truth about domestics

Pile of cash

General Motors has posted a $9.6 billion dollar net loss for the fourth quarter, a larger loss than what was anticipated by Wall Street.  The company also burned through $6.2 billion in cash during the last 3 months of the year, ending the quarter with $14 billion in cash, about what it needs to continue operations.  Based on most economic predictions, things are going to look like this for at least the next 2 years, so get used to hearing about more layoffs and more red ink for major corporations.  For the full article, head on over to CNN.

You can all stop holding your breath.  The United States will be fielding an F1 team for the 2010 season.  The important thing for viewers of this website to be aware of is the following quote describing the mission of the new team:

“To prove that American technology, American drivers and the American competitive spirit can compete and win on the F1 global stage.”

Placing the phrase  ‘American technology’ first in there might hint towards interesting things to come for the D3 in international motor sports.

However, one of the things that remains to be seen is whether Americans will get to see their team compete on home turf.  As of October of last year, the 2009 season does not have any races currently scheduled on US soil, let alone anywhere in North America.

The story was initially broken by SpeedTV according to Jalopnik yesterday.

For those who would like some more history on the F1 racing in the United States, here is the history according to Formula 1.com.

In a speech to the Detroit Economic Club, the CEO of the U.S. Chamber  of Commerce, Thomas Donohue, stated that protectionism and isolationism is not an appropriate way to save the auto industry. Donohue said that a protectionist policy will only hurt American jobs and the economy. Additionally, he said that said policies would also hurt America’s commitment to its global trade rules.

While I agree with Mr. Donohue, and other economists, about isolationism and protectionism not being a good policy, I believe that Mr. Donohue does not see the bigger picture. As I have stated (or ranted) before, this is not about protectionism; this is about playing the global trade game fairly. The United States has one of the most open trade policies of any other nation. Countries that are part of the European Union tend to practice protectionism on a level that makes it fair for their domestic companies to compete with foreign competitors.

But what about countries like Japan? Do they practice free, or fair, trade? No; they do not. They are not even close to practicing fair trade. Otherwise GM would sell more than 10,865 vehicles in Japan in 2008 (this is after a 35% sales increase from the previous year); there were 5.08 million vehicles sold in Japan last year (6% decline from 2007). A quick calculation shows that GM had a market share of 0.214%; wow, that is awesome!

Read the article at The Financial.

GM-Chrysler

Ok…I don’t really understand this whole article…so bare with me.  According to an article on the Financial Post, General Motors bondholders could push for a merger with Chrysler if they believe their investment would be better protected.  Just so I don’t screw anything up, get the details from the link.

Alan Mulally and Bill Ford

Ford Executive Chairman William Ford Jr. and Chief Executive Alan Mulally released a memo stating that they were voluntarily accepting a 30% reduction in their salaries over the next 2 years.  Ford’s board of directors will also forgo the cash portion of it’s members’ compensation this year.  Performance bonuses for salaried employees and senior executives for 2009 will be eliminated, on top of the bonuses that were removed for 2008.  The news comes one day after Ford reached a tenative agreement on new concessions from its hourly workers.  It’s nice to see the upper management making cuts too, not just cutting jobs and the pay of the people below them, hopefully it works out for all parties involved.  For the full story, head on over to the Wall Street Journal.

2010 Ford Transit Connect

The official EPA rating is in for the 2010 Ford Transit Connect and it appears that Ford may have underestimated the performance of the vehicle.  When unveiled at the Chicago Auto Show, product development boss Derrick Kuzak stated that the vehicle should return around 20 mpg city and 24 mpg highway.  The numbers came back from the EPA at 22 mpg city and 25 mpg highway.  A similar situation occured when Ford released their prediction for the 2010 Fusion Hybrid, which they had pegged at 39 mpg city.  The actual EPA number came back at 41 mpg city.  Oh well, I guess if you’re going to be wrong, it’s best to have the actual results come back showing that you actually did better than you expected.  Head on over to Autoblog for the full story.

2010 Ford Fusion Hybrid

This time it was Yahoo! Autos who ranked the 2010 Ford Fusion Hybrid higher than the Toyota Camry Hybrid.  Not only that, but they also ranked it higher than the Toyota Prius!  Truly incredible news, another amazing product from one of the American 3.  They rated the car based on it’s overall mpgs from the test and it’s drive-ability.  Plus the Fusion was the only car to offer the SYNC hands free bluetooth communications and entertainment system.  The Fusion Hybrid has won comparisons with USA Today and Car and Drivermagazine for similar reasons.  Overall, the Fusion is one of the most exciting cars to drive in the mid size sedan segment, and now it’s one of the most awarded too!  Head on over to Yahoo! for the full article.

Ford and UAW

In a recent press release, Ford Motor Company has stated that it has reached an agreement with the UAW on modifications to the Voluntary Employee Beneficiary Association (VEBA) retiree health care trust.  The agreement will allow Ford to use either cash or common stock to make payments to the VEBA, with stock totalling up to 50%.  If finalized, this agreement would allow Ford to become more competitive with foreign automakers’ U.S. manufacturing operations.  This is critical to Ford’s turn around plan to continue to operate without accessing government loans and to invest in ONE Ford products.  For the full release click here.

Car crashes into a bank

According to a Reuters news article, people involved in talks with senior administration officials stated that the administration believes the option of Chapter 11 filings by the two auto makers needs to be seriously considered.  Estimates stand at GM and Chrysler needing at least $40 billion in order to survive for the near future.  Head on over to Reuters for more.

Empty Dealer lot

According to a Reuters news story, a record number of dealerships closed in 2008, 881.  That number makes up about 4.2 percent of the country’s 20,084 auto dealers.  The lack of credit and slow sales is blamed for the cuts, while General Motors, Ford and Chrysler are all working to trim excess dealer capacity.  For the full article, head on over to Reuters.