Sunday, July 19, 2009

Will GM, Chrysler go Forward or President Obama's Iraq?

Obama's sobering message to Detroit | | Detroit Free Press

President Barack Obama, in his first visit to Michigan as chief executive officer of the outfit that now owns most of General Motors Co., did not declare victory Tuesday in the bailout of Detroit's auto industry.
"It was the right thing to do," he said of extending more than $50 billion in federal loans to give the companies a shot at surviving as leaner outfits with new management.

Obama expects GM, Chrysler Group LLC and the rest of Detroit's auto industry to go forward under their own power, without further support from Uncle Sam.

American Classic Cars

Some scary what-if questions still linger. What if the reborn GM or Chrysler-Fiat don't succeed? What if auto parts suppliers keep failing? Will Obama ride to the rescue with more taxpayer cash?

Can you imagine if a president of a corporation went in front of it's board and said, in order for us to sell more, we must put our products in fewer stores. Insane? Yes, but this is what we are with the Auto industry. It doesn't make sense to force dealerships to close, throwing more people out of work. The average dealership has about 50 employees, meaning the closing of 2,000 dealership could cost more than 100,000 jobs nationwide.

They say cutting the dealerships allows the surviving dealers to sell and service more vehicles, making them more profitable in a way that allows them to spend money on the advertising and their facilities
needed to attract sales.

Let's see, to make a company profitable borrow money you can't pay back, cut your production in half and sell your product in fewer outlets in order to make those outs more profitable. I thought the auto maker was suppose to be more profitable.
Obama had initially expected the entire process to take about 60-90 days. But a new GM has now emerged in around just 40 days since it filed for Chapter 11 on June 1 in the biggest failure of a U.S.
manufacturing company in history.
Chrysler also filed for Chapter 11 at the end of April and completed the sale of its assets to Italian
car maker Fiat SpA within about 40 days.
So now we are making fewer of the same product by the same people with less place to sell them and now the Auto Makers will be a success. President Barack Obama you now own this. Your Iraq.

More post with Wag This Dog.
Democrat's Culture of Corruption over shadow Republicans.
President Obama pledges co=operation with Canada for Oil.
Republicans Rejecting Barack Obama's Stimulus Plan.

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China's thriving auto industry -- 22 April 2008

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