GM’s plan…read it and weep.

You can review it here. (pdf)  The boys from Detroit are getting grilled as I write this, by the banking committee. Thanks to EmptyWheel for hosting the plan on Firedoglake’s servers.

Jon Tester asked one of them if they can guarantee that this will be the only bailout money they will need considering the economy.

The exec said no, he can’t make that guarantee. Of course he can’t..and neither can the financial institutions.

No one can guarantee shit…unless it’s a guarantee that it’s gonna get worse before it gets better.

That, you can probably take to your bank…if it’s still operating or hasn’t been bought out by a bigger fish in that pond.

The UAW is willing to take a hit as well:

From the New York Times: “At a news conference in Detroit, the U.A.W.’s president, Ron Gettelfinger, said that his members were willing to sacrifice job security provisions and financing for retiree health care to keep the two most troubled car companies of the Big Three, General Motors and Chrysler, out of bankruptcy.”

If the Big Three are allowed to go into Bankruptcy, they will die. No one will buy a vehicle from a company in Bankruptcy. But will people buy a vehicle from them anyway?

I don’t know the answers and neither does anyone else.

Sphere: Related Content

It ain’t over till the last Exec is done begging.

The Big Three are back on the Hill today, their hats in their hands and their jets out of sight. They got a plan, or so they say. From WaPo:

In its second attempt to persuade Congress to grant the U.S. auto industry $25 billion in emergency loans, Chrysler plans to make the case that automakers can cut their costs and point to the future by forging an alliance to share fuel-efficient vehicle technologies.

Ford will tell lawmakers that it intends to retool plants for smaller, more fuel-efficient cars as a part of its goal of becoming the fuel-efficiency leader in every vehicle category. General Motors will address its $43.3 billion debt burden and an upcoming multibillion-dollar payment to a union-run trust that will cover employee health-care costs.

Meanwhile, the Congress Critters are fighting amongst themselves over who is going to judge these plans. According to WaPo, Nan and Harry have said the following about which groups and/or departments will eyeball the automaker’s plans to get their collective shit together:

In their own letter to automakers last week, Reid and Pelosi said they “intend to give pertinent agencies within the executive branch, the Government Accountability Office, the Board of Governors of the Federal Reserve, as well as outside experts, the opportunity to comment on [the automakers'] work.”

It’s all so jacked up and it will not be getting any better any time soon. Meanwhile, Chase, who now owns Washington Mutual, announced they are shit-canning over 9,000 WaMu employees in the very near future.

Just in time for Christmas gents? How sweet of you.

Sphere: Related Content

What does GM stand for/Economy Falling

General Motors? Gross Mismanagement?

As the US economic house of cards falls- here is another case in point of a failed economy, and a failed ability to manipulate car owners into buying gas hog vehicles. The auto lobby & the government thought they had hoodwinked this country into buying their environmentally irresponsible low fuel efficiency vehicles by passing legislation that would address the mileage efficiency 13 years later. I’m guessing there was back patting , smoking of cigars & much festivity over their “win”. After all, many of the head honchos in government are oil tycoons, so this in bed together arrangement made US auto makers happy & the oil tycoons could laugh all the way to the bank. A fat & happy win-win situation- or so they thought.

Little did they know Consumers would vote with their dollars & refuse to buy the gas guzzling beasts. They practically can’t GIVE these big trucks & SUV’s away now, as many people witness the price of gas soar, and many openly questioning if they will ever come back down.

MSNBC reports:
General Motors Corp. said Tuesday it will lay off salaried workers, cut truck production, suspend its dividend and borrow $2 billion to $3 billion to weather a severe downturn in the U.S. market.

A large chunk of the reduction, he said, would come from cutting health care benefits for salaried retirees over age 65. Those people would get a pension increase from the company’s overfunded pension fund to help compensate for Medicare and supplemental insurance, the company said.

The company will speed up previously announced closures of some truck and sport utility vehicle factories. GM said last month it would close plants in Janesville, Wis.; Oshawa, Ontario; Silao, Mexico; and Moraine, Ohio, but Henderson would not say which closures would be accelerated or when the closures would take place.

GM said it will suspend its $1 per share annual dividend immediately, which will improve liquidity by $800 million through 2009. It’s the first time the company has suspended its dividend since 1922.

The company plans to raise $2 billion to $4 billion through the sale of assets, possibly including its Hummer brand. It also plans to borrow $2 billion to $3 billion by pledging assets, including stock of foreign subsidiaries, brands, stake in its finance arm and real estate. Wagoner said the company likely wouldn’t seek that cash until 2009.

Henderson said the company determined the credit markets are so inhospitable it would be too risky to raise cash that way, so it focused on internal cost-cutting.

GM and other auto companies have been hammered by high gas prices, the weak economy and a rapid shift in consumer tastes away from trucks and SUVs. GM’s sales were down 16 percent in the first six months of this year, led by a 21 percent decline in truck sales.

Just six weeks ago, GM said it would close the four truck and SUV plants and boost production of the smaller, more fuel-efficient cars that customers are demanding. It also announced production of a new car that could get 45 miles per gallon and would go on sale in 2010.

Some analysts have also speculated that GM would declare bankruptcy, but Wagoner said last week that bankruptcy isn’t a consideration.

“I suspect the vast majority of the reductions will be accomplished through initiatives which do not require involuntary actions,” Wagoner said. “Let’s see how it plays out.”

Yes, we will see how it plays out, indeed. Bankruptcy for one of the *big three* auto makers?
They missed the boat on Hybrids at a time when oil prices soared. Their own negligence & greed came back to bite them in the ass. When I go to used car lots, I can’t help notice all the SUV’s & trucks all lined up, with prices slashed & slashed again.

I guess these questions remain…

Why aren’t those jobless people, or retirees without health care, and those with foreclosed mortgages & closed banks buying new vehicles?

Sphere: Related Content