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AUTOMAKERS CRISIS & SOLUTIONS * USA
* Detroit Project: 'Car of the future' - DuPont CEO proposes a joint effort of the Big Three, others to create a 75 mph, butanol vehicle
Detroit,Mich,USA -The Detroit News, by Jaclyn Trop -December 3, 2008: -- The chairman and CEO of chemical giant DuPont called on top United States companies to band together to create a "car of the future" within the next two years... The endeavor could be called the Detroit Project, DuPont chief Chad Holliday said, and would be led by the Big Three automakers in a collaboration akin to the Manhattan Project, the national effort to develop the first nuclear weapon during World War II... The car would be safe, sensitive to the environment, capable of 75 miles per gallon -- and powered with butanol, a biofuel similar to ethanol but more tolerant to water contamination, made by DuPont... Holliday unveiled his self-described "crazy idea" to the Detroit Economic Club on Tuesday at a luncheon at the Westin Book Cadillac... "This is a unique time in history," Holliday said. "It just seems like this is the one window when you can pull something like this off"... The vehicle, which he said could be "the best in the world," could help the United States to recapture its competitive edge in two areas -- the environment and the economy... The project would require $5 billion in seed money, which could be raised by selling U.S. bonds similar to the way the government raised money for the war effort more than 60 years ago. The project would yield a strong return on investment, he said...
* Survival roadmap for the Big 3
Washington,DC,USA -The Detroit News, by David Shepardson -December 3, 2008: -- Detroit's Big Three automakers made a desperate plea for a $34 billion emergency federal bailout Tuesday, as General Motors Corp. and Chrysler LLC warned they would collapse by the end of the year without immediate help... The automakers delivered new business plans to Congress written during the last 11 days that for the first time spelled out in great detail the problems they face and the painful steps they must take to survive and restore profits amid plunging auto sales and a bleak outlook for 2009... The recovery plans exposed how conditions have worsened dramatically in the past two weeks since GM, Chrysler and Ford Motor Co. made their initial request to Congress for $25 billion and came as the industry reported a nearly 40 percent drop in November sales, the worst sales month in 26 years... After rebuffing the companies' first request, Congress told their top executives to come back with a detailed strategy for how they would spend the money and ensure future viability. The automakers, which have lost more than $100 billion combined since 2004, said in their new plans that they might not return to profitability until 2012...
* CEOs to save big by driving to D.C.
Detroit,Mich,USA -The Detroit News -December 3, 2008: -- The CEOs of Detroit's three automakers -- Ford Motor Co.'s Alan Mulally, General Motors Corp.'s Rick Wagoner and Chrysler LLC's Robert Nardelli -- are saving their companies more than $15,000 by driving to Washington, D.C., rather than flying by corporate jet:
* Cost of driving: Roughly $92.50 round trip, including gasoline and tolls. It's roughly 1,050 miles, and at 34 miles per gallon for Wagoner's Chevrolet Malibu hybrid, it will use roughly 31 gallons... So gasoline will cost about $56 at the national average of $1.81 per gallon of regular. Tolls for the Ohio and Pennsylvania turnpikes will be around $36.50...
* Cost of corporate jet: It's difficult to determine how much the automakers would pay to fly on their own jets, but it would cost $15,730 to fly from Detroit to Washington on a chartered jet, according to Oakland Air, a corporate jet service in Waterford Township... The figure includes flying a Cessna Citation from Detroit to Washington on Wednesday, flying the crew back to Detroit, and returning to pick up the executives for the return trip Friday... That was the lowest-cost option from the air carrier...
* Situation is far worse than we thought
The Detroit News: Commentary, by Daniel Howes -December 3, 2008: -- A teetering General Motors Corp. says it needs $12 billion in cash -- a third of it by the end of this month -- and a $6 billion credit line to make it into next year... Would it be enough?... Chrysler LLC, its monthly sales off worse than GM's, says it will need "immediate liquidity support" of $7 billion to reassure customers, encourage dealers and make it into next year. Would it come soon enough?... And Ford Motor Co., Detroit's darling of the moment, says it's OK for now. But it wants the ability to access up to $9 billion in government credit should, say, GM fail and take the entire domestic auto industry down with it in one cataclysmic collapse... What if Ford is too optimistic? ... Four quick thoughts to the most detailed corporate striptease this town has ever seen: It's far worse than many thought, especially at GM. Second, "the Big Three automakers" are not a monolith mired in identical dire straits, as the Senate Banking House Financial Services committees will see later this week... Third, members of Congress hoping for an easy call on the Detroit loan package won't get one -- and some of them are likely to be scared stiff after they read the automakers' plans, particularly GM's 37-page doozy that could have been subtitled "Prelude to the Apocalypse"... And most importantly: Would GM's chunk of a proposed $25 billion bridge loan to Detroit's automakers (Do I hear $30 billion? Or maybe $35 billion?) be even close to enough to keep the largest automaker afloat until school lets out in June? Consider that question No. 1 at congressional hearings Thursday and Friday...
* Auto sales plummet to 26-year low - Top six carmakers report 30%-47% drops in U.S. as bad economy scares off consumers
Detroit,MICH,USA -The Detroit News, by Scott Burgess -December 3, 2008: -- U.S. auto sales fell 36.7 percent in November, their lowest level since October 1982... The dire sales figures arrive as Detroit's auto executives head to Capitol Hill this week to ask Congress for up to $34 billion in emergency loans to help them through the worst auto market in decades. The auto companies' sales are reeling from tough economic times, spurred by the Wall Street meltdown, the subsequent tightening of the credit market and consumers moving from larger vehicles to more fuel efficient smaller ones. Consumers also remained wary of the down economy and postponed big ticket purchases... Dismal sales reports came from all corners, with the top six carmakers reporting double-digit losses in the United States... Chrysler LLC's November sales fell a staggering 47.1 percent; General Motors Corp.'s sales dropped 41.3 percent; and Ford Motor Co.'s were down 30.5 percent, according to Autodata Corp. Ford and GM announced Tuesday they would slash by one-third their first-quarter production in 2009... Japan's automakers also reported dramatic sales declines, led by Nissan Motor Co., whose sales were down 42.2 percent; Toyota Motor Corp. saw sales fall 33.9 percent; and Honda Motor Co.'s sales fell 31.6 percent...
* Situation is far worse than we thought
The Detroit News: Commentary, by Daniel Howes -December 3, 2008: -- A teetering General Motors Corp. says it needs $12 billion in cash -- a third of it by the end of this month -- and a $6 billion credit line to make it into next year... Would it be enough?... Chrysler LLC, its monthly sales off worse than GM's, says it will need "immediate liquidity support" of $7 billion to reassure customers, encourage dealers and make it into next year. Would it come soon enough?... And Ford Motor Co., Detroit's darling of the moment, says it's OK for now. But it wants the ability to access up to $9 billion in government credit should, say, GM fail and take the entire domestic auto industry down with it in one cataclysmic collapse... What if Ford is too optimistic? ... Four quick thoughts to the most detailed corporate striptease this town has ever seen: It's far worse than many thought, especially at GM. Second, "the Big Three automakers" are not a monolith mired in identical dire straits, as the Senate Banking House Financial Services committees will see later this week... Third, members of Congress hoping for an easy call on the Detroit loan package won't get one -- and some of them are likely to be scared stiff after they read the automakers' plans, particularly GM's 37-page doozy that could have been subtitled "Prelude to the Apocalypse"... And most importantly: Would GM's chunk of a proposed $25 billion bridge loan to Detroit's automakers (Do I hear $30 billion? Or maybe $35 billion?) be even close to enough to keep the largest automaker afloat until school lets out in June? Consider that question No. 1 at congressional hearings Thursday and Friday...
* Auto sales plummet to 26-year low - Top six carmakers report 30%-47% drops in U.S. as bad economy scares off consumers
Detroit,MICH,USA -The Detroit News, by Scott Burgess -December 3, 2008: -- U.S. auto sales fell 36.7 percent in November, their lowest level since October 1982... The dire sales figures arrive as Detroit's auto executives head to Capitol Hill this week to ask Congress for up to $34 billion in emergency loans to help them through the worst auto market in decades. The auto companies' sales are reeling from tough economic times, spurred by the Wall Street meltdown, the subsequent tightening of the credit market and consumers moving from larger vehicles to more fuel efficient smaller ones. Consumers also remained wary of the down economy and postponed big ticket purchases... Dismal sales reports came from all corners, with the top six carmakers reporting double-digit losses in the United States... Chrysler LLC's November sales fell a staggering 47.1 percent; General Motors Corp.'s sales dropped 41.3 percent; and Ford Motor Co.'s were down 30.5 percent, according to Autodata Corp. Ford and GM announced Tuesday they would slash by one-third their first-quarter production in 2009... Japan's automakers also reported dramatic sales declines, led by Nissan Motor Co., whose sales were down 42.2 percent; Toyota Motor Corp. saw sales fall 33.9 percent; and Honda Motor Co.'s sales fell 31.6 percent...
Labels: automakers' crisis
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