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AUTOMAKERS' CRISIS * USA - House OKs bailout, but it faces stiff GOP opposition in Senate
White House pushes for passage
Washington,DC,USA -The Detroit News Bureau, by David Shepardson & Gordon Trowbridge -December 11, 2008: -- The U.S. House approved a $14 billion auto bailout late Wednesday, but the bill's ultimate fate remained in serious doubt as the White House and Democrats struggled to win enough Republican support in the Senate... Supporters hope the measure's passage, by a 237-170 margin largely along party lines in the Democratic-controlled House, will increase political pressure on Senate Republicans to go along or risk being blamed for thousands of job losses that likely would result from a collapse of General Motors Corp. or Chrysler LLC. Both companies have said they need the money to survive through early next year... It was unclear Wednesday night when the Senate might consider the bill, but Republicans earlier in the day expressed doubt as to whether there is enough GOP support for the measure to get 60 votes, the number generally needed to pass controversial legislation in the 100-seat chamber... (Photo by Doug Mills / New York Times - Vice President Dick Cheney walks out of a Senate policy meeting where he tried to convince GOP senators to approve the auto aid bill) * OPINION - Senate should give auto industry shot at recovery
Detroit,MICH,USA -The Detroit News -December 11, 2008: -- Approval of an auto industry loan package will not save the domestic automakers, but it will give the Detroit Three a chance to save themselves... The emergency loans are desperately needed to keep the automakers alive long enough for their turnaround plans to take hold. Without the assistance, one or more of these companies could die... No one can know the impact a failure of a major automaker will have on the national economy. But at the least it would deepen and darken an already frightening recession... The House understood that, as evidenced by its approval vote Wednesday night. But the Senate is a tougher sell...
* OPINION - Chrysler LLC can't survive, expert says - Auto company should be allowed to wind down gracefully in a controlled process, asserts analyst
Detroit,MICH,USA -The Detroit News, by Alisa Priddle -11 Dec 2008: -- Chrysler LLC cannot survive intact, even with a government loan, an automotive analyst said Wednesday... The road ahead for Detroit's automakers, which are losing ground in North America to foreign competitors, is grim, CSM Worldwide forecasters said, predicting that Detroit's Big Three automakers will become the "Detroit Two"... It would be best for everyone involved if Chrysler were allowed to gracefully wind down and go away in a controlled, staged process, Michael Robinet, CSM vice president of global vehicle forecasts, said at an Automotive Press Association event... Assessing General Motors Corp., Ford Motor Co. and Chrysler on scale, efficiency, products and profitability, Chrysler "doesn't really have the scale, in most vehicle lines, required to survive in this market", Robinet said... It wasn't all Chrysler's fault, said Craig Cather, CSM's chief executive. He laid the blame on Daimler AG, which owned the Auburn Hills automaker before Cerberus Capital Management LP bought a majority stake, in part because Daimler limited Chrysler's ability to expand internationally, he said... A Cerberus spokesman would not comment on the study...
* COMMENT - Bailout or Bankruptcy: What Will It Take to Get the U.S. Auto Industry Back on Track?
PENN,USA -Wharton School of the Penn.University -December 10, 2008: -- ... While the lifeline loans would give the Detroit automakers some breathing room, legislators and auto executives remain under enormous pressure to come up with a plan to resolve the industry's deep structural and management problems... The plan's opponents in the Senate say that bankruptcy would be a more suitable outcome; a bailout would generate little motivation for the automakers to change their business models, and would likely lead to similar requests for government handouts down the line, they argue... Wharton management professor John Paul MacDuffie, who specializes in automotive research, favors government assistance to the industry, with strings firmly attached, over a forced bankruptcy. A negotiated financial package, he notes, could have the same impact as a reorganization accomplished through the bankruptcy court without the expense, delays and uncertainty that might cost the government even more in the long run. In addition, the size and complexity of the three automakers' operations would make it highly unlikely that the industry could pull together all its claimants and get them to swiftly agree to a pre-packaged bankruptcy plan, he says... * Dodd: Automakers should consider making buses
Detroit automakers will need to consider manufacturing buses and rail cars if they expect to get a lifeline from Congress...
Washington,DC,USA -The Connecticut Post, by PETER URBAN -10 Dec 2008: -- Among the caveats included in a 31-page bill to provide General Motors and Chrysler access to $15 billion to stay afloat through March is a requirement that they study the feasibility of making public transit vehicles... Senate Banking Committee Chairman Chris Dodd included the provision after broaching the idea to business leaders of General Motors, Chrysler and Ford during a hearing last week where they presented their proposal for a $34 billion bailout... The Connecticut Democrat noted during the hearing people aren't buying cars right now, but many municipalities and states are eager to boost mass transit...
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