General Motors announced yesterday that the company will be phasing out their Pontiac brand, and ceasing construction completely of the Saturn brand. They also say Hummer is doomed if they can’t find a buyer for the label by 31 March. Read more…
GM and Chrysler have made it clear that they need $21.6 billion in federal loans to stay afloat, in addition to the bailout money they have already received. They have also released detailed plans in which they cut 50,000 jobs, close several plants, and drop some of their weaker brands. Experts say this request for more money is no surprise.
The issue is not as much what the car companies are doing to cut costs, but what the government will do to stimulate car sales. Read more…
Obama will arrive to his inauguration with class… and basically in a tank:
Toyota Motor, the Japanese auto giant, said Monday that it expected its first operating loss in 70 years. That would be the company’s first annual operating loss since 1938, a year after the company was founded, and a huge reversal from the 2.3 trillion yen, or $28 billion, in operating profit earned last year.
Toyota’s numbers show that the worst recession since the worst financial crisis since the Depression is threatening not just the Big Three, but also even relatively healthy automakers in Japan, South Korea and Europe. Other companies are expected to report losses as well.
According to analysts, next year is expected to be even worse. The economy is expected to suffer until next summer.
I have a lot of trouble accepting the fact that while the American consumer decided not to pay the Big Three for its products, the government will step in and force them to do so - not as consumers but - as taxpayers.
However, it’s hard to argue against some action when you see this:
GM plans to reduce production by 250,000 vehicles in January by temporarily closing some of its factories. Twenty-one factories across North America will be affected. This comes after US talks of an industry bailout collapsed. Read more…
First of all, no matter what you’ve been hearing General Motors is not going out of business. This car company is in a terrible crisis, but they will endure.
Read more to dispel the GM myths.
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:
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