"President Obama has just finished his press conference on the government’s determination of the viability of General Motors and Chrysler, and the gist is that both automakers have failed to convince the feds that their business plans deserve further investment. Obama and his task force will give GM enough working capital to survive another 60 days and prove its viability, though no dollar amount was given. Chrysler, meanwhile, is being given another 30 days and working capital up to $6 billion to finalize a partnership deal with Fiat. If a deal can’t be made and another partner is not found, Chrysler will get no more federal aid. Also, Fiat won’t be allowed to take a majority stake in Chrysler until the automaker repays all the money it has borrowed from the government so far.
Perhaps the biggest news from the press conference is that the U.S. government will now fully back the warranties on vehicles sold by General Motors and Chrysler in the hopes that buyers will continue to consider their products amidst these tumultuous restructuring efforts. Also, the President has pledged to work with Congress to find funds to pay for a U.S.-version of the Cash for Clunkers program that has been so successful in Germany."
Well I guess his plans have changed from full out giving X amount of dollars to rebuild the economy to forcing deadlines be met and consequences be paid. Seems like this time Mr. Obama may have something useful up his sleeve? I’m thinking that forcing a partnership upon brands may create something worth while and save somewhat of our economy. GM sure dug themselves into a bigger hole and I’m sure 60 days will solve nothing. Than again two months is a long while…
Obama has been getting shit by some in the auto industry for this, but can you blame him? A government is a business, so what business wants to toss billions of its profits to into failing companies?
If they can’t do anything better then screw them… They’ve dug their own grave. I think Obama is doing the right thing. They’ve had enough time to make changes where now they’re just wasting money.
I just feel bad for the people who work for them though. Must be tough. I hope the Euro automakers move in and take GM and Chrysler’s place (if they go). They’ll have factories and stuff and eventually things will be like normal again.
These companies pay millions of dollars to financial agents who should be smart enough to avoid “going under” and should have seen this coming. I think its a good call by Obama
Did anyone else see the CAW president on TV yesterday around 2? I personally work as well as my two parents at the Chrysler Etobicoe casting plant. What you dont realize is that we have already given up TONS to try and make this company viable. Our breaks were cut close to 30% as well as increasing machine speed. They even removed stupid things such as cable TV in break rooms that cost close to 250$ per year.(This is a parts production plant not assembly) Labour counts for 7% of a cars assembly price. Alot of the problem is the companys refusal to work with the union.
He’s right. I’ve been giving the unions a bad rep in conversation, but to be truthful if they are only 7% of overall expenses, these companies shouldn’t be saying it’s their faults. The real issue seems to be unethical investing of pension funds in the markets, most likely trying to make a buck on top of paying the pensions. These legacy costs should not be removed off the books to save the money… that’s people’s pensions that they agreed too and worked for. If you ask me, and I know no one really is, these companies have a horrible business model. But can you really blame them? Our whole society was built on buying Escalades and Denalis when the Asians’ were working on fuel efficiency. They knew that’s where the market was going, but the big 3 fell for the big balla whips. Bad judgement call I think.
Ford Canada has done it right. Rather than ask for money to save their asses, theyve told the government to offer incentives to customers to make buying Canadian cars more attractive. I dig it.
in terms of unions my father is a lawyer for many factories that make car parts, and i cant tell you how many factories have been closed down because the CAW makes it impossible for the business to be viable…
to be honest, I would like GM to disappear… I know it’s not going to be good for anyone, but GM has been making garbage cars for decades worldwide. Do we really need companies like GM around?
They managed to screw everything up… they were in deep sh*t years before this crisis… why should anyone bail out a failing business? I think Obama did the right thing.
id have to agree with tosh but i mean through the years we’ve seen a lot of good/decent cars from GM group of companies. Cars like the corvette, the deville, and the silverado. all in all though it all just justifies the saying of how “you reap what you sow” instead of adapting their cars to the times they just built them bigger and more baller, and when they finally have hybrids to compete for that market, its already been too late.
I think Ford/GM dealerships have the WORST service. The service of their crappy products is why they fail.
Firstly, the product is shit so customers come in with problems.
Secondly, the after-purchase service is crap making the customer stuck with the companies crappy products. No wonder why not many people buy their cars anymore.
This will be good for everyone. Shows that even the biggest car manufacturers can fail. No one should be overly confident in what you do. I’ve noticed this with many Ford/GM dealerships as they have their head on way too high thinking they will never go under/fail, so they can continue to give shitty customer service.