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Auto industry to congress - Where's the love?

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September 07, 2008 – Comments (8) | RELATED TICKERS: F , GM

http://biz.yahoo.com/ap/080907/automakers_congress.html?.v=1

After the FNM/FRE news, GM and Ford must have figured they got short changed with the $25 billion of loan guarantees they got in last years energy bill.

Note that these loans would cover 30% of the cost of retooling for energy efficient cars and trucks.  Who do they think will be dumb enough to loan them the rest?  If $50 bill is 30% of what they need, they don't have anywhere near the cash required to complete this build.

Funny, Toyota and Honda don't seem to need gov't loan guarantees to build energy efficient cars and trucks.

Short rant, comments welcome.

 

8 Comments – Post Your Own

#1) On September 07, 2008 at 8:00 PM, RainierMan (78.24) wrote:

No, (the Bank of) Toyota and Honda do not need government backed loans. That's one benefit of not having to watch your profit center (trucks and SUVs) become pariahs overnight. Throw in best in class hybrid technology (Toyota) and promising fuel cell technology (Honda) and they start looking like they might just dominate the industry for the foreseeable future. Who know what else they have lurking in their research labs, but you just know they have some interesting technology in the pipeline. Oh, and they know how to actually turn a profit on small cars.

I've predicted before that those loans are a done deal since we are in an election year, and in any case every country wants an auto industry they can call their own. There will be cries of outrage, but I think they'll get the loans.

Who knows if Ford and GM will survive. They have so many problems you have to wonder. They can petition the U.S. International Trade Commission for relief from imports, but with so much Japanese brand production in the U.S. that's a dubious strategy.

I guess this isn't "short". Sorry. 

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#2) On September 07, 2008 at 8:13 PM, rd80 (98.26) wrote:

My rant was short, didn't mean to imply comments had to be :)

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#3) On September 07, 2008 at 8:17 PM, Option1307 (29.65) wrote:

maybe we should move to asia, them seem to "get it" over there... well not really, but you know what i mean inregards to these companies... Glad we put idiots in charge of ford/gm/chrysler.

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#4) On September 07, 2008 at 9:29 PM, abitare (31.77) wrote:

GM and F should go BK and restructure.

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#5) On September 07, 2008 at 9:33 PM, abitare (31.77) wrote:

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#6) On September 07, 2008 at 10:23 PM, rd80 (98.26) wrote:

"not a bail out, but a goverment assisted program"  unbelievable  Don't journalists ask questions any more?  You know, something basic like "How are they different?"

Maybe a better approach would be to put a lien on the assets of every congress critter who votes for this, every administration official who speaks out for it, and every lobbyist who pushes for it.  If the auto industry can't pay back the loans, their assets go before the taxpayer.  Bet they'd be a little less generous with taxpayer funded bail..., I mean gov't assisted programs.

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#7) On September 07, 2008 at 10:56 PM, RainierMan (78.24) wrote:

I'm not sure if a restructuring would work. Do they have the fuel efficiency technology to meet the next wave of change that is certainly on the way? If they couldn't get profitable with smaller cars in the last 30 years, can they get there quick enough now?

They do have small cars in their EU markets that are successful, so maybe they can move the same production system that works there, here. All this comes at a horrible time for them, but maybe the market will come back strong for small cars and they'll be able to make it work.

I know, it's not convincing. 

  

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#8) On September 07, 2008 at 11:04 PM, daayoo (< 20) wrote:

Ares,

Ever heard of the EV1? Where would GM be today if they weren't so short sighted?

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