Bailout Watch 461: More Money, Same Threats
The news that the Presidential Task Force on Autos (PTFOA) has decided to “loan” Chrysler and GM more money arrived well ahead of the March 31 (Tuesday) deadline. No less a personage than the president confirmed that Uncle Sam would turn a deaf ear to the 60 percent plus of America voters who oppose Motown Bailout III (Don’t forget the DOE tour). The announcement removed any possibility that GM bondholders and/or the unions would satisfy the previous loan’s conditions for a major debt for equity swap, or that GM would get its brands sorted out. To counter-spin this wholesale lack of “progress,” Bailout III will claim that new, piano-wire like “strings” are attached. Such as?
All I can find: GM bondholders and/or the unions will have to satisfy those same unsatisfied debt for equity/health care swaps. Or else. Here it is, via The New York Times.
Administration officials have said the bailout of the automakers is at a turning point, and the task force would intensify its oversight of G.M. and Chrysler until talks with the union and bondholders reached a conclusion.
Those officials also said the administration had no intention of nationalizing the auto companies or taking direct control of their managements.
Nor, apparently, calling the loans, putting Chrysler into Chapter 7, putting GM into Chapter 11, or removing current management and providing debtor-in-possession financing. Which is, was and will be the only sensible strategy or credible threat. Well, at least it was a credible threat until the Obama admin let it ride. Which they wouldn’t do again, would they? Meanwhile, here’s the thing . . .
The longer the feds keep throwing multi-billion dollar bags on the automakers’ IV pole, the less viable Chrysler and GM become. The process accelerates their product plan chaos (e.g., on-again, off-again GM products, the yes/no/maybe Chrysler Fiat hook-up); the constant erosion of command and control structure (employee cutback take their toll); and the brain damage caused by hitting their metaphorical heads against the same old walls (e.g., unions, debt, dealers, brands, products, inventory, marketing, technology). It has a cumulative effect.
As the Brits say, there will be tears at bedtime. Chrysler and GM will be worse off after federal life support than they would have been had they’d faced reality and filed. A C7/C11 would have forced the radical changes that the PTFOA seek. The damage to Chrysler and GM’s reputation would have been less severe.
Meanwhile, the new new federal loans aren’t a bridge to nowhere. They’re a road to nowhere paved in gold. Our gold.
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- Dusterdude The "fire them all" is looking a little less unreasonable the longer the union sticks to the totally ridiculous demands ( or maybe the members should fire theit leadership ! )
- Thehyundaigarage Yes, Canadian market vehicles have had immobilizers mandated by transport Canada since around 2001.In the US market, some key start Toyotas and Nissans still don’t have immobilizers. The US doesn’t mandate immobilizers or daytime running lights, but they mandate TPMS, yet canada mandates both, but couldn’t care less about TPMS. You’d think we’d have universal standards in North America.
- Alan I think this vehicle is aimed more at the dedicated offroad traveller. It costs around the same a 300 Series, so its quite an investment. It would be a waste to own as a daily driver, unless you want to be seen in a 'wank' vehicle like many Wrangler and Can Hardly Davidson types.The diesel would be the choice for off roading as its quite torquey down low and would return far superior mileage than a petrol vehicle.I would think this is more reliable than the Land Rovers, BMW make good engines. https://www.drive.com.au/reviews/2023-ineos-grenadier-review/
- Lorenzo I'll go with Stellantis. Last into the folly, first to bail out. Their European business won't fly with the German market being squeezed on electricity. Anybody can see the loss of Russian natural gas and closing their nuclear plants means high cost electricity. They're now buying electrons from French nuclear plants, as are the British after shutting down their coal industry. As for the American market, the American grid isn't in great shape either, but the US has shale oil and natural gas. Stellantis has profits from ICE Ram trucks and Jeeps, and they won't give that up.
- Inside Looking Out Chinese will take over EV market and Tesla will become the richest and largest car company in the world. Forget about Japanese.