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AUTOMAKERS' CRISIS * USA
* GM to idle another 2,000 plant workers - Cost-cutting move to hit 3 factories with 3rd shifts
Detroit,Mich,USA -The Detroit News, by Robert Snell -December 6, 2008: -- With Congress debating whether to give General Motors Corp. up to $18 billion in financing, the automaker announced 2,000 more layoffs Friday at three factories... GM is eliminating a third shift in Orion Township; Lordstown, Ohio; and Oshawa, Ontario, starting in February, the latest move in a series of factory layoffs this year for an automaker that also is cutting salaried staff to pare expenses and conserve cash... GM is in danger of being unable to pay its bills this month without an immediate $4 billion loan from the federal government. In all, GM is asking for $12 billion in loans and a $6 billion line of credit to restructure its business and survive a downturn in the auto industry... It was unclear whether the latest layoffs will be on top of the 30,000 jobs GM proposed eliminating as part of its restructuring plan submitted to Congress on Tuesday... (Photo by Charles V. Tines / The Detroit News - Marietta Branner works the line at GM's Orion Township plant in 2004. GM plans to eliminate a third shift at the factory in February)* Congress, White House zero in on auto aid plan - $15B in emergency loans in the works; House could vote next week
Washington,DC,USA -The Detroit News, by David Shepardson, Gordon Trowbridge & Christine Tierney -December 6, 2008: -- In a move that could save General Motors Corp. and Chrysler LLC from imminent collapse, the White House and Congressional Democrats neared an agreement on a $15 billion compromise short-term aid program for Detroit's Big Three automakers, two congressional aides said late Friday... The breakthrough came after House Speaker Nancy Pelosi, D-Calif., dropped her insistence that any aid come from the $700 billion Wall Street rescue program and agreed to tap a Department of Energy loan program intended for retooling factories to develop advanced fuel-efficient vehicles. GM and Chrysler could instead use the money to survive as they undergo significant restructuring in the next three months... The key factor in breaking a month-long logjam over whether to help the automakers and where to get the money was growing worry about the U.S. economy and the seismic effect on employment if the automakers failed... On Friday, the Labor Department said the nation shed an alarming 533,000 jobs in November, the largest monthly increase in unemployment since 1974, bolstering the case for help. As many as 3 million jobs could be lost within a year if Detroit's Big Three collapse, according to some estimates. Hundreds of auto suppliers and thousands of dealers would be affected... President George W. Bush also joined the fray Friday, urging Congress to pass emergency aid next week using the Energy Department money, saying he was worried the companies wouldn't survive... (Photo by Doug DeMark / Engine of Democracy - As part of "The Engine of Democracy" group, workers wear jerseys with numbers of auto-related jobs that could be lost if the Big 3 fail)* Experts support Big 3 loans
Washington,DC,USA -The Detroit News, by Christine Tierney -December 6, 2008: -- The government must send a strong signal that it backs the American auto industry and stop quibbling over which agency or department should provide urgently-needed loans, expert economic witnesses told Congress on Friday... The sector is as important to the U.S. economy as any of the banks that have received huge sums from the government with hardly any strings attached, renowned economist Jeffrey Sachs told the House Financial Services Committee... "At this point, the double standard with Wall Street is so painful and so palpable, it's hard actually to understand how one throws a $306 billion guarantee over Citigroup without a single hearing or a single plan, but we can't get even a loan" for Detroit's automakers, said Sachs, who was born in Detroit and teaches at Columbia University... "That's what we're talking about, with all of the disintegration of value that would go along with this"... (Cartoon from the boston.com)* Chrysler gets bankruptcy advisers - Study shows such a filing would be devastating to domestic car industry
Auburn Hills, Michigan,USA -The Detroit News, by Alisa Priddle -December 6, 2008: -- Chrysler LLC hired a firm that specializes in bankruptcy proceedings because Congress asked it to study the drastic step as an option, the automaker said in a statement Friday... In response, Chrysler LLC engaged outside advisers, including Jones Day, in order to provide a comprehensive independent analysis of the various options available to the company," the statement said... Bankruptcy questions first surfaced during congressional hearings in late November when Detroit's Big Three CEOs first went before House and Senate committees in their quest for emergency aid. Chrysler has said it needs $7 billion to stay afloat... The company's hiring of a bankruptcy advisory company shouldn't come as a surprise, said Van Conway of Conway, MacKenzie & Dunleavy, a Birmingham firm that specializes in reorganization and management of troubled companies...
* Automaker collapse may undo financial rescue, Levin says
Washington,DC,USA -The Detroit Free Press, by TODD SPANGLER & JUSTIN HYDE -December 4, 2008: -- A new twist in the argument for a rescue plan to help Detroit's automakers will be the effect their potential collapse could have on the country's financial markets... Noting that Congress and the Bush administration came together to authorize a $700-billion bailout of Wall Street this fall, Sen. Carl Levin of Michigan said today as hearings for the automakers' rescue plans got under way that if General Motors, Ford Motor or Chrysler LLC are allowed to fail, it could have devastating effects not only on the economy but some of those same financial markets helped already... The reason, he said, is the huge amount in corporate bonds issued by GM and Ford that would be vulnerable if the companies fail... (Photo by J. SCOTT APPLEWHITE/Associated Press - Sen. Carl Levin, D-Mich., right, and his brother, Rep. Sander Levin, D-Mich., left, talk about the auto industry crisis today on Capitol Hill in Washington) Labels: automakers' crisis
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