Показаны сообщения с ярлыком carpocalypse now. Показать все сообщения
Показаны сообщения с ярлыком carpocalypse now. Показать все сообщения

White House Loan Deal For Not-So-Big Three Is "Bankruptcy Lite" [Carpocalypse Now]

The bailout loan's no longer just a $15 billion bridge loan for the not-so-Big Three to make it until the Obama administration, it's actually "bankruptcy lite." It's also a really good idea.

Take a look at the stakeholders in the $15 billion bridge loan legislation for the Detroit automakers and you'll see why there's no clear message coming from anyone on the not-a-bailout; the automakers no longer have clout in D.C., the House Democrats seem fixated on making the not-so-Big Three into "Big Green," House Republicans are busy offering an alternative non-"ass-backwards" plan in the House that would have the Feds provide insurance which would cover up to 50% of losses of new investment in case of a default or bankruptcy. Senate Republicans, led by Sen. Shelby (R-Foreign Autobama) on the other hand are just eager to find a way to kill the UAW with some cockamamie scheme similar to House Republicans.

We guess given every other stakeholder's got both hands tied behind their backs (mostly of their own doing) or is completely without a clue when it comes to economics (Sens. Shelby and Ensign, we're looking at you), we shouldn't be surprised it was the lame duck White House that would actually craft a realistic message on the proposed bill. In the span of one press conference, White House Deputy Chief of Staff for Policy Joel Kaplan changed the message of the bill being a bridge loan for the not-so-Big Three to make it to the waiting hands of the Obama administration into what it should have been all along — "bankruptcy lite."

What this "bankruptcy lite" bill would provide the short-term financing the Detroit automakers need to give them an opportunity to do what we've said they need to do, take a few months to work with all the parties — UAW, dealers, suppliers, etc. — and get a realistic cost structure put in place before March 31st, 2009. At that time the "car czar" appointed by the President would either accept the plan presented by GM and Chrysler, come up with his own plan, or say "screw you two" to both and call back the collateral put down for the loan.

The plan makes sense to us, and it probably makes sense to the American people.

Photo Credit: CHRIS KLEPONIS / AFP



Related posts:



Related posts:



Автор: HallieGuy на 12:07 0 коммент.
Ярлыки: , , , , , , , , , , , , ,

Chrysler Needs $11 Billion To Make It Until The Imaginary 2009 Product Lineup Refresh [Carpocalypse Now]

Chrysler was the last of the not-so-Big Three to reveal their plan for long-term viability with an ask of $11 billion to sustain operations into the new year. But for what?

As recently as September, Chrysler said they had seven-to-nine new models for 2010. For the life of us, we can't figure out what those vehicles are considering the company's stopped development on every single product line. Are they talking about the Chrysler EV electric car family? Because seriously, that's smoke and mirrors. There's nothing new coming out of this company at any time in the next year.

But hey, Chrysler CEO Bob Nardelli also pledged to take a $1 salary and no kind of health or insurance benefits until the crisis is resolved. Well, he's earned it.

Because once you get past the huge $11 billion number and the fact that they're apparently going to be forced out of business in January without it, when you take a look at the automaker's plan, there isn't much in the way of specifics there. On the whole, the plan is less substantial than what GM or Ford are offering. I mean, although we may not agree with the sale projections they make, at least the other automakers are making a guess as to what sales numbers in the United States will look like for the next year. All Chrysler was willing to say was "Chrysler anticipates sales to be even lower than normal due to the economic downturn." What, did Chrysler can its market analysts already?

It's almost as if they're saying "buy us some time until someone else buys us." Actually, I think they may have said that on page three somewhere. Anyway, full highlights from Chrysler below.

Highlights of Chrysler LLC Plan Submitted Today to the Senate Committee on Banking, Housing and Urban Affairs and the House Committee on Financial Services

* Chairman and CEO Robert Nardelli looks forward to testifying before the committees later this week
* Chrysler will urge the immediate adoption of legislation that will allow domestic automakers to weather the current national economic crisis and continue to invest in industry-leading products, technologies and vehicles of the future
* Full plan attached as pdf file

* The first question is, what changes has Chrysler made to help itself? Since Chrysler became an independent company in 2007:
o We eliminated over 1.2 million units of capacity, or 30 percent;
o We reduced fixed costs by $2.4 billion and, separated over 32,000 employees – including 5,000 on the Wednesday before Thanksgiving. And at the same time …
o We invested in product improvements – over half a billion dollars in our first 60 days;
o We improved our latest JD Power quality scores, and reduced our warranty claims by 29 percent;
Part of our business model transformation includes alliances and partnerships – for example – the agreements to produce vehicles for VW and for Nissan. As a result, through the first six months of the year, Chrysler met or exceeded our operating plan, ending the first half with $9.4 billion unrestricted cash.

* Why does Chrysler need the funding? We need to address the unprecedented drop in vehicle sales caused by the financial crisis. U.S. sales are down from a 17 million unit selling rate in early 2007, to an estimated 11 million unit selling rate for the fourth quarter of 2008 – a 38 percent decline. We lost 20 percent of our sales virtually overnight when the financial market crisis forced us out of the consumer lease business. With customers not buying … with dealers not ordering … with our plants not producing … Chrysler’s cash inflow has suffered.
* So how will the bridge loan be used? Cash will support ongoing operations as we continue to restructure the business, including in the first quarter alone:
o $8.0 billion in payments to parts suppliers
o $1.2 billion for other vendors
o $900 million in wages
o $500 million in healthcare and legacy costs
o $500 million in capital expenditures

Without an immediate working capital bridge, Chrysler’s liquidity could fall below the level appropriate to ensure operations in the ordinary course by the first quarter of 2009.

* So, who is contributing to saving Chrysler? First and foremost, Chrysler and its extended enterprise will. That starts with me. I receive a salary of $1 a year. I have no employment contract, no change of control agreement, no “golden parachute,” and receive no health care or life insurance benefits from the company. We are committed to negotiate concessions from all of our constituents.
* The next question - Does Chrysler plan to build cars and trucks that consumers want to buy, and that support the country’s energy security and environmental goals? Our product plan features 24 major launches from 2009 through 2012. For the 2009 model year, 73 percent of our products will offer improved fuel economy compared to 2008 models. We plan on launching additional small, fuel-efficient vehicles. ENVI is our breakthrough family of all-electric … and range - extended electric vehicles – similar to the one parked outside. Chrysler’s product plan includes the introduction of the Ram Hybrid and our first electric-drive vehicle in 2010 with three additional models by 2013.
* Does Chrysler have a viable plan? With our requested bridge loan – absolutely! I also believe that further partnership, restructuring and consolidation would make the U.S. auto industry even more viable and competitive in the long run. Further opportunities for technology sharing would provide fuel-efficient cars and trucks more cost effectively and faster to market. The three-company alliance that developed the dual-mode hybrid is a good example. As a Country, we should not trade our current dependence on foreign oil for a future dependence on foreign technologies.
* The final question is, when will Chrysler pay back this loan? We believe we will be well positioned to begin repayment of the federal loans — in 2012. I recognize that this is a significant amount of public money. However, we believe this is the least costly alternative considering the depth of the economic crisis and the options we face.

[Source: Chrysler]



Related posts:



Related posts:



Автор: HallieGuy на 03:38 0 коммент.
Ярлыки: , , , , , ,

Chinese Automakers Invade The Main Floor Of Detroit Auto Show [Detroit Auto Show]

After years of skirmishing in the basement of the Cobo Center, the Chinese automakers will finally set up a base on the main floor of the upcoming Detroit Auto Show. Why were the two Chinese companies, BYD Auto and Brilliance Auto, honored with the presence among the big boys upstairs? It isn't because they're selling more cars in the US, because they still don't sell any here. The Chinese automakers are benefiting from the mass exodus of automakers from the Detroit show who are bailing to save money during the Carpocalypse. We suspect the organizers thought it would be a nice gesture since China currently holds around $600 billion in US debt. The two companies will get a total of 11,000 square feet vacated by Mitsubishi. Though we hate to see any automaker flee Detroit, there are a few reasons to look forward to a larger Chinese presence. Below is our list of the five best moments of Chinese automakers at the Detroit Auto Show.

5. Travis Exploits The Book Of Songs
We have the Chinese to thank for showing us their Book of Songs and letting Travis hump it.

4. Press Release Translations
For some reason, the Chinese automakers refuse to hire US-based PR people to smooth out the edges. Hilarity ensues.

3. An Honorary Degree
Had it not been for Changfeng Motors, Mike would never have gotten that honorary degree from Liebro University.

2. Lead-Tainted Tea Time
Unlike the American manufacturers, with their typical matchbox car and backpack swag, the Chinese automakers hand out some intense swag.

1. Illegal Test Drive Through Cobo Hall
If it weren't for the Chinese, we'd have never learned how fast you can drive inside Cobo or had the chance to disrupt an ALMS press conference. In a hybrid!

[AutoNews, Photo ROBYN BECK/AFP/Getty Images]



Related posts:



Related posts:



Автор: HallieGuy на 12:26 0 коммент.
Ярлыки: , , , , , , , , ,
Подписаться на: Сообщения (Atom)