GM gets another bailout

MattW · Apr 11, 2009

If we won't buy your cars, the FedGov sure will.

And they're Green too!

By June 1, the government plans to spend $285 million in stimulus funds to buy fuel-efficient vehicles from General Motors, Ford and Chrysler. The purchase is slated to include 2,500 hybrid sedans, the largest one-time purchase of hybrid vehicles to date for the federal fleet.

Each vehicle must have a better fuel economy rating than the one it replaces. The government aims to boost the new fleet's overall fuel efficiency at least 10 percent.

Wow! 10% - that's like 2MPG. Consider the planet saved!

The administration has already loaned GM and Chrysler a combined $17.4 billion, and has offered more if the companies can reduce their debt and labor costs

The cars should be free at this point, or damn near close to cost/lb of steel.

Meanwhile Chrysler is in hot water for relying on too many SUVs and low mileage vehicles in their plan to recover. They unveiled the 2011 Jeep Grand Cherokee this week. Though the mileage has improved over 11% from the previous model, that's not enough for the administration. How is 11% improvement for the Cherokee less than 10% for government vehicles?

The White House slammed Chrysler for having a product lineup so heavily weighted with trucks and SUVs. It added that the automaker does not have enough products in the pipeline to meet an expected increase in demand for small cars.

Demand for small cars? Who is projecting this demand - the White House Office of Optimistic Planning?

Demand for small cars is related to the price of gas - it's not at $4 anymore, and the spike probably made many people kick the SUV habit, they are still going to sell.

Chrysler is standing by the Grand Cherokee. It's profitable, recognizable and the No. 2-selling vehicle in the Jeep lineup. Grand Cherokee sales fell by almost half during the first three months of the year, but its market share has remained steady, according to Autodata Corp.
"It is one of their most important vehicles," said John Wolconowicz, senior automotive analyst for the consulting firm IHS-Global Insight. "The market for SUVs has not completely gone away, particularly for smaller ones like the Grand Cherokee."

Unique · Apr 11, 2009

I keep telling them and telling them.

TRUCK. PICK UP TRUCK.

Not SUV. Not Sedan.

But they don't listen. They never listen. Bah.

I'm keeping my 16 year old, faithful, fuel efficient TOYOTA until they do.

jodiodi · Apr 11, 2009

My husband and I don't buy GM, Ford or Chrysler vehicles. The quality just isn't there. As far as I'm concerned, if the American companies can make cars people need or want, they deserve to go under.

robeiae · Apr 12, 2009

I'm quite happy with my GM car, a Buick Enclave. Before I bought it, I checked out pretty much every vehicle in that class. It's not lacking in quality, at all. And I got more for my dollar, imo.

Now, that doesn't mean GM is just fine and dandy, but this idea that these companies cannot and do not make competitive cars is incorrect, imo.

Similarly, the government's claim that there won't be a demand for SUV's is incorrect. Really, I was happy with my VW Wagon, until kiddo number three came along. I needed the additional seating and space. It's as simple as that. And I don't think I'm the only person with more than two kids out there.

Clair Dickson · Apr 12, 2009

It's not just gas price that's affected people's (temporary) interest in small cars-- it's price. When money's tight, it's tough to spend $30k on a car. It costs less per month to purchase a new small car than a new big one.

So, yeah, I'd predict an increase in people looking for small cars. I've seen a lot more Aveos driving around here... I wonder if it's because you can get a base Aveo for $10k. The gas mileage on one of those isn't much better than the next size up.

And I've seen a great increase in people looking for used cars. The used small car market around me is insane-- overpriced and moving fast. If it runs, people will pay good money for it. People have less money per month to spend on cars-- and there are less people who can get loans at this time. The market has changed. At least in Michigan.

icerose · Apr 13, 2009

Well it looks like GM might have to file for bankrupcy in as little as 2 weeks.

http://news.yahoo.com/s/nm/20090413/us_nm/us_autos_gm

So what was the point of the bailout? Other than to throw away billions upon billions of dollars?

Wayne K · Apr 13, 2009

I hate GM, Ford and Chrysler because they really don't make cars here anymore. They were the model for outsourcing.
From what I understand the price of healthcare figured into that. They're still taking care of workers who retired 20 years or more ago.

GM gets another bailout

MattW

Company Man

Unique

Agent of Doom

jodiodi

Reflections of Reality

robeiae

Touch and go

Clair Dickson

A dark core to every cloud

icerose

Lost in School Work

Wayne K