Bloggy Business Today

To help offset costs, Chrysler has reportedly shut down 30 of its factories until January 19 and will re-open sparingly which is different from the traditional 2 week shutdown at the end of the year. By sparingly we mean that Chrysler will re-open some selected shops while others will extend to a third week at the most.

But all this would also depend on President Bush. He is expected to come up with a plan to bailout the embattled automotive industry and from the looks of it, everything will hitch on whatever he would announce this Friday.

If the bailout fails to push through, this one month shut down may eventually turn into a permanent shutdown as the big three has now found itself on the verge of filing bankruptcy except perhaps for Ford.

There were initial talks that General Motors and Chrysler would merge but nothing ensued after they had initial talks last October. From there, everything seemed to be hell for the U.S. auto industry as they try to figure out how to save their automobile industry from imminent disaster.

Along with the shutdown comes 46,000 union workers who are now placed in a spot if they would have a job after the said temporary shutdown. You can bet they are likewise awaiting for the Bush announcement and they can perhaps take it from there if they will still report for work come January 19 or not.

“Chrysler Financial finances 75 percent of all vehicles shipped to U.S. dealers, and we continue to support our dealer body with uninterrupted wholesale financing,” a Chrysler Financial spokeswoman, Amber Gowen, said.

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As expected, the government is exhausting all means to extend financial aid towards the embattled car manufacturing giants of Detroit, General Motors and Chrysler. While the first auto bailout plan did not pass the grade for refusal of the labor unions to take a significant salary adjustment that can be compared with the salary structure of Japan’s own line of car manufacturers, the new auto bailout plan hopes to put all these to rest and save the two car manufacturing giants from officially filing chapter 11 or bankruptcy

The alternative? The Troubled Asset Relief Program or TARP. The TARP is actually the $700 billion bailout approved by Congress in October.

The Bush administration said Friday it might use taxpayer dollars set aside to bail out banks and Wall Street firms to keep troubled U.S. automakers out of bankruptcy.

The move could provide an 11th-hour short-term lifeline to General Motors and Chrysler LLC, which have warned they are within weeks of running out of the cash they need to continue to operate.

With this development, the government is reversing the initial round of talks where the Senate all but killed the initial funding for the auto bailout plan which has amounted to $14 billion. Will this resolve the problem the U.S. economy is facing? Everyone is hoping that it does while some sectors are holding out other opinions.

Republican critics of a bailout have argued that the automakers should use bankruptcy to shed debt and onerous labor obligations. They point to the success of companies in other troubled industries, such as airlines and steelmaking, to use bankruptcy to reorganize.

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In what was deemed as the last saving grace to save Detroit’s auto industry, the auto bailout is history as talks for dramatic salary increases to be in line with Japan’s auto industry had the United Auto Makers refuse the deal. So with that part of the auto bailout play layout unaccounted for, the Senate rejected the bailout plan, failing to acquire the 60 required votes to approve the financial aid to Chrysler and General Motors.

So with this development, the future of these two giant car manufacturers of Detroit are looking grimmer. They have declared that they could be weeks from closing shop, leaving Ford which did not request for financial assistance at this time but may soon follow their footsteps if business does not pick up.

In the end, the doom of the U.S. auto industry may be pointed towards the greedy and selfish desires of their labor and manpower resources, something that will surely be monumental. But they are not entirely to blame. They have to work to survive and the drastic cuts in wages seem to be too much for them as the cost of living for these people needs to be satisfied.

But don’t close the door just yet. We saw the same scenario before when the financial bailout was being made. Expect a new round of auto bailout talks since the U.S. is surely not going to allow their auto industry to just drop dead.

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[tags]financial_bailout, last_saving_grace, bailout_plan, manpower_resources, u_s_auto, auto_makers, drastic_cuts, auto_industry, united_auto, car_manufacturers, financial_assistance, general_motors, financial_aid, chrysler, salary[/tags]

It was announced that the U.S. government is in its final stages of perhaps providing a $15 billion proposal to save Detroit’s car industry and avoid the collapse of these three automakers. General Motors and Chrysler are the ones in dire need of financial assistance to avoid bankruptcy while Ford just has not yet pushed the panic button and just wants some assistance just in case business does not pick up.

As far as the financial assistance that is being given, it shall be taken out of the taxpayers’ money. But hold on. Isn’t that fund the same as what the laid off employees were being deducted off when they were connected with some of these companies? The big three have cut off thousands of workers and while that did not draw much attention it looks ironic that they will be the ones who technically rescue these automakers and allow the millionaires survive for another day.

Prioritizing the economy’s state and the businesses that evolve around it is understandable. But what has the government have in store for the laid off workers who are now facing problems as far as surviving in the financial part of their lives?

The scenario does indeed look weird. A lot of people are in need of help. But as of now, it seems that the millionaires are getting the aid over the not so fortunate ones. Are we sure the owners of these large auto companies are really in need of help or just don’t want to infuse money to their companies so that they can invest it somewhere else.

These are some things you should ponder on folks. Business is still a dirty game and the wealthy know how to play it wisely.

The bailout is designed to allow GM and Chrysler to avert threatened bankruptcy through March with short-term loans. Ford Motor Co is not requesting immediate help but would like a line of credit in case its finances worsen.

Lawmakers fear if automakers collapse, it would deepen the U.S. recession. But many say market forces, not a government saddled with a record deficit, should determine their fate.

There also is reluctance to provide another federal rescue in the wake of the voter backlash against Congress for its passage of a $700 billion bailout for Wall Street in October.

At the same time, many argue that if Congress provided relief for millionaires in the U.S. financial industry, it should also help blue-collar autoworkers facing unemployment.

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[tags]short_term_loans, ford_motor_co, auto_companies, ford_motor, car_industry, automakers, bailout, millionaires, financial_assistance, recession, general_motors, lawmakers, chrysler, taxpayers, bankruptcy[/tags]

The “Big Three” have laid out their needs and have declared that if they don’t get any financial help soon, they may just be closing shop. Is the U.S. government listening? Unless they have earplugs on, the closure of the big three: General Motors, Ford and Chevrolet, could be the worst economic development the U.S. has ever faced and from all indications, they would do well to heed their call.

The Detroit automakers on Tuesday urged Congress to authorize $34 billion in loans and credit lines, far more than the $25 billion they failed to secure in November when lawmakers demanded the companies offer plans showing they could be made “viable.”

The development came on the same day that GM, Chrysler and Ford Motor Co posted a drop in combined U.S. sales of nearly 40 percent for November and warned that the world’s largest vehicle market showed signs of tumbling further in 2009.

The government has been put in a fix following the worst economic crisis ever to hit the country since decades ago. The pressure is mounting and though some sources say that help is on the way, hopefully it will not be too late to bail out the big three from impending closure or worst, bankruptcy.

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[tags]detroit_automakers, impending_closure, ford_motor, economic_crisis, financial_help, general_motors, economic_development, chrysler, chevrolet, bankruptcy, ford, congress, loans[/tags]