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Posted
Dec 11 2008, 03:56 AM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
The New York Times debunks the claim that the Big Three auto workers earn $73 an hour. That number came from the car companies themselves during union negotiations, writes David Leonhardt.
But it isn't completely accurate. Yes, the companies do spend about $73 for every hour of unionized work, Leonhardt writes. Not all of that goes to the worker's pocket.
Here's how it breaks down:
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Posted
Nov 17 2008, 01:51 PM
by
Anthony Mirhaydari
Rating:
Money Blog: Top Stocks Blog - MSN Money
General Motors, Ford, and Chrysler are at the epicenter of intense maneuvering in Washington D.C. as those taking a tough stand for free-market principles lock horns with pragmatists worried about massive layoffs in the rustbelt.
Political reality will lead to some form of assistance given the popularity of Keynesian fiscal stimuli these days and the amount of pressure being applied by industry. Unfortunately, people like to assume that once Detroit retools its factories and stocks its showrooms with the fuel efficient cars and car-based SUVs of the future, happy days will return. They won't.
As I wrote last summer, we simply have too many vehicles to sustain the Big 3's current production capacity. The United States now has 981 cars for every 1,000 people of driving age compared to 613 in the United Kingdom and just 24 in China. As a result, no amount of government aid will stop
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Posted
Jun 30 2008, 03:59 PM
by
Charley Blaine
Rating:
Money Blog: Top Stocks Blog - MSN Money
Chrysler exists because Lee Iacocca bet the company on the minivan. Now, thanks to the oil crisis, the minivan looks like it could be on its last legs.
One of the company's two minivan assembly plants will be shut indefinitely on Oct. 31, Chrysler said today. The problem is that families -- the target market for minivans -- have been particularly affected by rising gas and food prices, falling home values and more difficulty in borrowing money.
It's a humiliating development for Chrysler, which spent $1.4 billion on the redesign of its two industry-leading minivans, the Chrysler Town & Country and Dodge Grand Caravan. And then saw sales go, well, nowhere.
"Everything that a family needs is more expensive right now, and so the last thing they're looking at is, 'Do they need to replace their Honda Odyssey?'" said Rebecca Lindland, an auto analyst for Global Insight, the economic consulting firm
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Posted
Nov 11 2008, 11:29 AM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
A Deutsche Bank analyst gave General Motors' stock a price target of zero. Even if the company averts bankruptcy, Rod Lache noted, its future is likely to be "bankruptcy-like."
Meanwhile, hedge fund manager Bill Ackman says GM would be better off filing for bankruptcy instead of taking government bailout money.
"It has been hamstrung for years because it has too much debt and it has contracts that are uneconomic," he said on The Charlie Rose Show, according to Bloomberg. "The way to solve that problem is not to lend more money. They should do prepackaged bankruptcy."
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Posted
Nov 13 2008, 10:05 AM
by
Minyanville
Rating:
Money Blog: Top Stocks Blog - MSN Money
So much for one president at a time.
Bloomberg reports President-Elect Obama is urging lawmakers to rush through a $50 billion bailout for the struggling U.S. automakers. With no formal executive power until January, Obama is asking Democratic friends in the House and Senate to get their Republican counterparts behind a rescue plan. Any plan would also require the support of President Bush, according to Bloomberg.
Also at issue is whether the money would come from TARP -- essentially depleting the first $350 billion installment of bailout funds -- or from fresh legislation.
General Motors' situation is particularly dire, as many analysts believe that the once-largest carmaker in the world won't survive throug
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Posted
Apr 07 2009, 09:48 AM
by
Anthony Mirhaydari
Rating:
Money Blog: Top Stocks Blog - MSN Money
General Motors (GM) is making "intense" and "earnest" preparations for bankruptcy, which is now seen as the best option, according to a source familiar with the company's plans. The company is operating under a June deadline from the U.S. Treasury to reduce debt and slash costs as part of its $13.4 billion loan and request for an additional $16.6 billion.
It appears the plan to split the company in two is gaining momentum. Known as a "363 sale" because of the relevant section of the Chapter 11 bankruptcy code, this would see GM divided into one company containing healthy brands like Chevrolet and Cadillac and another holding troubled units like Saturn.
Officially, GM continues to work toward an out-of-court restructuring, which is something Ford (F) has been making great progress on. The catalyst for the apparent change of heart is the ongoing difficultly new chief executive Fritz Henderson and his counterparts at Chrysler are having negotiating with bondholders and the labor union. Creditors are holding out for better terms, secure in the belief that a sympathetic Obama administration won't allow a bankruptcy judge to
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Posted
Nov 21 2008, 11:41 AM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
The Wall Street Journal and U.S. News try some mythbusting about the Detroit automakers pressuring Congress for a bailout.
The automakers have returned home in failure, by the way, after pleading for help from lawmakers. Democrats said they wanted to see more evidence the companies had a turnaround plan in place, and asked to see a proposal next month. The inability to secure aid will increase the pressure on the companies' boards, the Journal says.
Now, about those myths:
1. Bankruptcy is, actually, an option. In fact, General Motors is already bankrupt, writes the Journal's Paul Ingrassia. It's out of cash and needs emergency help. All that's left is the official bankruptcy filing. Same for Chrysler.
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Posted
Jul 08 2009, 12:04 PM
by
Catherine Holahan
Rating:
Money Blog: Top Stocks Blog - MSN Money
 The models lean seductively over the hood of the 2010 Chevrolet Camaro, wearing only tiny yellow underwear emblazoned with the car's logo. Grasping a wash cloth, they rub down the car until it sparkles as an unseen cameraman asks about the car.
The videos, broadcast on YouTube, use sex appeal to sell Camaros to guys. Only the models aren't women, they're men.
The racy commercials are part of a new advertising campaign targeting gay, bisexual and transgender Americans.
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Posted
Oct 09 2008, 12:55 PM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
The economic crisis is taking a staggering and tragic toll on American carmakers. General Motors saw its shares drop to a 58-year-low today, tumbling 31% to $4.76. Ford's stock price fell 22% to a miserable $2.08.
The drop came after forecaster J.D. Power cut its predictions for U.S. car sales for this year and next. People are holding on to their old cars for longer now and putting off buying replacement vehicles, the forecaster said. Adding to the gloom: Standard & Poor's is considering cutting GM's ratings.
The long-term impact on the industry will be huge. Some car dealers have already filed for bankruptcy, seeing as the tumbleweeds blowing through their locations aren't buying anything. And other dealerships are likely to follow.
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Posted
Mar 14 2008, 08:40 AM
by
Robert Walberg
Rating:
Money Blog: Top Stocks Blog - MSN Money
While the old saw "as goes General Motors, so goes the nation" no longer holds much relevance, it's interesting to note that with oil prices skyrocketing to $110 per barrel, gold prices reaching the $1000 per ounce pinnacle and the economy on the brink of recession, that GM's shares have plunged to levels not seen since Ronald Reagan was president. So even though GM and the auto industry no longer drive the U.S. economy, they most certainly are victims when it crashes.
Of course, like the passenger that gets seriously injured for failing to fasten their seatbelt, much of the pain GM feels today is the result of its own bad decisions. When gas prices were cheap (hard to believe that we're only talking a few years ago), GM and its brain trust decided that bigger was better. So it gave us the Cadillac Escalade, GMC Yukon and Chevy Suburban. If that weren't enough, the company decided to acquire the Hummer brand name -- the very symbol of SUV excess, especially with regard to burning gas.
Considering that margins were higher in these oversized vehicles, and that consumers couldn't buy big enough, you could hardly blame them for chasing the almighty dollar. Unfortunately, management's job is to not only address the current needs but to envision where the marketplace is going -- and on that front GM failed miserably. It didn't foresee the relentless climb in energy prices, leaving it with a boatload of unwanted inventory and a dearth of smaller, gas/green friendly cars.
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