Day 313

Cash For Clunkers

Cash for Clunkers

The new cash for clunkers program is running out of money.  The $1 billion dollar program has been more than depleted by over 22,782 vehicles that have been purchased.  The program was created to stimulate the declining auto industry and get gas guzzling cars off the road.  No one predicted just how popular the program would be.  Various members of congress have stated that they will be working to redirect more stimulus money to the rebate program.  

Day 304

Dealer Assistance from GM

General Motors will be offering "Dealer Assistance" for all of the dealerships that are slated to shut down according to the new government restructuring program.  There will be approx. $600 million in funds that will be distributed.  GM will be compensating $1,000 per unsold car and 8 months of rent.  The per dealership average is $462,000 .

Day 292

General Motors

GM Rebounds

GM has been revived from bankruptcy.  It only took 40 days! There will be a heavy down-sizing of the company:

The new GM will have fewer brands, fewer plants and fewer workers. The number of U.S. executives will be cut by 35 percent and U.S. salaried employment will drop by 20 percent by the end of this year. As important, Henderson said, is that the corporate culture at the automaker must evolve, enabling the company to be more nimble and more focused on beating its competitors.

Day 266

Today I am in Detroit, Michigan.  Drove around the suburbs and happened to come across the Chrysler Factory that used to build Ram trucks.  Deserted, erie and sad, this town is.  

Day 261

Ruth Bader Ginsberg

Ruth Bader Ginsberg

News that Supreme Court Justice Ruth Bader Ginsburg has granted a stay on Chrysler's sale to Fiat makes a cameo appearance on the front page of the New York Times, the Wall Street Journal, and theWashington Post. The surprise action caught even the creditors, led by three Indiana pension funds, off-guard. In months of arguments, "the Indiana funds [contended] that the sale trampled on their rights as senior lenders because they would recover less than junior lenders. The funds also claim that the manner of the sale did not comply with bankruptcy law, and that the Treasury illegally used billions from the federal Troubled Assets Relief Program, meant for financial institutions, to prop up Chrysler," the WP writes. Under the current deal, a United Auto Workers retiree health care trust got a 55 percent equity stake and $4.5 billion note, and Fiat stands to get an initial 20 percent stake. 

Day 221

"Surgical Bankruptcy"

Auto giant, Chrysler, will file for bankruptcy after talks between creditors and government officials fizzled last night.  This "surgical bankruptcy" will radically reorganize the division of ownership:  55% to Chrysler's retiree health fund, 35% to Fiat, 8% to the United States and two percent to Canada.  

Particularly striking to some economists and historians is that the plan turns over ownership of a major U.S. industrial company to an employee-run trust, a deal that is "unprecedented on this scale," according to Harley Shaiken, a University of California at Berkeley professor and expert on unions.

The government plan also calls for ensuring that Chrysler maintains substantial U.S. manufacturing operations. It requires that at least 40 percent of company sales volumes remain manufactured domestically, or for the company's total production in this country to remain at least at 90 percent of its U.S. production last year.

Day 150

Gimme Gimme More

Big Three Automakers, GM and Chrysler beg for more money to stay afloat.  GM might need as much as $30 billion on top of the $13.4 billion it received from government funds.  The company also plans to cut 47,000 jobs.  Chrysler asked for $5 billion more (it already received $4 billion) and will cut 3,000 jobs.  

We've dug ourselves into a hole.  The real losses are yet to be seen.

Day 142

Bailout for French Auto Makers

The French are next in line to weigh the possibility of giving aid to auto manufacturers.  The loans are raising concerns from other European Union countries.  The European Commission is requesting clarification of the bailout plan to avoid any legal worries.  Slovakia has come out to voice concerns of protectionism and Germany in regard to distortion of competition law.   

Day 122

GM Slump

General Motors falls behind Toyota as the world's biggest automaker, a title claimed for over 77 years.  Sales for the auto giant dropped 11% in 2008.