truth about domestics

John Stewart, host of Comedy Central’s, The Daily Show, is one funny mother f***er.  The clip we posted here is one of the funniest things I have heard on the impending automotive doom in a long time.  I’m glad that he takes the time out of his show to poke some fun at the auto industry, but also uses the segment to point out how extremely biased the government is against helping the domestic automakers.  He makes a comment about how several members of the government want to see accountability before they give GM and Chrysler any more money, and then plays clips of several banking officials stating that they really had no way to track the money they were given (which, at $700+ billion, is about 30 times more money than GM and Chrysler have received.)  Anyway, head on over to Jalopnik to check out the clip.

Rick Wagoner (GM)

General Motor’s CEO, Rick Wagoner, has been asked to step down by the Automotive Task Force in Washington D.C.  For the full story, and Mr. Wagoner’s press release, head on over to Autoblog.

Now that I got the official business out of the way, it’s time for one of my legendary rants.  Sure someone needs to take the blame for GM’s current position.  I mean, Rick Wagoner should have seen this coming.  Not only is GM producing it’s highest quality line of vehicles ever, they’re also the most fuel efficient, safest and most technologically advanced.  Plus, I mean, it’s totally GM’s fault that the banks collapsed, people can’t get financing to buy vehicles, gas prices hit $4+ last summer and the housing market is in shambles, so might as well blame all that on Rick Wagoner too.  Hey, wait a second!  Wasn’t Rick Wagoner CEO during 9/11?  We might want to look into that, maybe we can blame that on him too.

Glad to see that Washington thinks that because the market sucks and people aren’t buying cars, that it’s all Rick Wagoner’s fault.  If it were true that GM isn’t doing anything right, then they wouldn’t outsell Toyota and Honda and Nissan in the United States.  They wouldn’t be the second largest automaker in the world.  They wouldn’t sell cars like the Chevrolet Cobalt that gets better fuel economy than the Honda Civic or the Toyota Corolla.  They wouldn’t propose an idea like the Chevrolet Volt, a car that is expected to average 100 mpg (energy equivalent) when it’s launched late in 2010.  Sure, Mr. Wagoner could have done more.  He could have cut more jobs, he could have made more production cuts.  I hear and read hundreds of comments like that every day.  All from people who are using what they know today to look back 3 years and cast judgement.  If you were the CEO back in 2007, would you have started cutting jobs when the company was starting to show signs of improvement?  Would you have cut new product plans because, 1 year down the road gas was going to skyrocket to more than double it’s price at the time?  To anyone who says yes, I say, “bullshit.”  There was no way anyone could have seen the market collapse coming, or the high gas prices, or the lack of credit from the banks.

Hopefully Obama doesn’t abandon the Domestic automakers to the point of bankruptcy.  It sure looks as though it’s headed that way.  Oh, and to anyone who still doesn’t think the auto industry affects them, check the stock market.  I don’t care if you don’t own a share of Ford, GM or Chrysler stock, look at the market.  Rick Wagoner steps down, analysts say GM and/or Chrylser could be headed for bankruptcy and boom, the market drops 250+ points.  Weird…I didn’t think the Domestic manufacturers mattered to this country…yet their negative news spread throughout the market, causing wide spread panic and more selling.  Maybe when GM and Chrysler said they support directly and indirectly over 1 million jobs, they were telling the truth!  Are investors worried that their collapse would cause other businesses to fail?  You’re damn right they are!  Now where’s my blood pressure medication…

Even though the two companies are not in bankruptcy, nor have they filed for bankruptcy, it sounds like the mere thought of it is enough to scare buyers away. A CNW Research survey gathered responses from over 40,000 consumers who said that they intend on buying a new vehicle. The research shows that the number of people whose primary choice would have been one of GM’s brands dropped by 12% and by nearly 33% for those whose choice would have been a Chrysler vehicle.

Ford, who has not requested any government support, has seen an increase of 12% of consumers who would consider a Ford vehicle as their first choice. Honda saw a 13% increase, and Hyundai and Kia saw the largest increases of 59% and 50%, respectively.

Granted, part of the reason GM and Chrysler are not doing as well is probably because of their greatly reduced advertising budgets. More likely than not though, the entire bankruptcy situation is having a much larger affect on the two Detroit automakers than some people choose to realize.

Read the full article at Reuters.

Visteon coming down (Brighton Sign)

According to a new study by consulting firm A.T. Kearney, more than half of all current automotive suppliers are at risk of going into bankruptcy protection in 2009, resulting in at least 1 million job loses.  The most optimistic scenario would have 35% of all suppliers going under, while some put that number as high as 70%!  Head on over to Autoblog for the full story.

Chrysler

According to a recent CNNMoney story, Chrysler LLC won’t need additional federal funding to run it’s operations if it succeeds in securing $5 billion in low-interest loans by the end of the month.  The money would be used to help Chrysler get through the crucial July shutdown period, when the automaker traditionally idles plants for up to two weeks.  This loan would be in addition to the $4 billion they have already received from the government to avoid filing for bankruptcy.  For more, head on over to CNNMoney.

Ford Flex built at Oakville, Canada plant

Ford Motor Company and Chrysler LLC have stated that the new agreement reached between General Motors and the Canadian Auto Workers union is “weak.”  Chrysler goes on to state that the CAW didn’t offer enough concessions to bring production costs in line with what is going on in the market.  Ford has also come forward, saying that the agreement between GM and the CAW will not allow Ford’s Canadian operations to remain competitive.  For the full story, head on over to Autoblog.

Rick Wagoner (detnews)

In what can only be seen as good news, General Motors has decided to take a pass on $2 billion in loans that they had previously requested.  The money was originally requested for the month of March, but extreme cost cutting measures and deferral of spending is cited as the reasons for no longer needing the money.  This should ease the way for more of the funding that the General is going to need in order to survive the upcoming months, but hopefully this will shed some good light on the situation, as GM has been receiving a lot of negative press for needing federal aid to survive.  For more, head on over to Autoblog.

GM CAW (Autoblog)

The Canadian Auto Workers (CAW) union has agreed to concessions that will substantially reduce General Motor’s operating costs in Canada.  The cuts were necessary for GM to be granted loans from the Canadian government.  GM has asked the Canadian government and province of Ontario for up to $5.4 billion in loans.  For more, including GM’s official press release, head on over to Autoblog.

Hopefully this sort of news continues for GM, as the automaker could use all of the good publicity it can get at the moment.  This will also allow GM to continue building quality vehicles in Canada, such as the new Camaro.

GM - UAW (GM)

General Motors and the United Auto Workers union have reached a tentative agreement on contract changes for the 62,000 workers and are still negotiating on the retiree health-care fund.  Ford’s contract changes saved them a reported $500 million and GM is expecting to save double that, close to $1 billion dollars.  This is good news as GM tries to cut costs to convince President Obama’s auto task force to free up another $16.6 billion in government loans to keep the automaker out of bankruptcy.  For the full story, as well as Ford’s reaction to the news, head on over to Bloomberg.

Chrysler Town & Country (Chrysler)

Chrysler has apparently threatened the Canadian government with severe job cuts, to the tune of 9,000, unless they provide $2.3 billion in loans AND it’s Canadian union agrees to slash labor costs by 25%!  Sure, Chrysler is hurting, probably more so than the other 2 Detroit automakers, but this seems a little extreme.  Not long ago I posted an article about how Chrysler was reducing production at it’s Windsor minivan plant to just 1 shift, eliminating 1,200 jobs.  That plant is the only one Chrysler has to produce it’s new minivans, so if they close that plant, they would have to re-open a recently closed minivan plant in St. Louis.  Those moves seem to be a little extreme in my opinion, as moving production of a vehicle from one plant to another is not a quick or an easy thing to do.  Hopefully both parties can come to an agreement soon.  For more, head on over to the ReportonBusiness.