Autoblog

Total Bailout Bill: $97.4 Billion, with a 'B'

Jeremy Korzeniewski — Fri, 20 Feb 2009 10:58:00 EST

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

With all the rescue/bailout talk going on here at Autoblog and, oh, just about everywhere else, you may find that it's tough to keep up with it all. Thankfully, the scribes over at Detroit Free Press have consolidated the discussion down to one easy-to-read but tough-to-comprehend figure: $97.4 billion. That's the total you get when adding up the initial $25.4 billion that automakers were promised to help retool their plants to build more fuel efficient cars; the $25.5 billion that auto suppliers have banded together to seek from the Feds and the $39 billion in loans that General Motors and Chrysler have requested from the feds to stave off a worst case scenario.

Of that $97.4 billion, a total of $24.9 billion has already been paid out to General Motors, GMAC, Chrysler and Chrysler Financial. If the entire amount were paid out, every American would then have contributed $874 to the auto rescue/bailout.

[Source: Detroit Free Press]

Total Bailout Bill: $97.4 Billion, with a 'B' originally appeared on Autoblog on Fri, 20 Feb 2009 10:58:00 EST. Please see our terms for use of feeds.

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Autoblog Podcast #106

Dan Roth — Tue, 09 Dec 2008 17:32:00 EST

Filed under: Podcasts, Government/Legal, Chrysler, Ford, GM, Earnings/Financials, Brabus, Opinion/Editorial

Has it really been a month of podcasts already? Alex Nunez and editor Neff join Chris and Dan for Autoblog Podcast Episode 106. Hilarity ensues as we cover the bailout (what else?) and try to touch on a couple other issues before finally deflating like a punctured balloon at the 64-minute mark. Enjoy, and remember to drop any feedback our way at podcast at autoblog dawt com.

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Autoblog Podcast #106 originally appeared on Autoblog on Tue, 09 Dec 2008 17:32:00 EST. Please see our terms for use of feeds.

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Mulally chooses Escape Hybrid for D.C. road trip

Sam Abuelsamid — Tue, 02 Dec 2008 09:58:00 EST

Filed under: Government/Legal, Green, Crossover, Ford

Click above for a high-res gallery of the 2009 Escape Hybrid

Ford CEO Alan Mulally has made the politically correct decision for his return trip to Washington DC this week and is skipping the company jet. In fact, he's skipping the airport altogether and hitting the road in an Escape Hybrid. It seems like it would have been better to grab one of the brand new Fusion Hybrids, but no one in Washington should be too upset at the choice of the Escape. The last one we tested for AutoblogGreen averaged 33 mpg. Perhaps he'll even take one of the prototype plug-in hybrid versions, although that wouldn't make much sense for the nine-hour drive. In our reader poll you actually opted for the Fusion by a wide margin, followed by the Fiesta and Mustang. The Escape came in at a respectable fourth.

Gallery: ABG Garage: 2009 Ford Escape Hybrid Limited

[Source: Automotive News - Sub. Req.]
Photos Copyright (C)2008 Sam Abuelsamid / Weblogs, Inc.

Mulally chooses Escape Hybrid for D.C. road trip originally appeared on Autoblog on Tue, 02 Dec 2008 09:58:00 EST. Please see our terms for use of feeds.

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Porsche head predicts a hedge fund will swallow GM or Ford

Jonathon Ramsey — Mon, 01 Dec 2008 13:01:00 EST

Filed under: Etc., Europe, Chrysler, Ford, GM, Porsche

Little guy Porsche is taking huge swings, and not just at the giant that is Volkswagen. Porsche head Wendelin Wiedeking had fierce Teutonic words for General Motors and Ford, and banks. His Rindfleisch - beef, that is - with U.S. automakers is that, through unsound practices, they have thrown absolutely everything into turmoil. In the words of the Guardian, in fact, they have driven "the industry to the brink of ruin."

Those are big and perhaps hyperbolic words. But he then singles out GM for "openly threatening" the U.S. Government with bankruptcy, and predicts a hedge fund will take control of "one of the U.S. car manufacturers." Since Chrysler is already controlled by a hedge fund, that only leaves GM and Ford as the possible subjects of that comment. We can't imagine a hedge fund trying to swallow GM or Ford, especially after Cerberus has taken such a beating with Chrysler that seemingly all they can say is "Must... find... the exit."

Wiedeking is on more Earthly ground when he talks about the little guys, suppliers, who are quietly going under -- even though many of them ran their business correctly -- due to the banks' refusal to lend money while the clash of automotive titans continues. In a quote that people in many different industries can applaud, he says "We need banks to give credit, not just talk about credit ratings but start real actual lending to companies." Amen. Thanks for the tip, Sonny!

[Source: The Guardian]

Porsche head predicts a hedge fund will swallow GM or Ford originally appeared on Autoblog on Mon, 01 Dec 2008 13:01:00 EST. Please see our terms for use of feeds.

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GM jets: No tracking for you!

Jonathon Ramsey — Sun, 30 Nov 2008 19:16:00 EST

Filed under: Etc., GM

GM has seven planes (four of them are for sale), and one of them was recently and infamously used for a brief sojourn to Washington for head honcho Rick Wagoner. When the public found out about it, well, let's just say the polling numbers weren't exactly favorable. For reasons that might or might not be related to that episode, GM has asked the FAA to block its planes from being able to be tracked on sites like FlightAware.com. This is something that private plane owners -- a group of folks who don't usually seek the limelight -- are known to do. And GM has every right to do it and not be judged for it, since it's possible that GM feels the flight thing can turn into and undo distraction. But we can still raise an eyebrow at the timing... Thanks for the tip, Big Spender!

[Source: Bloomberg]

GM jets: No tracking for you! originally appeared on Autoblog on Sun, 30 Nov 2008 19:16:00 EST. Please see our terms for use of feeds.

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Would GM shed Saab, Saturn and Pontiac to secure gov't aid?

Jonathon Ramsey — Fri, 28 Nov 2008 10:15:00 EST

Filed under: Government/Legal, GM, Pontiac, Saab, Saturn

When ants need to cross some dangerous span in order to get to the thing they want, certain ants in the colony will sacrifice themselves to build a bridge that other ants can cross. That's how you get the honey. In GM's case, the honey is a $12 billion government lifeline. The dangerous span is, well, extinction. And the sacrificial ants in this case could be Pontiac, Saturn, and Saab.

Before the government would start writing checks (to the automakers, at least), Congress told GM (and Ford and Chrysler) to come back with a plan that gave some indication of long-term viability and a return to financial health. Supposedly, as part of such a plan, GM has looked at "shedding" the three brands in question, which would eliminate the massive costs associated with production, marketing and sales. But that would happen after massive payouts, some serious upheaval and tens of thousands of job losses. It would leave GM with Chevrolet, GMC, Buick, and Cadillac... which, since it's in ruthless survival mode, makes us wonder what kind of crush GM has on GMC. GM will release a 10-to-12 page plan to the public making its case and Congress has scheduled a hearing on the matter for December 5th.

In the article, the word "shedding" is used to describe what GM would do with Saturn, Pontiac, and Saab. But we don't know where and how they would shed them. Saturn is a misfit child (not really Saturn's fault), Pontiac is unsure of itself (except when it comes to the G8 triplets and the Solstice), and Saab sold about 33,000 cars in America last year and 125,000 around the world. With the state of lending and credit markets, it would probably be easier to buy a pterodactyl than get a loan to buy one of GM's brands. HUMMER's already been on the block so long it's about to get arrested for loitering. So is "shedding" a euphemism for "bye-bye..."? We'll know soon enough. Thanks to all who tipped in.

[Source: Bloomberg]

Would GM shed Saab, Saturn and Pontiac to secure gov't aid? originally appeared on Autoblog on Fri, 28 Nov 2008 10:15:00 EST. Please see our terms for use of feeds.

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Michael Moore mixed on Big 3 bailout

Frank Filipponio — Thu, 20 Nov 2008 17:21:00 EST

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

While there is definitely a huge rift between those who favor a Detroit bailout and those who would rather see the Big 3 fade away, you'd think that someone like Flint-native and documentary maker Michael Moore would be all in favor of helping the Big Three succeed. After all, Moore rose to fame for his first documentary entitled "Roger and Me" that featured then-CEO of General Motors Roger Smith. According to this piece in the Detroit News, however, Moore doesn't profess unconditional support for a Big 3 bailout. It seems he has mixed feelings about the whole situation.

Moore was on Larry King last night saying that the automakers ignored the wishes of consumers by continuing to build bigger vehicles just to maximize profits. Foreign automakers, on the other hand, built SUVs and more fuel-efficient vehicles in other categories. Moore elaborated by saying that
the current managers don't deserve a dime, but that it would be terrible if so many people lost jobs because of them. He went on to suggest that Congress should demand change for any money given out, including building up alternative fueled vehicles and mass transit in the country.

[Source: Detroit News]

Michael Moore mixed on Big 3 bailout originally appeared on Autoblog on Thu, 20 Nov 2008 17:21:00 EST. Please see our terms for use of feeds.

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Aw Snap! Congressional Democrats undercut compromise bailout bill

John Neff — Thu, 20 Nov 2008 15:16:00 EST

Filed under: Government/Legal, Earnings/Financials

Wow, what an amazing piece of political theater that just went down. As we reported, four senators from auto producing state (two Democrats and two Republicans) led by Michigan Senator Carl Levin have reached an agreement on a compromise bailout bill for automakers. They were set to announce details of the compromise bill at 2:30PM, but before they could, a team of Congressional Democrats led by House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid walked into the room in which the press conference was to be held and announced that they didn't support the compromise bill and that CEOs of the Big 3 would have to come back after the Thanksgiving holiday and present a plan on how any loans that might be given would be used.

Back to that compromise bill. The big stalemate, other than whether U.S. automakers should get a bailout at all, is where the money would come from. Democrats want to take $25 billion from the $700 billion bailout fund for financial institutions while Republicans and the White House want to re-appropriate $25 billion in loans that have already been approved for investments in green technology. Levin revealed the compromise to be a version of the Republican's plan, with concessions made to Democrats in that certain environmental restrictions would remain in tact and that loan repayments would go directly back to replenish the $25 billion fund for green investments.

What do we take away from all this? The Big 3 will get no assurance of federal aid before Thanksgiving, and there's still no guarantee they'll get help after the break. The ball is again back in the court of the Big 3 CEOs, who need to show up in December with detailed plans of how each would use any federal aid. The Democrats are calling for "accountability" and "viability" in their proposals, which are due to Congress by December 2.

Aw Snap! Congressional Democrats undercut compromise bailout bill originally appeared on Autoblog on Thu, 20 Nov 2008 15:16:00 EST. Please see our terms for use of feeds.

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The Detroit 3's problem is really... "vehicle density"?

Jonathon Ramsey — Thu, 20 Nov 2008 09:59:00 EST

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

There have been so many different arguments for why The Detroit 3 should or shouldn't get a bailout that we could make a casserole out of them. One argument against a bailout -- or at least, a reason for the futility of a bailout -- that we don't recall hearing yet is "vehicle density."

The argument is put forth by Anthony Mirhaydari at MSN Finance. Basically, he says that with 981 cars per 1,000 people of driving age in America and new cars being sold faster than used ones are taken out of service, there simply isn't enough room for U.S. auto makers to sustain the volume of sales necessary to avoid factory closures and layoffs.

As an argument against the bailout, though, we find it tenuous. No one is saying that Ford, GM and Chrysler won't need to cut a lot of fat whether or not they get bailed out. But the bailout is to aid the survival of the companies at all, not to prevent layoffs and shuttered factories, which, again, will happen with our without money. According to Mirhaydari, Detroit's only option is to go forth and colonize other markets. Well, except for Chrysler, because "Chrysler as we know it will cease to exist very soon."

[Source: MSN]

The Detroit 3's problem is really... "vehicle density"? originally appeared on Autoblog on Thu, 20 Nov 2008 09:59:00 EST. Please see our terms for use of feeds.

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Quoth Mitt Romney in the NYT: "Let Detroit Go Bankrupt"

Jonathon Ramsey — Wed, 19 Nov 2008 19:21:00 EST

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

Mitt Romney, former Massachusetts governor, former entrant in the marathon to win the White House, and current automotive industry expert (who knew?) had a few things to say in the New York Times today on the potential auto industry bailout. The opening paragraph says it all: "IF General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won't go overnight, but its demise will be virtually guaranteed."

Romney is not rooting for the end of the biz, but he believes that bankruptcy is the only way to save it because it will force a reset, and that will be the only way for the Detroit 3 to rectify entrenched structural problems. These include UAW contracts -- "a new direction for the UAW," executive perks -- "sanity in salary and perks," getting rid of old blood -- "management as is must go," just for starters.

Romney believes that the auto industry is crucial to America's national interest in more ways than one. And he isn't against helping the U.S. automakers, but believes that a shock to the system is the only thing that can rescue it, long term. Have a look at the piece and let us know what you think -- but no need to make a decision yet; give it another few minutes, and we're sure someone else will have another prescription. Thanks for the tip, Mike!

[Source: New York Times, Photo by Mario Tama/Getty]

Quoth Mitt Romney in the NYT: "Let Detroit Go Bankrupt" originally appeared on Autoblog on Wed, 19 Nov 2008 19:21:00 EST. Please see our terms for use of feeds.

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The Skinny: Automaker aid from the Feds

Jonathon Ramsey — Tue, 18 Nov 2008 14:31:00 EST

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

So here's a breakdown of what's going on in Congress concerning federal aid for U.S. automakers. A Senate bill expected to be voted on this Thursday would expedite funds for Ford, GM and Chrysler so that they could actually get the cash they need within 22 days after the bill becomes law -- should the bill become law. The $25 billion loan, paid back at an initial rate of 5-percent, would come out of the $700 billion bailout fund for financial institutions. The Senate's stipulations would be that the government receives "stock warrants or senior debt instruments to the government," similar to actions taken with banks that accessed the $700 billion. As well, top executives get no big payouts and stockholders get no dividends.

The rumblings on the track indicate that unless the folks in favor can change a lot of minds before Thursday, the Senate bill has little hope of passing. That makes it even more unlikely that a House version of the bill would pass, since it has even stricter requirements. The House bill would also get money for the automakers quickly, but would establish a Financial Stability Oversight Board that would have veto power over any auto company action that would cost more than $25 million. Who would be on that board and how would they be chosen? Who knows.

Latest word is also that the White House doesn't want to take money from the $700 billion bank bailout and use it for the auto industry. It would rather speed up disbursement of the $25 billion in low interest loans that was already approved for research into more fuel efficient vehicles and let the automakers use that for their current cash needs. The White House also wants, and the Senate bill requests, that Ford, GM and Chrysler give the Treasury "a detailed plan on how the government funds requested will be utilized to ensure the long-term financial posture of the company." Cue the dramatic music, some maniacal laughter and the late Vincent Price intoning: the plot thickens.

[Source: Automotive News - sub. req'd]

The Skinny: Automaker aid from the Feds originally appeared on Autoblog on Tue, 18 Nov 2008 14:31:00 EST. Please see our terms for use of feeds.

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Senator calls for 50-mpg mandate for Detroit to receive aid

Jonathon Ramsey — Mon, 17 Nov 2008 19:29:00 EST

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

"Thick and fast." That's the phrase that describes the opinions, pleas, advice, denunciations, and WTF? going on around the U.S. auto industry right now. Enter Congress, which is trying to figure out how to give Detroit automakers the $25 billion they were promised a few months ago. Congressmen are sounding off almost daily on what kinds of stipulations they want to attach to the loan/bailout/whatever you want to call it -- and that's just the ones who would vote for it at all.

Next up is Senator Bill Nelson, a Florida democrat, who wants U.S. automakers to achieve a fleet average of 50 mpg by 2020. Right now, the CAFE target is 35 mpg by 2020 -- a goal agreed upon only after a huge amount of jockeying in and out of Congress. Nelson asked, "Why should we be pouring taxpayer money into an automobile industry that has continued to resist higher miles per gallon, which has led us in part to the problems we're in?"

While that might sound like a great idea to some, it would cost a terrific sum of money to achieve. The Detroit Three need the money they're asking for just to get to Q2 of 2009, not to create a range of cars that would represent magnificent advances -- based on where we are right now -- in 11 years. There's a good chance nothing will be decided until the president-elect takes office, and by then, who knows what other requests Congress will have.

[Source: Automotive News - Sub. Req.]

Senator calls for 50-mpg mandate for Detroit to receive aid originally appeared on Autoblog on Mon, 17 Nov 2008 19:29:00 EST. Please see our terms for use of feeds.

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