Friday, November 28, 2008

The Engine Of Democracy-Auto Facts


The Engine Of Democracy Will Be Up Dec. 1st-The Engine Of Democracy
Visitors also will be able to see the impact of Detroit's automakers on their state as well as key facts and myth-busters concerning Detroit's automakers such as:


-- The automakers are requesting a bridge loan, not a bailout as Wall
Street has done. The companies need the loan because the U.S. credit
freeze has essentially closed capital markets and squeezed their cash
flow from operations that are being devastated by extremely low consumer
demand across the industry. This freeze is happening as the automakers
are in the midst of huge restructuring costs, heavy pension and health
care payments and massive-yet-crucial product and advanced technology
investments so that today's and tomorrow's vehicles are even safer and
more environmentally friendly.

-- GM, Ford and Chrysler make vehicles Americans want to buy. 50 percent of
the products sold in this country come from those companies. The
best-selling vehicle in the U.S. is a Ford; No. 2 is a GM product.

-- Motor vehicles and parts are the single largest export from the U.S.,
topping aerospace, medical equipment and communications.

-- According to J.D. Power, three of the top five brands for dependability
are American made: Buick, Cadillac and Mercury. The 2008 Chevy Malibu
is the highest ranked midsize car in initial quality. The 2008 Chevy
Silverado ranks highest in large truck quality. Ford quality is on par
with Toyota and Honda.

-- Ford has the most five-star safety rated vehicles in the industry and GM
has the same number of vehicles as Toyota that achieved the top safety
rating, according to the Institute for Highway Safety.

-- GM, Ford and Chrysler build fuel-efficient vehicles. GM has twice as
many models thatget 30 mpg or better than its nearest competitor. GM's
four new midsize crossover vehicles have best-in-class fuel economy. GM
has eight hybrids on the road today, with a total of 20 planned by 2012.
The 2-Mode Chevy Tahoe full-size SUV was named Green Car of the Year
last November. The new Ford Fusion Hybrid and Mercury Milan Hybrid beat
the Toyota Camry Hybrid by 6 miles per gallon. In minivans, Chrysler is
better than both Nissan and Toyota and basically tied with Honda.

-- GM, Ford and Chrysler have been restructuring their businesses over the
past few years that included the loss of tens of thousands of jobs, a
new labor contract with the UAW that will bring costs in line with
foreign competitors in this country, and productivity gains that have
put them on par with the competition. Ford was profitable in the first
quarter of 2008 before the economic crisis began and has been working
for two years to improve its balance sheet through aggressive
restructuring while accelerating the development of new, safe,
fuel-efficient and high quality products. GM has reduced structural
costs in North America by $9 billion since 2005, eliminated raises and
bonuses for executives and salaried employees, and aggressively
addressed its manufacturing footprint, shifting from truck and SUVs to
smaller cars and crossovers.

-- According to The Harbour Report, the manufacturing productivity bible of
the industry, GM has more plants leading their respective segments in
productivity than any other competitor, foreign or domestic.

Wednesday, November 26, 2008

UAW faces deeper cuts to clinch auto rescue


UAW faces deeper cuts to clinch auto rescue
November 26, 2008

DETROIT (Reuters) -- The union contract hailed as the deal to save Detroit automakers a year ago is in danger of coming undone in the face of the industry's push to secure the federal bailout it now sees as its best bet to survive.

The centerpiece of the historic UAW contract, the creation of a trust to take over the estimated $80 billion retiree health care liability of the Detroit 3, seems certain to be re-examined as General Motors and its rivals seek government aid to survive a brutal downturn in car sales.

UAW President Ron Gettelfinger said the creation of that Voluntary Employee Beneficiary Association -- or VEBA -- trust would safeguard retiree health care for 80 years.

Wall Street analysts, meanwhile, hailed the deal as a game-changer for Detroit, one that could level the playing field with competitors led by Toyota Motor Corp.

But with GM running short of cash and pleading for a share of a $25 billion federal bailout, the UAW faces increasing pressure to accept concessions that would rewrite provisions for funding the VEBA even before it takes effect from 2010.

Those are likely to include a more limited payout for the VEBA health care trust, which could imply reduced benefits for future retirees. The union will also face pressure to abandon a "jobs bank" program that pays wages to laid-off workers.

"They have got to make some adjustments to the VEBA, because there is no way they can afford to make those payments," said Erich Merkle, a Crowe Horwath consultant.

A UAW spokesman was not available for comment.

With automakers seeking a rescue and sales at 25-year lows, analysts expect GM, Ford Motor Co. and Chrysler LLC to present revised restructuring plans designed to show executives, creditors and factory workers accepting new sacrifices.

Cutting or eliminating the "jobs bank" where idle workers may receive nearly full pay and benefits for up to two years, and deferring or reducing payments to the VEBA are two avenues of likely union concessions, analysts said.

"After the federal government, this is a most likely source of liquidity to help tide them over," Fitch Ratings managing director Mark Oline said of the VEBA.

Gettelfinger has said broad changes to the VEBA are not being considered, but analysts believe the union would be willing to make some compromises.

TRICKY

GM, Ford and Chrysler collectively have pledged about $48 billion to the VEBA fund through transfers of current trusts and future payments to cover a share of the liabilities.

"I don't think the UAW is going to be a challenge here," IHS Global Insight analyst Aaron Bragman said. "You will see them come back with even more concessions, because they realize the alternative is that they are all out of a job."

In July, the UAW allowed GM to defer $1.7 billion of payments for the VEBA for two years -- in exchange for a note paying 9 percent interest.

The fact the union and the automakers have had a federal court certify the VEBA agreement could make changes difficult, but not impossible. The deal would be "tricky to renegotiate, but that doesn't mean it is off-limits," Standard & Poor's credit analyst Gregg Lemos Stein said.

"In this environment, we don't think it would be an insurmountable challenge," he said.

S&P expects GM and Chrysler to run short of cash by early in 2009 without a market improvement it does not expect, or external support. Ford has until mid to late 2009.

WHITHER THE JOBS BANK?

While the jobs bank has been a lightning rod for controversy and seized as a symbol of Detroit's excess, the 2007 contract sharply curtailed the program. The Detroit-based companies are also not the only ones to pay idled workers.

Both Toyota Motor Corp. and Honda Motor Co. have retained idled U.S. workers during plant closures this year -- Toyota at its Texas truck plant and Honda in Alabama and Ohio.

"I think the jobs bank for sure has to go," Merkle said. "Even if it didn't cost them anything, there is a problem of political appearances, and it's very hard for anyone outside the auto industry to understand."

JP Morgan analyst Himanshu Patel expects "shared sacrifice" to be a major theme, whether part of an immediate bailout of the U.S. auto industry or a more comprehensive plan that takes shape under the Obama administration.

"Such multi-party concession deals take months, not weeks, to negotiate," Patel said in a note to clients.

Setting up GM to operate profitably in a much weaker U.S. market will require UAW concessions on the VEBA, jobs bank and a cut in wages and benefits for active workers, Patel said.

Gregg Shotwell, now a GM retiree and a persistent critic of the UAW leadership as a union member, said he expected the jobs bank to be eliminated and VEBA reduced. He believes UAW workers are resigned to the changes.

"We warned that the VEBA was not bankruptcy-proof and now it is looking shaky, and I'm one of these guys depending on the VEBA," Shotwell said.

American Auto Makers-Contributions after September 11th 2001


Contributions after September 11th 2001

Ford, Chrysler and GM's 9/11 Contributions

CNN Headline News did a short news listing regarding Ford and GM's contributions to the relief and recovery efforts in New York and Washington. The findings are as follows......


1. Ford- $10 million to American Red Cross matching employee contributions of the same number plus 10 Excursions to NY Fire Dept. The company also offered ER response team services and office space to displaced government employees.

2. GM- $10 million to American Red Cross matching employee contributions of the same number & a fleet of vans, suv's, &trucks.

3. Daimler Chrysler- $10 million to support of the children and victims of the Sept. 11 attack.

4 . Harley Davidson motorcycles- $1 million & 30 new motorcycles to the New York Police Dept.

5. Volkswagen- Employees and management created a Sept 11 Foundation, funded initial with $2 million, for the assistance of the children and victims of the WTC.

6. Hyundai- $300,000 to the American Red Cross.

7. Audi- Nothing.

8. BMW- Nothing.

9. Daewoo- Nothing.

10. Fiat- Nothing.

11. Honda- Nothing despite boasting of second best sales month ever in August 2001

12. Isuzu- Nothing.

13. Mitsubishi- Nothing.

14. Nissan- Nothing.

15. Porsche- Nothing. Press release condolences via Porsche website.

16. Subaru- Nothing.

17. Suzuki- Nothing.

18. Toyota- Nothing despite claims of high sales in July and August 2001. Condolences posted on the website.

Whenever the time may be for you to purchase or lease a new vehicle, keep this information in mind. You might want to give more consideration to a car manufactured by an American-owned and/or American based company. Apart from Hyundai and Volkswagen, the foreign car companies contributed nothing at all to the citizens of the United States. It's OK for these companies to take money out of this country, but it is apparently not acceptable to return some in a time of crisis. I believe we should not forget things like this. Say thank you in a way that gets their attention.

Emailed To us at gmchryslernews.blogspot.com

Are There UAW Concessions Coming?



(CNSNews.com) – The Big Three automakers are forced to pay 85- to 95-percent of union wages and benefits to members of the United Auto Workers union who aren’t working – even if their plants have been closed.

Industry analysts say union labor agreements that obligate the Big Three to pay millions of dollars to workers who are no longer working are a major reason why the automakers are in trouble – a problem that no short-term bailout can fix.

During hearings last week where the chief executives of Ford, Chrysler and General Motors appeared before the Senate Banking Committee, Sen. Bob Corker (R-Tenn.) raised the issue.

Corker asked Rick Wagoner, CEO of General Motors, why with all of the measures he has taken to prevent a collapse, his company was still not making money.

“Is it because of the (United Auto Workers) union?” Corker asked pointedly.

Wagoner, who demurred from answering directly, said that even at plants that are closing, “85 percent” of union employment benefits still “have to be paid.” He said that GM has had to restructure and reduce the cost of operating in the U.S., but the company still pays for employees that are not currently working at “idle facilities.”

Chrysler Chairman Robert Nardelli, facing a similar question from Corker, confirmed that “agreements are in place” between Chrysler and UAW that, regardless of demand, Chrysler must still operate at a pay rate of 95 percent of wages for employees not currently working at idle facilities.

Peter Morici, a professor at the University of Maryland’s school of business, told CNSNews.com that one of the biggest problems the companies face is the UAW’s Jobs Bank – a program established more than two decades ago that guarantees nearly full salary and benefits to out-of-work employees.

“Right now if a plant closes in St. Louis and a new one opens in Kansas City, the workers don’t have to move from St. Louis to Kansas City; they can opt to get a $105,000 payout or go on Jobs Bank where they can collect 95 percent of pay for the rest of their lives,” Morici said.

The Detroit automakers have not released official numbers indicating how much they currently spend on their respective Jobs Banks, but previously released four-year labor contracts signed with the UAW in 2003 revealed “contribution caps” to be implemented by each of the Big Three.....More

Chrysler News-Daimler struggles to shed Chrysler


Chrysler News
Tom Krisher / Associated Press
DETROIT -- Daimler AG says talks to sell its remaining stake in struggling automaker Chrysler Holding LLC have stalled because of exaggerated demands from Chrysler owner Cerberus Capital Management LP.

Daimler says Cerberus is making demands that exceed the value of the private equity firm's investment in Chrysler. It also says Cerberus is claiming Daimler provided incomplete information about Chrysler.

Daimler sold 80.1 percent of Chrysler to Cerberus last year in a $7.4 billion deal. Cerberus is trying to buy the remaining 19.9 percent stake and is in talks to sell Chrysler.

A message left for a Cerberus spokesman wasn't immediately returned.

Stuttgart, Germany-based Daimler said in a statement Wednesday that Cerberus has alleged "conduct outside the ordinary course of business by Daimler during the time between signing and closing of the transaction, as well as an allegation of incomplete information about the business."

Cerberus and Daimler signed the deal May 14, 2007, and the sale closed Aug. 6, 2007.

Daimler spokesman Han Tjan declined to give details of the allegations but said they are untrue.

"We reject these allegations as being completely without substance," Tjan said in a telephone interview.

Cerberus, a New York private equity firm, is making financial claims that go "beyond the framework of the contractually agreed possible obligations under representations and warranties," Daimler's statement said.

Since Cerberus acquired Chrysler, U.S. auto sales have dropped substantially. Chrysler sales fell 35 percent in October from a year earlier and are down 26 percent for the first 10 months of this year.

Cerberus has recorded substantial losses since it purchased the majority stake in Chrysler: $1.6 billion last year and $1.28 billion in the first half of this year.

Since Chrysler is privately owned, the company does not have to report its earnings, but they can be calculated from Daimler's balance sheet.

Auburn Hills-based Chrysler, along with other U.S. automakers, is seeking federal loans to stave off running out of cash. Cash-starved General Motors Corp. reportedly had been in talks last month to buy Chrysler.

Sunday, November 23, 2008

Plane facts: GM cutting back fleet


Automaker downsizing to 3 jets; Chrysler owns none while Mulally, family use Ford aircraft.
Robert Snell and Alisa Priddle / The Detroit News
General Motors Corp. has been thinning its corporate jet fleet. Ford Motor Co. continues to explore ways to curtail travel expenses. And Chrysler LLC doesn't even own planes anymore.

The CEOs of Detroit's Big Three didn't mention those facts this week when lawmakers chastised them for arriving in Washington on pricey corporate jets to appeal to lawmakers for $25 billion in emergency loans.

"From a PR standpoint, it was a nightmare," said Michael Layne, a partner in Marx Layne, a public relations firm in Farmington Hills....More

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The Big Three Must Make Their Case For Loan


Automakers to make a clearer case for bailout
Congress is expecting executives to return with detailed business plans that answer three key questions.

By KENDRA MARR, Washington Post

In just nine days, Detroit's Big Three automakers hope to replead their case for a $25 billion emergency loan. But this time they will be expected to produce clearer business plans.

On Friday, House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., sent the automakers a letter calling on them to submit "a credible restructuring plan" by Dec. 2. The letter comes after Congress refused to vote Thursday on carving the loan out of the $700 billion financial rescue plan.

President Bush, in his weekly address Saturday, castigated Democrats for failing to vote on an alternative proposal to let automakers instead tap $25 billion in loans that are supposed to help them improve the fuel efficiency of their cars.

"If the automakers are willing to make the hard decisions needed to become viable, they should be able to receive the funds Congress already allotted to them for other purposes," Bush said.

Pelosi and others have said there was not enough support in Congress to provide funding absent a detailed turnaround plan.

Pelosi and Reid laid out a number of requirements for a restructuring plan that would generally answer three questions:

1. How will the $25 billion be spent and paid back?

Automakers have said they intend to split the $25 billion loan roughly along the lines of their share of the U.S. market. GM would get $10 billion to $12 billion. Ford and Chrysler would take $7 billion to $8 billion each.

Asked how they intended to pay back the loan, Chrysler chief executive Robert Nardelli said the automakers hoped the money would buy them time to transform their businesses.

"We wouldn't be here today asking for this if we didn't have a high confidence level that we could weather this economic trough, continue to resize, make these gut-wrenching decisions to come out the other side leaner, more agile, and for us, a higher-quality, higher-reliable product," he said.

Yet some analysts said GM alone may need as much as $30 billion next year to deal with a potential cash shortfall. Pelosi and Reid are asking the automakers to document their current financial positions and outline plans for meeting health care and pension obligations. They want estimates for when the loans would be repaid under varying auto sales conditions.

Some analysts say the automakers also need to work on their marketing pitches, recalling the assertive spirit of former Chrysler chief executive Lee Iaccoca, who persuaded Congress to bail out Chrysler in 1979.

"He was much more a salesman," said Bruce Belzowski, an associate director at the University of Michigan's Transportation Research Institute. "When he went before Congress he was excited and emotional about what he was going to do. ...... What a great show for just a $1.5 billion loan."

2. How will the automakers demonstrate accountability?

Congress wants to see that the industry is willing to make sacrifices if it accepts government aid.

Some lawmakers cringed when Ford chief executive Alan Mulally refused to cut his salary to $1 like Iacocca, saying, "I think I'm OK where I am." And flying three separate private jets to Washington to testify enraged Rep. Gary Ackerman, D-N.Y.: "I mean, couldn't you all have downgraded to first class or jet-pooled or something to get here? It could have at least sent a message that you do get it."

The United Auto Workers will likely need to make some "visible indication of sacrifice" to push forward the automakers' plans, said Dave Cole, chairman of the Center for Automotive Research.

Ford and GM made some headway on Friday, announcing cuts at several plants.

3. Is the industry viable?

This is perhaps the most important question for Congress.

GM chairman and chief executive Rick Wagoner attempted to convey a commitment to make cars more fuel efficient.

"We have 20 models that get more than 30 miles per gallon highway, more than twice any other manufacturer today," he said. "We have six hybrid models. We'll offer three more next year. We're the global leader in biofuel vehicles."

But lawmakers want further assurances. Pelosi and Reid asked automakers to demonstrate their ability to meet fuel standards of at least 35 miles per gallon by 2020.

Yet some analysts said GM alone may need as much as $30 billion next year to deal with a potential cash shortfall. Pelosi and Reid are asking the automakers to document their current financial positions and outline plans for meeting health care and pension obligations. They want estimates for when the loans would be repaid under varying auto sales conditions.

Some analysts say the automakers also need to work on their marketing pitches, recalling the assertive spirit of former Chrysler chief executive Lee Iaccoca, who persuaded Congress to bail out Chrysler in 1979.

"He was much more a salesman," said Bruce Belzowski, an associate director at the University of Michigan's Transportation Research Institute. "When he went before Congress he was excited and emotional about what he was going to do. ...... What a great show for just a $1.5 billion loan."

2. How will the automakers demonstrate accountability?

Congress wants to see that the industry is willing to make sacrifices if it accepts government aid.

Some lawmakers cringed when Ford chief executive Alan Mulally refused to cut his salary to $1 like Iacocca, saying, "I think I'm OK where I am." And flying three separate private jets to Washington to testify enraged Rep. Gary Ackerman, D-N.Y.: "I mean, couldn't you all have downgraded to first class or jet-pooled or something to get here? It could have at least sent a message that you do get it."

The United Auto Workers will likely need to make some "visible indication of sacrifice" to push forward the automakers' plans, said Dave Cole, chairman of the Center for Automotive Research.

Ford and GM made some headway on Friday, announcing cuts at several plants.

3. Is the industry viable?

This is perhaps the most important question for Congress.

GM chairman and chief executive Rick Wagoner attempted to convey a commitment to make cars more fuel efficient.

"We have 20 models that get more than 30 miles per gallon highway, more than twice any other manufacturer today," he said. "We have six hybrid models. We'll offer three more next year. We're the global leader in biofuel vehicles."

But lawmakers want further assurances. Pelosi and Reid asked automakers to demonstrate their ability to meet fuel standards of at least 35 miles per gallon by 2020.

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Friday, November 21, 2008

GM NEWS-GM to extend holiday shutdown, will cut production

DETROIT – General Motors Corp. will extend its holiday shutdown or make other production cuts at five factories at as it deals with a continued U.S. auto sales slump and fights to stay solvent.

Also Friday, the company announced changes at five other factories that could increase production of some models, all based on a volatile U.S. auto market that has slumped to a 25-year low.

The changes won't be the last as cash-starved GM tries to conserve as much money as possible while awaiting Congressional action on a bailout loan package for Detroit's three automakers.

"Market demand is usually the prevailing criteria," said spokesman Chris Lee. "We're looking at this much more frequently than I've ever seen us as far as making minor adjustments. And I suspect that will be the norm going forward."

GM said it will cancel a down week starting Dec. 8 at its Wentzville, Mo., factory that makes full-size vans, and will keep or restore overtime at factories in Delta Township, Mich., near Lansing; Spring Hill, Tenn.; Arlington, Texas; and Fort Wayne, Ind.

But factories facing cuts include a plant in Lordstown, Ohio, where workers were told that the normal two-week holiday shutdown will be extended until Jan. 20. The sprawling factory complex stamps parts for and assembles the Chevrolet Cobalt and Pontiac G5 small cars.

Also affected is a car plant in Oshawa, Ontario, which will see an additional week of closure starting Jan. 12 on the Chevrolet Impala assembly line. The holiday shutdown will be extended until Jan. 12 at a car-making plant in Orion Township, Mich., near Pontiac, and until Jan. 20 at a car assembly plant in Kansas City, Kan., GM said.

GM also plans to close the Oshawa, Ontario, truck plant sooner than planned. The company had said in June it would close the pickup truck plant by 2010; the new closure date was not available. In addition, GM will slow assembly line speeds at two of the factories.

The automaker normally shutters its plants for two weeks around the Christmas and New Year's holidays, reopening them the first week in January. But with U.S. auto sales down 15 percent and GM sales off 20 percent for the first nine months of the year, the closings were extended.

Workers will get holiday pay for the first two weeks, then go on layoff and get unemployment benefits and supplemental pay from the company.

At Lordstown, the last scheduled workday will be Dec. 23, although production will start to wind down before that, said Dave Green, president of a United Auto Workers local at the complex.

Green said that after Jan. 20, the Lordstown complex will keep operating around the clock, but assembly line speed will be reduced from the current 62 vehicles per hour to 46.5 vehicles. The Lordstown complex, located about 50 miles southeast of Cleveland, employs about 4,200 production workers.

Earlier this year the company added workers to the plant as demand for its small, fuel-efficient cars increased. But since then the bottom has fallen out of sales industrywide, and GM later announced it would lay off up to 1,100 of the plant's workers starting Jan. 20.

Green said he's optimistic that GM will resume production as scheduled on Jan. 20, although at the slower assembly line speed.

"I think we'll come back, and then if production warrants, or demand wanes, maybe there will be a little more down time," he said. "It's all driven by the market, so it's really out of our hands."

GM and its Detroit counterparts are seeking billions of dollars in loans from the federal government. Congress is requiring the automakers to come up with plans to become viable before it will decide on the loans.

GM has announced thousands of factory layoffs so far this year and is cutting its salaried staff in order to pare expenses and conserve cash. The company has said it could run out of cash by the end of this year.

In afternoon trading, GM shares dipped 17 cents to $2.71.


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Thursday, November 20, 2008

Breaking News:Senate cancels vote on auto bailout


Senate Majority Leader Harry Reid says he wants to help Detroit's Big Three, but he calls off a scheduled vote on a $25 billion auto industry bailout.

WASHINGTON (AP) -- The Senate's top Democrat has called off a planned vote this week on a $25 billion auto industry bailout.

Senate Majority Leader Harry Reid said that he wanted to figure out some way to help Detroit's struggling Big Three but that efforts to do so had stalled.

The White House and congressional Republicans rejected Democrats' plan to dip into the $700 billion Wall Street rescue fund to finance loans to U.S. automakers.

A bipartisan group from auto industry states is working to cut a deal on a scaled-down aid package. If agreement can be reached, Reid said the Senate could still vote on it as part of a measure to extend jobless benefits.


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Wednesday, November 19, 2008

Big 3 carmakers beg for $25B, warn of catastrophe


By JULIE HIRSCHFELD DAVIS

WASHINGTON (AP) — Detroit's Big Three automakers pleaded with a reluctant Congress Tuesday for a $25 billion lifeline to save the once-proud titans of U.S. industry, pointedly warning of a national economic catastrophe should they collapse.

Millions of layoffs would follow their demise, they said, as damaging effects rippled across an already-faltering economy.

But the new rescue plan appeared stalled on Capitol Hill, opposed by the Bush administration and Republicans in Congress who don't want to dip into the Treasury Department's $700 billion financial bailout program to come up with the $25 billion in loans.

Rank and file Republicans and Democrats from states heavily impacted by the auto industry worked behind the scenes trying to hammer out a compromise that could speed some aid to the automakers before year's end. But it was an uphill fight.

"Our industry ... needs a bridge to span the financial chasm that has opened up before us," General Motors Corp. CEO Rick Wagoner told the Senate Banking Committee. He blamed the industry's predicament not on management failures but on the deepening global financial crisis.

And Robert Nardelli, CEO of Chrysler LLC, told the panel the bailout would be "the least costly alternative" when compared with damage from bankruptcy.

Under questioning from skeptical senators, both said they'd be willing to consider slashing their salaries to $1 to show a willingness to sacrifice for federal help.

Sympathy for the industry was sparse, however, with bailout fatigue dominating Capitol Hill. Lawmakers bristled with pent-up criticism of the auto industry, and questioned whether a stopgap loan would really cure what ails the companies.

At the start of a more than four hour grilling before his committee, Sen. Christopher Dodd, D-Conn., told the leaders of GM, Chrysler and Ford Motor Co. that the industry was "seeking treatments for wounds that I believe to a large extent were self-inflicted."

"You're asking an awful lot," Dodd, the panel chairman, said at the close of the session. "I'd like to tell that you in the next couple of days this is going to happen. I don't think it is."

Sen. Mike Enzi, R-Wyo., complained that the larger financial crisis "is not the only reason why the domestic auto industry is in trouble."

He cited "inefficient production" and "costly labor agreements" that put the U.S. automakers at a disadvantage to foreign companies.

Ford CEO Alan Mulally told senators the auto industry was "a pillar of our economy."

GM's Wagoner refuted criticism that his company was not keeping pace with the times, saying it had been on the brink of a turnaround before the financial meltdown hit, reducing sales to the lowest per-capita level since World War II.

Failure of the auto industry "would be catastrophic," he said, resulting in three million jobs lost within the first year and "economic devastation (that) would far exceed the government support that our industry needs to weather the current crisis."

Chrysler's Nardelli sought to respond to those who suggest the automakers seek Chapter 11 bankruptcy protection, as have some airlines that later emerged restructured and leaner.

"We just cannot be confident that we will be able to successfully emerge from bankruptcy," Nardelli said.

Chrysler was bailed out by the federal government once before, in 1979, with $1.2 billion in loan guarantees. The company repaid the loan, plus interest, ahead of schedule. Back then, former Chrysler CEO Lee Iacocca reduced his salary to $1.

Under questioning from Sen. Jon Tester, D-Mont., Mulally didn't join the other two executives in saying he'd do the same now.

"I sure respect the intent of it, but the most important thing is that we not degrade our ability to be competitive and deliver this plan," Mulally said.

Joining the Big Three CEOs, Ron Gettelfinger, president of the United Auto Workers union, said the emergency loans were important for the survival of the industry and union jobs. He said the UAW recognized that "in order for these companies to be competitive, we had to make tough calls" in labor concessions.....More


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V.P. Dick Cheney Indicted On Criminal Activity Charges

Have You Wondered Why V.P. Dick Cheney has been absent during this economic crisis and Auto Industry Rescue Loan?

V.P. Dick Cheney has been indicted on Criminal Activity Charges!


Political Roast-Cheney, Gonzales indicted in South Texas county

Article By CHRISTOPHER SHERMAN (AP)

McALLEN, Texas (AP) — Vice President Dick Cheney and former Attorney General Alberto Gonzales have been indicted on state charges involving federal prisons in a South Texas county that has been a source of bizarre legal and political battles under the outgoing prosecutor.

The indictment returned Monday has not yet been signed by the presiding judge, and no action can be taken until that happens.

The seven indictments made public in Willacy County on Tuesday included one naming state Sen. Eddie Lucio Jr. and some targeting public officials connected to District Attorney Juan Angel Guerra's own legal battles.

Regarding the indictments targeting the public officials, Guerra said, "the grand jury is the one that made those decisions, not me."

Guerra himself was under indictment for more than a year and half until a judge dismissed the indictments last month. Guerra's tenure ends this year after nearly two decades in office. He lost convincingly in a Democratic primary in March.

Guerra said the prison-related charges against Cheney and Gonzales are a national issue and experts from across the country testified to the grand jury.

Cheney is charged with engaging in an organized criminal activity related to the vice president's investment in the Vanguard Group, which holds financial interests in the private prison companies running the federal detention centers. It accuses Cheney of a conflict of interest and "at least misdemeanor assaults" on detainees because of his link to the prison companies.

Megan Mitchell, a spokeswoman for Cheney, declined to comment on Tuesday, saying that the vice president had not yet received a copy of the indictment.

The indictment accuses Gonzales of using his position while in office to stop an investigation in 2006 into abuses at one of the privately-run prisons.

Gonzales' attorney, George Terwilliger III, said in a written statement, "This is obviously a bogus charge on its face, as any good prosecutor can recognize." He said he hoped Texas authorities would take steps to stop "this abuse of the criminal justice system."

Another indictment released Tuesday accuses Lucio of profiting from his public office by accepting honoraria from prison management companies. Guerra announced his intention to investigate Lucio's prison consulting early last year.

Lucio's attorney, Michael Cowen, released a scathing statement accusing Guerra of settling political scores in his final weeks in office.

"Senator Lucio is completely innocent and has done nothing wrong," Cowen said, adding that he would file a motion to quash the indictment this week.

Willacy County has become a prison hub with county, state and federal lockups. Guerra has gone after the prison-politician nexus before, extracting guilty pleas from three former Willacy and Webb county commissioners after investigating bribery related to federal prison contacts.

Last month, a Willacy County grand jury indicted The GEO Group, a Florida private prison company, on a murder charge in the death of a prisoner days before his release. The three-count indictment alleged The GEO Group allowed other inmates to beat Gregorio de la Rosa Jr. to death with padlocks stuffed into socks. The death happened in 2001 at the Raymondville facility.

In 2006, a jury ordered the company to pay de la Rosa's family $47.5 million in a civil judgment. The Cheney-Gonzales indictment makes reference to the de la Rosa case.

None of the indictments released Tuesday had been signed by Presiding Judge Manuel Banales of the Fifth Administrative Judicial Region.

Last month, Banales dismissed indictments that charged Guerra with extorting money from a bail bond company and using his office for personal business. An appeals court had earlier ruled that a special prosecutor was improperly appointed to investigate Guerra.

After Guerra's office was raided as part of the investigation early last year, he camped outside the courthouse in a borrowed camper with a horse, three goats and a rooster. He threatened to dismiss hundreds of cases because he believed local law enforcement had aided the investigation against him.

The indictments were first reported by KRGV-TV.

Associated Press writer Deb Riechmann in Washington contributed to this report.

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Tuesday, November 18, 2008

The Big Three Plead to Congress For A Loan


WASHINGTON – Detroit's Big Three automakers pleaded with Congress Tuesday for a $25 billion lifeline to save their once-proud companies from collapse, warning of broader peril for the national economy as well.

It was an uphill battle, with the plan stalled on Capitol Hill amid opposition from Republicans and the Bush administration. But congressional leaders worked behind the scenes in an effort to hammer out a compromise that could speed some aid to the automakers before year's end.

The executives of Chrysler LLC, Ford Motor Co. and General Motors Corp., as well as the United Auto Workers union chief, were pleading their case Tuesday afternoon before the Senate Banking Committee. A House panel was to hear from them Wednesday.

Majority Leader Steny Hoyer said Congress might have to return in December — rather than adjourning for the year this week, as expected — to push through an auto bailout.

"Dealing with the automobile crisis is a pressing need. We are talking about a lot of people ... and a great consequence to our economy," said Hoyer, D-Md. "Obviously we are going to be back here, we think, in December."

The financial situation for the automakers grows more precarious by the day. Cash-strapped GM said it will delay reimbursing its dealers for rebates and other sales incentives and could run out of cash by year's end without government aid.

In the Senate, leaders were focusing on a plan favored by the White House and GOP lawmakers to let the auto industry use a $25 billion loan program created by Congress in September — designed to help the companies develop more fuel-efficient vehicles — to tide them over financially until President-elect Barack Obama takes office.

However, House Speaker Nancy Pelosi, D-Calif., and other senior Democrats, who count environmental groups among their strongest supporters, have vehemently opposed that approach because it would divert federal money that was supposed to go toward the development of vehicles that use less gasoline.

Instead, they want to draw a separate $25 billion for the industry from the $700 billion Wall Street bailout — bringing the government's total aid to the car companies to $50 billion.

A Senate vote on that plan, which would also extend jobless benefits, could come as early as Thursday, but aides in both parties and lobbyists tracking the effort privately acknowledge it doesn't have the support to advance. Treasury Secretary Henry Paulson renewed the administration's opposition on Tuesday.

Even the car companies' strongest supporters conceded Tuesday that changing the terms of the fuel-efficiency loan program might be the only way to secure funding for them with Congress set to depart for the year and the firms in tough financial shape.

"While I believe we have to have retooling going into next year, if in the short run the only way we have to be able to get some immediate help is to take a portion of that, I would very reluctantly do that — but only because I believe President-elect Obama is going to be focused on retooling and on a manufacturing strategy next year," said Sen. Debbie Stabenow, D-Mich.

The White House said the government shouldn't send any more money to the struggling auto industry on top of the already-approved loans.

"We don't think that taxpayers should be asked to throw money at a company that can't prove that it has a long-term path for success," said White House Press Secretary Dana Perino.

Sen. Mitch McConnell, R-Ky., the minority leader, said that redirecting the existing loans was "a sound way to go forward," and that he was working with Democratic Leader Harry Reid of Nevada to set a vote on such a plan.

"The auto industry obviously is very important, very important to my state, but there is a way to do this," said McConnell, who has two Ford plants and a GM plant in his state.

Paulson, testifying on the House side, defended the administration's handling of the massive $700 billion bailout for the financial industry and said it should remain off-limits for Detroit, no matter how badly the automakers need help.
More....


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Monday, November 17, 2008

The Big Three Bailout



Battle over Big Three bailout looms in lame-duck Congress
(CNN) -- Congress kicked off a special lame-duck session Monday, and a partisan battle awaits over the fate of the nation's Big Three automakers.
As newly minted legislators convened in Washington on Sunday for this week's orientation and leadership elections, the 110th Congress met in its last session before passing the baton January 6.

Specifically, Senate Democrats were trying to earn GOP support for their proposed bailout of the Big Three automakers. Democrats would like to see a vote Wednesday, but some concede they probably don't have the support.

Senate Majority Leader Harry Reid, speaking on the Senate floor Monday, urged action on the plan.

"The Treasury Department has acknowledged that they could provide the auto companies the temporary assistance to keep automakers solvent by taking money out of the $700 billion we've already provided to the Treasury Department," Reid said.

"If we move forward, we can protect American jobs, help American families and prevent our economy from falling further into a recession," he said. "In the event there is objection to passing this important legislation, we'll have the opportunity to vote on a second piece of legislation ... that consists solely of unemployment insurance and relief for the auto industry and the auto industry's work force."

Two House Democratic aides confirm that House Democratic leaders and House Financial Services Committee Chairman Barney Frank, D-Massachusetts, are scheduled to meet with Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke on Monday afternoon.

The meeting -- to take place in House Speaker Nancy Pelosi's office -- will include an update on the Troubled Asset Relief Program, or TARP, the $700 billion measure that was passed last month to help bail out financial institutions.

"One out of 10 jobs in this country are auto-related. Twenty percent of retail sales are auto-related or automobiles, so this is a national problem," Sen. Carl Levin, D-Michigan, told NBC's "Meet the Press" on Sunday.
More....





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If No Bailout Of The Big Three, Massive Job Loss and Boycotts


It looks like a lot of politicians and so called economic experts are split on the Bailout Of The Big Three. Which to rephrase that, it is a loan to the big three.This week will really heat up the debate over the purposed Auto Industry Rescue plan.

It is hard to believe anyone would take pleasure in helping the industry fold up and take it's business overseas. We all know the job losses could reach 3.5 Million when the smoke clears! and how is that good for America?

You let the Government bailout the lending institutions that have caused the credit mess and gave out loans they didn't have the securities to back.So you reward them!

What happens after you gave AIG Billions?, They handed out bonuses and through a $500,000 party! But Thats ok, we can over look that!

How can the common person have any leverage? Your Dollar and your Vote!

How can the common person, autoworker, designers or engineers make a difference to voice their opinion against those who oppose the rescue of American jobs? Boycott

These politicians who oppose the rescue of American jobs-Don't Vote for them!

For the radio show host that rips the American auto industry-Don't Listen to their show!

For companies that are supported buy the foreign auto makers-Don't Shop there!

For Television Shows that are supported by Advertising from the foreign auto makers-Don't Watch them!

The only voice the common worker has is who they vote for and where they spend their dollar!

The Big 3 Bailout-Auto executives in spotlight as U.S. weighs bailout


By John Crawley and Paul Eckert

WASHINGTON (Reuters) - U.S. automakers should consider executive shake-ups if it would ensure congressional backing for a bailout supporters say is needed to prevent industry collapse, an architect of the effort said on Sunday.

The statement by Carl Levin of Michigan underscored the difficulty Democrats are having in finalizing a rescue plan of up to $25 billion and securing majority support in the Senate, which plans to begin debate on the matter on Monday.

"If it was the difference between getting this kind of support or not, obviously the management should consider resigning," Levin, a staunch industry ally, said on NBC's "Meet the Press."

Levin said he has not been approached on that ultimatum. But some lawmakers have raised the issue and it has factored in a broader national discussion of whether taxpayers should save General Motors Corp, Chrysler LLC and Ford Motor Co.

One influential Republican cited corporate decision-making over the years as the primary reason for Detroit's distress.

"I don't believe they've got good management. They don't innovate. They're a dinosaur, in a sense, and I hate to see this," Richard Shelby, the top Republican on the Senate Banking Committee, said on NBC's "Meet the Press."

Levin, lobbyists and other rescue supporters contend a bailout is justified because millions of factory, supplier, dealer and other jobs are tied to the health of industry.

The companies face bleak liquidity prospects with sales plunging and credit markets choked for corporate and consumer borrowing. Most consumers finance their auto purchases.

GM has said it could run short of cash in early 2009. All three manufacturers reject bankruptcy as an option.

The White House and Republicans who have spoken out on the issue do not unanimously oppose help for Detroit, but there is strong aversion to a bailout.

MANAGEMENT AN ISSUE

Jon Kyl of Arizona, the Republican Senate whip, does not see the chamber approving a straight, $25 billion bailout next week.

"I don't speak for every Republican, but I suppose most of us will oppose it as a very bad idea. This didn't happen to the auto companies overnight," Kyl said on "Fox News Sunday."

Another author of bailout legislation has no plans to make assistance conditional on management changes even though he is not convinced a bailout will pass.

"I'm not sure who I want the new management to be," House of Representatives Financial Services Chairman Barney Frank said on the CBS program "Face the Nation." Continued...
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Friday, November 14, 2008

Chrylser News-Greedy Chrysler Executives Get Millions In Bonuses!



Read this article your going to flip! Massive bonuses to Chrysler's top executives!

Chrysler execs get millions to stay put

Automaker defends payouts amid looming bailout talks

As Detroit's crumbling auto industry asks Congress for a bailout, Chrysler is in the awkward position of paying about $30 million in retention bonuses to keep top executives while the company cuts thousands of jobs.

Chrysler owes the bonuses under its contracts with about 50 executives, based on a retention incentive plan crafted early last year by former German parent DaimlerChrysler, when it was preparing to sell the Chrysler unit.

Nancy Rae, Chrysler executive vice president for human resources and communications, said the move made sense at the time to ensure potential buyers that key Chrysler executives would remain in place after a sale. She acknowledged that the bonuses could be seen as controversial now.

"We all would be smarter if we knew what we know now back in February of '07," she said. "Probably a lot of different decisions would be made."

Chief executives of Chrysler LLC, General Motors Corp. and Ford Motor Co. are expected to testify next week before a House committee on a proposal for $25 billion in low-cost government loans to help keep the companies afloat. Any aid is expected to come with limits on executive pay and bonuses. It is unclear whether those conditions would affect existing bonus plans -- Chrysler's was hatched around April 2007 -- or merely limit future bonuses and golden parachutes.

Retention bonus plans are fairly common in volatile times and at troubled companies that are straining to attract and retain top talent.

But they have been controversial in recent automotive industry bankruptcy cases involving suppliers Delphi Corp. of Troy and Toledo-based Dana Holding Corp. A 2005 change in U.S. bankruptcy laws forbade the payment of retention bonuses to executives just for staying at a company while it's in bankruptcy proceedings.

Documents obtained by the Free Press show that at least six Chrysler executives are due to receive bonuses of more than $1 million apiece to stay through August 2009, the two-year anniversary mark of when private equity firm Cerberus Capital Management bought an 80.1% stake in Chrysler.

Those promised the largest retention bonuses:

• Frank Ewasyshyn, executive vice president, manufacturing, $1.89 million.

• Frank Klegon, executive vice president, product development, $1.8 million.

• Rae, $1.66 million.

• Simon Boag, president, Mopar/global service and parts, $1.65 million.

• Steven Landry, executive vice president, North American sales, $1.63 million.

• Michael Manley, executive vice president, international sales, marketing and business development, $1.53 million.

The bonus sizes ranged from a high of Ewasyshyn's $1.89 million down to $200,000. The agreements provided for payments of 25% of the bonuses in February 2008 -- which were made on schedule -- and for the remaining 75% to be paid in August 2009.

Promise of a smooth transition
In an interview this week, Rae said Daimler considered it necessary to develop the plan because potential buyers wanted assurance of a smooth transition.

"These were very conservatively constructed," she said of the bonuses. "And keep in mind that it was Daimler doing it, Daimler selling the company and Daimler ensuring it was reasonable for a buyer. ... This was a Daimler program."

She added, "What was put in place at that time was very appropriate -- not only" as a "market practice but for the environment, the conditions of the company, the potential sale."

Peter Morici, a University of Maryland professor and former chief economist at the U.S. International Trade Commission, said he expects executive compensation to become a large issue during the debate over aid for the automakers. He questioned the need of retention bonuses for auto industry executives.

"Who are they going to work for?" he asked. "My feeling is they've run the companies into the ground."

John Challenger, a human resources expert with Challenger, Gray & Christmas in Chicago, acknowledged that such bonuses can be controversial but said companies see them as necessary to prevent loss of leadership during critical times.

"To get good people, the right people, then you often have to pay retention bonuses -- otherwise they just won't come or they won't stay," he said.

Rae said the Chrysler plan has succeeded in keeping talent in place.

"It's been very successful in these challenging times," Rae said.

With public support for helping auto companies weak, according to a Gallup poll, Congress has vowed to prevent big bonuses to executives as a condition of federal aid.

U.S. House Speaker Nancy Pelosi, D-Calif., said Congress will push next week to expand the nation's $700-billion bailout of the financial industry, called the Troubled Asset Relief Program, or TARP, to include automakers.

The auto companies would face limits on executive pay and bans on so-called golden parachutes, which enrich departing executives, said Pelosi and U.S. Rep. Sander Levin, D-Mich.

"We're very much interested in making sure there is shared effort and shared sacrifice," Levin told the Free Press.

Levin said lawmakers discussed those provisions at a meeting last week in Washington with automotive Chief Executive Officers Rick Wagoner of GM, Alan Mulally for Ford and Bob Nardelli of Chrysler, as well as UAW President Ron Gettelfinger.

"Everyone said they fully understood that," Levin said.

U.S. Sen. Chuck Grassley, R-Iowa, sent a letter Thursday to Wagoner, Mulally and Nardelli, urging them to trim executive compensation packages if they expect loan aid.

"They should take every step possible, including cutting executive salaries and bonuses, and exhaust all alternatives before coming to the taxpayers for tens of billions of dollars in help," Grassley said in a written statement.
..................Read More

Chrysler News-Nardelli Said Chrylser must have Merger or Alliances To Survive!


Checkout the latest Reuters report!

Nardelli wants the bailout loan and still a merger with a domestic company or overseas Alliances!


Chrysler urges bailout, Washington split
REUTERS By Soyoung Kim

DETROIT (Reuters) - Goldman Sachs suspended its rating on General Motors Corp on Thursday and said the automaker needs at least $22 billion in federal aid, while Chrysler said it would be "very difficult to survive" without government support.

But U.S. lawmakers remained deeply split over whether to bail out the U.S. auto industry, and U.S. Treasury Secretary Henry Paulson said any federal aid for the U.S. automakers must ensure their long-term viability.

Chrysler LLC Chief Executive Bob Nardelli said Chrysler was losing money due to a decline in U.S. auto sales to 25-year lows, and said Chrysler would seek federal money for its liquidity and restructuring needs.

In one of his few appearances since merger talks between GM and Chrysler broke off, Nardelli said Chrysler must have broader ties with U.S. automakers or alliances with overseas competitors to ride out the industry downturn.

The auto industry has stepped up lobbying efforts to get government support and the heads of the three U.S.-based automakers are expected to testify next week before a congressional committee considering aid for the industry.

The Bush administration said the government could quickly disburse $25 billion in loans already approved by Congress. However, the administration has responded coolly to an aid plan being shaped by Democrats, which includes using part of the $700 billion financial rescue package to provide additional liquidity for the auto industry.

U.S. President-elect Barack Obama is considering appointing someone to lead efforts to help the auto industry return to health, an Obama aide said on Thursday.

The sales slide that began in the United States has spread to the rest of the world because of the credit crisis. On Thursday, data showed that auto sales in Europe fell 15 percent in October from a year ago.

Goldman Sachs forecast that GM would end 2008 with $12.5 billion in cash, within the $11 billion to $14 billion minimum range GM has said it needs to operate, requiring the No. 1 U.S. automaker to seek government assistance.

GM's shares, which hit a 65-year low this week, closed down 13 cents, or 4.22 percent, at $2.95, as investors awaited news on any government rescue. Goldman Sachs said a new program to support the auto industry was most likely, though the timing was uncertain.

Also on Thursday, JPMorgan cut its GM rating to "neutral" from "overweight" and said the automaker needs "something immediately" to make it through the end of the year.

JPMorgan, which also slashed its target price for GM stock to $1.84 from $3.08, said a government bailout could easily reach $30 billion unless GM reforms its vast liability structure.

The warnings come in the wake of GM's deeper-than-expected third-quarter loss and cash burn, announced on Friday.

BAILOUT MEASURES DEBATED

Analysts have warned that any government assistance, which they say is imperative for GM to survive through early 2009, would come at a significant cost to existing shareholders.

Democratic leaders have called for emergency aid for the auto industry in addition to $25 billion of low-interest loans previously approved to support capital investment to meet new fuel economy mandates.

Lawmakers will hold a hearing next week to consider a bill to give another $25 billion in federal loans to U.S. auto manufacturers, possibly using part of the $700 billion financial market rescue law enacted last month.

But the White House said on Thursday it was not the intent of Congress to use the financial rescue package to help ailing U.S. automakers, while U.S. Commerce Secretary Carlos Gutierrez told Reuters that opening the financial bailout fund to one industry was "not a good idea.

House Republican leader John Boehner said spending billions on a bailout with no promises of reforming the companies was "neither fair to taxpayers nor sound fiscal policy."

GM, Ford Motor Co and Chrysler have been burning cash as the global credit crisis accelerated the decline in U.S. auto sales and placed severe limits on corporate and consumer borrowing.

GM ended September with $16.2 billion in cash, down from $21 billion at the end of the second quarter.

The downturn also has affected the plans of non-U.S.-based automakers in the United States.

The Nikkei newspaper reported that Toyota Motor Corp was considering delaying the start of production at its new Mississippi plant until 2011 or later, from 2010.

Standard & Poor's lowered credit ratings on two North American auto parts suppliers and placed the ratings on 14 other suppliers on negative watch, citing their exposure to the three U.S. automakers.

"The credit watch listings reflect the increasingly beleaguered state of the Michigan-based automakers and the multiple scenarios -- almost all of them negative -- that could play out over the next few weeks or months," S&P said in a report released on Thursday.

The agency lowered credit ratings on Dana Holding Corp to B+ from BB- and Magna International Inc to A- from A.

(Additional reporting by Kevin Krolicki in Palm Desert, California, Doug Palmer in Washington, Caren Bohan in Chicago, Christiaan Hetzner in Frankfurt; Editing by Gary Hill)


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Thursday, November 13, 2008

Chrysler News-Could Chrysler Just Become Jeep Corp.?


Here is a very interesting article about Chrysler LLC just becoming Jeep Corp and dropping some of its vehicles to survive!

US News.com

One Way for Chrysler to Exit the Scene

Does the name "Chrysler" get your juices flowing? Make you crave the open road? Conjure visions of yourself in your dream car? Compel you to open your wallet?

Anybody who answers yes might want to rush out and buy a Chrysler right away (deals abound!) because the enduring American nameplate might not be around that much longer. While much of the alarming news from Detroit over recent weeks has focused on General Motors and Ford—which could both run out of cash in 2009 and face the prospect of bankruptcy—the No. 3 U.S. automaker is probably in even worse shape.

Overall Chrysler sales, which include the Jeep and Dodge nameplates, are down 26 percent for the year, compared with 15 percent for the industry and 21 percent for the three domestic automakers combined. Chrysler, arguably, has no compelling small or midsize passenger cars of the kind thrifty buyers want these days. It recently canceled one of its more innovative vehicles, the Dodge Durango hybrid, just weeks after introducing it—a panicky move. Even worse, GM bailed out of a proposed merger with Chrysler to tend to its own mounting problems, which leaves Chrysler's regretful owner—the private equity firm Cerberus Capital Management—increasingly desperate to unload its unloved stepchild.

But what if Chrysler LLC suddenly became the Jeep Corp.?

That's an intriguing idea floated by CNW Marketing Research, an Oregon-based research firm with a track record of predicting industry trends. In a fresh study, CNW found that the Jeep brand resonates much more strongly with car shoppers than any other brand under the Chrysler umbrella. The findings suggest that Chrysler might not survive the worst automotive downturn in decades, but it might have a better chance if it consolidated its vehicles under the Jeep name. Details of the study:

The Jeep brand is much cooler than Chrysler. No surprise here, since Jeeps still connote rugged off-roading and teenage adventure. Specifically, CNW found that a Jeep vehicle is nearly twice as "acceptable" to friends, relatives, and colleagues as a Chrysler vehicle, which is considered more stodgy. And Jeeps convey a much stronger self-image to their owners.

Even baby boomers prefer the Jeep brand over Chrysler. That's surprising, given that Jeep models like the Wrangler and Liberty, designed for unfriendly terrain, tend to punish aching backs, while Chrysler products like the 300 sedan or the Pacifica crossover are pretty plush. But boomers are probably voting with their egos.

Jeep connotes quality. The perception isn't entirely accurate: The Jeep lineup scored below average in J.D. Power's 2008 quality ratings, on a par with Mitsubishi and Suzuki. But apparently, the ability to ford a stream counts as quality, even if the A/C or cruise control blinks out occasionally.

Chrysler LLC could drop most of its Chrysler and Dodge products. Consumers would barely notice, even though it would throw thousands of workers out of their jobs and cause upheaval at the company.

Some Dodge trucks could take the Jeep badge. The Dodge Ram pickup truck still commands a loyal following. And Jeep has no pickup: You do the math. Dodge SUVs like the Durango and the Journey could survive just as well if they were Jeeps.

Some old Jeep names still resonate. Retired names like Wagoneer, Comanche, and Renegade could be revived and applied to Dodge products.

There's one question CNW can't answer just yet: If the whole company became the Jeep Corp., what would happen to Chrysler's minivans, its one other successful lineup? Surely Jeep aficionados would gag if a gaggle of staid minivans joined the rowdy family. But what about selling the minivan lineup to GM? The last competitive minivan that GM fielded was the . . . well, there never was one. In fact, Chrysler's minivans are the one part of the product portfolio GM could use the most. A fanciful idea, perhaps. But Detroit could use a few of those.


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Wednesday, November 12, 2008

Last Hope-Automakers bailout-Pelosi, Reid to Seek Automakers Bailout Next Week


It's Next Week Or bust! Will The Automakers get the rescue money they need?

ABC News' Jonathan Karl reports: House Speaker Nancy Pelosi says she'll seek assistance for Detroit automakers during a lame-duck session next week.

The idea is to pass a bill opening up some of the $700 billion bailout money for the automakers.

I am told Pelosi will also likely seek an extension of unemployment benefits but wait until January for a major stimulus package.

"In order to prevent the failure of one or more of the major American automobile manufacturers, which would have a devastating impact on our economy, particularly on the men and women who work in that industry, Congress and the Bush Administration must take immediate action," reads a statement by Pelosi.

"Emergency assistance to the automobile industry would be conditioned on executive compensation restrictions, a prohibition on golden parachutes, rigorous independent oversight, and other taxpayer protections to ensure that any companies that benefit from this assistance – and not the taxpayers – bear the full burden of repaying any costs that are incurred."

And now Senate Majority Leader Harry Reid says he "determined" to pass legislation helping the automobile industry next week during a lame-duck session of Congress.

Reid's statement offers no specifics and reminds us that until January "we still have the slimmest of majorities in the Senate; this will only get done if President Bush and Senate Republicans work with us."

On that point:

The White House is lukewarm to Pelosi's idea of using some of the $700 billion banking bailout money for the automobile industry. One senior White House official told me it's "a slippery slope" and asked rhetorically, "who's next?"

The White House would prefer Congress pass legislation loosening the restriction on the $25 billion in loans Congress made available to Detroit in September. That money, under current law, must be used for fuel efficient technology. So far, not one dollar of it has been loaned. The auto industry says it needs money to stay alive, not to embark on new projects.

"Why does Speaker Pelosi absolutely refuse to use the $25 billion actually appropriated for the automobile industry?" asks the official. Answer: environmental groups don’t want the money to be diverted.

Meanwhile, the auto industry likes Pelosi's approach, but sees it as a stopgap measure until the new Congress passes something more comprehensive in January. As one auto industry source working with Congressional leaders told me, "We're talking about a bridge loan, a bridge to the stimulus."


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Henry Paulson: Rescue package not for automakers


David Shepardson / Detroit News Washington Bureau
WASHINGTON -- Treasury Secretary Henry Paulson said Wednesday he would move to open up the auto financing market, saying he favors rewriting the rules overseeing a $25 billion retooling loan program for Detroit's Big Three automakers to speed aid.

But Paulson again said he didn't think $25 billion in emergency bridge financing for automakers should from the $700 billion Wall Street rescue package, or Troubled Asset Recovery Program. "We need a solution, but the solution has got to be one that leads to viability," Paulson said at a press conference today. "The intent of the TARP was to deal with the financial industry."

He noted that auto finance activity has virtually seized up.

"Approximately 40 percent of U.S. consumer credit is provided through securitization of credit card receivables, auto loans and student loans and similar products. This market, which is vital for lending and growth, has for all practical purposes ground to a halt," Paulson said. "Addressing these two priorities will have powerful impacts on the overall financial system, the strength of our financial institutions and the availability of consumer credit. Third, we continue to explore ways to reduce the risk of foreclosure."

On Friday, President-elect Barack Obama urged Congress to speed the $25 billion retooling loans. Automakers are concerned that they won't pass the financial viability test to qualify for the loans.....More


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Tuesday, November 11, 2008

Bailout-Obama suggested more help for auto industry


WASHINGTON (Map, News) - President-elect Obama suggested to President Bush that the administration immediately provide extra help to struggling U.S. automakers, aides to the Democrat say, in their first face-to-face meeting since Election Day.

Obama's aides said the president-elect brought up the issue with Bush during their two-hour White House talks on Monday, expressing his view that action is needed now, not just to help the U.S. companies but also the broader economy, because of their enormous reach. Obama raised the idea of an administration point person on autos with a portfolio aimed at improving the long-term health of the companies.

Bush repeated his position, recently stated by staff, that he is open to helping the automakers.

Also, amid discussions over whether new economic stimulus spending is needed, Obama focused on his desire for it while Bush stressed that his main priority for any postelection action out of Congress is approval of a long-stalled free trade agreement with Colombia, said people familiar with the conversation between the two men. The sources declined to be named publicly because of the private nature of the talks....more

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GM News-GM shares hit 65-year low amid liquidity concerns


DETROIT (Reuters) – Shares of General Motors Corp plummeted 15 percent to a 65-year low on Tuesday, extending recent steep declines on lingering concerns that the automaker's cash holdings might fall below the necessary minimum during the first quarter.

Shares of other automakers and parts suppliers also declined across the board amid increasing concerns over whether the industry could survive a deep downturn in U.S. auto sales.

Credit analysts at JPMorgan said on Tuesday GM has several options to improve liquidity, but added that the No. 1 U.S. automaker's short-term survival will require the help of the government, the company's suppliers, or both.

While government aid would decrease the risk of a bankruptcy, analysts have warned that any assistance would come at a significant cost to existing shareholders.

The White House said on Tuesday it was open to considering any proposals from Congress to accelerate loans to the ailing U.S. auto industry from the already-appropriated $25 billion package.


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Monday, November 10, 2008

Hyundai Motor stock down on trade fears, Chrysler


SEOUL (Reuters) - Shares in South Korea's Hyundai Motor fell on Monday as investors worried the United States may harden its stance on car trade and on talk, denied by Hyundai, that it may target parts of money-losing Chrysler.

Hyundai, the country's 10th biggest company in market value and the world's No. 5 car maker along with affiliate Kia Motors Corp, dived as much as 8.4 percent on Monday before stabilizing a little. The shares were down 5.1 percent at 51,800 won by 0239 GMT.

Analysts said U.S. President-elect Barack Obama's focus on the importance of helping the U.S. auto industry may have spooked investors.

Obama, who has said he opposes a 2007 free-trade deal with South Korea unless it is renegotiated to grant greater access to the Asian market for U.S. automakers, said on Friday federal help for the distressed auto industry was a "high priority."

"Obama's comments on the auto industry put pressure on Hyundai," said Choi Dae-sik, an analyst at HI Investment & Securities. "Although today's fall looks excessive as we don't know what exactly Obama would do."

U.S. politicians meanwhile made fresh calls at the weekend for the Bush administration to use a recently launched $700 billion corporate bailout program to rescue General Motors Corp , Ford Motor Co and Chrysler LLC with desperately needed cash.

"Over the weekend we've had a pretty staunch show of support toward the auto industry by U.S. law makers, and this has deepened worries about where trade relations with the U.S. are headed," said Lee Sang-hyun, analyst, Hana Daetoo Securities.

The Bush administration, which recently rebuffed a request for capital from GM to help facilitate a possible merger with Chrysler, has not decided whether it will -- or can, by law -- expand the bailout initiative beyond banks and other financial services firms....Article

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Wall Street Journal-America's Two Auto Industries


Government Aid to GM, Ford, Chrysler Could Preserve Old Way of Building and Selling Cars
Can you imagine life without General Motors Corp.? That's now an urgent question facing America's political leaders.

GM survived for 100 years, steering through two world wars, the Great Depression, and all the booms and busts in between. But on Friday, GM said it faces a substantial risk of financial collapse by the middle of next year unless the economy makes a significant improvement, the capital market freeze thaws, or the government provides the money to sustain the company through the downturn.

The Democratic Congress and President-elect Barack Obama signaled last week they are willing to lend a hand. "The auto industry is the backbone of American manufacturing and a critical part of our attempt to reduce our dependence on foreign oil," Mr. Obama said Friday.

So the question isn't whether Washington is willing to offer more public money to help auto companies survive. There even appears to be a consensus on how much: Up to $50 billion. The tougher question is what's Washington's goal?

First, Congress and Mr. Obama will need to decide what they mean by "the auto industry."

America has two auto industries. The one represented by GM, Ford and Chrysler is Midwestern, unionized, burdened with massive obligations to retirees, and shackled to marketing and product strategies that have roots reaching back to the early 1900s.

The other American auto industry is largely Southern and non-union, owes relatively little to the few retirees it has, and enjoys a variety of advantages because its Japanese, European and Korean owners launched operations in this country relatively recently. Their factories are newer, their brand images and marketing strategies are more coherent -- Toyota uses three brands in the U.S. to GM's eight -- and they have cars designed for the competitive global market that exists today.

Honda Motor Co. sells one basic Civic world-wide. Ford sells two different versions of its rival Focus compact car. Ford is engineering one Focus to take advantage of global economies of scale, but the new car won't hit the U.S. market until 2010.
...Article

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GMAC mortgage unit might not survive!


General Motors Corp. says the troubled mortgage industry and frozen credit markets have raised doubts that the mortgage business of its GMAC financial arm can survive.
The automaker said today in a filing with the Securities and Exchange Commission that market developments have raised substantial doubt about the viability of Residential Capital LLC.
The filing says the value of Residential Capital’s mortgage loans have deteriorated due to weak housing prices, delinquencies and defaults. It also is having trouble raising capital...Article
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GM stock spirals after analyst's grim forecast



A key Wall Street analyst slashed his target price for General Motors Corp. shares to zero today, saying the company could run short of cash by December and that even with government aid, shareholders are likely to lose their investment....Article

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GM stock spirals after analyst's grim forecast



A key Wall Street analyst slashed his target price for General Motors Corp. shares to zero today, saying the company could run short of cash by December and that even with government aid, shareholders are likely to lose their investment....Article

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Saturday, November 8, 2008

A Great Automotive Rebuttal- Gm, Chrysler, Ford, Hyundai,Nissan


The Big Three should get the money they need to consolidate and change the direction of the auto industry. The major players will have to work together to survive and build alternative power standardization. Everyone has been screaming they want alternative energy and want to stop the dependency on foreign oil!..Well, If you want electric and hydrogen powered cars,you'll have to pay for the infrastructure overhaul!

Here is a great rebuttal to the Financial Times article (Why Detroit is not Wall Street)The article says The Big 3 Will Fail and Should not be bailed out!


From Mr Stephen J. Collins.

Sir, Your editorial “Why Detroit is not Wall Street” (October 31) takes a disappointingly narrow and harsh view of the unprecedented shocks confronting Chrysler, Ford and General Motors. It also vastly underestimates the importance of the car industry to the US economy.

As the current global economic crisis stabilises, these companies do have the ability to recover and continue their vital role in the future of US manufacturing. The alternative would be a tragedy that would have a devastating impact on the US economy and further diminish the US's competitive standing.

The three American car companies generate 5m American jobs and employ seven out of 10 American car workers. No other American industry generates more employment, annual economic output, exports and retail business.

Your editorial maintains that “bailing out one or more of the carmakers would only delay the inevitable”. But what is being proposed is a partnership between the Detroit carmakers with the US government for advanced automotive research and development and alternative fuel technologies in order to meet our national energy goals. Partnerships like this are what governments around the world have been doing for years to support their national car industries.

The transformation of the US car industry to a new and different energy future is well under way, but the financial crisis and dramatic economic slowdown are presenting huge challenges.

The solution lies in working together – government, management and labour – towards solutions that will get our economy and our industry through this crisis and retain US leadership in the global automotive industry.

Stephen J. Collins,
President,
Automotive Trade Policy Council,
Washington, DC, US
On behalf of Chrysler LLC, Ford Motor Company and General Motors Corporation


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A Great Automotive Rebuttal- Gm, Chrysler, Ford, Hyundai,Nissan


The Big Three should get the money they need to consolidate and change the direction of the auto industry. The major players will have to work together to survive and build alternative power standardization. Everyone has been screaming they want alternative energy and want to stop the dependency on foreign oil!..Well, If you want electric and hydrogen powered cars,you'll have to pay for the infrastructure overhaul!

Here is a great rebuttal to the Financial Times article (Why Detroit is not Wall Street)The article says The Big 3 Will Fail and Should not be bailed out!


From Mr Stephen J. Collins.

Sir, Your editorial “Why Detroit is not Wall Street” (October 31) takes a disappointingly narrow and harsh view of the unprecedented shocks confronting Chrysler, Ford and General Motors. It also vastly underestimates the importance of the car industry to the US economy.

As the current global economic crisis stabilises, these companies do have the ability to recover and continue their vital role in the future of US manufacturing. The alternative would be a tragedy that would have a devastating impact on the US economy and further diminish the US's competitive standing.

The three American car companies generate 5m American jobs and employ seven out of 10 American car workers. No other American industry generates more employment, annual economic output, exports and retail business.

Your editorial maintains that “bailing out one or more of the carmakers would only delay the inevitable”. But what is being proposed is a partnership between the Detroit carmakers with the US government for advanced automotive research and development and alternative fuel technologies in order to meet our national energy goals. Partnerships like this are what governments around the world have been doing for years to support their national car industries.

The transformation of the US car industry to a new and different energy future is well under way, but the financial crisis and dramatic economic slowdown are presenting huge challenges.

The solution lies in working together – government, management and labour – towards solutions that will get our economy and our industry through this crisis and retain US leadership in the global automotive industry.

Stephen J. Collins,
President,
Automotive Trade Policy Council,
Washington, DC, US
On behalf of Chrysler LLC, Ford Motor Company and General Motors Corporation


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