Panic In Detroit As Viability Plan Deadline Looms
Our deadbeat automakers will turn in their viability plans today, but, according to a number of reports, these plans (like their predecessors) will be short on workable details. Which helps explain why GM and Chrysler will be turning in their plans after the close of the markets today. The Treasury will receive the “plans” electronically at 4 p.m. today, but a public press conference won’t happen until 5:30 p.m. Which is probably for the better. GM’s stock price has dropped by double digits today, despite reports that their second tranche of bailout cash has already been approved. But having “scored a trillion dollars” as Bowie puts it, there’s still plenty of panic in Detroit.
Barrons reports that key provisions of the plan have not yet been confirmed, as GM has failed to secure union or bondholder concessions that the plan calls for. Barron’s Bob O’Brien writes “without knowing whether auto workers will knuckle under to requests for job and wage cuts and benefit reductions, it’s impossible to know whether the auto maker will be forced to seek bankruptcy protection.”
MLive reports that GM’s latest round of buyouts is not being well received. “It’s nowhere near, not even close to the interest that there was the last time,” says a shop steward at Flint Truck Assembly. Yeah, because workers are “only” being offered $20k and a $25k car voucher to leave their jobs. Still, do they think the offers are going to get better?
On the asset sales front, Reuters reports that there’s little interest in buying GM brands and operations. Hummer, Saab, AC Delco, the Strasbourg manufacturing plant and medium-duty truck operations have been on the block for months now, yet no buyers have emerged. So even if Saturn is sacrificed to the gods of bailout in this latest plan, it is unlikely that a buyer will emerge to provide any tangible compensation for the brand.
At Chrysler, pathos-laden cost-cutting measures are hollowing out anything that might have been worth saving at Auburn Hills. The Freep reports on the sorry mess, revealing that ChryCo employees can no longer park on the roof of the campus parking structure in order to save the firm $100k by not plowing it. Chrysler has also closed its executive dining room, removed half of its fluorescent lightbulbs, removed clocks to cut maintenance costs and is auctioning off 32 works of art. According to a restructuring effort, these measures are about “sending a message that they’re serious.” Serious about squeezing more bailout bucks, anyway.
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@johnthacker I brought up all of that other stuff in response to other's comments here, and because you can't take into account everything that is going on without looking at all that has and can effect what is going on. Quality, management, competitors, money staying here, it all effects how well GM and Chrysler succeed and how quickly the economy turns around, in regards to keeping money here. And I do admit I am a fanboy for American vehicles, aka the Big 3, but I also appreciate the other makes I mentioned. And I did post a link to Jalopnik where they cite a profit for the 2006 financial year for GM, but that profit went into their reorganization. If they had been given enough time I believe they could have righted the ship, but only the people inside GM know the actual numbers behind their situation then and now. Also I wasn't blaming their problems on the economy. I was stating that the economic situation did not help them in their restructuring in any way, shape or form unless you feel that it will help them and us if they go into bankruptcy, which I feel it might, but am uncertain depending on the details. Either way we dont know if they would have needed government money if the economic situation hadn't happen, no one knows what an alternate scenario would end up like. And I don't believe everything I read on any of the autoblogs, including TTAC, because I need to find the information myself objectively. TTAC, which is a great site, has shown some biases I feel against the Detroit 3, even though in today's market many of their vehicles are better designed, more exciting, and just as reliable as other manufacturers. And I don't understand how you feel they have stolen money from you via the government. Do you feel the same way about the banks? I differ in opinion on this because I would much rather support GM and Chrysler before I would the banks, and every other major country in the world is looking to loan money to their automakers to help them, so why shouldn't we? You're taxes haven't gone up, unless you are above the middle class, so how has it really effected you? I'm just lost on why and when people lost pride in their country and helping it out, especially when every other country still has this mindset of national pride. And I never called you a fool for your beliefs, I just pointed out that I disagree with them.
unseensightz : You make some valid points and there's nothing wrong with supporting your country's manufacturers. However, I think many people here would be less reluctant to bail Detroit out if they felt Detroit was more deserving of support. Based on the decisions and attitude I've seen from GM and Chrysler, I don't think they've earned that kind of goodwill. By contrast, I think Ford has done a lot of things right (at least from a PR perspective) and this is the only American automaker I wouldn't mind supporting, be it through a bailout or purchasing their products.