Tax payer recovery "dim" on automaker bailout?

Still less than outright bankruptcy?

A Congressional Oversight Panel, according to early reports, is expected to offer "detailed analysis on the dim prospects of taxpayers recovering all of their investment into the US auto industry".

While not surprising, it is impossible not to ask, 'how much would tax payers have lost if GM and Chrysler went into bankruptcy?'

Regardless, I think a better question might be, are we making the correct investments into the Big 3? For instance, are there ways to hedge this investment, or to help increase the upside of this investment?

Kudos to Obama for now

This is not the future

UAW boss Ron Gettelfinger is telling members to ratify a new round of concessions with Ford. Otherwise, according to Gettelfinger, Ford will not survive.

Holy cow. During the first round of Congressional testimony on this issue, the UAW seemed pretty resistant to any further concessions. I guess the UAW has finally seen the light. Certainly the problems associated with the Big 3 are not purely the fault of the UAW, but the union did play a significant role.

Kudos to the Obama administration and Congress for playing some hard ball with Detroit. With the significant tie between labor and Democrats, an earlier cave in was expected, at least by this blogger. Of course, such a cave in probably would have guaranteed the eventual collapse of Detroit's automakers.

Still, now comes the hard part. How do the Big 3 deal with the fact that 10 million sales per year might be America's new run rate? Can the Big 3 compete at producing small, fuel efficient vehicles at a profit? Will any US automaker produce 100,000 hybrid cars per year within the next 5 years?

Bailout Nation: Calling Big 3 haters and supporters

Are the Big 3 ready?

"Get me a plan that works."

That's what President Obama is hoping for on Tuesday, when automakers present their restructuring plans to the Treasury Department. Is such a plan, however, even possible?

Auto sales sunk 37 percent in January as automakers struggled for survival. GM, for instance, is slashing 10,000 white collar jobs and offering early retirement to every hourly worker as it tries to raise cash from partnerships in China and Korea. Additionally, GM is trying to unload brands such as Hummer.

Serious changes are occurring within the auto industry, which is good, but is it enough? And, what about the product?

In recent weeks and months, all of the Big Three have been showing off their EV plans as proof of how they will help America reduce foreign oil dependency and global warming? But is this all just poppycock?

If these cars are going to save the Big 3, the Big 3 will need to sell millions of such vehicles EVERY year, right? When is that going to happen? 2020? Later?

Yet, in just a few months, California might put into law emissions requirements that will soon make most of the Big 3's money makers unfit for sale in the Nation's most important auto market. How will GM or Chrysler compete with the Toyota Prius or the Honda Insight in such an environment?

So, what should Obama and Congress do? Undoubtedly, a new bailout is inevitable, but should America's new energy vision focus only on protecting the Big 3, or should it be more focused on achieving results, on achieving real change?

For instance, why not do just enough to keep the Big 3 afloat, while providing massive consumer-driven tax incentives for highly efficient, manufactured in America, vehicles made by any automaker? Besides, isn't competition the mother of innovation?

Black October over - Next for the Big 3?

October was scary, but is the worst over?

So, October was a pretty scary month for US automakers, and it now appears inevitable that the Big 3 will become the Big 2. But, is that is bad as it gets? Is the worst over?

Before addressing the dark side, there were a few a bright spots in October. GM, for instance, stated that despite massive financial concerns, the development of the Chevy Volt will continue as planned. And Ford, according to Consumer Reports, has basically caught up to the best automakers in quality. Moreover, the Ford Fusion hybrid might be a more solid hybrid than the Toyota Camry hybrid.

Still, with the economy possibly crashing into a recession, financial issues could become much worse for automakers, especially US automakers whom have been hit particularly hard by the dramatic decline in gas-guzzler sales. So, even if these automakers avoid bankruptcy, will they really be able to afford producing significant numbers of new, fuel efficient vehicles? When will a US automaker produce 100,000 hybrid cars per year (including the Volt)?

Honda takes jab at Big 3 on fuel economy. Has anything changed?

Honda predicted gas-guzzler fade?

While calling loans to US automakers the right thing for the US government to do, Honda CEO Takeo Fukui blamed US automakers for many of their problems saying, "Their response (to fuel economy) was too slow," according to the DetroitNews.

Fukui also indicated that even though the large truck and SUV market was highly profitable at one time, Honda didn't invest much in that segment because the company didn't believe gas-guzzling was sustainably profitable.

Ironically, when Honda was making this decision, the Big 3 were, collectively, betting the farm on gas-guzzlers, even after events like 9/11.

Yet, even today, it is very distressing how little effort the Big 3 are putting into hybrid cars to challenge the Toyota Prius and the soon-to-be-released Honda Insight. Do hybrid cars not make sense to Detroit the same way that large SUVs and trucks made so much sense just a few years ago?

Automaker bailout goes to President

Chevy Volt and EV1 at Alt Car Expo

Both the House and the Senate have signed off on a bill to give $25 billion to automakers to help make more fuel efficient vehicles. And, I'm OK with that. This is about jobs at a time when jobs are desperately needed.

Still, this isn't just a loan, it is a bailout. Tax payers ARE putting up $7.5 billion to secure these loans. Besides, despite new CAFE regulations, the markets are DEMANDING the Big 3 move towards efficiency. The Big 3 have no choice but to change, something that should have been obvious after 9/11 and Katrina.

Let's hope they get it right this time.

Financial terrorism and automaker loans

Did terrorists help bring down the financial markets?

There are now a few people that monitor Wall Street wondering if some short sellers weren't trying to help take down the US stock market with unscrupulous short selling. Already, new restrictions are coming into play because of known abuses.

So, for a mid-day distraction, let's have some fun with this speculation.

The Big 3 need loans. Problems in the financial markets are preventing this from happening without government help. Let's say financial terrorism - and let's say its foreign oil-driven terrorism, such as used by bin Laden-types - has helped to hurt the US financial system, preventing Big 3 loans. If such speculation - financial terrorism - proves to be true, would you be more open to an automaker bailout?

Foreign oil dependency & Global Warming: Michigan doesn't get it

Politicians in Michigan need to wake up

"Michigan's congressional delegation is urging the U.S. Health and Human Services Department to stop touting foreign cars to its employees.

In a letter to Secretary Mike Leavitt, Michigan lawmakers blasted an e-mail his department sent to its 67,000 employees advising them to avoid sport utility vehicles and recommending a number of foreign cars," writes the DetroitNews.

"It is our hope that your agency will refrain from sending out similar communications that make product endorsements, particularly by non-U.S. companies," the delegation wrote. "It seems to us the time and effort that went into producing this document could have been better spent preventing disease, assuring food and drug safety (and) improving children's health."

Wake up Michigan!

Honestly, global warming is the biggest issue facing the Health of America if it's real. Sure, global warming is a contentious issue, but global warming dissenters do not have absolute proof that human-influenced global warming is not real. Thus, there is nothing wrong with the Health and Human Services Department taking a stand - something the Big 3 should have done a couple of decades ago and at least after 9/11.

However, more to the point, the Health Department is not promoting foreign cars, they are promoting green cars. Sadly, American automakers just haven't been very green. Even more disappointing, being green coincides very closely with fuel economy, which also means that since 9/11, American automakers have done little to address foreign oil dependency.

How patriotic is that when foreign oil dependency has become one of the most critical issues to national security, even to the health and welfare of the American people?

Big 3 Keep Begging But Give Nothing

Unlike Toyota, GM and DaimlerChrysler have not sold 1 full hybrid car in America

"The opening round of congressional hearings this year on global warming and alternative fuels showed one fact is clear: The climate for automakers on Capitol Hill is becoming increasingly unforgiving," claims the DetroitNews this morning.

Good. Can automakers blame Congress?

According to GM, the Big 3 doesn't need an increase in CAFE, they need more money - much, much more money. Yet, the Big 3 have already been given billions to produce vehicles like the EV1 and hybrid cars, yet what has America received in return?

Increased foreign oil dependency. (READ MORE)

The Big 3's Hybrid Efforts: Hype or Reality?

The Volt was a hype machine at NAIAS

With the Big 3 bleeding red, it wasn't very surprising that each of the Big 3 automakers made important hybrid debuts and/or announcements leading up to the first 100 hours of the new Democratic Congress and before the President's State of the Union Speech. Obviously, they had to show they were taking some action on fuel economy and global warming, or at least they had to create that perception.

GM was the hype machine king, launching the Chevy Volt electric hybrid at NAIAS. I believe GM is serious about the Volt, and I believe the Volt will one day be a sale's leader for GM. Still, at this point in time, I'm more concerned about GM's dual mode hybrids, such as the soon-to-be released Yukon hybrid. Where is it?

I don't just want to hear about the hybrid cars GM is going to develop, I want to see the hybrids GM has developed saving gas at gas stations in my neighborhood.

Similar to GM, both Ford and DaimlerChrysler made big announcements as well, such as Ford's plug-in hydrogen hybrids, flex-fuel hybrids and Chrysler's testing of plug-in hybrids. These were all great announcements, but announcements are not much more than PR hype. Hopefully, these PR efforts were not just hype campaigns to influence politicians.

Daniel Howes on the UAW and Big 3 problems

I read the automotive section of the Detroit News everyday, even though I don't live anywhere close to Detroit. So, why does a guy from Los Angeles care about the Detroit News? Because the Detroit News offers the pulse of the Big 3. While I've always considered Daniel Howes to be the most entertaining and open-minded Detroit News auto beat writer, I've regularly had issues with some of his views and with many of the views of the rest of the auto beat staff. Too often, the Detroit News has seemed just as lost in the past as the leadership at the Big 3.

The last couple of weeks, however, Howes has been on the attack, poignantly arguing that if Detroit (Big 3) doesn't start making significant changes - immediately - then Detroit automakers will have no one to blame but themselves.

Obviously, I couldn't agree more and I have constantly used hybrid cars as an example.

Well, today, Howes set his sights on Ron Gettelfinger of the United Auto Workers - an important aspect of Detroit's dysfunction. I highly recommend reading the article. Click here to read.