– “Rammed” – Fiat Chrysler Forced To Buy Back 500,000 Pickup Trucks From Customers In Historic Settlement (ZeroHedge, July 27, 2015):
In a stunning ruling, US safety regulators have mandated that Fiat Chrysler must offer to buy back from customers more than 500,000 Ram pickup trucks and other vehicles as part of a costly deal with safety regulators to settle legal problems in about two dozen recalls. As WTOP reports, this is the biggest such action in US history, and is in addition to a $105 million civil fine and owners of more than a million older Jeeps with vulnerable rear-mounted gas tanks will be able to trade them in or be paid by Chrysler to have the vehicles repaired. Think the punishment is harsh, consider that at least 75 people have died in crash-related fires, although Fiat Chrysler maintains they are as safe as comparable vehicles from the same era.
– Frontrunning: July 23 (ZeroHedge, July 23, 2014):
- Here come the gates which we predicted in 2010: SEC Is Set to Approve Money-Fund Rules (WSJ)
- Dick’s cuts 400 jobs as golf now less popular (MW)
- Kerry arrives in Israel, pushes for peace (Reuters) (Sure!)
- Pay Penalty Haunts Recession Grads as U.S. Economy Mends (BBG)
- Appeals Courts Issue Conflicting Rulings on Health-Law Subsidies (WSJ)
- Rebel Stronghold Donetsk Holds Breath as Shellfire Mounts (BBG)
- Business executive wins Georgia Republican runoff in U.S. Senate race (Reuters)
- Five held in China food scandal probe, including head of Shanghai Husi Food (Reuters)
- Jobs Hold Sway Over Yellen-Carney as Central Banks Splinter (BBG)
Overnight Media Digest
* Two U.S. appeals courts issued conflicting rulings on subsidies for health coverage purchased on federal insurance exchanges, clouding a major part of Obama’s health law. (http://on.wsj.com/1pb81yo)
* The Federal Reserve Bank of New York found that Deutsche Bank AG’s U.S. operations suffer from a litany of serious financial reporting problems that the lender has known about for years but not fixed. (http://on.wsj.com/1jUoOXe) Continue reading »
Tags: Banking, Barack Obama, Blackstone, China, Chrysler, Deutsche Bank, Economy, EU, Europe, Gaza, Global News, Government, Hamas, Israel, John Kerry, JPMorgan, Microsoft, Money Market, Obama administration, Palestine, Palestinians, Politics, RBS, SEC, U.K., U.S.
– U.S. loses $1.3 billion in exiting Chrysler (CNNMoney, July 21, 2011):
NEW YORK (CNNMoney) — U.S. taxpayers likely lost $1.3 billion in the government bailout of Chrysler, the Treasury Department announced Thursday.
The government recently sold its remaining 6% stake in the company to Italian automaker Fiat. It wrapped up the 2009 bailout that was part of the Troubled Asset Relief Program six years early.
Aug. 31 (Bloomberg) — U.S. auto sales in August probably were the slowest for the month in 28 years as model-year closeout deals failed to entice consumers concerned the economy is worsening and they may lose their jobs.
Industrywide deliveries, to be released tomorrow, may have reached an annualized rate of 11.6 million vehicles this month, the average of eight analysts’ estimates compiled by Bloomberg. That would be the slowest August since 1982, according to researcher Ward’s AutoInfoBank. The rate would be 18 percent below last year’s 14.2 million pace, when the U.S. government’s “cash for clunkers” incentive program boosted sales.
“Home sales are way down, the stock market is way down, the unemployment report is very disappointing and consumer confidence is sputtering,” Jesse Toprak, vice president of industry trends at TrueCar.com, said in an interview. “People just don’t want to make big-ticket purchases because they’re uncertain about their jobs and the value of their homes.”
While automakers increased discounts by 1 percent from July to an average of $2,864 per vehicle, sales to individuals probably fell 7 percent from last month, according to Santa Monica, California-based TrueCar.
– Lindsey Williams on Alex Jones: ‘The Elite have changed there Timeline’ – ‘Within two years you will not recognize America’ – ‘War is planned after two years, starting in the middle east area and spreading to the entire world’
Alex continues his discussion with pastor Lindsey Williams about the plans of the elite to crash the economy.
Added: 23rd Oct 09
1 of 4:
Continue reading »
Tags: Alex Jones, Bailout, Banking, Bonds, China, Chrysler, Debt, Dollar, Economy, Euro, Fed, Federal Reserve, General Motors, Global News, GM, Gold, Great Depression, Hyperinflation, Hyperinflationary Depression, Inflation, Lindsey Williams, New World Order, Oil, Oil Prices, Police State, Politics, Quantitative Easing, Silver, Society, Stock Market, Treasury, U.S., Wall Street
“Nobody in the senate today understands basic economics.”
Hyperinflation Nation starring Peter Schiff, Ron Paul, Jim Rogers, Marc Faber, Tom Woods, Gerald Celente, and others.
Prepare now before the US dollar is worthless.
Part 1 :
Tags: Agriculture, Alan Greenspan, Banking, Barack Obama, Bonds, Bubble, budget deficit, Bush administration, Cars, Central Bank, China, Chrysler, Congress, Debt, Depression, Documentary, Dollar, Dow Jones, Economy, Fed, Federal Reserve, Food, Food shortages, GDP, George Bush, Gerald Celente, GM, Gold, Great Depression, Healthcare, Henry Paulson, Hyperinflation, Hyperinflationary Depression, Inflation, Jim Rogers, Keynesianism, Marc Faber, Martial Law, Medicaid, Medicare, Monetary System, money supply, Obama administration, Peter Schiff, Politics, Real Estate, Ron Paul, Silver, Social Security, Stock Market, Taxpayers, Timothy Geithner, Treasury, U.S., Wall Street, White House, Zimbabwe
May 14 (Bloomberg) — Chrysler LLC asked a bankruptcy judge to let it reject 789 automotive dealership agreements by June 9, many located in the suburbs of major U.S. cities.
The company wants to break contracts with about a quarter of its estimated 3,188 retail outlets, including seven dealers with AutoNation Inc., two with Lithia Motors Inc. and the Atlanta unit of Asbury Automotive Group Inc., according to a filing today in Manhattan with U.S. Bankruptcy Judge Arthur Gonzalez, who must approve the cuts.
Fiat SpA, not Chrysler, decided which dealers will be brought along to a new company to be formed with the company’s best assets and run by the Italian carmaker, according to people familiar with the matter. Trimming the bulk of dealers from urban areas will increase profitability at the remaining dealers, lawyers for Chrysler said.
“The Hedge Funds make more money with Chrysler dead than alive.”
“Capitalism is now eating itself in America, it’s swallowing itself, it’s destroying itself, because they are going after the last crumbs on the table as the American economy implodes.”
“They are going to fire millions of workers in the entire auto industry.”
“In France workers actually have representation. They can kidnap the boss in France and they can get away with that. In America if they try to kidnap the boss they would be gunned down by American Homeland Security. They have no ability to protest in America, the workers. They are just cogs in the wheel. They are treated like complete mud.”
“They want to eliminate the entire middle classes in America, because they are in the way of the bankers.”
Added: Mai 07, 2009
Chrysler, one of the three pillars of the American auto industry, will file for bankruptcy today after last-minute negotiations between the government and the automaker’s creditors broke down last night, an Obama administration official said.
U.S. officials had offered Chrysler’s secured lenders $2.25 billion in cash if they would agree to writedown the $6.9 billion in secured debt that the company owed. But a small group of hedge funds refused the 11th-hour deal, forcing an imminent bankruptcy.
– Daimler to Cede 19.9% Stake in Chrysler to Cerberus (Bloomberg)
– Chrysler Will File for Bankruptcy, Official Says (Bloomberg)
An administration official this morning expressed disappointment, saying the holdouts had failed to “do the right thing,” but that “their failure to act in either their own economic interest or the national interest does not diminish the accomplishments made by Chrysler, Fiat and its stakeholders, nor will it impede the new opportunity Chrysler now has to restructure and emerge stronger going forward.”
President Obama is scheduled to address the issue at noon today at the White House.
April 29 (Bloomberg) — President Barack Obama plans to announce tomorrow morning that Chrysler LLC will be placed into Chapter 11 bankruptcy leading to an alliance with Italian automaker Fiat SpA, people involved in the matter said.
Administration officials are still trying to resolve outstanding issues, and the plan is not finished yet, said one of the people, who declined to be named. If there’s a bankruptcy filing, it could come as soon as tomorrow, the people said.
Zombie banks, zombie carmakers, zombie debt and soon a zombie dollar……
Feb. 17 (Bloomberg) — General Motors Corp. and Chrysler LLC, already relying on government aid to survive, take their case to the U.S. Treasury today that they can undo past mistakes and justify more U.S. aid to return to profit.
GM, with a pledge for $13.4 billion in loans, may seek support beyond an $18 billion request made Dec. 2 because of worsening economic conditions, people familiar with the automaker’s plan said. Chrysler has said it needs at least $3 billion in addition to $4 billion it received last month.
General Motors and Chrysler are to call upon the US government for billions more in extra funding as President-elect Barack Obama asks the US Congress to release the second half of the $700bn (£471bn) bail-out fund.
The two companies, who were granted $17.4bn from the US Treasury’s $700bn Troubled Assets Relief Programme (TARP) in December, are working to achieve further funds in order to carry out comprehensive restructurings of their ailing businesses.
GM chairman and chief executive Rick Wagoner said at the North American International Motor Show in Detroit that the $13.4bn his company should receive in full by mid-February will be enough to see it through to the end of March, but wouldn’t comment on what the next move might be.
But GM president Fritz Henderson stressed yesterday that the baseline plan submitted to Congress in December called for a total of $18bn under the worst-case scenario envisaged for the US auto industry.
“We’ll develop our plan … then we’ll present it. We’ll make judgments from there,” he said ahead of GM’s press conference at the motor show. “It was pretty clear that the requirements were beyond, at that point, $12bn for a continued downside scenario.”
Meanwhile Chrysler is already in talks with the Treasury over further funding, seeking $3bn in additional government aid for its finance arm, with sources suggesting a second cash infusion on top of the $4bn received in December could be complete by the end of this week. “We are making good progress to qualify for a total of $7bn, which puts us in a really good financial position,” Chrysler vice-chairman Jim Press said.
The cash calls from Detroit came as President-elect Obama asked President George W Bush to ask Congress to free-up the remaining $350bn of the TARP allocation.
Jan. 5 (Bloomberg) — General Motors Corp.’s U.S. sales plunged to a 49-year low in 2008, dragged down by a 31 percent slide in December as demand was ravaged by the recession and concern that the biggest domestic automaker might collapse.
Toyota Motor Corp.’s U.S. deliveries plummeted 37 percent last month, while Honda Motor Co. slipped 35 percent, Ford Motor Co. fell 32 percent and Nissan Motor Co. was down 31 percent, pointing toward the industry’s worst annual volume since 1992. Chrysler LLC dived 53 percent.
– Auto sales plunge again in December (CNN)
– Bleak US sales in December cap a grim year for automaker (IHT)
– US Auto Sales Plunge Whopping 36 Percent in Dec. (AP)
The federal rescue of GM and Chrysler couldn’t overcome buyer pessimism and tight credit in the world’s biggest auto market. Ford’s 2008 U.S. sales sagged to a 47-year low, while GM’s total of 2.95 million light vehicles was the least since 1959, according to trade publication Automotive News.
“It’s one of the worst years ever, and this year will be worse,” said Stephanie Brinley, an analyst at consulting firm AutoPacific Inc. in Southfield, Michigan. “It’s not a gas problem. It’s not a credit problem. It’s a consumer confidence problem, and it’s worldwide.”
GM and Chrysler received commitments last month for as much as $17.4 billion in U.S. loans, saying they would have run short of operating cash by this month.
GM’s results last month beat the average estimate of a 41 percent drop among six analysts surveyed by Bloomberg News. Tempering the decline was a 43 percent surge in deliveries of the Chevrolet Malibu sedan. Sales of GM’s Saab brand, which the Detroit-based automaker says it may sell, fell 57 percent.
U.S. Market Share
Thanks to bigger declines throughout 2008, the U.S. automakers will likely mark the first calendar year where their combined market share was less than 50 percent, based on results through November, when they held 47 percent.
The drop in full-year U.S. sales for Toyota and Honda were the first for the Japanese automakers since 1995 and 1993, respectively.
Toyota failed to get a boost from no-interest loans offered on most of its models since Oct. 2. Sales of its Prius hybrid, the best-selling gasoline-electric car in the U.S., declined 45 percent. The Tundra full-size pickup dropped 52 percent, while Toyota’s Lexus luxury brand finished the month down 32 percent.
Industrywide U.S. sales extended a streak of declines of at least 25 percent dating to September. Vehicle sales for the year likely will total slightly more than 13 million, based on estimates from a Bloomberg News survey of 22 analysts and economists.
While that annual total would be the lowest in 16 years, it doesn’t reflect the steepening slide in U.S. auto demand.
Last month’s seasonally adjusted annual sales rate probably was 10 million, a 39 percent decline, based on the Bloomberg survey. The November rate was 10.2 million, and annual sales for all of 2007 were 16.1 million.
“We are at the bottom now,” said Tom Libby, an automotive analyst at consumer-research firm J.D. Power & Associates in Troy, Michigan. “People have just stopped buying and I don’t blame them. When you have such a decline in savings and net worth, it just doesn’t surprise me sales have fallen so much.”
Sales of Daimler AG’s Mercedes-Benz and Smart minicar fell 24 percent in December. Volkswagen AG was down 14 percent, while its Audi unit was off 9.3 percent. Bayerische Motoren Werke AG’s sales of BMW- and Mini-brand autos fell 36 percent.
U.S. jobless rolls reached a 26-year high in the week ended Dec. 20, signaling a worsening labor market as the economy heads into the second year of a recession. That weakness adds to the strain on automakers after record fuel prices in 2008’s first half damped demand for full-size pickups and sport-utility vehicles.
President-elect Barack Obama has made an economic stimulus package his top priority, and he told reporters today in Washington that the nation faces an “extraordinary challenge” in reviving growth.
“The sooner stimulus efforts find their way to where they’ll do the most good — into the hands of consumers — the sooner we’ll see a turnaround in confidence levels and a return of buyers to the marketplace,” Jim Lentz, president of Toyota’s U.S. sales unit, said in a statement today.
December’s plunge may have been eased by the resumption of low-cost financing from GM last week, auto-research firm Edmunds.com said, citing a surge in vehicle inquiries on its site and dealer surveys.
Ford’s U.S. sales were “strong” in the last two weeks of December, Executive Vice President Mark Fields told reporters today in Dearborn, Michigan, where the automaker is based. Ford discounted its remaining F-150 pickups from the 2008 model year after a redesigned version debuted in October.
GM, Chrysler Rescue
Consumer concern that Detroit-based GM and Auburn Hills, Michigan-based Chrysler would fail to get government aid and be forced into bankruptcy may have contributed to December’s slump, Patrick Archambault, a Goldman, Sachs & Co. analyst based in New York, said in a Dec. 28 research note.
President George W. Bush announced Dec. 19 that GM and Chrysler would get the emergency loans in exchange for restructuring their businesses. GM had said it might run out of operating funds by the end of 2008, while Chrysler had said it might fall short by the middle of this month.
GM had resisted demands by some U.S. lawmakers that it file for bankruptcy instead of pursuing federal loans, saying buyers wouldn’t trust a car company under court protection.
To contact the reporters on this story: Mike Ramsey in Southfield, Michigan, at email@example.com; Alan Ohnsman in Los Angeles at firstname.lastname@example.org
Last Updated: January 5, 2009 15:22 EST
By Mike Ramsey and Alan Ohnsman
It seems that the US government and the Federal Reserve are looting taxpayers’ until there is nothing left.
If you take into account what Peter Schiff and Lindsey Williams are telling us….
– Peter Schiff: US Dollar is on the verge of collapse; This is hyperinflation; This is Zimbabwe (12/17/2008):
“I am a 100% convinced that anybody who has their wealth in US Dollars will be just as broke as the people who had their money with Madoff.”
– Peter Schiff on CNBC: The government is pouring gasoline on a fire that it set (12/29/08):
“We are in the process of creating another Great Depression.”
…with the odd timing that there is an ‘Army combat unit to deploy within the U.S.’ plus ‘Pentagon: 20,000 Troops to Bolster Domestic Security’ …
((Of course those troops need training: Northcom Combat Team Conducts “Humanitarian Support” Exercise in Maryland: “The Armed Forces Press Service has initiated a propaganda campaign designed to convince the American people that deploying the 3rd Infantry Division in the United States in violation of the Posse Comitatus Act is a good thing.”))
…then it does not sound like a crazy conspiracy theory anymore that the government will deploy more and more soldiers within the U.S. in preparation for civil unrest in case US citizens realize that they are betrayed by the government and the Fed, who ‘are’ destroying the future of the US by creating massive debt and hyperinflation, which will ultimately lead to the total collapse of the US.
Soon the government and the Fed will have turned the U.S. into a ‘Third World’ country.
Treasury Opens Door to Aid for Broad Array of Firms, Industries
Jan. 1 (Bloomberg) — The U.S. Treasury threw the door open to taxpayer financing for a widening array of companies and industries by drafting broad guidelines on aid to the auto industry.
The Treasury’s guidelines, published yesterday, would let officials provide funds to any company they deem important to making or financing cars. That leaves room for the government to provide money from the Troubled Asset Relief Program beyond loans already committed to General Motors Corp., GMAC LLC and Chrysler LLC.
“There are going to be other industries that are going to have just as good a case,” as the auto companies, former St. Louis Federal Reserve Bank President William Poole said in an interview on Bloomberg Television. “We don’t know what those other industries are going to be. Where does this process stop?”
Shares of auto suppliers including American Axle & Manufacturing Holdings Inc. and Lear Corp. jumped yesterday after Treasury announced the guidelines. The Motor & Equipment Manufacturers Association has been lobbying for the use of federal funds as a backstop in case parts makers can’t collect money the auto manufacturers owe them.
WASHINGTON – President Bush agreed to an emergency bailout of General Motors and Chrysler, giving them a few months to get their businesses in order, but left to President-elect Barack Obama the difficult political decision of ruling on their progress.
The president’s plan gives carmakers until March 31 to restructure.
Doug Mills/The New York Times
The plan pumps $13.4 billion by mid-January into the companies from the fund that Congress authorized to rescue the financial industry. But the two companies have until March 31 to produce a plan for long-term profitability, including concessions from unions, creditors, suppliers and dealers.
The bailout plan sets “targets” rather than concrete requirements about what those concessions may be, meaning that Mr. Obama and his advisers have enormous latitude to decide how to define long-term viability.
A huge bailout for Detroit was barely able to budge Wall Street on Friday.
Stock markets surged in early trading after President Bush announced plans to extend $13.4 billion in emergency loans to the troubled automakers General Motors and Chrysler. But Wall Street’s reaction cooled, the morning’s early gains eroded, and markets ended mixed.
A future out of control, bankrupt financial institutions trying to hold on, limitation on credit severely limits ability of the economy to start up again, debt totally embraces our lives, handouts a state secret, soon cash infusions wont work for banks anymore, banks hold too much toxic garbage to even know if they are solvent. We are now 17 months into a credit crisis that continues to expose the corruption and incompetence of government, banking, Wall Street and transnational corporations. The situation has not stabilized and it won’t anytime soon. All we see are sweetheart deals for elitist corporations for which American taxpayers will pay for years to come. The future of our nation is totally out of control. For the last eight years our economy has been running on something for nothing, lies and deceit. The result will be hyperinflation and then the Second Great Depression. Continue reading »
Tags: AIG, Banking, Bear Stearns, Ben Bernanke, Bonds, Bubble, Chrysler, Citigroup, COMEX, Corruption, Credit Crisis, Credit Crunch, Debt, Depression, Derivatives, Derivatives market, Dollar, Economy, Fannie Mae, Fed, Federal Reserve, Ford, Fraud, Freddie Mac, GM, Gold, Goldman Sachs, Government, Great Depression, Henry Paulson, Hyperinflation, Inflation, JPMorgan, Mortgage crisis, Mortgages, Politics, Recession, Stock Market, Taxpayers, Treasury, U.S., Unemployment, Wall Street
If you oppose those disastrous bailouts people then you should have better voted for Ron Paul and not for Mr. ‘Change is Protectionism’ or Mr. ‘Bomb Them All’. Ron Paul would have listened to the people. He always did. Those elite puppets won’t.
Survey shows that Americans think federal aid for the Big Three is unfair and won’t help the economy.
NEW YORK (CNNMoney.com) — A majority of Americans oppose a bailout of the troubled U.S. auto industry, according to a poll released Wednesday.
The CNN/Opinion Research Corp. poll, conducted by telephone on Dec. 1-2 with nearly 1,100 people, showed that 61% of those surveyed oppose government assistance for the major U.S. automakers.
The poll comes at a critical time for the American auto industry. Ford Motor, General Motors and Chrysler LLC are requesting up to $34 billion dollars in emergency loans from the government to amid the weakest auto sales in 25 years and persistently tight credit.
General Motors and Chrysler, burning through billions of dollars in cash, are the most imperiled. All three companies submitted plans to Congress on Tuesday making their case for funding, and industry executives are set to testify on Capitol Hill as lawmakers debate whether to take emergency action.
But Wednesday’s poll suggests that Americans believe bailing out the Big Three is a bad idea.
A full 70% of respondents indicated that a bailout is unfair to taxpayers.
The ‘USSA’ will bailout almost everything until the USS Titanic sinks.
Dec. 3 (Bloomberg) — General Motors Corp. and Chrysler LLC told Congress they need $11 billion in government loans just to survive the year. Democrats pledged to keep them out of bankruptcy without saying how.
The aid requests delivered yesterday to U.S. lawmakers total $34 billion, more than a third larger than the plans they set aside last month, and heighten the pressure for action as a deepening auto slump quickens GM’s rush toward a default.
While President-elect Barack Obama has said he favors an industry rescue, GM and Chrysler said yesterday they won’t be operating through his January inauguration without the money stalled by a deadlock in Congress. Democrats want to use the $700 billion bank-bailout fund, and Republicans favor tapping an Energy Department loan program.
On Friday November 21, the world came within a hair’s breadth of the most colossal financial collapse in history according to bankers on the inside of events with whom we have contact. The trigger was the bank which only two years ago was America’s largest, Citigroup. The size of the US Government de facto nationalization of the $2 trillion banking institution is an indication of shocks yet to come in other major US and perhaps European banks thought to be ‘too big to fail.’
The clumsy way in which US Treasury Secretary Henry Paulson, himself not a banker but a Wall Street ‘investment banker’, whose experience has been in the quite different world of buying and selling stocks or bonds or underwriting and selling same, has handled the unfolding crisis has been worse than incompetent. It has made a grave situation into a globally alarming one.
‘Spitting into the wind’
A case in point is the secretive manner in which Paulson has used the $700 billion in taxpayer funds voted him by a labile Congress in September. Early on, Paulson put $125 billion in the nine largest banks, including $10 billion for his old firm, Goldman Sachs. However, if we compare the value of the equity share that $125 billion bought with the market price of those banks’ stock, US taxpayers have paid $125 billion for bank stock that a private investor could have bought for $62.5 billion, according to a detailed analysis from Ron W. Bloom, economist with the US United Steelworkers union, whose members as well as pension fund face devastating losses were GM to fail.
Tags: AIG, Bailout, Banking, Bush administration, Chrysler, Citigroup, Derivatives, Derivatives market, Dollar, Economy, FDIC, Financial Crisis, Ford, General Motors, GM, Government, Henry Paulson, Lehman Brothers, Politics, Stock Market, Taxpayers, Treasury, U.S., Wachovia, Wall Street, Washington Mutual
U.S. President-elect Barack Obama looks on before the start of a meeting with Senator John McCain of Arizona, former Republican presidential candidate, at Obama’s transition office in Chicago, Nov. 17, 2008. Photographer: Frank Polich/Bloomberg News
Nov. 21 (Bloomberg) — President-Elect Barack Obama‘s transition team is exploring a swift, prepackaged bankruptcy for automakers as a possible solution to the industry’s financial crisis, according to a person familiar with the matter.
A representative of Obama’s team has already contacted at least one bankruptcy-law firm to say that Daniel Tarullo, a professor at Georgetown University’s law school who heads Obama’s economic policy working group, would call to discuss the workings of a so-called prepack, according to this person.
U.S. lawmakers yesterday delayed until December a vote on whether to give General Motors Corp., Ford Motor Co. and Chrysler LLC a $25 billion bailout. GM today said it would idle production at four plants an extra week and return some corporate jets to conserve cash. Automakers could use a judge-supervised bankruptcy to reduce debt and reject expensive contracts.
“It creates the environment to deal with GM’s problems but limits government financial commitment,” said bankruptcy lawyer Mark Bane of Ropes & Gray in New York.
Bankruptcy is just one option being examined. Obama told CBS News’s “60 Minutes” on Nov. 16 that government aid to automakers might come in the form of a “bridge loan,” advanced if the industry could draw up plan to make itself “sustainable.” The president-elect earlier urged Congress to approve as much as $50 billion to save automakers, using the model of Chrysler’s bailout in 1979.
Chinese carmakers SAIC and Dongfeng have plans to acquire GM and Chrysler, China’s 21st Century Business Herald reports today. [A National Enquirer the paper is not. It is one of China’s leading business newspapers, with a daily readership over three million.]
The paper cites a senior official of China’s Ministry of Industry and Information Technology- the state regulator of China’s auto industry- who dropped the hint that “the auto manufacturing giants in China, such as Shanghai Automotive Industry Corporation (SAIC) and Dongfeng Motor Corporation, have the capability and intention to buy some assets of the two crisis-plagued American automakers.”
These hints are very often followed with quick action in the Middle Kingdom. The hints were dropped just a few days after the same Chinese government gave its auto makers the go-ahead to invest abroad. And why would they do that?
Nov. 20 (Bloomberg) — U.S. lawmakers deadlocked on a plan to bail out the Big Three automakers, leaving General Motors Corp. facing the prospect it could run out of cash before a new Congress can come to the rescue next year.
Democratic congressional leaders disagreed with Republicans and President George W. Bush‘s administration over how to provide $25 billion in aid to GM, Ford Motor Co. and Chrysler LLC. Only two days remain in a lame-duck session for lawmakers to resurrect a compromise.
Senate Majority Leader Harry Reid, a Nevada Democrat, suggested yesterday the situation was dire and refused to set aside time today to debate a compromise proposed by Senator Kit Bond, a Missouri Republican. Reid said Bond’s plan hasn’t been put in writing and the House of Representatives is about to adjourn.
“We have to face reality,” he said. “The reality is that we tried a number of different approaches.”
‘But, but, but … that money was only for my friends on Wall Street and not for the people.’
Henry Paulson, U.S. treasury secretary, left, and Ben S. Bernanke, chairman of the U.S. Federal Reserve, right, listen during a hearing of the House Financial Services Committee in Washington, on Nov. 18, 2008. Photographer: Jim Lo Scalzo/Bloomberg News
Nov. 18 (Bloomberg) — Treasury Secretary Henry Paulson rejected using the government’s financial-rescue program as a “panacea” for economic difficulties, clashing with lawmakers who want the funds to help beleaguered homeowners.
“The rescue package was not intended to be an economic stimulus or an economic recovery package,” Paulson said in testimony to the House Financial Services Committee in Washington. The Troubled Asset Relief Program was designed to stabilize financial markets and the flow of credit and “is not a panacea for all our economic difficulties.”
Representative Barney Frank, who heads the House panel, cut off Paulson during the question-and-answer session, saying “the bill couldn’t have been clearer” in also being aimed at reducing foreclosures. Paulson told lawmakers he has no plans to use the second half of the $700 billion program, indicating it will be up to the incoming Obama administration to resolve the matter.
“We don’t have a lot of time and I don’t usually do this,” Frank said in interrupting Paulson during an exchange on how to deploy TARP cash. “I read sections of the bill that says — write it down — give them assistance,” Frank, a Massachusetts Democrat, told the Treasury chief.
Should Congress bail out the Big Three? Here’s what lawmakers are considering and what’s at stake.
NEW YORK (CNNMoney.com) — For more than a century, the U.S. auto industry has been at the center of the American industrial economy. Events over the next month could determine if that remains the case.
This week, Congress will consider whether to cough up billions of dollars to bail out the troubled companies.
There are loud advocates with strong arguments on both sides.
Nov. 16 (Bloomberg) — U.S. automakers should not get $25 billion in proposed federal loans to save them from possible bankruptcy, Senator Richard Shelby, the top Republican on the Banking Committee, said.
“Companies fail every day and others take their place,” Shelby said on CBS’s “Face the Nation” today. “There’s not a bank in this country that would loan a dollar to these companies.”
Unsold Chrysler products sit at a dealership in Dormont, Pa.
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.
Related article: Daimler: Chrysler worth nothing
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.
Nov. 15 (Bloomberg) — General Motors Corp., burning through cash as sales slump, would cost the government as much as $200 billion should the biggest U.S. automaker be forced to liquidate, a forecasting firm estimated.
A GM collapse would mean “more aid to specific states like Michigan, Ohio, and Indiana, and more money into unemployment and extended benefits,” Nariman Behravesh, chief economist at IHS Global Insight Inc. in Lexington, Massachusetts, said yesterday in an interview.
Behravesh’s projection of $100 billion to $200 billion in costs dwarfs the $25 billion industry bailout plan that will be debated in Congress next week to prop up Detroit-based GM, Ford Motor Co. and Chrysler LLC. The drain on taxpayers from a rescue or a GM failure is a central issue for U.S. lawmakers.
Included in the Global Insight estimate, which Behravesh supplied to Bloomberg News, are the anticipated costs for existing programs, such as unemployment insurance, and new measures that the economist said would be needed to revive economic growth after millions of auto-related job losses.
A GM shutdown would wipe out jobs among suppliers as well as at the automaker itself, pushing the U.S. unemployment rate next year to 9.5 percent, compared with current projections of as high as 8.5 percent, Behravesh said.
Nov. 7 (Bloomberg) — General Motors Corp., seeking federal aid to avoid collapse, said it used $6.9 billion in cash in the third quarter and may fall below the minimum it needs to operate before the end of this year.
GM said it will be near its minimum threshold for operating cash for the remainder of 2008 and will be “significantly short” of that level by the end of June without an improvement in market conditions, a major asset sale or access to new loans or cash support. GM has said it needs at least $11 billion in cash to pay its bills each month.
“GM is making a pretty direct plea for help,” said Pete Hastings, a fixed-income analyst at Morgan Keegan Inc. in Memphis, Tennessee. “The message is, `we’ve done all the things we can do, and we need help.’ And if we don’t get help, fill in the blank.”
Such is the severity of the downturn in the global car industry that US manufacturers are now pushing for their own state bailout.
Why stop at the banks? Now governments around the world are pouring taxpayer money in to bail out loss-making financial institutions, it is getting harder to argue against subsidies, loans, guarantees and other forms of government assistance for other industries, too – particularly since the economic pain is now being felt far from Wall Street.
Which is why Rick Wagoner, chief executive of General Motors, the largest US carmaker, packed his suitcase for Washington and headed to the capital again this week. He is leading a lobbying push aimed at tapping taxpayers and staving off the bankruptcy of the loss-making company. GM’s coffers are being depleted at a rate of $1bn a month, and will run dry by the end of next summer. Little wonder its shares have touched levels not seen since it emerged from the Great Depression.
GM – owner of the Vauxhall brand and Chevrolet, amongst others – is in the throes of merger talks with its smaller rival Chrysler, which is also haemorrhaging cash. The hope is a merger will save money, allowing them to close more factories and cut more jobs. The trouble is, things are so desperate they don’t have the cash to write the redundancy cheques. They are asking for up to $10bn in low-cost loans to tide them over.
So here we are, on the brink of Bail-out II: Detroit.
The General Motors Corporation world headquarters.
General Motors Corp.’s hopes of buying longtime rival Chrysler LLC are floundering because the auto maker remains unable to secure the financing necessary for the deal, say people familiar with the matter.
In recent days GM, its lenders, and Chrysler owner Cerberus Capital Management, have been trying to woo investors with a pitch about the transaction. That pitch touts a combined GM-Chrysler as delivering cost savings of up to $10 billion, an immediate boost in revenue and an increase in cash available to the merged firm. Outside money is needed to fund the cost-cutting — especially buyouts and severance packages for tens of thousands of hourly and salaried employees. Those cuts could total as much as 40,000 jobs if a deal comes together, said people briefed on the talks. And GM is already burning more than $1 billion in cash each month.
The United Auto Workers union has publicly questioned the deal but privately is studying its merits. GM is pitching the combination as a way to better ensure the continued funding of hundreds of thousands of UAW retiree pensions and health-care benefits. A new company would produce upward of $250 billion in annual revenue, while owning more than 30% of the U.S. market. It would also house an estimated $30 billion in cash, thus improving the company’s credit rating and lowering the risk that either GM or Chrysler would have to seek bankruptcy protection over the next 15 months.
But several of the potential lenders remain unconvinced. Credit markets remain extremely tight, and a number of lenders are fearful of the complexity and scale of combining two industrial giants amid an economic downturn. If investors continue to shun the deal, its proponents could take their case to the U.S. government, arguing that a merger is vital to the survival of the nation’s domestic auto industry. It is unclear at this point what role, if any, Washington might be willing to play. But GM, Cerberus and its banks aren’t ruling out selling a stake in the new company to the federal government.
If Rick Wagoner, chairman and chief executive of General Motors, fails to get a merger deal, he could go down in history as the executive who presided over GM’s demise. (Rick Wilking/Reuters)
DETROIT: Rick Wagoner is running short of time and options to save General Motors and salvage his legacy as the leader of the biggest automaker in the world.
With GM burning through cash and auto sales sinking to historic lows, Wagoner is pushing hard for a merger with Chrysler – in talks first reported by The New York Times a week ago – after testing the waters for a similar deal with Ford Motor.
That Wagoner is even considering a merger with one of his crosstown rivals illustrates GM’s precarious state.
Wagoner, the company’s chief executive since 2000 and chairman since 2003, has not granted interviews since the Chrysler talks were revealed. But Wagoner and GM’s president, Frederick Henderson, are convinced that the automaker is in dire need of the cash, additional revenue and cost savings that a merger could provide, according to several people with knowledge of the talks.
Oct. 10 (Bloomberg) — General Motors Corp., Ford Motor Co. and Chrysler LLC, the three biggest U.S. automakers, may be forced into bankruptcy as the global credit freeze damps U.S. sales, Standard & Poor’s analyst Robert Schulz said.
“Macro factors could overwhelm them at some point” even as GM, Ford and Chrysler vow to stick with their turnaround plans, Schulz, S&P’s lead automotive credit analyst, said today in a Bloomberg Television interview in New York. The companies said they have no plans to seek bankruptcy protection.
His assessment underscored the pressure on the industry as the worsening credit crisis makes it harder for buyers to get loans and dealers to finance their operations. S&P said yesterday it may further trim credit ratings for GM and Ford on forecasts for 2009 auto demand to fall to its lowest since 1992.
With all three companies working to boost cash, any bankruptcy filing would be a last resort, not a “strategic” decision, Schulz said.
Those carmakers do not deserve a single cent and here is why:
Who Killed The Electric Car? (Documentary)
Documentary about GM killing of the electric car. It has been here since ‘96 but they killed it off. The “gasoline” for operating this car only costs 16 cents per gallon!
DETROIT – The auto industry moved a step closer to winning the first of two battles it’s been waging in Washington for the past few weeks: A $25 billion direct loan program for automakers and suppliers was attached to a broad government spending bill approved Wednesday by the House of Representatives.
The bill, a “continuing resolution” that would continue to fund the federal government past the start of its new fiscal year on Oct. 1, includes the $7.5 needed to cover costs required to start the loans flowing. Approval by the Senate and the President’s signature are expected in the next few days.
The second battle, however, over rules governing how the loans will be doled out now won’t be decided until after the Presidential elections. That’s a setback for the industry.
Chrysler President Jim Press: “Maybe towards the end of ’09, going into 2010, there’ll start to be some signs of recovery.” Maybe not.
The Wall Street Journal is reporting Auto Sales Tumble, But Industry Sees Signs of Hope.
Sales of cars and light trucks fell 15.5% to 1.25 million last month, down from 1.48 million a year earlier, according to Autodata Corp. The closely watched seasonally adjusted annualized selling rate was 13.7 million vehicles, up from 12.55 million in July, but down from 16.3 million in August 2007, Autodata said.
And you know who will pay for all of this.
Aug. 22 (Bloomberg) — General Motors Corp., Ford Motor Co., Chrysler LLC and U.S. auto-parts makers are seeking $50 billion in government-backed loans, double their initial request, to develop and build more fuel-efficient vehicles.
The U.S. automakers and the suppliers want Congress to appropriate $3.75 billion needed to back $25 billion in U.S. loans approved in last year’s energy bill and add $25 billion in new loans over subsequent years, according to people familiar with the strategy. The industry is also seeking fewer restrictions on how the funding is used, the people said today.
GM and Ford lost $24.1 billion in the second quarter as consumers, battered by record gasoline prices, abandoned the trucks that provide most of U.S. companies’ profit and embraced cars that benefit overseas competitors such as Honda Motor Co. U.S. auto sales may drop to a 15-year low this year and fall even more in 2009, analysts have said.
NEW YORK (Reuters) – Standard & Poor’s on Thursday cut ratings on all three major U.S. automakers deeper into junk status, citing expected losses due to higher gas prices and a weakening U.S. economy.
S&P cut its ratings for General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz), Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz) and Chrysler Automotive LLC to “B-minus,” or six levels below investment grade, from “B.” It also cut to “B-minus” from “B” the finance arms of Ford, Chrysler and GMAC, which is 49 percent owned by GM.
Related article: GM Posts $15.5 Billion Loss; More Job Cuts Possible