Archive for the ‘GM’ Category

Obama’s on the Road To Ruin with American Car Companies

May 10, 2009

“I don’t want to run auto companies,” President Obama said last week. “I’m not an auto engineer. I don’t know how to create an affordable, well-designed plug-in hybrid.”

To those of us who still quaintly believe in the power of private enterprise and free markets, that was a reassuring answer from the leader of a country heading toward owning 8% of Chrysler and 50% of General Motors. It suggested the president understands that, even with their lousy track records, business professionals are better equipped than government bureaucrats to decide what cars to make, what prices to set and how many people to employ.

By Eva Rodriguez
New York Post

Seconds after that promising, if relatively vague, opening, though, Obama took much of it back. He couldn’t help himself. “But I know that, if the Japanese can design an affordable, well-designed hybrid, then, doggone it, the American people should be able to do the same,” he said. “So my job is to ask the auto industry: Why is it you guys can’t do this?”

So much for hands-off. George W. Bush may have been this country’s first MBA president, but Obama is on the brink of becoming its first CEO in chief — and that would not bode well for Chrysler, GM or taxpayers.

There’s nothing wrong with Chrysler and GM building fuel-efficient green cars — if they can make money. I’d have no problem whatsoever if one of them manufactured a pink, snout-grilled mini-car that ran on manure — as long as it proved profitable. (I wouldn’t buy one, mind you, but I’d smile and wave as you drove by.)

My goal as a taxpayer is to see that these companies earn enough so that they return my tax dollars as soon as possible. And what if green cars aren’t the way to go? What if market research and consumer surveys show that as long as gas costs only $2 a gallon, US drivers will stick with the true road hogs, our SUVs? And what if CEO Obama doesn’t like these answers because they don’t jibe with his goal of reducing greenhouse gases?

Read the rest:
http://www.nypost.com/seven/05102009/postopin
ion/opedcolumnists/os_road_to_ruin_168446.htm

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From George Will

Proponents of today’s world-turned-upside-down economic policies say the policies might seem wrong but really are boldly modern in their rejection of markets in favor of pervasive government intervention in economic life. Hence New York, which until eight months ago was the financial capital of the world, is no longer even the financial capital of the United States. Washington is.

So says Ian Bremmer in “State Capitalism Comes of Age: The End of the Free Market?” in the current issue of Foreign Affairs. It should be read by Americans who are dismayed by the blurring of the line between public and private sectors.

Most Americans assume — and are encouraged to do so by those doing the blurring — that the government is doing this reluctantly and is eager to find an “exit strategy” to “unwind” its interventions. Bremmer, president of the consulting firm Eurasia Group, believes that although the governments of many developing nations have made “a strategic rejection of free-market doctrine,” governments of developed countries do not intend to “manage” their economies “indefinitely.” About the former, he is correct. About the latter, his wish may be the father of his thought.

Read the rest:
http://www.nypost.com/seven/05102009
/postopinion/opedcolumnists/the_end_
of_free_markets_168445.htm

Related:
Obama “Bailed Out” Auto Makers, Now “Takes Over” — In China, Vouchers Electrified Sales
.
Obama-Fiat-Chrysler-Union Plan Includes U.S. Made Luxury Alfa Romeo; Sub-Compact Made in China, Mexico, Korea

American Auto Industry: Unsustainable Losses

Obama “Bailed Out” Auto Makers, Now “Takes Over” — In China, Vouchers Electrified Sales

May 9, 2009

Despite massive government “bailouts,” GM says the bulk of its future cars will likely be made in China, Mexico and South Korea….

GM could still face bankruptcy: it owes a report to the Obama administration by June 1st.

And Chrysler’s fate is unknown.  It is in bankruptcy court now with a deal on the table to include Fiat and others….

*****************

From The Associated Press:

Vehicle sales in China jumped 25 percent in April from the year before to a record monthly high of 1.15 million units, according to industry figures. Passenger car sales surged 37 percent over a year earlier, to 831,000, outpacing sales in the United States, where 820,000 units were sold in April. After slowing late last year as the impact from the global financial crisis deepened, China’s auto sales have risen for five consecutive months.

Related:
Obama-Fiat-Chrysler-Union Plan Includes U.S. Made Luxury Alfa Romeo; Sub-Compact Made in China, Mexico, Korea
.
Under Restructuring, GM To Build More Cars Overseas

A sheet of one dollar bills. The dollar rose as investors waited ...

Obama Crows Of Improving Economy, Prays (In Private) That’s True; But Many Have Real, Serious Doubts

May 9, 2009

These are not the headlines of vibrant recovery: “Layoffs slow,” “Joblessness Less Than Expected,” and “Fewest Job Cuts Since November.”

But you won’t have to read these headlines much longer: the newspapers are going bankrupt.

Have we made any systemic changes to improve the American economic system that will result in high paying, long-term jobs?
.
No.

So the ‘recovery” is like a man nearly dead that may, just might, get off his death bed.  For a while.  There is nothing to indicate vibrancy and life.

Paul Krugman of the New York Times wrote this week, “What we’re really seeing here is a decision on the part of President Obama and his officials to muddle through the financial crisis, hoping that the banks can earn their way back to health.”

Obama, Geithner Review Of Banks Says Multiyear Period of Economic Weakness Still Ahead

Krugman concludes, “Actually, a multiyear period of economic weakness looks likely in any case. The economy may no longer be plunging, but it’s very hard to see where a real recovery will come from.”
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Stephen Hester, chief executive of Royal Bank of Scotland, dampened hopes that the economy is bouncing back, declaring that he did not see any signs of “green shoots” of recovery.

U.S. Banks Whisper “Recovery” But Key Brit Bank Doesn’t See it….
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Our American automobile indisurty is now dead.  It will be reborn but will never again produce the jobs and money into American pockets and American government tax coffers that it once did.

We’ve spend billions on “bailing out” the car makers.  And what do we have?  Dealerships will close by the hundreds, GM will make most of its future cars in Mexico, South Korea and China (it says) and Chrysler is in a sort of Frankenstein mating dance with Obama as the Pastor.

Obama-Fiat-Chrysler-Union Plan Includes U.S. Made Luxury Alfa Romeo; Sub-Compact Made in China, Mexico, Korea

Obama has missed a big opporunity to remake our economy.

Dim View Of Near Term Economy

********************

The economy no longer is in a free fall. Everyone has heard that by now, whether or not they feel that it’s true in their own lives.

Wall Street believes it’s true enough: The winter plunge in stocks has given way to a two-month-old rebound that has pushed most major share indexes up 30% or more, and back into positive territory for the year.

By Tom Petruno
The Los Angeles Times

The market’s job is to anticipate key inflection points in the economy. Sometimes, it even gets them right.

Yet there’s a specter over this market recovery that looms larger as stocks climb: The short-term outlook for the economy has improved significantly. But there is a glaring lack of faith in the longer term.

Many big investors fear that the huge structural problems facing the economy — the ongoing need for consumers to shrink their debt loads, for example — will make it very difficult to foster an expansion robust enough to justify a sustained climb in share prices.

Read the rest:
http://www.latimes.com/busine
ss/la-fi-petruno9-2009may09
,0,3818307.column

Weak Demand in Treasury Bond Auctions? Has The U.S. Put Too Much Trust At Risk?

May 8, 2009

America’s economic recovery now depends upon debt.  Debt we “sell” to people like China in the form of Treasury bonds.

The entire Obama budget is based upon debt.  He swears he is for tax breaks but tax increases have got to be in the near future.

And the top earners like Donald Trump are already making noise about moving elsewhere — just as Brit tycoons are fleeing tax rates approaching 60%.

China holds more U.S. debt that anyone else.  But China may not continue to buy.

And Obama is chasing busnesses away: by offering to tax offshore earnings and other now untaxed assets.

And by generally making business and Wall Street the enemy, in talk and in actions.

Even as we the U.S. Taxpatyers are paying billions to bail out GM, with the help of Obama and geithernew, GM is making plans to move a lot of its future auto production to China.

China’s recovery is coming along, fine, thank you; and there may be no need to take on more debt for the U.S.

China already makes much of what sells in the U.S. — and for right now, Americans aren’t buying.  So China’s factories shut down.  Now China is doing something new: encouraging the Chinese to become consumers.

This will be a long and slow process but the Chinese government is determined.

Michelle Malkin:
http://michellemalkin.com/2009/05/
08/battered-hedge-fund-managers-syndrome/

Related:
Fed Tells California: Can’t Cut Pay of Union Jobs To Save Budget; Threatens Loss of Stimulus Money
.
Where Are The Jobs? Ask The Unions
..
Obama, Geithner Review Of Banks Says Multiyear Period of Economic Weakness Still Ahead
.
China, Asia Dig Out of Recession Much Faster Than U.S.
.
EU Leaders, Unions, Disagree On More Jobs Or Union Jobs
.
Under Restructuring, GM To Build More Cars Overseas
.
Obama Promised 5 Million Green Jobs But Sierra Club Says “green jobs are not always good jobs” that can support a middle-class lifestyle
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Unemployment 8.9%, Highest Since 1983, Hiring Slow, Many Taking “Less Quality” Jobs, Government Grows

China’s Vouchers For Car Buyers Means Best Sales Month

May 8, 2009

China’s passenger-vehicle sales rose 37 percent last month, the most in three years, as government subsidies spurred demand for minivans and small cars.

Local drivers bought 831,000 cars, minivans and other passenger vehicles in April, the China Association of Automobile Manufacturers said in an e-mailed statement today. Vehicle sales, including buses and trucks, rose 25 percent to 1.15 million.

From Bloomberg

China has withstood a global slump in auto sales after the government cut retail taxes and began handing out 5 billion yuan ($733 million) in subsidies to help boost demand. Volkswagen AG and other automakers are expanding in China, the world’s largest auto market so far this year, to offset tumbling sales in Europe and the U.S.

“The increase was impressive, but it’s sure to slow,” said Qin Xuwen, a senior analyst at Orient Securities Co. in Shanghai. “Subsidies can only sustain demand for so long amid the current economic situation.”

General Motors Corp., the biggest overseas automaker in China, boosted sales in the country 50 percent last month on demand for minivans, which account for 63 percent of its sales.

In the first four months of the year, China’s vehicle sales rose 9.4 percent to 3.83 million. That compares with 3 million in the U.S., where sales tumbled 37 percent amid a recession.

Related:
Reactions To Recession: Isreal Wants Huge Spending Cuts; Brits Mulling Huge Taxes; Obama Wants To Totally Fund Health Care, Education, Re-engineered Energy System
.
China’s passenger-vehicle sales rose 37 percent last month, the most in three years, as government subsidies spurred demand for minivans and small cars.

Local drivers bought 831,000 cars, minivans and other passenger vehicles in April, the China Association of Automobile Manufacturers said in an e-mailed statement today. Vehicle sales, including buses and trucks, rose 25 percent to 1.15 million.

China has withstood a global slump in auto sales after the government cut retail taxes and began handing out 5 billion yuan ($733 million) in subsidies to help boost demand. Volkswagen AG and other automakers are expanding in China, the world’s largest auto market so far this year, to offset tumbling sales in Europe and the U.S.

“The increase was impressive, but it’s sure to slow,” said Qin Xuwen, a senior analyst at Orient Securities Co. in Shanghai. “Subsidies can only sustain demand for so long amid the current economic situation.”

General Motors Corp., the biggest overseas automaker in China, boosted sales in the country 50 percent last month on demand for minivans, which account for 63 percent of its sales.

In the first four months of the year, China’s vehicle sales rose 9.4 percent to 3.83 million. That compares with 3 million in the U.S., where sales tumbled 37 percent amid a recession.

Read the rest:
 http://www.bloomberg.com/apps/ne
ws?pid=20601080&sid=aEZmnuI1d9DE

Obama’s Gangster Government

May 8, 2009

Give President Obama credit – he at least made the proverbial offer Chrysler’s secured creditors couldn’t refuse. The way Obama strong-armed creditors who rightfully expected to be treated justly under the law was right out of Juan Peron’s playbook. Like the Argentinian strong man, Obama muscled the owners and creditors out of a productive private company and gave it to union leaders, who will then fill his campaign coffers in gratitude for his generosity. The Examiner’s Michael Barone – who has forgotten more about American government and politics than most Washington political experts know – was correct to dub Obama’s Chrysler heist “an episode of Gangster Government.”

Forget what anybody in the White House or what is left of the Chrysler executive corps claims to the contrary because the UAW effectively owns the company now, holding 55 percent of its stock. True, the union doesn’t get an explicit controlling majority of the board of directors, but who needs that when you’ve got the White House guaranteeing your work and the U.S. Treasury Department making sure you never have to worry about the bottom line. UAW President Ron Gettelfinger’s place in Big Labor’s Hall of Fame is now secure. He found a sugar daddy with an endless supply of cash. So UAW members and retirees can keep right on drawing those pay and benefits so excessively generous they made it impossible for the old Chrysler to compete with Toyota and Honda.
 
Contrasting mightily with the Pennsylvania Avenue Gang’s thuggery is the quiet confidence of Ford Motor Company’s president and CEO, Allan Mullaly. He had the foresight three years ago to strengthen his firm’s cash and credit reserves in anticipation of the inevitable decline of auto sales. He also invested heavily in more fuel efficient products at just the right time for market conditions. When GM and Chrysler headed hats-in-hand to Washington last fall, Mullaly said Ford didn’t want a bailout and then watched quietly as his two cross-town rivals committed corporate suicide. Now Ford is positioned strongly to be the last great American car company. With a guy like that at the helm, it’s enough to make people who love American free enterprise go out and buy a new Ford.      
 
Editorial From The Washington Examiner

Under Restructuring, GM To Build More Cars Overseas

May 8, 2009

The business climate in the U.S. is going down hill.  And government “intervention” isn’t helping…

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By Peter Whoriskey
The Washington Post

The U.S. government is pouring billions into General Motors in hopes of reviving the domestic economy, but when the automaker completes its restructuring plan, many of the company’s new jobs will be filled by workers overseas.

According to an outline the company has been sharing privately with Washington legislators, the number of cars that GM sells in the United States and builds in Mexico, China and South Korea will roughly double.

The proportion of GM cars sold domestically and manufactured in those low-wage countries will rise from 15 percent to 23 percent over the next five years, according to the figures contained in a 12-page presentation offered to lawmakers in response to their questions about overseas production.

As a result, the long-simmering argument over U.S. manufacturers expanding production overseas — normally arising between unions and private companies — is about to engage the Obama administration.

Read the rest:
http://www.washingtonpost.com/wp-dy
n/content/article/2009/05/07/AR2
009050704336.html?hpid=topnews

Toyota forecasts $8.6 billion annual loss

May 8, 2009

Toyota Motor Corp (7203.T), the world’s biggest automaker, forecast a much deeper-than-expected annual loss of $8.6 billion as sales tumble, keeping dozens of its factories underused.

Toyota booked a $6.9 billion loss for the January-March fourth quarter and cut its annual dividend for the first time since at least 1994, when it changed its reporting period.

By Chang-Ran Kim, Asia autos correspondent
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The global downturn that has battered demand for cars and pushed U.S. rival Chrysler (CBS.UL) into bankruptcy, has hit Toyota badly as it went from rapid expansion to overcapacity almost overnight. The Japanese giant posted its first-ever consolidated operating loss last year after a record profit the year before.

While the entire industry is caught in the slump and manufacturers are selling cars that have piled up in stockyards, Toyota has been especially vulnerable due to its exposure to the United States and Japan, where sales have plunged to multi-decade lows. Customers, fearing for their jobs, are putting off big-ticket purchases.

“My first impression is bad. Toyota’s outlook was worse than I had expected. The company expects a really tough time for the first six months,” said Naoki Fujiwara, a fund manager at Shinkin Asset Management.

“I expect the bottom for the auto industry is the April-June period, followed by a slow recovery.

Read the rest from Reuters:
http://news.yahoo.com/s/nm/20090508/bs_n
m/us_toyota;_ylt=AqimRu8vRMxBJNWeRyrwA
ces0NUE;_ylu=X3oDMTJhZGhmdjVhBGFzc2V0
A25tLzIwMDkwNTA4L3VzX3RveW90YQR
jcG9zAzEEcG9zAzIEc2VjA3luX3RvcF9zd
G9yeQRzbGsDdG95b3RhZm9yZWNh

American Auto Industry: Unsustainable Losses

May 7, 2009

One has to get the feeling that the American automobile industry is dead — or nearly so.

Even with all the Obama tinkering, which is questionable in its value at best, the wall is quickly nearing the windshield and the crash test dummy is the American taxpayer.

File:Dummies.jpg
Above: Obama and Geithner go for an outing….

Today General Motors said it posted a loss of $6 billion for the first three months of this year.

GM has to give a plan to the federal government by June 1 or go into bankruptcy.

Chrysler is in bankruptcy court and the auto parts manufacturers are saying all this turmoil will mean many of them may go out of business.
Related:
Obama’s flawed auto logic

GM Lost Another $6 Billion in Three Months: Are You Ready To Buy a U.S. Made Car Now?

Ford May Suffer as Chrysler Shutdowns Reach Suppliers

See Ed Morrissey at Hot Air:

For the first time in 80 years, Ford outsold GM, bringing in a topline number of $24.8 billion in sales, against the bailed-out automaker’s $22.4 billion.  Both companies had severe reductions in global sales over 2008’s Q1 figures, with Ford losing almost $15 billion in revenue — and GM over $20 billion.

Ford beat GM on the bottom line, too, although that victory seems somewhat Pyrrhic as well.  GM lost six billion dollars on the bottom line, while Ford managed to stanch the bleeding down to $1.4 billion.  Even that shows better efficiency at Ford, with losses amounting to 105% of sales, while GM’s loss figures to 127% of sales. 

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http://hotair.com/archives/2009/05
/07/shocker-ford-beats-governm
ent-motors-in-q1/

Obama’s flawed auto logic

May 7, 2009

President Barack Obama insists he doesn’t want to run the domestic auto industry — and we should all be thankful for that.

But his actions speak differently — and we should all be worried.

“… I rejected the original restructuring plan” that Chrysler LLC submitted for government loans, he said April 30 in announcing his decision to force Chrysler into bankruptcy. “… And the standard I set was high — I challenged them to design a plan …”
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That’s a lot of self promotion and involvement from a guy who doesn’t want to control the companies.

By Manny Lopez
Detroit News

To be sure, the government, with the investment of $4 billion in our tax dollars in Chrysler and $15.4 billion in General Motors Corp. needs to set guidelines and rules for repayment. If not met, call the loans and get our money back.

But forcing a private American company into bankruptcy because the president thinks it’s the most prudent action. Um, no. Not by any measure.

Read the rest:
http://detnews.com/article/20090507
/OPINION03/905070376/Obama
-s-flawed-auto-logic