President Obama has just finished his press conference regarding the government's decision on the viability plans that were submitted by GM and Chrysler on February 17th after they received $17.4 billion in loans.
“Neither goes far enough to warrant the substantial new investments that these companies are requesting,” Obama said. “They must produce plans that would give the American people confidence in their long-term prospects for success.”
Obama warned the two automakers that they may be forced into a quick bankruptcy. The quick bankruptcy would be quick and could last for as little as 30 days.
"We also cannot continue to excuse poor decisions. And we cannot make the survival of our auto industry dependent on an unending flow of tax dollars. These companies -- and this industry -- must ultimately stand on their own, not as wards of the state."
Full Story: Detroit News
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General Motor’s Response:
GM Statement on Auto Industry Restructuring
Today’s announcement by President Obama begins a new era for the U.S. auto industry. It also marks a defining moment in the history of General Motors.
The U.S. Treasury will provide working capital financing for GM for 60 days while GM completes a more accelerated and aggressive restructuring to put the company on sound long-term financial footing. We understand the historic opportunity this presents, and we are fully committed to successfully completing the reinvention of GM.
As President Obama said today, the success of this reinvention is vital for GM, for the U.S. and global economies, and for the millions of employees, suppliers, dealers, retirees and others who depend on the company.
During the next 60 days, GM will address the tough issues to improve the long-term viability of the company, including the restructuring of the financial obligations to the bond holders, unions and other stakeholders. Our strong preference is to complete this restructuring out of court. However, GM will take whatever steps are necessary to successfully restructure the company, which could include a court-supervised process.
The men and women of GM, including our dealers, suppliers and other key partners, know what we must do to accomplish this task. We are fully committed to making this successful. We owe that to the GM community, to our customers, and to the U.S. taxpayers, who are providing support during this exceptionally challenging time.
Quotes attributable to Fritz Henderson, GM CEO
“The U.S. Treasury has said that it strongly believes that a substantial restructuring will lead to a viable GM. Over the next 60 days, we will work around the clock, with all parties, to meet the aggressive requirements that have been set by the Task Force, and to make the fundamental and lasting changes necessary to reinvent GM for the long-term.”
“We have significant challenges ahead of us, and a very tight timeline. I am confident that the GM team will succeed, and that a stronger, healthier GM will play an important role in revitalizing America’s economy and re-establishing its technology leadership and energy independence.”
“The administration has made it clear that it expects GM to expand and accelerate its restructuring efforts. I want the American people to know that we understand and accept this guidance. The road is tough, but the ultimate goal – a leaner, stronger, viable GM – is one we share.”
General Motors Corp. (NYSE: GM), one of the world’s largest automakers, was founded in 1908, and today manufactures cars and trucks in 34 countries. With its global headquarters in Detroit, GM employs 243,000 people in every major region of the world, and sells and services vehicles in some 140 countries. In 2008, GM sold 8.35 million cars and trucks globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Hummer, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM’s largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM’s OnStar subsidiary is the industry leader in vehicle safety, security and information services. More information on GM can be found at www.gm.com.
GM is the majority shareholder in GM Daewoo Auto & Technology Co. of South Korea, and has product, powertrain and purchasing collaborations with Suzuki Motor Corp. and Isuzu Motors Ltd. of Japan. GM also has advanced technology collaborations with Chrysler LLC, Daimler AG, BMW AG and Toyota Motor Corp. and vehicle manufacturing ventures with several automakers around the world, including Toyota, Suzuki, Shanghai Automotive Industry Corp. of China, AVTOVAZ of Russia and Renault SA of France.
Genuine GM Parts and accessories are sold under the GM, GM Performance Parts, GM Goodwrench and ACDelco brands through GM Service and Parts Operations, which supplies GM dealerships and distributors worldwide. GM engines and transmissions are marketed through GM Powertrain.
Chrysler’s Response:
Chrysler LLC Statement in Response to the Announcement by the Administration, U.S. Treasury and President’s Auto Task Force attributed to Chrysler LLC Chairman and CEO, Bob Nardelli
Auburn Hills, Mich., Mar 30, 2009 - Today marks an important milestone for Chrysler LLC. We are encouraged by the commitments of the Administration, U.S. Treasury and President’s Auto Task Force to the American automobile industry and Chrysler’s viability, with a Fiat alliance.
We are pleased that Chrysler, Fiat and Cerberus have reached agreement on a framework of a global alliance, supported by the U.S. Treasury. Chrysler has consistently said that the alliance with Fiat enhances its business model that expands its global competitiveness. We appreciate the willingness of the Task Force, along with industry and financial experts, to consult closely with us in order to achieve this significant step.
By providing Chrysler with product and platforms, technology cooperation and global distribution, Fiat strengthens Chrysler’s ability to create and preserve U.S. jobs; gives U.S. consumers more choices for environmentally advanced vehicles; gives its dealers more of the products they need to be successful; helps stabilize the supplier base; and allows Chrysler to pay back government loans sooner.
Chrysler has had a series of very constructive discussions since our plan was submitted February 17, including weekly face-to-face meetings with the Task Force. We have been impressed by their speed, diligence, good faith and strong grasp of the difficult issues our industry faces in this financial crisis. This is evidenced by the U.S. government’s initiatives to support consumer warranties and suppliers, as well as their appointment of Dr. Edward Montgomery, Director of Auto Recovery.
I want to personally assure all of our customers, dealers, suppliers and employees that Chrysler will operate ‘business as usual’ over the next 30 days. While we recognize that we still have substantial hurdles to resolve, Chrysler is committed to working closely with Fiat, the Administration, U.S. Treasury and the Task Force to secure the support of necessary stakeholders. If successful, the government will consider investing up to the additional $6 billion requested by Chrysler to help this partnership succeed.
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Comments (18)
The best thing GM could do is change their name to AIG - then they would get get money - NO QUESTIONS ASKED!!!!!
Posted by Rob S | March 30, 2009 11:42 AM
Posted on March 30, 2009 11:42
What they should of done was called themselves Halberton, then they would be given billions of dollars, no accountability, no-bid car sales, no questions asked, and no email traces.. Opps, sorry, wrong president now... Can't do that anymore...
Posted by sparky | March 30, 2009 11:57 AM
Posted on March 30, 2009 11:57
Here's what's going to happen.
GM & Chrysler can't come up with a way to become profitable (since Obama is a union shill and won't let them tell the UAW to drop dead). Obama will then give them more money so that they can "come up with a new plan". The next plan fails again (same reason, not allowed to ditch the UAW) so they're given more money to come up with a new plan. Repeat until the US is bankrupt.
Posted by Totenglocke | March 30, 2009 12:07 PM
Posted on March 30, 2009 12:07
If only they had contributed to Obama's campaign fund...
Posted by mbw | March 30, 2009 12:27 PM
Posted on March 30, 2009 12:27
I love the line: "The quick bankruptcy would be quick".
Posted by gm0n3y | March 30, 2009 1:10 PM
Posted on March 30, 2009 13:10
Run Fiat, Run!
Posted by zippy | March 30, 2009 2:38 PM
Posted on March 30, 2009 14:38
The Obama admin solve their way out of a paper bag never the less solve these problems. And I thought the Bush admin was bad on the economy, but the Obama admin will eclipes that in no time.
Posted by SteelCity1981 | March 30, 2009 3:15 PM
Posted on March 30, 2009 15:15
There is no point helping out these companies. The decline of love for American car has started a decade or two ago and it won't stop (well, besides the few fans out there still). There is no need to support bad companies that design bad products year after year. Why produce cars if no one wants your design? Why would you want to survive? Why would you take Americans money to design more craps? Why won't you stop asking for a bailout and just die? Why? Why?
Posted by AmericanCrap | March 30, 2009 3:34 PM
Posted on March 30, 2009 15:34
I'm surprised that the lowest bid contract of the gulf wars gets the worst reputation. Halliburton is a fine upstanding company that does more for the US, and other countries at a reasonable price/rate. If asking 2% over actual cost is wrong, what about those others that asked 100% over costs? Any ways, it was a mistake to vote for Obama. He and his staff are a bunch of tax dodgers.
Posted by Wayne | March 30, 2009 3:51 PM
Posted on March 30, 2009 15:51
The sooner Chrysler goes tits up, the sooner I can drop the company issue Dodge Journey off at the dump, get my car allowance back and drive my Fusion again. The quality difference between those two vehicles is night and day.
Posted by Chmilz | March 30, 2009 4:41 PM
Posted on March 30, 2009 16:41
I also like the 3rd paragraphs line "The quick bankruptcy would be quick."... Haha
Chrysler just needs to be completly redone. To me this is how they should be.....
Dodge...
- Sprinter
- Caravan/ Grand Caravan
- Ram
- Charger
- Challenger
[people will buy the performance of the Charger, Challenger no matter what gas prices are]
Chrysler...
Die!
Jeep...
- Wrangler
- Grand Cherokee
- Liberty [redesign it tho]
Make that a Starting point.
Posted by Bradford | March 30, 2009 4:57 PM
Posted on March 30, 2009 16:57
@ Bradford
What? No small car for the people? Your "starting point" doesn't even include a small 'everyday' car. Your redo of Chrysler is an epic failure.
Posted by Arthur Pappas | March 30, 2009 11:58 PM
Posted on March 30, 2009 23:58
@ Arthur Pappas
the above is a lineup of what they already have, therefore the starting point. Their is currently no good little car offered by Chrysler, Dodge or Jeep [duh on that 1 tho], so they would have to draw one up and bring it in while deciding wether it should be a slightly bigger Civic, Corolla, fighter or a cheaper smaller Yaris, Fit or Aveo fighter.
Posted by Bradford | March 31, 2009 12:20 AM
Posted on March 31, 2009 00:20
wait till they almost DEAD then TATA & some chinese automaker will buy gm and chrysler V8, V10 technologies
then they will buy some US and Canadian Plant to build their cars....
Posted by jettto | March 31, 2009 7:25 AM
Posted on March 31, 2009 07:25
@AmericanCrap
Have you even looked at a Ford in the last few years??!!! Well I do every single day and quality wise, there is no better brand, technology wise, theres no better brand, and you there trashing the american auto makers?! get your facts right before you say they build crap year after year because you dont know wtf your talking about! If the economy were to suddenly bounce back today, Ford would DOMINATE your beloved japs over there at toyota, the economy is why no one is buying cars, and if you havent noticed its not just the American ones asking for money, its toyota as well asking for billions from their government. I recomend you go over to a Chevy or Ford dealer and check them out, then you can talk.
Posted by Phil | March 31, 2009 8:32 AM
Posted on March 31, 2009 08:32
@AmericanCrap
I can't say anything for Chrysler though....theyre screwed
Posted by Phil | March 31, 2009 8:33 AM
Posted on March 31, 2009 08:33
@ Phil
I agree with you with Fords quality. I wouldnt mind a Focus 2 door alongside my truck in my garage. They are really nice eco cars with great looking interiors, well equiped packages at a good price and they look easy to work on under the hood. I'de think they would be a great look at for possible future Civic, Corolla owners becuase its cheaper and looks to be ready to be on the same level. I just don't like those chrome side vent things by the front doors.
Fords getting better and better and im impressed... to bad I really can't say the same stuff about the Cobalt [cheap] or GM in general. Their going downhill in a hurry.
Who goes first... GM or Chrysler?
Posted by Bradford | March 31, 2009 9:45 AM
Posted on March 31, 2009 09:45
@Phil
The Detroit Three were in trouble years before the economy meltdown. And the the millions of Honda and Toyota owners couldn't be all idiots, can they?
Yes, some current GM products are significantly better than past models: e.g. Malibu, G6, G8, Vibe (because it's a Toyota twin), 2009 Vue (not the old one), Acadia (and its Pontiac, Buick, Saturn, Chevy copies), CTS. But, they arraived at the market a decade too late to save GM from general public opinion that domestic cars = poor design and poor quality.
Ford has even fewer good products (quality-wise and in sales numbers, except for the F-150s) in the market that I don't know why you think Ford will dominate the market once the economy improves.
I know what I am talking about because the company I work for has a fleet of two dozens or so vehicles. I have driven GM (3 generations of Malibus, G6, Torrent, Equinox, Uplander, Montana, Bonneville, Impala), Chrysler (Charger, 300, 2 generations of Caravan, Liberty, Sebring), Ford (old and new Taurus), Nissan (2 generations of Altimas) and I've personally owned Accord, Civic, Celica, Matrix, Sennia and a Mercede.
The Detroit Three have left such a bad taste in the consumers' mouth in the past two decades that it is hard to turn that opinion around with a few good products in the last few years. I still remember many people considered Japanese cars to be tin cans and junk right up to the mid-80's. It had taken the Japanese brands decades to achieve their current (real and preceived) status of superior quality.
The current market meltdown is the last nail for the Detroit Three's coffins but their collective mismanagement, stubbornness, and arrogance have sealed their doom long time ago. (And the UAW / CAW union heads aren't helping either.)
Posted by Wise_Caveman | March 31, 2009 10:41 AM
Posted on March 31, 2009 10:41