, automakers and suppliers now want lawmakers to come up with the money for the program — and expand the pool of money available to $50 billion over three years.
DEARBORN – Ford Motor Co. said Wednesday it will introduce its new blind-spot mirror this fall on the 2009 Ford Edge crossover.The automaker had planned to bring the mirror to market next year but moved up the date after getting so much positive feedback, said Kelly Kohlstrand, a member of Ford’s advanced product marketing and technology planning team.
Ford also is in a race with General Motors Corp. to bring the technology to market. Blind-spot mirrors will be a standard feature on the 2009 Chevrolet Traverse crossover, which will start production in September, according to GM spokesman Terry Rhadigan. Read more…
According to The Associated Press
Just a week after Ford’s disastrous quarterly earnings announcement on July 24, (BusinessWeek.com, 7/24/2008), Mazda, the Japanese company one-third owned by the ailing U.S. automaker, on July 31 once again highlighted how much better it is faring than its larger partner.
In a tough environment for all automakers, Mazda’s operating earnings slid an expected 12%, to $265 million, but that was largely explained by a sharply stronger yen. Perhaps more important, the company said it still expects net earnings of $750 million during the current financial year. Despite weaker U.S. sales in July, Mazda plans to sell 1.48 million cars this year, up 9% from 2007. Read more…
According to Ian Rowley
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