First the bad news. The bailout goes way above the initial $25B, it could easily top $40B.
Chrysler: Want something around $7-8B. No real plans other than that. There are some vague mentions of electric vehicles, but Chrysler's bottom line is that its bottom line is quite bad. It will only have $2.5B at the end of the year. They feel if they do not receive the loan by Jan 1, they may go under. Their CEO, Robert Nardelli, supposedly already makes $1* a year.
GM: Want up to $18B, but at least $12B, with $4B by the end of the year. GM wants to kill Saab, Saturn, and possibly Pontiac, though Pontiac may be refocused as a "performance brand", whatever that means. Cheap, fast cars? I agree with dumping all three. Saab is kind of interesting, but nobody buys them. Saturn was interesting until a few years ago when GM closed the TN plant and turned Saturn into copies of other vehicles. GM's plan also calls for dealer reductions, $1* a year pay to Rick Wagoner, and UAW renegotiations. And how exactly can they renegotiate with the UAW when they have all that cash?
Ford: Ford is asking for access to a $9B loan that they hope not to use. They predict a return to profitability in 2011, although a long recession or a bankruptcy by GM or Chrysler would hurt them and could turn that $9B maybe into a $14B bailout. At least they seem to be willing to go it on their own. They plan to convert many of their truck/SUV factories to make small cars. They plan on cutting their dealer network, and also raising their fuel economies by up to 36% in a few years. If they take the assistance, their CEO Alan Mulally will take a $1* salary.
*Plus stock options
1 comment:
I hope everything balances out. If Chrysler and GM don't have real plans, then they shouldn't receive anything and should go under.
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