Finally, the truth comes out. When dissecting the U.S. Government’s decision to bail out both General Motors and Chrysler from the mountain of debt they have incurred throughout the years, it’s easy to point out that Uncle Sam could’ve had ulterior motives in doing this. Perhaps a national stake in ownership of the future automotive conglomerates is what they are looking for?
Yet, when you look at the big picture – we mean the really big picture – you’ll understand that there was a lot more to the deal than meets the eye. Ford Motor Company Executive Chairman Bill Ford Jr. nailed the bull right between the eyes when he said that it wouldn’t just be GM and the pentastar that would suffer if the government hadn’t decided to step up and rescue them. According to Ford the second, the entire automobile industry would’ve taken a very, very serious hit. “It would have been so catastrophic to have a supply-base meltdown because it would have brought down all the auto manufacturers and frankly some other industries as well," Ford Jr. told CNBC TV.
“The United States would’ve been in a lot of trouble if Chrysler and GM were left for dead.”
In so many words, Ford even went as far as saying that the entire U.S. economy would have plummeted if Chrysler and the General went under. If the government hadn’t taken the steps it did, then the bankruptcies would’ve caused a complicated – and maybe cataclysmic – chain of events that would lead to other industries filing their own Chapter 11s, the most affected industries being those with vested interests in the auto industry, including those who supply both GM and Chrysler with the parts they need to build their lineup of cars. It’s a simple case of supply and demand. When there’s absolutely no demand for these parts, why even bother generating any supplies.
It’s easy for all the skeptics to point out that the US government only made the move bailout the automakers for their own self-serving interests; but Henry Ford Jr couldn’t have made the truth clearer when he said, “The United States would’ve been in a lot of trouble if Chrysler and GM were left for dead.”
“I don’t know anything about cars.”
Those were the words of newly-appointed General Motors Chairman Edward Whitacre, Jr. when asked about the challenges he’s facing, charged with infusing some new life into General Motors.
Hardly comforting, don’t you think?
To be fair to the man, it’s not as if he’s a fish out of water in the business world. After all, he’s solely responsible for elevating the status of AT&T as a telecommunications giant. So maybe he doesn’t know the ins-and-outs of the auto industry, but judging from his track record, we ought to cut him some slack and see if he can do for GM what he has already done for AT&T. When you talk to Mr. Whitacre, the newly appointed GM Chairman doesn’t see his lack of knowledge on cars as a burden, but – as expected – a challenge.
"A business is a business, and I think I can learn about cars. I’m not that old, and I think the business principles are the same."
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In the wake of its impending bankruptcy, the Detroit-based car manufacturer is not about to give up without a fight.
Word is being spread that despite having filed for a Chapther 11, GM still opened a battery laboratory that is being lauded as one of the country’s most technologically advanced batt labs. It really does make you wonder what’s going on in the minds of the GM bigwigs surrounding the state of GM and its very uncertain future.
Apparently, these guys have decided that if they can’t sell cars, they might as well keep themselves afloat by being at the forefront of advanced battery technology.
In some way, it’s a brilliant idea because it keeps GM in the loop as far as state-of-the-art car technology is concerned. The batt lab – which should never be confused with the Bat Cave – is located in Warren, Michigan and has been called the Global Battery Systems Lab.
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Chalk another one up for the economy, first Joe the plumber and now the General. By the time you read this Chevrolet’s parent company General Motors will be filing for Chapter 11 Bankruptcy. What will result is a substantial investment from Canada as well as the United States that will result in the U.S. Government owning about 60% of the American automotive conglomerate and out neighbors to the north receiving 12% as well. This might be good for vehicles like the Camaro that are produced in the Oshawa Plant, these operations should be getting some renewed interest after the deal.
New car buyers will be directly affected, GM choices will now be limited to their core brand Chevrolet, the luxury line Cadillac, their elderly targeted Buick and trucks for hard working Americans from GMC.
The President of the United States, Barack Obama, will address his nation in a press conference regarding the hearing at 11:55 A.M. Current GM CEO, Fritz Henderson, will then address the media about twenty minutes later.
General Motors started a used-car incentive program on Oct. 1 which offered 3.9 percent financing for 60 months on used models of Chevrolet Impala and Silverado, Pontiac G6 and GMC Sierra vehicles. The program was slated to end Jan. 5, yet in an impromptu move GM ended the program early due to the poor credit market.
GM has also announced they are ending automotive lending operations in seven European nations, and scaling back on operations in others. Earlier, GM said financing for vehicles in the United States will no longer be available to customers with credit scores under 700, eliminating roughly 40 percent of customers.
"I think what everybody has recognized is that the market is changing very quickly and we’re looking at availability of credit and it’s just very tight to finance these kinds of programs," GM spokesman John McDonald said.
GM will replace the program Nov. 4, though McDonald did not divulge details.
