LIVEBLOG: President Obama's press conference on the Auto Industry
by John Neff on Mar 30th 2009 at 11:02AM 
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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Reader Comments (Page 1 of 5)
inteller 11:09AM (3/30/2009)
Wow, this is great news. Wind these two turds down. Chrysler 30 days to deliver? never going to happen.
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Inigo 11:14AM (3/30/2009)
"Chrysler 30 days to deliver? never going to happen."
No, but what will happen is that the government will give them more time after that, and more time after that, and...well, you get the picture. Same with GM.
inteller 11:17AM (3/30/2009)
well they aren't getting any money today, so hopefully this afternoon we'll hear about their prearranged bankruptcy.
Rob 11:21AM (3/30/2009)
Werd homeskillet. HOPE AND CHANGE. I'm sick of 4 or 5spd automatics.... more gearing, or make the first few gears high for acceleration, then an ultra low gear for the highway. There's no reason engines should be spinning at 3500rpms at 75mph. I'm sick of the same old crap repackaged in slightly better looking designs. I want INNOVATION, and actual change if I'm going to get a newer vehicle. I want LESS WEIGHT. I don't want as many safety features, I think they make everything bloated. To all the safety freaks, motorcycles are still legal, but I can't buy a car without 4 airbags!? WTF.
g00fba11 11:36AM (3/30/2009)
Many of us here were pushing for gov't financed Ch. 11 + gov't backed warranty back in November. Now, after 4 months and $30B down the drain, we've come full circle again, except that Chrysler is now even closer to Ch.7 than 11.
It'd be interesting to see how this whole thing transpires in the next couple of months.
Rob 11:52AM (3/30/2009)
Wait. Dammit! As an enthusiast, I vehemently disagree with the cash for clunker thing. It ruins my hobby, and dammit, keeping an old car on the road (if it well maintained and not belching smoke) is BETTER FOR THE ENVIRONMENT than some new hybrid. People look at MPG and think higher is better, but ignore the costs of producing a new vehicle in terms of energy consumption, refining, shipping materials, plastic offgasing, paint fumes, adhesives, etc. A car starts to use more energy on the road than it was created once it hits around 600,000 miles... and most cars don't make it that far. Until we keep cars on an average of 600,000 miles, crushing older cars is a stupid idea. Look at Cuba. They still rock stuff from the 1950s.... even though those cars get crap MPG, it's STILL better and cheaper for the environment.
Mr.Oak 12:30PM (3/30/2009)
CHRYSLER - FIAT deal DONE!!!!!!!
The FIAT Chrysler GLobal Init.....
Matt 6:12PM (3/30/2009)
What I don't get is... any multi-billion dollar company with so many employees and such a large global focus, any like-company in GM's position would be in a difficult spot, too. 60 days isn't going to make much a difference, when you're talking about issues that have taken years to create and will take years to reverse.
Cutting down on half their workforce, phasing out entire facilities and shedding brands will help GM in the long-term with survivability/viability, as well as helping them maintain profitability. And creating good, sound-of-quality vehicles that people want to buy - G8, Cobalt XFE, Malibu, Silverado, etc - as well as designing vehicles to be brought to fruitition that people will likely want to purchase and that are examples of the ever-so-beloved eco-friendly name plate - Cruze, Volt, etc - these are what will make them money and keep them alive.
But the Cruze isn't coming out in April, nor is the Volt. And people (myself included) can't get financing when normally they could for, say, a new Malibu. This creates a waiting game.
If they can't commit to a long-term solution (the government AND GM) then why commit to any at all? If you don't think they'll be fine, don't give them 60 days worth of aid - that will simply be a waste of capital, at least through the eyes of the same government that thinks things can magically get better within sixty days.
New, innovative product isn't created and released within sixty days. Heck, it isn't done in sixty weeks. And while many parts of GM's portfolio could use a re-freshening (Aveo, Cobalt/G5, G6, etc) and shedding some of the clones (G3? Come on. Four variants of the Buick Enclave? No thanks.) would definately help, the fact is a lot of their product is solid and can compete. Don't believe me? Please, go test drive a Camry, and a Sonata, and an Accord or Altima. Then test drive a Malibu. It's not a bad car, and is subjectively better than several competitors.
We just need time to wait this stuff out - the inability to get a vehicle loan, even with a credit score in the 600s, because of the economy for example - and things should be fine.
If you can't have the faith in a several year long viability, then don't give them sixty days. And if you're going to oust Wagoner, then oust all the upper management, or double the size of the board while removing existing members. Bring more insight in there. I highly doubt there hasn't been a time when ideas have existed that the board HASN'T denied, where they might have been useful.
Do what Mullaly has done at Ford, get down to your employee and customer's mind-set. Turn things around, take chances. You'll waste cash on development/production either way, if your crap doesn't sell then oh darn, it might not have sold the other way either.
TGM 11:51PM (4/01/2009)
They're not being told to correct everything. They're being told (and it says so in the article) that they need to create a viable *plan* to correct their problems.
Lucas 11:13AM (3/30/2009)
Damn... I keep meaning to buying Ford stock. I gotta just do it.
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DesiAuto 12:58PM (3/30/2009)
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.
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GM leadership is useless ... I am disappointed that Only CEO was fired and not entire leadership team. They ran this company in the ground.
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I don't know why Chrysler is in the business.
superman211 11:48AM (3/31/2009)
I know FIAT and Chrysler are going to have a hay day together making the world's worst car.
Smegley 11:14AM (3/30/2009)
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).
Reply
Lucas 11:18AM (3/30/2009)
Ugh oh... we have a FEMA death camp believer on our hands...
Sean 11:20AM (3/30/2009)
Objection, relevance?
Jason 11:30AM (3/30/2009)
Actually, the market started rising as soon as his speech began, and GM stock went through the roof. Look it up. These short-term market swings don't matter of course, but I just wanted to correct the record.
Smegley 11:50AM (3/30/2009)
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.
Jason 12:20PM (3/30/2009)
"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."
You said the market goes down when Obama opens his mouth, today it went up. GM intraday low is 2.40 and it's at 2.85 as I type this. Dow is currently just ahead of it's daily low but was at it's high point today FWIW (nothing).
As for as Obama thanking himself, click this link (http://blogs.telegraph.co.uk/toby_harnden/blog/2009/03/24/the_truth_about_barack_obamas_irish_teleprompter_gaffe)
and take it from someone who was there and not the right-wing nutters.
If they were smart they would have had Bush on a teleprompter a long time ago. Are you guys jealous, stupid, or both?
Smegley 2:13PM (3/30/2009)
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."
Jason 2:41PM (3/30/2009)
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.