US auto bailout goes ahead!

[vztrt]

Somewhat of an update for the bailout.

http://news.theage.com.au/world/weak...1223-743s.html

Originally Posted by theage

With a massive government bailout secured, US automakers are focused on a far bigger threat than empty coffers: empty showrooms and spooked consumers.

The US auto industry dodged almost certain collapse last week when the government extended 13.4 billion US dollars in loans to cash-strapped General Motors and Chrysler. The plan could include an additional four billion US dollars from February for GM pending congressional action.

But analysts warn it could be a temporary reprieve unless sales improve soon.

And few predict sales will increase without significant government help as the United States slips deeper into its worst financial crisis since the Great Depression.

"Friday's bailout does not mean bankruptcy for all of the Detroit Three has been avoided," JP Morgan Chase analyst Himanshu Patel wrote in a research note Monday.

Ford, another major US automaker, said it would not be part of the loan program. But although it is in a better cash position than GM or Chrysler, the company also suffers from falling car sales.

While GM is still at risk of bankruptcy, Patel wrote that he expects both the Bush and the Obama administrations would work to prevent a failure at GM or Ford.

But the terms of the deal announced last week suggest that "some sort of orderly down stepping of Chrysler may be in the works," he said, cautioning that this would have a significant impact on a number of auto suppliers.

Patel also noted that Bush "made it clear the bankruptcy was still an option" when he announced the 13.4-billion-dollar bailout package.

The requirement that GM and Chrysler prove their "viability" by March 31 "could provide the next administration enough room to force one of the carmakers into bankruptcy," he added.

Even if the government tries to prop up General Motors, "it is not clear whether GM can achieve the changes that it needs before time runs out," wrote Deutsche Bank analyst Rod Lache.

"We still see it as unlikely that GM (or any automaker) will be able to restructure itself to positive cash flow in North America while US light vehicle sales continue to trend around the (annualized) 10 million unit range," Lache wrote.

While the terms of the bailout package will help GM accelerate its cost-cutting plans, it will not be able to reach a breakeven point at its current market share level unless US sales reach an annualized rate of 13 million vehicles.

But Lache said GM's share of its home market will likely continue to slip from 20 percent to about 18.5 percent. That would push GM's breakeven point to 14.5 million vehicles, he wrote.

Few analysts expect auto sales to rebound to that level until 2010 and Lache said he expects demand to remain below trend levels of 16 million units through 2011.

There is also the risk of serious production disruptions should the already fragile supplier base be racked by more bankruptcies and liquidations as a result of the dramatic drops in production levels, Lache warned.

"Uncertainty over these issues, and uncertainty over the magnitude and duration of US, European, Asian, and Latin American downturns imply that there is still considerable risk on the horizon," he concluded.

"There appears to be an increased acknowledgement in Washington that there may not be sufficient capital to support three independent US automakers in that environment."

US auto sales have fluctuated between around 16 and 17 million units a year for the past decade.

They are expected to reach only about 13.1 million this year and fall to 12 to 12.5 million units in 2009, according to auto pricing and rating website Edmunds.com.

Facing the sharpest drop-off in demand in decades after financial markets crashed in September, carmakers began offering huge discounts and incentives to customers but have had little success in increasing sales.

"The price point is really not the main issue," said Jesse Toprak, industry analysis director at Edmunds.com.

"It's the uncertainty in the market place -- people don't know if they're going to lose their jobs and their homes."

The credit squeeze has also had a major impact: about 40 percent of prospective car buyers who used to be able to get low-cost loans are now squeezed out because their credit, while good, is not good enough.

"There has to be some incentive for getting people out to shop and it's not going to be just credit or incentives," Toprak said in a telephone interview, adding that the government should develop a plan to boost demand.

"If they let the market handle this crisis, the recovery will take much longer and will come at the expense of the domestics."

[Ohio XB]

Yup, it's pretty dire.

I like how the article points out that Ford also suffers from falling car sales. I wonder if the reporter noticed that the entire auto industry is suffering from falling car sales. When reporters specify one company like that it makes it sound like they specifically have this problem, even though in the US Toyota had a farther sales drop in November than Ford did, and Ford actually gained market share in October and November, even with declining sales.

Most believe that the reason Ford gained market share is because of the news coverage of GM and Chrysler needing money. If those two companies lost market share because they were asking for money, imagine what filing bankruptcy would do to them?


Steve

[Luke Plaizier]

It's interesting to note that while the US media appears to be offering Ford a reprieve in any mention of the bailout, almost universally in Australia this is completely ignored, and Ford is lumped into every single US bailout coverage article here in Australia.

At one point there were 4 local manufacturers - Ford, GM, Toyota and Mitsubishi - but the media hounded Mitsubishi on it's low sales year in year out, which in turn encouraged people to keep away. It is well accepted that the demise of Mitsubishi was both initiated and perpetuated by the media. The company may have recovered if 'rumours' of a mitsubishi withdrawal from Australia had not become such strong headline news. Mitsubishi spent nearly 3 years denying these rumours - but it was almost as if the media spent all of it's efforts in that time convincing the public that these rumours were true.

Ford appears to be the latest target of poor sales in Australia, and it's not hard to think, based on their previous actions, that the local media are bent on trying to prove themselves right again, even if it means mis-reporting the beneficiaries of the US bailout.


Lukeyson

[vztrt]

Originally Posted by Luke Plaizier

It's interesting to note that while the US media appears to be offering Ford a reprieve in any mention of the bailout, almost universally in Australia this is completely ignored, and Ford is lumped into every single US bailout coverage article here in Australia.

At one point there were 4 local manufacturers - Ford, GM, Toyota and Mitsubishi - but the media hounded Mitsubishi on it's low sales year in year out, which in turn encouraged people to keep away. It is well accepted that the demise of Mitsubishi was both initiated and perpetuated by the media. The company may have recovered if 'rumours' of a mitsubishi withdrawal from Australia had not become such strong headline news. Mitsubishi spent nearly 3 years denying these rumours - but it was almost as if the media spent all of it's efforts in that time convincing the public that these rumours were true.

Ford appears to be the latest target of poor sales in Australia, and it's not hard to think, based on their previous actions, that the local media are bent on trying to prove themselves right again, even if it means mis-reporting the beneficiaries of the US bailout.


Lukeyson

Dont let people's livelyhood get in the way of a good story.

[Gobes32]

I read somewhere that Ford has declined the US Government's offer for a loan, this way they remain in control of their own destiny because they will not have some bureaucrat telling them how to run the company, unlike Chrysler and GM who will be fully answerable to the government. I guess Ford's reasoning would be, "We had turned the corner before all this garbage and if we continue down the same path then eventually there will be light at the end of the tunnel".

On another note, you can't help but feel that this whole crisis has bought everyone back to a level playing field, and now is Ford's best chance to take the first positive step.

[vztrt]

Originally Posted by Gobes32

I read somewhere that Ford has declined the US Government's offer for a loan, this way they remain in control of their own destiny because they will not have some bureaucrat telling them how to run the company, unlike Chrysler and GM who will be fully answerable to the government.

From the article posted above

Ford, another major US automaker, said it would not be part of the loan program. But although it is in a better cash position than GM or Chrysler, the company also suffers from falling car sales.

[vztrt]

Just so we dont think this is isolated

http://news.theage.com.au/business/f...1224-74ms.html

Originally Posted by theage

France to give more aid to auto industry
December 24, 2008 - 10:31AM


France is to unveil a new plan to help its struggling auto industry by the end of next month, President Nicolas Sarkozy said on Tuesday during a visit to Brazil.

"A plan for the French automobile sector before the end of January is not a protectionist measure, it's to help our industries build the cars of the future," he said, evoking the development of electric vehicles.

Sarkozy already, in early December, announced 1.5 billion euros ($A3.07 billion) in aid to France's automobile industry, while not ruling out that more measures might follow.

He has asked his industry minister, Luc Chatel, to come up with a plan by the end of December to save a sector which directly or indirectly employs 10 per cent of the workforce in France.

Facing a collapse in car sales, Renault, PSA Peugeot Citroen and their suppliers have dramatically cut production, and industry leaders warn prospects for the coming year or two are bleak.

Renault and PSA have announced thousands of job cuts.

Sarkozy has repeatedly insisted that France will not allow its car industry to fall victim to the economic crisis.

His foreshadowing of more public money to help automakers and encourage reluctant carbuyers comes a week after the US government extended a $US13.4 billion ($A19.68 billion) provisional bailout package to cash-strapped General Motors and Chrysler.

[Ohio XB]

I am glad to see people delving into this for themselves. The media here certainly has several agendas, not just the destruction of the UAW.

Ford is not taking any government money at this time because 2 years ago Ford secured financing for a line of credit and a loan. This totalled about $26B USD. This is why Ford has, in Mulally's terms, "..sufficient liquidity.." to get through until 2010. I am sure that Ford would like to avoid government control as well, however, if Ford really needed the money they would HAVE to take it. The whole truth is that Ford doesn't really need it. They said this from day one the first time the Big3 went to Washington.

Ford would like a $9B USD line of credit, which would be money that Ford could access, in any increments up to, or any portion of, $9B USD incase GM or Chrysler should go into bankruptcy causing a disruption of the supplier base. Another Concern Ford has is if the economy were to significantly worsen.

Otherwise, if these two events do not occur Ford has the money it needs to reach and go into 2010.

After the begining of 2010 arrives Ford will be launching it's global car, the Fiesta, in the US, the healthcare and pension responsibilities for the retirees will be passed onto the UAW and be off of Ford's books, and other European vehicles will be hitting the market, the Euro Focus and several others. Ford expects the economy to be on an upswing by then and these smaller cars to draw customers into the showrooms and give Ford a shot in the arm of revenue.



Ford is starting to get a lot of great coverage in the media. The reporters are citing Ford can come out ahead showing themselves to be in a better position by not taking any money. Also, people have started looking into Ford and learning about Alan Mulally and how good it is that he is at Ford.



Steve

[phoon]

While I agree with the comments about the media to some extent, I think that there is more to it than just blaming them. With Mitsubishi's demise in Australia for example. I bought my wife a new Verada in 1999 (mitsu's top of the range flagship model) and it was a superb vehicle. Comfort, appointments, finish quality, a nice 3.5 ltr six cyl with plenty of get up and go and good fuel economy at a comparable price to the bog stock bottom dweller holdens and fords at the time. Now we traded that in 2003 for a BA xr6. Nice car but wife complained that it was nowhere near as good as the Verada (a 4 year older car). Then Mitsu lost the plot from there and started building fugly cars until it ended with one of the most boring and ugly cars ever built, the 380. Now I am sure the car was probably a good drive if my previous experience is anything to go by, but the 380 was god damn ugly and boring looking. Maybe manufacturers are to blame to some extent as well. BUILD CARS THAT PEOPLE WANT TO BUY and take into consideration what is going on in the world, for years the trend has been towards (dare I say it cause it breaks my heart) smaller cars. The big US car makers are so far behind the asian manufacturers in this that they thought that they could just ride through this fad for small cars by still building millions of F150's because these had been the cash cows for so long. Australia is not much different to US, we love our big cars but the so many people have decided to go with smaller vehicles and this hasnt happened overnight. Companies like toyota have been leading the sales in this country for a fair few years now whereby it was always a competition between ford and holden. Times change, as do the people buying cars, younger generation is more enviormentally concious than my gen ever was, so the trends change. Media the problem? possibly, but the car makers need to be held accountable for their own decisions. Lets face it, our larger cars are becoming a niche market.

[Keepleft]

Put this elsewhere here @ forum.

GMAC now a commercial bank, US Fed Reserve December 24, 2008.
http://www.federalreserve.gov/newsev.../20081224a.htm

[Luke Plaizier]

So WTF does that mean?

Does the US have the equivalent of Australia's Prudential Regulatory Authority (APRA) - which financial insitutions must conform to join in order to receive the government's guarantee? Is this how GMAC accesses some of that $700bn?


Lukeyson

[Ohio XB]

Originally Posted by phoon

While I agree with the comments about the media to some extent, I think that there is more to it than just blaming them. With Mitsubishi's demise in Australia for example. I bought my wife a new Verada in 1999 (mitsu's top of the range flagship model) and it was a superb vehicle. Comfort, appointments, finish quality, a nice 3.5 ltr six cyl with plenty of get up and go and good fuel economy at a comparable price to the bog stock bottom dweller holdens and fords at the time. Now we traded that in 2003 for a BA xr6. Nice car but wife complained that it was nowhere near as good as the Verada (a 4 year older car). Then Mitsu lost the plot from there and started building fugly cars until it ended with one of the most boring and ugly cars ever built, the 380. Now I am sure the car was probably a good drive if my previous experience is anything to go by, but the 380 was god damn ugly and boring looking. Maybe manufacturers are to blame to some extent as well. BUILD CARS THAT PEOPLE WANT TO BUY and take into consideration what is going on in the world, for years the trend has been towards (dare I say it cause it breaks my heart) smaller cars. The big US car makers are so far behind the asian manufacturers in this that they thought that they could just ride through this fad for small cars by still building millions of F150's because these had been the cash cows for so long. Australia is not much different to US, we love our big cars but the so many people have decided to go with smaller vehicles and this hasnt happened overnight. Companies like toyota have been leading the sales in this country for a fair few years now whereby it was always a competition between ford and holden. Times change, as do the people buying cars, younger generation is more enviormentally concious than my gen ever was, so the trends change. Media the problem? possibly, but the car makers need to be held accountable for their own decisions. Lets face it, our larger cars are becoming a niche market.

I don't blame the media for where GM. Ford, and Chrysler are, I blame them for erroneous reporting now that paints an inaccurate and unfair picture of the UAW and these companies. I have no problem with the media reporting facts, it is the lies I have a problem with, like the $73/hr figure that the media says the present workers receive. This has been perpetuated for a good part of this year. It is only within the past few weeks that it is being recognized that this figure includes pension and healthcare payments for 1 million retiress, and this costs has been rolled into the current worker's total compensation and stated as being what the current workers get.

That is not journalism, that is executing an agenda. Just report the frigging news.......the reality.

Of course I could also point out whenever there is a recall on US brand cars it is front page news, but when there is a recall on a Toyota it is written about on page 9, and then it is only several sentences. This is fair and balanced reporting, even when Toyota has a bigger recall.........right.


Yup, the Ford Five-Hundred was a very bland car. Even after dressing it up some and calling it the Taurus it is still bland. You can't polish a turn......or is that TRD? :evil3:


In the US Toyota has a truck with TRD on it and of course it is viewed as a terrible marketing ploy here.


Steve

[Ohio XB]

Originally Posted by Keepleft

Put this elsewhere here @ forum.

GMAC now a commercial bank, US Fed Reserve December 24, 2008.
http://www.federalreserve.gov/newsev.../20081224a.htm

What this means now is that GMAC will not be prejudiced against like it was previously while applying for this status YEARS ago.

GMAC doesn't just finance cars, they also finance home mortgages like a bank or savings and loan does. As a result they are hurting from making sub-prime loans too.


Ford Motor Credit will not receive this rating and are not applying for it. They only finance car loans and leases.



Steve

[Ohio XB]

Originally Posted by Ohio XB

What this means now is that GMAC will not be prejudiced against like it was previously while applying for this status YEARS ago.

GMAC doesn't just finance cars, they also finance home mortgages like a bank or savings and loan does. As a result they are hurting from making sub-prime loans too.


Ford Motor Credit will not receive this rating and are not applying for it. They only finance car loans and leases.



Steve

Correction, it was not GMAC but rather Chrysler's financial arm that applied for this status years ago. GMAC applied in November. I am sure in part to get their hands on TARP money, but as mentioned they do also supply home loans.

GM owns 49% of GMAC. They sold off 51% to Cerberus, same company that owns 80% of Chrysler and Chrysler's financial arm.

If credit card companies (American Express) can get Bank Holding Status I don't see why GMAC shouldn't. Personally, I don't agree with American Express getting the status.



Meanwhile the financial institutions that have already received billions in TARP money are already saying they can't or won't account for how they spent the money. Well, the money was given to them with next to no stipulations.





Steve

[prydey]

Originally Posted by phoon

Lets face it, our larger cars are becoming a niche market.

while this is slightly off topic, i don't believe the falcon and commodore type cars are a niche market. 1st and 3rd in the monthly sales race isn't exactly 'niche' to me. also the widely reported exodus from large to small cars isn't backed up by the monthly sales figures either. small cars, while they may be slightly increasing in sales, they are not increasing to the same extent as the 4wd/suv market. there is also a lot more brand/model choice now than before so it only stands to reason that the traditional commodore and falcon will take a bit of a hit. as for fuel economy of these large cars, they are only very marginally thirstier than a smaller engined mid size car and only about 20 - 30% worse than the smallest of cars. when you consider the many advantages in room, safety, power, towing etc i feel there is still a very good argument for these cars. its their reputation as petrol guzzlers that is hurting them. they are not that bad for a big car.

people whinge about the economy of our 'aussie' cars and compare them to a lot of the euro's but they forget that these things are built to a cost. they are heavier because ford and holden know that if they use aluminium or lighter materials that maintain strength, the cost of the build will be substantially dearer. no one wants to pay $30k at the moment for a new commo/falc, let alone $45 - 70k for a base model.

[Ohio XB]

It's pretty much the same on this side of the pond. Americans prefer larger vehicles rather than small cars, even today. It's just that when gasoline goes from $1.25 a gallon to $4 a gallon people cannot afford such a change within a year. The only reason sales of small cars spiked at that time was because people could not afford gas for their larger vehicles. Food prices had also increased.

Well, now that gasoline is back down in price do you think small car sales are still up? Nope. Even hybrid sales are nothing like industry analysts projected. People want vehicles that the want to drive, not what they have to drive.


Steve

[Luke Plaizier]

That's a pretty accurate assessment in my opinion.

The key is obviously to make large cars economical. It always struck me as curious that Toyota and Honda are trying to make already economical cars more economical - there's not much reward for a whole lot of effort. Large cars and trucks, however, would benefit a whole lot more. It's a pity the Escape Hybrid didn't come to Oz, I'd have liked to have seen how it fared.

Also, interestingly, large cars are more likely to have the space to fit a 2nd tank for dual fuel usage. The alternate fuel with the most penetration in Australia is LPG. It was once reported that a 2 Tonne Ford Territory on LPG cost less to run over a 400km loop than a Prius - when LPG was 60c and Fuel $1.20 per Litre, so not far from where it is now. Ethanol seems to be getting a bit of a commercial push now, but the best we have is E10. There's maybe 4 or 5 pumps in all of Australia selling E85.

I hope that Ford are quick to bring out the Fusion Hybrid drivetrain into an Australian Mondeo, and that some of that technology might filter into the Australian RWD, ne RWD large car.


Lukeyson

[Ohio XB]

I don't really know what Ford's plan is for the hybrid system it is introducing in the Fusion. I can tell you this though, the only reason for hybrid vehicles is for company image. Toyota still hasn't made a dollar off of one of their hybrids, and they don't even have the UAW. Hybrids only make up 5% of the auto market here. How much time would you spend trying to capture only 5% of what people are buying? Well, the government also thinks people want these cars, even though they are not buying them in any appreciable volume. If people bought a million more of them then the manufacturers could make some money on them. Right now the volume is too low and parts cost too much.

Also, as of this coming Spring (our spring) Ford will offer the most hybrids of any manufacturer here.

There also isn't much of an infrastructure for E85 here either. It's getting better. You used to look to see if there was a pump anywhere in your surrounding counties. Now we actually have two pumps in our county. How far do you want to drive to fill up though? E85 produces 30% LESS fuel mileage. Also, the oil companies got it set so that it can never be more than 50 cents cheaper than gasoline, which means after you subtract that 30% fuel mileage you don't save any money with it.


Steve

[vztrt]

GM gets AID.


http://business.theage.com.au/busine...0101-7885.html

Originally Posted by the age

GM gets aid, Chrysler still waiting

January 1, 2009


General Motors, the largest US automaker, received $4 billion in initial rescue loans from the US Treasury to help it avoid collapse. Chrysler, also in line for government help, is still waiting for its money.

GM, which had said it might run out of cash by the end of the year without government aid, announced the deal today in an e-mailed statement.

The loans are part of $US17.4 billion in financing that the Treasury has promised to GM and Chrysler, a bid to avert a bankruptcy by either company amid a recession. GM’s infusion will help the Detroit-based automaker pay suppliers as its cash dwindles. Chrysler’s package is still being negotiated.

The US Treasury is “working expeditiously with Chrysler to finalize that transaction and we remain committed to closing it on a timeline that will meet near-term funding needs,” Brookly McLaughlin, a Treasury spokeswoman, said in an e-mail.

GM’s cash reserves were expected to fall to between $US9 billion and $US10.1 billion by today, GM said December 2, less than the $US11 billion minimum it needs for monthly bills.

GM had $US16.2 billion in cash at the end of September. The original U.S. loan documents said the first payments would be made by December 29. Two days ago, Treasury pledged an additional $US6 billion to GMAC, GM’s finance unit, as part of a broader industry rescue.

Sales Incentives

GM said yesterday it’s offering financing discounts, including no-interest loans for as long as five years, on some 2008 and 2009 models. It aims to spark sales after the US rescue of GMAC made it easier to offer loans to consumers. GMAC also cut the credit bureau score needed to get its loans from 700 to 621 after getting the U.S. Treasury commitment for loans.

Chrysler has said it would run short of cash some time in January. The company could continue to operate until the Treasury funds come through, Lori McTavish, a company spokeswoman, said in an e-mailed statement.

“The discussions relating to Chrysler LLC have been positive and productive, and we look forward to finalizing the details of our financial assistance in the immediate future,” she said.

Chrysler, controlled by Cerberus Capital Management, has been battered by a 28% plunge in US sales, the most among major automakers. Chrysler Financial, the automaker’s credit arm, has applied for aid from the federal Troubled Asset Relief Program, spokesman Bill Porter said.

Broader Help

The Treasury released rules today that open the door to providing funds to any company it deems important to auto manufacturing or financing car purchases.

That’s consistent with analysts’ speculation yesterday that suppliers, such as GM’s bankrupt former parts unit Delphi Corporation, might be eligible for assistance.

GM, Ford Motor Company and Chrysler failed to get Congress to approve requests for $US34 billion in loans earlier in December, despite warnings from economists that a collapse of one or all of the automakers could result in the loss of more than 2 million jobs.

The Treasury announced on December 19 that it make loans to GM and Chrysler, though not Dearborn, Michigan-based Ford, which had only sought a credit line and says it has enough cash to survive.

US auto sales have fallen 16% through November and may finish the year at the lowest level since 1993. In November, industry sales declined 37%, reaching a selling rate not seen in nearly 30 years. Chrysler’s sales dropped 47% last month, and GM sales plunged 42%.

Bloomberg

[vztrt]

Chrysler now gets Aid

http://news.theage.com.au/world/us-t...0103-79bq.html

Originally Posted by the age

US Treasury finalizes 4-billion-dollar loan to Chrysler

January 3, 2009 - 12:44PM

The US Treasury said it has finalized a 4-billion-dollar loan to troubled cash-strapped carmaker Chrysler.

"Treasury today finalized the loan transaction for Chrysler car company and funded the full amount of 4 billion US dollars," Brookly McLaughlin, a Treasury spokeswoman, said in a statement.

Chrysler Chairman and CEO Bob Nardelli said the loan would help the company "bridge the current financial crisis."

"This initial loan will allow the Company to continue an orderly restructuring, while pursuing our vision to build the fuel-efficient, high-quality cars and trucks people want to buy, will enjoy driving and will want to buy again," he added in a statement.

The loan is part of a 13.4-billion-dollar rescue package the US government approved in December for General Motors and Chrysler to stave off collapse amid tight credit and dismal sales.

The first segment of the bailout provides four billion US dollars each to GM and to Chrysler, the smallest of the Big Three US automakers.

GM, the largest US automaker, was to receive an additional 5.4 billion US dollars in mid-January and would be eligible for a further 4 billion US dollars from February pending congressional action. Treasury has also provided six billion US dollars in aid to GMAC, GM's financial arm.

Under the agreement, the automakers will have to prove their viability by March 31 or the government could require the funds to be repaid within 30 days.

"The objective of this program is to prevent a significant disruption of the American automotive industry that poses a systemic risk to financial market stability and will have a negative effect on the real economy of the United States," the Treasury said on its website Wednesday.

The Treasury added it would determine eligibility of participants in the program on a case-by-case basis.

The Treasury announced on December 19 a massive rescue of GM and Chrysler, facing a threat of imminent bankruptcy that could create economic chaos and throw millions out of work across the country.

The money for the auto industry injection comes from the 700-billion-dollar financial industry bailout approved in 2008.

Ford Motor Company, the second-largest US automaker, has asked the government for a line of credit as a backstop in the face of plunging sales.

[Ohio XB]

Originally Posted by vztrt

Chrysler now gets Aid

http://news.theage.com.au/world/us-t...0103-79bq.html

Once again the article states that these companies must prove their viability by March 31. It sounds like they need to be viable by then but they only need to have more detailed plans that prove their viability.


Steve

[b0son]

Originally Posted by Ohio XB

IThe only reason sales of small cars spiked at that time was because people could not afford gas for their larger vehicles.

A pretty compelling reason one would think...

Well, now that gasoline is back down in price do you think small car sales are still up?

No sales are up!

Anyone thinking petrol will remain cheap is kidding themselves. Now that OPEC know we can and do pay $100/barrel+, do you think they're going to want us paying $50? They've already cut quotas, something I bet they'll do a few more times over the next year or two.

If car sales pick up in the US and everyone starts buying pickups again, it will simply demonstrate that a lot of buyers are stupid/short-sighted.

[Ohio XB]

2008's two biggest sellers were still pick-up trucks. We have many many contractors here.


I think the majority of Americans don't believe that gas prices will stay as low as they currently are. As a matter of fact this past Friday they shot up 20 - 40 cents a gallon depending where you are at. It's another holiday weekend. Anyways, also because other prices are up, such as food and natural gas, people still need to have tight belts so what kind of cars they do buy has fuel mileage consideration.

Yeah, all sales are down right now, but of the sales that DO happen there is not a heavy lean towards hybrids or very small (Class B) subcompacts in the percentages it was in July. I agree that Americans are pretty fair weather when it comes to certain issues, this being one of them. However, Ford's truck marketing is now geared towards the contractor and small business owner rather than the casual owner. More of their trucks will be the smaller cab versions that are used for work as well. Ford has already stated that the casual truck owner is not going to be the biggest part of their market for a number of years at least so they are targeting work applications.

As a result they have innovated an "office on wheels" system called "Ford Work Solutions" which enables the boss to handle his computer, internet, and paper work, including printing, right in the cab as well as monitor the locations of his other fleet vehicles and if he, and his other vehicles, have all the correct tools in the bed, and the truck will even alert him to anything that may have been stolen. There is also a security cable to run through all the heavy tools to keep them secure. It's basically the world's first interactive pick-up.

http://www.youtube.com/watch?v=DA_wd9vqz-4


As far as OPEC nations cutting production I believe as long as they can move the oil, even at a lower price, they will. I have seen countless times when they said they would cut back production and it never happened. I feel this is because none of them want to "not sell" oil that someone else will. My case in point....

...imported cars are piled up at our shipyards because there is no room on the dealership lots because they are not selling, but there are no oil tankers piling up in the bays and OPEC has not reduced their output significantly yet, if at all.


I don't think it is impossible that OPEC will cut production but in the past they have not been too anxious to do so even after stating that they would. If they did sometimes it would only last a week or two. But yes, I believe the price will go up regardless. Countries are ALWAYS going to be buying oil anyways.



Steve

[Romulus]

That's pretty innovative "Ford Work Solutions". Why can't we have that stuff here?

[Bossxr8]

Originally Posted by TVS Super Pursuit

That's pretty innovative "Ford Work Solutions". Why can't we have that stuff here?

Because Ford sell more F series in a month than Ford Australia's total production over a whole year. Leaves a lot more dough in the development fund. If only Ford Australia had that sort of R&D money there would be limitless capabilities.

[vztrt]

Originally Posted by Bossxr8

Because Ford sell more F series in a month than Ford Australia's total production over a whole year. Leaves a lot more dough in the development fund. If only Ford Australia had that sort of R&D money there would be limitless capabilities.

If FoA could spread their costs out (like a GRWD platform) then that would free up more R&D dollers. Still dont understand why Ford cant export to the middle east....even SA.

[Bossxr8]

Originally Posted by vztrt

If FoA could spread their costs out (like a GRWD platform) then that would free up more R&D dollers. Still dont understand why Ford cant export to the middle east....even SA.

Beats me either. :

Its like Detroit would rather see FoA fail than succeed.

[vztrt]

Originally Posted by Bossxr8

Beats me either. :

Its like Detroit would rather see FoA fail than succeed.

Wait havent they been doing that for the last 10-15 years??

[Bossxr8]

Originally Posted by vztrt

Wait havent they been doing that for the last 10-15 years??

If you believe the rumours that various american born FoA Presidents have been sent over to shut the place down. From what I can remember David Morgan was rumoured to be on a mission from Detroit to shut the place down in 95.

And then Tom Gorman did a damn god job of sending the place into a massive tailspin.

[vztrt]

Originally Posted by Bossxr8

If you believe the rumours that various american born FoA Presidents have been sent over to shut the place down. From what I can remember David Morgan was rumoured to be on a mission from Detroit to shut the place down in 95.

And then Tom Gorman did a damn god job of sending the place into a massive tailspin.

lol, god damm aussie presidents doing a good job and mking FoA profitable!! :P