Tag: Automakers

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Auto Executives To Address Senate

From Kentucky Public Radio’s Lisa Autry (WKYU-Bowling Green)

The U.S. Senate Commerce, Science and Transportation Committee will hear from General Motors and Chrysler executives about dealership closures Wednesday.

Chrysler plans to end its relationship with 800 dealerships, while GM is aiming to drop 11 hundred dealers. There are about 62 hundred GM dealerships in the country. Owensboro Chevrolet dealer Don Moore says that’s too many for the current economy.

“The market share for GM has gone from 51% down below 20% and the low teens,” he says. “When that has occurred, it’s not viable to have so many dealers. The dealers cannot continue to make the money.”

The committee will look at ways to protect the employees and owners of targeted dealerships who could end up with hundreds of thousands of dollars in inventory that cannot be sold.

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Obama Could Announce Fuel Efficiency Standards Tuesday

Top news outlets, including the Associated Press, The New York Times, and The Wall Street Journal are reporting that the Obama administration is poised to announce, possibly as early as Tuesday, a one-size-fits-all standard for fuel efficiency for all cars and light trucks by 2016.

The decision would not only greenlight California’s request to increase its standards, but improve on and nationalize them, making tailpipe emissions at least 30 percent cleaner than they are now.

Automakers have been grumbling about state-by-state standards, which they say make for some expensive manufacturing tweaks state by state. While this move should end their grumbling, it remains to be seen, even with the billions in federal loans they’ve received, whether there will be strong negative reaction from the industry to the cost of making more efficient cars.

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Analyst Says Ford Is Poised For Success

As Chrysler enters bankruptcy and General Motors restructures with government funds, Ford remains viable. That’s according to longtime automotive writer Jerry Flint.

Flint says if it continues to avoid accepting federal bailout funds, Ford will appear to be a stronger company to consumers than Chrysler or GM.

“It’s one thing to spend $10 on $100 on a product from a bankrupt company like an airline ticket,” he says. “It’s another thing to spend $30 or $40 thousand on a product from a company that’s going down.”

Once the economy recovers, Flint says Ford will emerge as the strongest, and possibly only domestic automaker.   He says that doesn’t mean there won’t be some downsizing.

“We’re dealing with a 40% reduction in volume,” he says. “Don’t worry about a couple hundred people being laid off in Louisville. Hope that the plant keeps going and anyone has a job.”

The Louisville Assembly Plant may lay off up to 380 workers, but is expected to remain open and begin making a new model in 2011.

Flint says he has no direct ties to the auto industry, but his wife owns some Ford stock.

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Ending Jobs Bank Could Hurt Local Economy

When President Bush announced a government loan to General Motors and Chrysler last week, he called for the end of the jobs bank program, which provides benefits and partial wages for laid-off employees.

While Ford is not set to receive aid anytime soon, ending the jobs bank program could hurt former Ford employees in Louisville. Retail researcher John Talmage says ending the program during a restructuring of the Big Three automakers would leave thousands of workers without pay or updated skills.

“The most important thing for a laid-off worker is to find a new job as quickly as possible,” he says. “If the infrastructure that supports sustaining that worker during that unemployment and retraining, retooling and redeploying that worker ends, then, in this economy, it’s going to be very hard to make those kind of matches.”

The United Auto Workers union previously agreed to suspend the jobs bank program to help the struggling automakers.

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Auto Loan Could Mean End Of Jobs Bank

General Motors and Chrysler stand to receive $17.4 billion in federal loans if they can restructure their businesses toward profitability.

The money for the loans comes from the $700 billion financial bailout, and none of it is set to go directly to Ford anytime soon. But United Auto Workers Local 862 President Rocky Comito says keeping GM and Chrysler afloat will boost consumer confidence and keep parts suppliers in business.

But part of the call for restructuring means ending the jobs bank program that provides assistance to laid off workers. Comito says he’s not sure if the union will sign off on that.

“We’re just waiting to see what will happen with the UAW. What, if any other concessions are asked about and then the negotiators will have to decide what they need to negotiate,” says Comito.

Earlier this month, the UAW approved a suspension of the jobs bank to keep the Big Three solvent.

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UAW Members Rally For Big Three Loan

UAW WorkersWith the heads of the Big Three automakers in Washington asking for financial assistance, local United Auto Workers union members are encouraging Congress to approve loans for the companies.

At a UAW rally at Ford’s Kentucky Truck Plant in Louisville, Local 862 President Rocky Comito said if Ford, GM and Chrysler go under, it would bring chaos to the entire industry.

“The parts suppliers that supply parts to us are the same ones who supply them to Toyota, Hundai, whoever,” he said. “So it’s not just the big three, it’s all the automotive industry.”Ford

The Big Three are requesting up to $34 billion in bridge loans. They say the funds are necessary to stay afloat in the recession, with new investments needed to produce fuel-efficient cars.

Retired UAW worker Joe Dennis attended the rally. He says his pension and health benefits also depend on the loan.

“I put 35 years in,” he says. “I’m like everyone else – you like think that’s a guaranteed income, but it’s not. If something happens to this company or the big three, I’ll lose everything I work for.”

Kentucky Truck Plant Chairman Scott Eskridge says the loans are crucial to the Big Three’s survival.

“If we don’t get this bridge loan, GM ain’t going to make it to the end of the year. They’re not going to have the money to pay their suppliers and employees to the first of the year,” he says. “Unfortunately, bankruptcy is the only option.”

Congressman John Yarmuth of Louisville also spoke at the rally. He says there may not be enough votes in the Senate to approve the loan until the new Congress is sworn in next year.