Autoblog

Obama vows not to give up on Detroit automakers

Chris Paukert — Wed, 25 Feb 2009 10:57:00 EST

In last night's televised speech to a joint session of Congress, President Obama vowed to commit to a reworking of the domestic auto industry, saying that it is too important to let go:

But we are committed to the goal of a re-tooled, re-imagined auto industry that can compete and win. Millions of jobs depend on it. Scores of communities depend on it. And I believe the nation that invented the automobile cannot walk away from it.

Obama will present is first budget proposal on Thursday, but in his speech, he said that his administration will focus on three things: energy, health care, and education. All three components of his focus have the potential to impact the auto industry, but Obama took particular pains to acknowledge that the U.S. has fallen behind in renewable energy production, noting that "New plug-in hybrids roll off our assembly lines, but they will run on batteries made in Korea."

In his speech, Obama was short on specific courses of action, but he acknowledged that Detroit's automakers have fallen into disrepair in part because of their own doing and in part because of market conditions:

As for our auto industry, everyone recognizes that years of bad decision-making and a global recession have pushed our automakers to the brink. We should not, and will not, protect them from their own bad practices.

[Source: Automotive News (subs. req.) | Image: Saul Loeb/Getty]

Obama vows not to give up on Detroit automakers originally appeared on Autoblog on Wed, 25 Feb 2009 10:57:00 EST. Please see our terms for use of feeds.

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Ralph Nader opposes $50 billion loan from feds

Chris Shunk — Mon, 08 Sep 2008 14:04:00 EST

Filed under: Government/Legal, Chrysler, Ford, GM

The Detroit 3 are pushing hard for $50 billion in low interest loans to keep factories running, build new ones and create alternative powertrains. Presidential candidate Barak Obama has already endorsed $50 billion in loans and Republican nominee John McCain has signed on for $25 billion in loans already guaranteed in the 2007 energy bill. If Ralph Nader were elected to office (won't happen), he would be against such a loan. Nader told a group of supporters in the Detroit area that "tax payers should not be played for a sucker," and that decades of bad decisions by automakers means that no such government assistance is deserved.

GM spokesman Greg Martin countered that Nader was basically a non-entity in the big picture, pointing out that the loan would help quickly get more fuel efficient vehicles on the road. U.S. Rep. Joe Knollenberg from Michigan remarked that Detroit automakers could be paying 15-20% in interest rates without the government loan, which would be pegged at 4-5%. We're not experts on the subject, but we're pretty sure a loan with a 20% interest rate is a bad idea, and it's not the kind of rate you want to pay if you're competing against Toyota.

[Source: The Detroit News, Photo by Alex Wong/Getty]

Ralph Nader opposes $50 billion loan from feds originally appeared on Autoblog on Mon, 08 Sep 2008 14:04:00 EST. Please see our terms for use of feeds.

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Auto industry advertising slump hurting old media

Chris Shunk — Tue, 12 Aug 2008 09:30:00 EST

Filed under: Etc., Marketing/Advertising

Mainstream media has been quick to pile on Detroit automakers, which, along with some questionable Motown metal, has helped drive nationwide perception of the Big Three into the ground. Now that times are tough at traditional media outlets, well, that's Detroit's fault, too. Back in 2004, about $24 billion was doled out to television, print, and radio ads. Fast forward to 2008, and painfully slow sales coupled with cash-strapped automakers and dealerships have cut that number to about $15 billion. That's putting an Excursion-sized dent in the earnings of stalwart media companies like Viacom and Time Warner (Autoblog and Weblogs, Inc. are owned by Time Warner), as the media giants point directly towards Detroit and a soft auto market to explain their drop in revenue.

While times are tough on TV, print advertising is taking the brunt of the blow. Newspapers took a $131 million hit in the first quarter of 2008 as dealers have pulled back on full and half-page ads due to slow sales and limited cash flow. The proliferation of mainstream Internet advertising is also cutting into old media's profits, as automakers feel they're getting more bang for the buck with less expensive online ads. With the car market looking worse by the day and the unabated growth of Internet advertising, we don't expect this trend to reverse itself any time soon.

[Source: New York Times]

Auto industry advertising slump hurting old media originally appeared on Autoblog on Tue, 12 Aug 2008 09:30:00 EST. Please see our terms for use of feeds.

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