Category Archives: auto industry
See all those happy faces in the photo above? They will all be unemployed sooner than later. From the BBC:
The world’s largest carmaker will stop production at the Fremont, California-based New United Motor Manufacturing plant in March 2010.
GM announced earlier this year that it would withdraw from the venture.
Toyota said: “Over the mid to long-term, it just would not be economically viable to continue production.”
The firm will move production to its other plants in the US and in Japan.
There are also reports circulating that Toyota is closing down a plant in Europe as well as one in Japan for at least a year.
The recession might be shrinking according to Obama and his go-to guy Bernanke, but you couldn’t tell it by looking at Toyota or Nissan’s plans they are making for plant closings this year and in 2010 and 2011.
The Treasury Department is preparing a Chapter 11 bankruptcy filing for struggling U.S. automaker Chrysler that could come as soon as next week, according to a New York Times report.
People with direct knowledge of the action told the newspaper that the U.S. Treasury has an agreement in principle with the United Automobile Workers union, whose members’ pensions and retiree health care benefits would be protected as a condition of the bankruptcy filing.
Wonder when GM will do the same? From the NYT writeup linked above:
Moreover, Fiat of Italy would complete its alliance with Chrysler while the company is under bankruptcy protection.
The only major question that remains unresolved is what happens to Chrysler’s lenders, who hold $6.9 billion in company debt. The government’s most recent offer, presented Wednesday, would give the company’s lenders about 22 cents on the dollar, or $1.5 billion, and a 5 percent equity stake in a reorganized Chrysler. Earlier this week, a steering committee of the lenders proposed that they receive 65 cents on the dollar, or $4.5 billion, and a 40 percent equity stake.
Officials at Chrysler and the Treasury were not immediately available for comment.
With the assholes in Congress bitching that the Big Three Automakers are retards in how they do business, it should be noted that Toyota is also posting a huge loss for the fiscal year…their first in 70 years of making vehicles. From the NYT link:
Analysts said Toyota’s downward revision, its second in two months, showed that the worst financial crisis since the Depression was threatening not just the Big Three but also even relatively healthy automakers in Japan, South Korea and Europe. Many other companies will also soon be reporting losses.
Worse, analysts said that they expected next year to be even more painful, amid forecasts that the global economy would continue to slide until at least the summer. This could cause a significant shakeout, driving smaller and weaker companies into the arms of a smaller number of bigger, richer players.
“It is just a matter of time before all major automakers are losing money,” an auto analyst in Tokyo for Credit Suisse Securities, Koji Endo, said. “And things will just get worse next year, when companies start losing money for the second consecutive year.”
Toyota, which just a few months ago seemed unstoppable after eight years of record profits, said it suffered from plunging vehicle sales not only in North America but also in once-promising markets like India and China, which many had hoped would prove immune to the United States malaise. Toyota’s group includes the automaker Daihatsu and the truck builder Hino.
Unlike the Big Three here in America, Toyota has plenty of cash on hand to weather the hard times…$18 Billion to be exact. But the U.S is their biggest market..and it sucks for Toyota just as it sucks for the Big Three:
In November, Toyota’s sales dropped 33.9 percent and Honda Motor’s 31.6 percent, both faring slightly better than G.M., which had a 41 percent decline.
Still, it sucks to be a purveyor of anything expensive..regardless of which country does the manufacturing.
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.
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.