One year ago, the U.S. auto industry was at the weakest point in its history. To make matters worse for the both the industry and the Obama Administration, the majority of Americans wanted nothing to do with a bailout, having just undertaken an even pricier propping up of the country's lending institutions. But President Obama and the Auto Task Force made the difficult decision to push General Motors and Chrysler through bankruptcy while providing $50 billion in loans to keep the doors open at t
Without the government bailout of General Motors and Chrysler, the U.S. auto industry would likely have two fewer domestic automakers and hundreds of thousands of high paying jobs would be history. The Detroit News reports that ex auto task force chief Steve Rattner recently told an audience at a bankruptcy conference that the state of Michigan and the city of Detroit would have faced municipal bankruptcy if Chrysler and GM were liquidated.
When U.S. Secretary of Transportation Ray LaHood opened the Detroit Auto Show last week and said that the Chevrolet Volt was, "obviously the kind of green car Americans are looking for," it was a slightly self-serving statement. After all, the government that LaHood works for owns a large share of General Motors (and Chrysler). Even though Ford didn't take a bailout from the government, Newsweek wanted to know just who's in charge of the Big Three these days. Their assessment? It's not anyone in
President Obama has just concluded a televised press conference where he announced that Chrysler will indeed head into Chapter 11 bankruptcy proceedings almost immediately. As part of the same announcement, he noted that the Auburn Hills automaker has reached terms with Fiat and will be headed into a partnership agreement that will include a cash infusion and technology transfers. By some estimates, the restructuring is expected to take 30-to-60 days.
Is that 'B' as in bankruptcy or 'B' as in bailout? Probably 'B' as in both. Regardless of the buzzword you choose to slap on the respective situations General Motors and Chrysler find themselves in, it's not good, and Ford realizes this fact just as clearly as the rest of us. In response, the Blue Oval has embarked on a new plan to pick up as much market share as possible.
President Obama has just finished his press conference on the government's determination of the viability of General Motors and Chrysler, and the gist is that both automakers have failed to convince the feds that their business plans deserve further investment. Obama and his task force will give GM enough working capital to survive another 60 days and prove its viability, though no dollar amount was given. Chrysler, meanwhile, is being given another 30 days and working capital up to $6 billion t
According to The Detroit News, the United Auto Workers is giving its blessings to a potential Chrysler-Fiat tie-up. Chrysler honcho Bob Nardelli earlier pegged the possible union as a $10 billion bonanza for Chrysler, since the Pentastar would save money on developing a range of platforms, engines, and cars. The UAW's interest is, of course, the job savings: the partnership has been said to be worth 5,000 jobs that might otherwise be lost.
It's the General Motors and Chrysler merger saga, take three. A few months ago, GM said "No can do" to the union, taking off its ring and walking out of church. Now GM's bondholders may be contemplating a shotgun wedding, forcing The General back to the altar over the debt-equity swap the automaker needs to conclude to have a chance at more government financing.
Just as Chrysler tries to hammer out a cash deal with Ottawa and Ontario for at least a billion dollars, the automaker's Canadian branch has been hit with a half-billion dollar tax reassessment. The Canada Revenue Agency has been trying to collect tax payments from Chrysler for years, after the agency adjusted the amount Chrysler owes on parts and vehicles that were shipped across the border. Canada Revenue wants $500 million to pay off abuses from "transfer pricing," which is a bit of voodoo be
Two days after General Motors got its first installment of cash from the Treasury Department, Chrysler also closed on its loan. On Friday, Chrysler received a transfer of $4 billion to help tide it over while management tries to find a way to right the ship. CEO Bob Nardelli acknowledged the complex arrangements that had to be made with privately owned Chrysler. It's not known at this point exactly what arrangements were made as far as collateral and what the government would get from Cerberus i
We've already seen GM and Ford issue their pleas for government loans, and now it's Chrysler's turn. The only privately-owned automaker of the three released a 13-page document outlining the aid it seeks from the Feds and how it plans on spending our hard-earned cash. If you want to read the full text, it's available after the jump. But the condensed version follows.
Chrysler still makes cars? Apparently so, and CEO Bob Nardelli was on Capitol Hill yesterday with his colleagues from Ford and General Motors, warning that the Pentastar is in serious danger of exhausting its reserves by early 2009. Chrysler's share of the $25 billion in aid the automakers are asking for stands at $7 billion, though at the current rate, that money wouldn't last long, possibly about one fiscal quarter. Senators are concerned that the automakers will turn into a monetary black hol
"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.
Back in the late seventies and into early eighties, Chrysler had gotten itself into such horrid financial shape that the U.S. government decided to step in and fix the situation itself. Considering the sorry state of affairs that all three of the Detroit automakers find themselves in today, some may wonder if a government-funded bailout is in the cards. Not so much... at least according to John McCain. "Frankly I just don't see a scenario where the federal government would come in and bail out a
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