Auto Bailout Will Cost Taxpayers $30 Billion

Wednesday December 16th, 2009 at 8:1212 AM
Posted by: michael.leroy

GM Chrysler bailout
$30 billion is gone, but it could have been worse

This was a bad year for both the auto industry and the American taxpayer. The Obama administration’s effort to save General Motors and Chrysler will cost taxpayers $30 billion. The Detroit News reported last week that the losses were less than expected. Earlier forecasts projected a loss of $44 billion of the $82 billion loaned-out.

GM received $50 billion of the money, with $43 billion given in exchange for 61 percent of the company.
A large portion of the $30 billion loss is due to Chrysler. Chrysler has had much of its $12 billion debt forgiven. The government is requiring Fiat to pay back $6 billion in loans before it can increase its 20 percent stake in the company, said Detroit News.

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Obama Defends Auto Bailout

Friday July 17th, 2009 at 6:77 AM
Posted by: m35man

President Barack Obama defended his bailout of General Motors Co. and Chrysler Group LLC, citing their speedy exit from bankruptcy and saying the consequences of doing nothing would have been catastrophic.

“I agreed that they should be held accountable. But I also recognized the historic significance and economic prominence of these companies in communities all across Michigan and all across the country.”

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A Brand New Day for Chrylser

Friday June 12th, 2009 at 7:66 AM
Posted by: m35man

Sergio MarchionneChrysler Group LLC employees officially met the new boss earlier this week–and he’s not anything like the old boss – which is probably a very good thing, indeed. Chrysler is now run by Fiat, and the first item on the new agenda is profitability—something the old bosses didn’t seem to be all that concerned about.

In his first day on the job, CEO Sergio Marchionne announced sweeping changes including his senior management team and a reorganization that will force every brand to be profitable on its own.

This is the age of bailouts and acquisitions. And a bailout is a weird thing, because it’s a happy moment, yet so many questions arise. Will it be a success? Whose heads will roll? Who will get hired to turn things around? It represents a new beginning, but one burning question keeps coming up—will it be better this time or will the mistakes of the past repeat themselves?

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Big 3 says, "Show Me the $$!" Do Americans Approve?

Monday December 29th, 2008 at 6:1212 AM
Posted by: m35man

bucketA lot of people have been asking the same question: Why should the American people be responsible for bailing out the Big 3? They’ve made all the classic mistakes. First, they failed to change their strategy and haven’t acted quickly enough to the changing marketplace and world economy. Second, they built too many dealerships. And third, they weren’t proactive in designing and manufacturing alternative fuel vehicles.

From what I’m hearing, American taxpayers who were polled approve of loaning money to the Big 3, but after that, they’re on their own. People are willing to help them out, but the assistance will be limited and will have to be paid back within a reasonable time frame. People don’t trust carmakers as a rule and don’t believe the loan will ever be paid back.

Will the Big 3 give consumers a break in return, once they’re back on their feet? Only time will tell.

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Look How They Do It In France!

Friday December 26th, 2008 at 6:1212 AM
Posted by: goofshow

countryside cyclingThe French are known for many things, such as the advent of the beret. But look how they are handling their auto industry bailout. French President Nicolas Sarkozy is ready to offer new financing assistance to the country’s troubled auto industry, which include PSA/Peugeot-Citroen, and Renault, not to mention their suppliers and dealers and everyone else associated with the industry. But there are strings attached—French style. Sarkozy will only grant assistance if the companies promise to keep manufacturing in France. Renault and PSA/Peugeot-Citroen already manufacture in such places as Brazil, Columbia, Romania, Russia, India, Poland and Turkey.

Sarkozy wants commitments that the automakers aren’t going to take the money and run, while France’s companies have to ask themselves if winning access to new government-backed credit at low interest rates outweighs the risk of state intervention in their day-to-day activities.

How would the U.S. auto companies react to such a proposal from Obama? Let’s hear your thoughts.

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The Big Three: Celebrate! Celebrate! Dance to the Music!

Wednesday December 10th, 2008 at 7:1212 AM
Posted by: goofshow

Ford GM ChryslerIt worked (to some extent). The Big Three could be getting their billions in no time. Woo-hoo! Though it’s not the original over-inflated amount, Democrats in the US Congress have announced they will introduce a bill making up to 15 billion dollars available in immediate aid for the US automobile industry. Part of the bill includes creating a presidentially named “car czar.” (Hurrah for funny alliterations!) The federal overseer would supervise a broad industry restructuring and would be empowered to yank the money back if the car makers weren’t doing enough to ensure their own survival—such as the continual outpouring of crappy cars that the consumer doesn’t want. Needless to say, the corporate jets have got to go!

Step right up; which industry is next in line for a bail out? Skeptics think the Big Three will burn through the money by April. Let’s look forward to Big Three Spring Break Washington D.C. 2009!

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Oh Canada!

Tuesday December 9th, 2008 at 7:1212 AM
Posted by: goofshow

Canadian maple leafOk, if it’s not bad enough that the Big Three have been traveling to Washington (thankfully in fuel efficient vehicles this time and not private jets), to ask for a bailout. Now, the execs are now taking their money-begging road show to Canada. Yes, Ford, GM and Chrysler are seeking a $6.8 Billion Government Loan from Canada! Besides outsourcing autoworker jobs to foreign countries, the auto industry is now reaching a hefty hand across our northern border to seek billions in loans and credit from the Ontario government. According to Reid Bigland, CEO of Chrysler Canada, the loan is, “to ensure Chrysler Canada’s substantial Canadian manufacturing and operational footprint is protected.”

It’s good to see that taxpayers of Canada might be paying for our auto snafu. I guess it’s a tradeoff; we gave Jim Carey a film career so those Cannucks owe us. If you’re wondering about the number of people working in Detroit’s Big Three Canadian operations has a workforce of tens of thousands scattered across the Great White North, employed in both plants and dealerships.

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No Blank Check!

Wednesday December 3rd, 2008 at 6:1212 AM
Posted by: goofshow

Like a stern parent with an over-indulgent child who never seems to listen, President-elect Obama is already laying down the law with the U.S. auto industry. Addressing a press conference in Chicago, Obama stated that in order to keep the economy afloat he is firmly committed to make sure the U.S. auto industry doesn’t simply vanish, deeming it as the backbone of our country’s manufacturing base.

“We’ve got to make sure that it is there and that the workers, and suppliers, and businesses that rely on the industry stay in business,” Obama said. While on the same hand, Obama is not willing for we—the taxpayers–to pony up money for a $25 billion blank check to the Big 3 when they’ve been so resistant to change. As put in the Wall Street Journal, if Obama wants a sustainable U.S.-owned auto industry, will he require changes in the Big 3s management, labor agreements and cost structure in return for aid?

With the same scolding of a child who needs to take a time-out, Obama added, “I was surprised that they did not have a better thought out proposal when they arrived in Congress. I think Congress did the right thing, which is to say, You guys need to come up with a plan and come back before you’re getting any taxpayer money.”

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Ford Sells 20% Of Its Stake In Mazda

Monday November 24th, 2008 at 12:1111 PM
Posted by: tonyb

In an effort to raise cash and prop up its faltering balance sheets, Ford Motor Company has sold 20% of its stake in Mazda, netting the blue oval boys $540 Million. This follows on the heals of GM selling of 3% of their stake in Suzuki (netting the General $230 Million).

According to statements from both Ford and Mazda, this will not effect their ongoing joint ventures, as well as the sharing of platforms and powertrains. That makes sense for both entities. especially for Ford. what will be needed in the near future will be smaller, more fuel efficient engines, which Mazda seems to have by the boxcar load.

Ford President and CEO Alan Mulally said, This agreement allows Ford to raise capital that will help fund our product-led transformation, and at the same time, allows Ford and Mazda to continue our successful strategic relationship in the best interest of both companies. Ford will continue to focus on the Ford brand worldwide and deliver the products our customers really want and value.”

And Mazda Chairman, President and CEO Hisakazu Imaki added, “The sale of Mazda shares by our partner, Ford, will not result in any change in Mazda’s strategic direction and we will continue to accelerate our product-led brand improvement and cost innovation initiatives. We will continue our strategic relationship through our ongoing joint ventures with Ford, as well as the sharing of platforms and powertrains.”

Source: CarScoop

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Michael Moore Speaks Out About The Auto Industry on CNN

Monday November 24th, 2008 at 11:1111 AM
Posted by: goofshow

Michael MooreControversial filmmaker Michael Moore spoke out last night about the auto industry on CNN’s Larry King Live.

“I’m of mixed mind with this bail out,” Moore said, who doesn’t want to see hundreds of thousands of autoworkers suffer at the hands of these auto makers, but at the same time,“I don’t think that these companies, with these management people, should be given a dime because that’s just money going up in smoke or off to other country.”

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