BREAKING NEWS! BREAKING NEWS!
The Big 3 Automakers were back begging for more bailout money from the U.S. Government and filing restructuring plans to support there efforts. Ford it should be noted has not requested any funds to survive, although it says it would need funds if GM or Chrysler should fail.
General Motors has requested $16.6 Billion dollars and Chrysler has submitted a plan calling for $5 Billion dollars and indicate that thousands more jobs will be lost there hands are out.
Chrysler projects the U.S. auto market will sell only 10.1 million vehicles the lowest output in 40 years, which is less than the 11.1 million units that it predicted when they received there first loan from the Treasury. This lower forecast is in line with the reason why they have increased the amount of additional funds that they indicated is need to keep the automaker afloat.
Chrysler also announced that it will eliminate the Chrysler Aspen, Dodge Durango and PT Cruiser models from its line up. In addition it announced that the company will comply with the Federal Governments guidelines in reducing executive compensation and stated that it had eliminated company matching employee 401(k) plans and many other cost cuts.
Chrysler further made proposals to sell over $300 million dollars in "non earning assets" in 2009 and states that it will begin paying back the loan beginning in 2012. The proposal was contained in 199 pages that it submitted to the Treasury and included what the company would due should it face bankruptcy.
General Motors, Ford and Chrysler as indicated by the release of a statement from the UAW union has reached tentative agreements on making changes to the 2007 labor contracts. The UAW also stated that ongoing talks are still going regarding funding retiree health care obligations that the union has agreed that it would take over next year.
General Motors is in desperate need of $16.6 Billion dollars and may need upwards of $30 Billion dollars in government loans as it submitted its restructuring plans to the Treasury Today (2/17/09). The plan includes eliminating 47,000 jobs and closing 5 more U.S. factories. The company is also planning on eliminating or selling its Saturn, Hummer and Saab brands.
Commentary: I see a future in which the U.S. will not be manufacturing any or very very few so-called American brands here in the states, the cost to manufacture vehicles with labor cost and other monetary factors make the cost to high and you can't build a business case to support it, when the U.S. is competing with other countries who's labor cost are considerably less than the U.S.. Any business model that makes since has many factors to consider and importing these vehicles from countries that have lower labor cost and are emerging as industrial centers will become standard within the next 6-10 years.
I will report on the GM plan as I research the plan more thoroughly.
Enjoy Today!
That Car Guy
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