They want another $14 billion right now.
They indicated that they’ll need more after that. General Motors thinks it will need a total of $30 billion. Chrysler – well, they’ve asked for $9 billion so far, but who knows how much they will need.
And don’t look now, but here comes Ford. They are merrily bleeding money with the rest of them.
Ford has now tapped its last available line of private credit, and are facing a big pension fund shortfall. The arithmetic strongly suggests Ford is likely to be in the bailout line before long as well.
Yet I am not sure if the American people have the stomach to subsidize the automakers much longer. If you lived in Colorado, would you want to cough up more billions to keep them afloat?
Meanwhile, none of these automakers is doing much of what they were created to do: Sell cars. Sales have been plummeting, thanks in large part to the credit crunch and the national recession. The Big Three sold about half as many cars last month as in January a year ago. Here’s what they plan if they get the new loan money.
General Motors intends to close five American plants, eliminate the jobs of another 47,000 workers worldwide, and dump Pontiac and Saturn. Chrysler just said they are going to ditch a few models, like the PT Cruiser and the Dodge Durango, and “trim production capacity.” I think that’s a polite way of saying they are also going to close more plants.
How either company gets from this point to profitability would seem to require a leap of faith. Maybe a pole vault of faith.
Still, the car companies claim that it would cost us, i.e., the government, more than $100 billion if both were to declare bankruptcy. Respected economists also say nearly two million jobs would be lost if Chrysler and GM went out of business. Add another million if Ford were to go belly up as well. That would be nationally devastating, at a time when the President is using everything except electric paddles to try to jump-start the economy.
Here is what I wanted to hear from GM and Chrysler yesterday.
I wanted them to make a powerful case that they had a plan to take both companies to a place where they would have a modern, flexible line of vehicles. I wanted them to discuss new ways of doing business that would make sense, and maybe even some daring thoughts of partnerships with government to build transit systems.
They automakers might also have done well to remind us that this nation needs a manufacturing sector, and there isn’t much of one left. Most of all, they need to more the conversation beyond gimmie, and they need a better answer for the question: Why should we help you? My political sense tells me they better do it, pretty soon.
It is insane to rely on the worthless CEO'curently running the Big 3..
Our state continues to be tortured with shallow leadership in both the public and private sector..
We must change our leaders now!!!!
Posted by: Thrasher | February 18, 2009 at 03:15 PM
Yes we must have Thrasher-that eminently qualified man who has accomplished so much and written so many policy pronouncements from his think tank.
Thrasher continues to spew vitriol and offers nothing of substance.
Just another loser looking for a taxpayer handout. Betcha he's party of the 50% that pay nothing but bitch to high heaven.
Posted by: Augustas Woodward | February 19, 2009 at 08:04 PM
Augustas,
I see envy still rules yor world with regard to my status..BTW I was recently published in the "printed blog"..
Make sure you take a peek also in the Eccentric as well..I penned a commentary on the worthless value of financial advice and experts...
Always making a diiference...hell you already know this..lol,lol,lol
Posted by: Thrasher | February 20, 2009 at 11:03 AM