Bailout Watch 459: Pay Them to Build What for Whom?
Now that the Presidential Task Force on Automobiles (PTFOA) has pre-capitulated on re-upping Chrysler and GM’s bailout bucks, an obvious concern arises: now what? Chrysler offers a tri-branded line of non-competitive products whose sales have been propped-up by federally-funded discounts plus plus plus. GM is still in over-branded, over-dealered, over capacity hell. So, if both companies score big bailout bucks ($22B), what will they spend it on? Building cars? Inventories are already swelled and, here’s the kicker, sales are still declining. As we approach the end of the month, Automotive News [sub] is using the “T” word: “The sales numbers for March, due next week, are likely to reveal another tumultuous month. New-car sales could be down as much as 40 percent, according to J.D. Power and Associates. And the monthly sales rate will continue to flirt with lows not seen in 27 years.” Interesting choice of words; who’s about to get NSFWed here?
The taxpayer. And Ford, Honda, Toyota, Nissan, Hyundai and the rest—as Chrysler and GM do whatever it takes to move the metal on our dime. How bad will it get?
Toyota, or in mediaspeak “even Toyota,” is predicting March will come in like a slug and leave like an ant with three broken legs. “Annualized sales in January and February were a little above 9 million,” pronounceth ToMoCo Prez, Katsuaki Watanabe, “and we’re hearing that March will be about the same if not worse than February.”
This is well below Chrysler and GM’s “worst case scenario.” In other words, their viability plan ain’t worth jack. As if you didn’t know. Even the PTFOA’s head honcho Steve Rattner has admitted what the automakers won’t: they low-balled their request for aid. But that’s OK. ’Cause in Bailout Nation time is not of the essence. Not yet, anyway.
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