• Mar 30, 2009


President Obama is scheduled to give a press conference today at 11:00 AM EST today in which he'll officially reveal his plans for the U.S. auto industry. Stay tuned and keep hitting refresh on your browser to learn the latest.

Hightlights - Follow the jump for full liveblog

- Gov't will give GM adequate working capital to survive next 60 days

- Working capital up to $6 billion will be provided to Chrysler for next 30 days, during which time an acceptable deal with Fiat must be struck

- Chapter 11 bankruptcy still an option

- NEW TAX BENEFIT (for vehicle's purchased between 2/16 and end of year): Deduct cost of any sales tax or excise tax.

- Cash for Clunkers incentive (get money to trade in old car and buy new one): Obama wants to make this happen and make it retroactive, work with Congress to carve out funds from Recovery Act to pay for it.

- Designating a new Director of Recovery for Auto Communities and Workers


- Auto industry has shed over 400,000 jobs in the past year, Michigan has 10% unemployment rate

- "We cannot and must not, and will not, let our auto industry vanish."

NOTE: DOW down 275 points at 11:11 AM EST

- Companies must stand on their own, not as ward's of the state

- Neither restructuring "plan" goes far enough to warrant substantial new investment each company is requesting

- GM/Chrysler being offered limited, additional period of time to fundamentally restructure in a way that would justify new investment from government.

- Sounds like the administration is basically giving each automaker more time to restructure and another deadline to submit another progress report to justify more investment.

- Committed to working with Congress and automakers to meet one goal: "United States of America will lead the world in building the next generation of clean cars."

- Obama going through list of accolades that U.S. automakers have received for their "green" cars.

- "Our auto industry is not moving in the right direction fast enough to succeed in a very tough environment."

- Obama is now going to go over what each automaker needs to do...

GM
- Current GM plan is not strong enough
- Confident GM can rise again if it undergoes fundamental restructuring
- Rick Wagoner stepping aside is first step
- Not a condemnation of Wagoner, recognition that company needs new vision
- Gov't will give GM adequate working capital to survive next 60 days
- Criteria GM has to meet includes A) consolidating enough on profitable brands, B) cleaning up balance sheets, C) business model to survive and succeed in this competitive global market.

- "Let me be clear, the U.S. government has no interest in running GM."

Chrysler
- Situation more challenging
- Partner required to remain viable (Fiat)
- Fiat will give Chrysler technology and build cars and engines in the U.S.
- Chrysler will repay tax payers before Fiat can take majority stake in company
- Working capital up to $6 billion will be provided to Chrysler for next 30 days, during which time an acceptable deal with Fiat must be struck
- If no agreement with Fiat happens and no other partner steps up, Chrysler gets no more money


- Chapter 11 bankruptcy still an option, Obama is being very careful to explain what "bankruptcy" means, i.e. restructuring, clearing away old debts, companies remain open and workers employed.

- U.S. government will stand behind warranties of GM and Chrysler cars.

What gov't will do to support demand for auto sales...
- Gov't will make sure funds to purchase gov't cars will be paid as soon as possible
- Accelerate Treasury Dept's Consumer and Business Lending Initiative
- Work with auto finance company's to increase available credit

- NEW TAX BENEFIT (for vehicle's purchased between 2/16 and end of year): Deduct cost of any sales tax or excise tax.

- Cash for Clunkers incentive (get money to trade in old car and buy new one): Obama wants to make this happen and make it retroactive, work with Congress to carve out funds from Recovery Act to pay for it.

- Obama ending with speech directly to working people: "I will fight for you."

- Compares auto industry crisis to natural disaster, "Damage is clear and we must likewise respond."

- Designating a new Director of Recovery for Auto Communities and Workers to "cut through red tape". Ed Montgomery appointed, former Deputy Labor Secretary. Will provide support to auto workers and their families (not sure how, though). Apparently he'll have access to Recovery Act money.

- Closing with ra-ra speech on how Americans have always tackled adversity and emerged stronger.

Speech ends at 11:25 AM EST, Dow at 264 points.


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  • 65 Comments
      • 5 Years Ago
      Obama certainly isn't running the government like a business.
      • 5 Years Ago
      It looks like something is running out of his nose in that picture, wet snot or something.
      • 5 Years Ago
      Damn... I keep meaning to buying Ford stock. I gotta just do it.
        • 5 Years Ago
        I know FIAT and Chrysler are going to have a hay day together making the world's worst car.
        • 5 Years Ago
        So far I've bought 500 shares of F (over the period of last 60 days).

        Ford is going to be a true American Come Back story.

        ---

        GM leadership is useless ... I am disappointed that Only CEO was fired and not entire leadership team. They ran this company in the ground.

        ---

        I don't know why Chrysler is in the business.
      • 5 Years Ago
      Not a good idea, Barry O. The market tanks every time you open your mouth, and today it dropped like a rock after our Dear Leader Chairman Obama cans Wagoner.

      Obama, please just go to a corner and study Karl Marx and keep your ruinous influence out of the free market which clearly has labeled you a retard (which is completely separate from and no reflection on your bowling skills).
        • 5 Years Ago
        Jason as I type the market is back at the lows. Of course for obamatards it's considered a victory any time the market doesn't completely tank beyond a 4% drop due to Barry opening his big mouth.

        As for the 'prompter, just go out and youtube the incidences of the 'prompter going out on the campaign trail and you'll see what a stuttering bumbling moron Obama is when he doesn't have a script in from of him. Even on the trail where he says the same crap over and over he doesn't bother to know what he is supposed to say, but he surrrre says it great when the 'prompter functions.

        Obama is as stupid as Bush - just a bit "prettier."
        • 5 Years Ago
        Smegley, the market may be back down again, but it don't change the fact that you wrote lies and I called you out on it. I don't care what the market does day to day and neither should you.

        I don't know about the "prompter going out on the campaign trail," but I followed Obama closely during the campaign and I think he's a brilliant and thoughtful speaker, with or without prompter. He does say "uh" a lot but I prefer that than the idiocy of Bush. If that is his major flaw that's terrific.
        • 5 Years Ago
        Check again, Jason. GM's going back to its daily lows and so is the Dow. Guess the teleprompter gave Obama yet another bad economic script to recite, no doubt articulately, but substantially void, as is the norm with this POSident.

        At least however the 'prompter managed to delete the Irish Prime Minister's speech so Obama didn't open up by thanking himself again because that's what the 'prompter told him to say.
        • 5 Years Ago
        Objection, relevance?
        • 5 Years Ago
        Ugh oh... we have a FEMA death camp believer on our hands...
      • 5 Years Ago
      So if your a bank that has lost more money then it has ever made or will ever make you get your funds ASAP but if you make something from nothing you must pass a Government handout test? GM and Chrysler are in bad shape but they require pennies on the dollars compared to banks!
      • 5 Years Ago
      Hope the government won't make GM and Chrysler to stop making the muscle cars and high performance cars.
        • 5 Years Ago
        I think you are going to start seeing some very advanced automobile ideas hit the streets. The muscle car body styles are very popular now as "boomers" are wanting to relive their youth. :) New hybrids coming on the market now have get-up-and-go!
      • 5 Years Ago
      Here's my favorite Obama quote:

      “Let me be clear: the United States government has no interest or intention of running GM”

      That said, Obama then fires Rick Wagoner and the GM Board of Directors, and appoints yet another GM finance guy to be CEO.
      • 5 Years Ago
      What's the difference between this Tax Benefit and the last one?

      Weren't we deducting taxes on new cars purchased since October?
      • 5 Years Ago
      He gave the Cash for Clunkers plan a boost. Up until now it was just a proposal be some House member, I hadn't heard anything to lead me to believe it had any support. But with Obama saying he backs the idea if they can find the funding, it's chances have increased.

      I think this plan would really increase car sales dramatically. I'm pretty sure I'd accelerate my future purchase plans to participate. But maybe I'm the exception. If the problem is really the ability for buyers to get car loans, Cash for Clunkers wouldn't help much. I'm thinking a lot of it is just a reluctance to make a big purchase such as a car in the current economy. I think a $4000-$5000 incentive would change a lot of minds.
        • 5 Years Ago
        BigWill,

        The clunker car has to have been registered for the previous 120 days for it to be eligible in the version of the bill I read (H.R. 1550), which would presumably prevent such dealer shenanigans.

        It seems like very few new cars would even qualify. If you go to fueleconomy.gov, you see there are darn few cars that average 30 mpg overall, and very few US made ones to get the full $5K. The 27 mpg for U.S. made cars to be eligible for $4K has more cars that meet the mark, but you are still talking compact cars and hybrids. Not everyone is going to want to buy a car that economical
        • 5 Years Ago
        You do realize that that $4-5K in incentives won't actually end up being that?

        1) If that bill passes, expect the auto makers to pull back their own incentive programs. And they can do that because ...
        2) That bill basically makes virtually all clunkers worth $5K. So it's worth your while to find someone who has a clunker but doesn't need a new car and will sell for $2-3K; pay $2-300 tax/title, trade it in, and make $1-3K on the trade.

        In fact, if I were a dealer and saw this bill coming, I would be picking up every cheap $100 clunker I can get right now; stockpile them, then when people come to buy new cars after that bill is passed, sell them to the new car buyer for $4K. The new car buyer would still get a $1K discount.
        • 5 Years Ago
        inteller,

        How co CoParts take the credit for themselves? You had to purchase a new car to get the credit?

        Specifically, a U.S manufactured car that averages 27 mpg or a North American manufactured car that average 30 mpg get $4000, while a U.S. manufactured car that averages 30 mpg qualifies for $5000.
        • 5 Years Ago
        yeah, and places like CoParts are licking their chops, because they will start getting these cars and taking the credit for themselves while on the back end stripping them down and recycling the parts.
      • 5 Years Ago
      so when will we read about the Camaro and Escalade cancellation announcements?
        • 5 Years Ago
        I think they will survive this year, canceled next year for sure.
      • 5 Years Ago
      To those thinking that FDRs mass spending fixed the Depression:

      Try reading some history books that were NOT written to the left leaning interpretation of history. WW II is finally pulled us out of the depression..accept it, and deal with it.
      • 5 Years Ago
      I have to admit that for a few years now I have wished that GM stock would go to 30 cents a share, because the corporation had no integrity. My Mother, who had Alzheimer's disease and a huge brain tumor found her way to a GM dealership in Alabama one day and "bought" a 2 year old 2000 Buick Century Lemon at a cash price of $15,047.58. VIN #2G4WS52J6Y1264570, why was the car on the auction block at 4000 miles, and sold with bald tires? I went to the dealership within 2 days and attempted to return the car. No, I was told. They would not take the car back and refund the cash. The car had 4,000 miles on the odometer. My Mother was at the point she did not understand the difference between night and day, literally. The lady at the clerk's office at the court house wouldn't even tag the car, thankfully. We were stuck with the car. I tried to sell it, couldn't sell it, and later had to tag and insure the care after an auto accident totaled the other car that she had owned for many years. It wasn't long before the transmission had to have major work. The car gets about 15 miles to the gallon. The steering something needs an expensive repair. I am medically disabled and poor as a result, so that work just won't get done.
      I am glad to see that someone has been put at the helm of this once proud auto manufacturer who understands that a business will not thrive without satisfied customers. You need to get rid of the consumer artibration agreement that most folks don't understand the significance of, and require that your dealerships play fair.
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