Freddie Ford & Chrysler Mae?

The Scotsman

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Detroit's sputtering Big Three turn to Washington for help


DETROIT (AFP) — Battered by weak sales, declining market share and miserable credit ratings, Detroit's Big Three automakers are now turning to the US government for help.

General Motors Corp., Ford Motor Co. and Chrysler LLC will be launching a campaign in the coming days to secure at least 25 billion dollars in federal loans to help get past the current economic malaise.

"This isn't a bail out," said Greg Martin, Washington spokesman for GM, the largest US automaker which has been awash in speculation for months that it is running short of cash.

"These are direct loans that we have to pay back," added Ford spokesman Mike Moran.

Detroit's goal is to have new legislation in place for the aid package by the time Congress adjourns in late September or early October.

The combination of an economic slowdown, the credit crunch and presidential politics, have enhanced the prospects of such a plan.

The possibility of one or more of the Big Three seeking bankruptcy protection -- which could have an enormous economic impact -- has created a sense of urgency.

"We are encouraging Congress to take this up now," said John Bozzella, vice president of external affairs and public policy at Chrysler LLC, created by private equity investors for the spinoff of the former Chrysler Corp. operations from Germany's Daimler.

Bozzella said the loan authorization was included in energy legislation was signed into law last December by President George W. Bush after passing through the Democratic-controlled Congress.

The law requires automakers to raise the fuel economy of vehicles sold in the US market to 35 miles (56 kilometers) per gallon (3.8 liters).

The Bush administration has estimated that retooling for the new standards would cost the automakers 100 billion dollars.

"This was authorized by Congress. There was a consensus this was needed to transform and drive new technology," Bozzella said.

The bill also authorized the US Department of Energy to approve up to 25 billion dollars in loans to fund technology reseach.

The legislation, however, requires that any loans authorized under the measure have to be guaranteed by the federal government. To do that Congress needs to appropriate 3.7 billion dollars for the insurance premiums, automakers said.

The bill for the insurance could rise to more than seven billion dollars if Congress boosts the loan total to 50 billion dollars.

"The long term goal of the legislation was to increase energy security and to ensure the US has the domestic capacity necessary for building more efficient vehicles," Bozzella said.

Suppliers and even foreign carmakers operating in the US could qualify for the loans, notes Bozzella.

"There are no restrictions in the language on which companies are in and which companies are out," he said.

The automakers say they have a commitment from the congressional leadership to take up the enabling legislation when both the House and Senate reconvene in the coming week.

Both Barack Obama, the Democratic presidential candidate, and Republican nominee John McCain have endorsed idea of loan guarantees.

The chances for passage are helped by the fact that four of the states that would most benefit from the legislation, Michigan, Ohio, Indiana and Missouri, would benefit from research and assembly plants from a new technology drive.

"Michigan, Missouri, Indiana, Ohio -- that's where the election is going to be decided right there," noted one Ford official, who asked not to be identified.

Ellen Hughes Cromwick, Ford's chief economist, said the credit crunch has had a serious impact on carmakers, limiting their options for raising fresh capital.

"It could be the credit crunch could persist for some time," she said. "That's a situation that adds a lot of uncertainty to the market."

Peter Morici, economist at the University of Maryland, said any loan program even if it is called a research plan would be a "fig leaf for a subsidy" that distorts the market.

But he added that "our trading partners give us no choice. Every other major auto manufacturing country protects their industry so we may have to do the same."

http://afp.google.com/article/ALeqM5jB-SF8CATsHxpEA3Yke755BiTDbg


Now its the turn of the car makers! Why not just nationalise everything and be done with it!
 
Werbung:
Now its the turn of the car makers! Why not just nationalise everything and be done with it!

Well that is what bailout precedents do for you.

The car makers have two options in my opinion.

1) Compete
2) Go out of business
 
here is a idea, make cars with better MPG and you would sell more cars...they as normal 5-10 years behind the market change , and are suffering .
...BINGO!

That's exactly what I've been thinking. Instead of making these dinosaurs whilst the rest of the world has been researching cleaner and more fuel efficient vehicles the neanderthals at the "Big 3" have been knuckle dragging their way to financial oblivion.

Do the research :mad:
 
Werbung:
here is a idea, make cars with better MPG and you would sell more cars...they as normal 5-10 years behind the market change , and are suffering .

Seriously?

The EV1 was the first modern production electric vehicle from a major automaker and also the first purpose-built electric car produced by General Motors (GM) in the United States.
GM_EV.jpg

Introduced in 1996, The EV1 electric cars were available in California and Arizona as a lease only, as well as through a Southern Company employee lease program in Georgia, and could be serviced at designated Saturn retailers. They were discontinued after 1999 and subsequently removed from the roads in 2003 by General Motors (except for a few). The car's discontinuation was and remains a very controversial topic.

There were no sales... the car was a total flop because back in 1996, gas was cheap.

From '84-87 Honda produced the CRX, which got 49 Mpg city and 54 Mpg Highway...
1991.honda.crx.jpg

The big 3 could crank them out tomorrow but with all the modern safety equipment necessary to pass regulations, the car would get about half as many Mpg or be a stripped down tin can as originally designed. These are still popular cars because they are so lightweight but your odds of surviving a crash in one of these is nowhere near as good as your chances in one the "Dinosaurs" the big 3 are producing today.

From the makers of the EV1, Chevy could jump back into domestic competition with the release of the Volt:
chevy-volt-a01.jpg

The Concept Chevy Volt, with its revolutionary E-Flex Propulsion System, will be different than any previous
electric vehicle because it will use a lithium-ion battery
with a variety of range-extending onboard power
sources, including gas and, in some vehicles, E85
ethanol(1) to recharge the battery while driving.

When it comes to plugging in, the Volt will be designed to use a common 110–volt household plug. For someone who drives less than 40 miles a day, Chevy Volt will use zero gasoline and produce zero emissions.(2) For longer trips, Chevy Volt's range-extending power source kicks in to recharge the lithium-ion battery pack as required.

Its supposed to be released in 2010 but they may release it earlier if public interest were greater.

Dodge has one too, it looks pretty cool as well:
dodge-zeo-concept-430.jpg

DETROIT — We’ve finally seen an electric -powered vehicle that has our motoring mouths salivating to find a backcountry road. The Dodge ZEO Concept is sleek, aerodynamic and appears to be speeding—even sitting on a display turntable. This four-door coupe just may be the hit of the 2008 concepts.

The big 3 can't afford another flop... thats why its REALLY important that we not WASTE THEIR TIME, and taxpayer money, with boondoggles like Corn Ethanol. Now that Congress is all on board for the Pickens Plan, the big 3 could now be facing another change in direction... to Natural Gas powered vehicles. Point more of the blame where it belongs, not at the domestic car industry but to Washington and its long arm of interference.

The lesson here, leave CONGRESS out of picking the winners and losers where technology is concerned and let the market decide them. Corn Ethanol was forced onto America through taxpayer subsidies and the consequences have been dire, even requiring its own kind of federal bailout...

Now specifically in the Car industry, the big 3 switched to E85 style vehicles - because Congress was backing Corn Ethanol at the time - and now that CE has fallen apart, people are scrambling to find "Alternatives" to Corn for creating Ethanol so the Government can save face and the car industry can save billions in an otherwise worthless investment.
 
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