So Detroit was sent away with a flea in its ear. The chiefs of GM, Ford and Chrysler went to Washington to plead for $25 billion in state loans, and they didn’t get the money. But they get a second chance. They have to 2 December to come back with a far more detailed plan of how they’ll spend the loans.
It all got a bit silly at times. They were asked why, if they were in such a cash crisis, they’d come in three separate private jets. No doubt there was a good reason, but that sort of apparent extravagance doesn’t play out well in front of the voters.
But the main issue was that they were vague about how they’d use the loans they were asking for.
I guess that’s partly because GM doesn’t want to put its business plan for the Volt, say, into the public domain. It would make very interesting reading for Toyota execs.
But there’s still a lot Detroit could tell Washington. Just to prove they’ve thought about it.
I asked Ford’s North American chief Mark Fields what would happen if Ford didn’t get the Federal cash. He ran off before answering, but his spokeswoman told me it was ‘an insurance policy – we probably wouldn’t need it’.
Lucky Ford (if it’s true). For GM it isn’t like that. The money is needed, and soon. Even to wait til Barack Obama is in the Oval Office might be too late.
We’ve also been reminded that politicians are very selective about who or what they have the taste for subsidising. They make all sorts of principled-sounding noises about ’survival of the fittest’ and how the Detroit three are just dinosaurs. But truth is over the past years the southern states have put billions into subsidising new factories for Toyota, Honda, BMW, Mercedes and the rest.
By the way, a history lesson. Chrysler was given government-guaranteed loans in 1979. To get them, it came up with a detailed plan, and everyone involved in the company made cuts and sacrifices. Including management, workers, unions, suppliers and banks.
This worked – Chrysler used the cash to develop the K-car and the original Voyager. The K-car is a laughing stock now, but back then it was efficient and modern and right for the times.
Chrysler paid back the loans several years early and the American people made money on the sale of Chrysler stock warrants.
The faster street car is not the Bugatti Veyron but the Koenigsegg CCXR Edition that does 410 km/h.
“Chrysler was given government-guaranteed loans in 1979.”
And it’s in trouble again.
giacomo, stop posting that the ccx-r is the fastest car, we all know that, hush!
Chrysler was given loans, but right now I have the feeling they want no-strings-attached money, and obviously so does Congress, and the rest of the American public.
Basically the current “plan” is “uhhh, give us some money… uhmmm, and we’ll keep making cars…. we need money… hm, yeah, that’s it”
The GOOD part of this, is that a lot of really shady dealerships have finally gone out of business. For instance Bill Heard Chevy had 2007 sales of $2.1 billion, pretty much *owned* the Southeast US, literally the world’s largest dealer, and now they’re casters-up. $2+ billion to ZERO.
It’s just a business which makes crappy products no one wants.The US government know this. The only problem is what to do with the work forces? That said post election the Government doesn’t need their votes, so stuff them…
Giacomo what blog were you reading??
‘Cad 1′ is the fastest road car: Bentley GT Stretched (a lot) with a Saturn 5 rocket motor. Having slight problems getting it though the MOT as the C02 emissions are a little on the high side…
Most of ‘middle America’ is still hooked on American autos. Here in the south, where all the foreign automakers have located their plants, there’s still a deep vein of “Ford vs Chevy”, where adherents to both sides routinely get into pissing matches about who makes better vehicles. One thing those people can agree on is they hate the Japanese and European cars!
I am of the belief that people in this country still buy American for one of three reasons: a) they genuinely like the product, b) that’s what they’ve always driven and c) that’s the only dealership nearby.
I have to wonder if option C is what is keeping GM afloat at the moment. People who buy because they really have no other option!
The trouble is that some of the american companies have tried to get some europian sales, which would help with europe now haveing more buying power than the USA, but there is only one problem with that, by the time the american cars have got here they are the same price as the BMW or Audi they are compeating agaist and they just arn’t gd enough as a result. I mean when a Caddy CTS costs £26,000 for a 2.8 V6 and u can have a BMW 325i for the same money that is alot more econimical (since petrol in the UK is at about 90p+ per letre) which would you pic?