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Cars, Candidates, Loans, and Bailouts

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#110
bigthree.jpg
 
#111
Darryl Siry weighs in on the auto industry:

Greentech Media: Green Light Blog Archive The Fundamental Issue in the Auto Industry Is Overcapacity
The fundamental problem is OVERCAPACITY.

Supply has exceeded “true” demand for many years. This shouldn’t happen in efficient markets but this imbalance was perpetuated by the availability of essentially free credit that allowed consumers to overbuy and overspend.

The industry was tooled up and structured to deliver against total market sales of 17MM units a year. When credit dried up this last summer — and markets started the wrenching process of reaching a new equilibrium — it was shocking to watch as the annualized sales figures dropped 20 percent, 30 percent and then over 40 percent by November.
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#112
All in all my take on the requested so-called "bailout" is that propositions were suggested by the Senate/Congress by way of questioning (testing"?") the CEO's willingness to make sacrifices ("good faith" efforts in exchange for taxpayer willingness to release some, if not all, of the requested funds) to keep their respective livelihoods (their individual auto companies, not to mention the thousands of employees dependent upon them for their livelihoods) afloat, but they (Congress) and we (the American people) received little more than token acceptance of the suggestions in what amounts hollow public proclamations (i.e., the CEO's willingness to accept none but "$1" salaries):

"The heads of the Detroit’s automakers might be willing to accept $1 salaries as a condition of a federal bailout, but they won’t commit to capping their total compensation, even at $1 million."
The Washington Independent No Word on Other Options for Detroit Bailout

Even the UAW balked at restructuring compensation packages:

"Even as Detroit's Big Three teeter on collapse, United Auto Workers President Ron Gettelfinger said Saturday that the problem is not the union's contract with the automakers and that getting the automakers back on their feet means figuring out a way to turn around the slumping economy."
UAW leader says blame economy for Detroit 3 woes - Yahoo! Finance

They all ask (albeit demand) alot, yet are unwilling to give anything of themselves in return, which would only serve to benefit them. For all intents and purposes, they've cut off their noses in order to spite their own faces, be it intentional or not.

As the metaphor goes, "actions speak louder than words...", and from their behavior it's easy to realize that they never had any real intention of changing anything about the manner in which they've been conducting business but were, instead, intent only on prolonging the ever debilitating debacle that the American auto industry has atrophied to under their individual tutelage, pointing the finger of blame at every conceivable, and some not so readily conceivable, scapegoat out of pure avarice instead of the true culprits...themselves.

It's damned disgraceful and about as un-American as anyone can get.
 
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#114
Retooling loan requests at $30.8 billion | Freep.com | Detroit Free Press
Detroit's automakers and 11 other companies have asked for $30.8 billion in low-interest federal loans to retool factories for more fuel-efficient vehicles, the U.S. Department of Energy told the Free Press on Wednesday -- outstripping the $25 billion that Congress gave the program just three months ago.

The loans were approved as part of last year's law boosting fuel economy standards to 35 miles per gallon by 2020. But money for the plan has become a political cause over the past few months as the finances at Detroit's automakers weakened.

The three automakers told Congress earlier this month that they were seeking $21.7 billion in loans through the program, and that was in addition to the $34 billion in loans and credit lines they were seeking from Congress. Under the program, the loans could be used to pay part of the retooling costs for vehicles such as the Chevrolet Volt.
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#115
If Tesla "doesn't deserve government bailout", then there is no way I want to see my taxes used for this...

BBC NEWS | Business | Government confirms Jaguar talks

Ford sold them to India's Tata when the writing was on the wall. Now, 6 months later, they are asking for a bailout when the parent company is obviously plenty big enough to look after itself.

Jaguar Land Rover was bought by India's Tata in June for £1.7bn ($2.6bn). Since then output has been trimmed at its three main UK manufacturing sites.

News of the talks with the UK government came after Tata said it was to sponsor Ferrari's Grand Prix team.

Tata, which bought Jaguar Land Rover from Ford, said it was not commenting on talks with the government.

Neither Tata or Ferrari have revealed the cost of their sponsorship deal.

Jaguar Land Rover chief executive David Smith said he agreed with the opinion of trade body Society of Motor Manufacturers and Traders that the industry's "situation in the UK is a national emergency requiring urgent action".
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So a premium brand and an SUV maker going to the wall is now a national emergency? I'd be sorry to see the end of Jaguar, especially as they are now turning out some nice cars, but life will go on. The loss of 15,000 jobs is of course very sad.

Woolworths is going under with the loss of 80,000 jobs. Are they getting a bailout? Of course not.
 
#116
And BBC NEWS | Business | Chrysler plants close for a month

Factory shutdowns

In announcing its plant closures, Chrysler also left open the possibility that the factories would be closed for more than a month.

GM has suspended major work on its $370m engine factory in Michigan, where it plans to build a new small car engine which is key to its efforts to reinvent itself as a maker of fuel-efficient and all-electric cars.

The new plant is scheduled to build a turbocharged 1.4-litre engine for the Chevrolet Cruze small car and another version of the engine to provide backup power to its electric car, the Chevrolet Volt.

Last week, GM said it was shutting down 30% of its North American production.
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#120
Another Darryl Siry article:

Greentech Media: Green Light Blog Archive A Simple Solution to Support EV Startups

This is where the government could play a very valuable role. By providing low or no interest working capital loans which could be used only for funding inventory purchases and other similar up-front product costs (such as shipping and logistics), the government can level the playing field for startups and allow them to scale production rapidly to put products in the hands of their customers. To prevent abuse of the program and overproduction of vehicles, the government could require that these startups demonstrate a credible order book that proves (to the extent possible) that the products being built will indeed be sold to customers.
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