Bloggy Business Today

As expected, U.S. President Bush approved the much celebrated auto bailout plan amounting to a whopping $17.4 billion, a move that drew cheers from the big three (Chrysler, General Motors, and Ford) and jeers from the union workers. This move has provided a new lease on life for the embaffled U.S. auto car industry but the real test starts once they get these loan bailouts which are expected to prolong their corporate existence for the time being.

Promises were made but it remains to be seen how it will all fit in. As we know, the auto industry is not the only one in the air of uncertainty. Prior to that, it was the banks, some of which have closed down. So what could possibly be next? Real Estate? Technology? Anyone among them can be next in line that would need financial bailouts as well.

So what were the specifics of the auto bailout? Here it is:

Under terms of the loans, the government will have the option of becoming a stockholder in the companies, much as it has with major banks, in effect partially nationalizing the industry. Bush said the companies’ workers should agree to wage and work rules that are competitive with foreign automakers by the end of next year.

A good deal or not? We surely haven’t heard the last of this one!

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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]

For most businesses, when something goes wrong in the course of business operations for profit, expect marketing to carry the burden of taking the blame. Such is the same issue right now for the big three automobile manufacturers of Detroit, Chevrolet, Chrysler and Ford. Their much celebrated losses and impending financial catastrophe has been blamed on their marketing strategies and not there actual car quality.

These three car manufacturers have been around and car enthusiasts don’t really need to own one to understand how good these vehicles are. They are a universal brand that has gained popularity and while many never saw this coming, it is apparent that at least two of them are clinging on to dear life in the corporate world.

The times are tough but that does not mean you cannot adjust towards the market trends. Good marketers know how to manipulate in business and apparently this is something that is being hit by most business critics.

It makes you wonder why the marketing people were not included in the axed jobs by these companies.

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Unlike the big three (General Motors, Chevrolet and Ford), Citigroup was given a financial bailout assistance worth $20 billion as the government lent a helping hand to save the stricken bank from billions of dollars that could have totally been catastrophic. Stocks reacted as well as Dow Jones industrial shot up 300 percent.

And so the proper selection of which companies to help out continues but there is still a lot of work to do as far as strengthening the financial system of the United States is concerned. There are more companies outside the big three automobile manufacturers out there drowning and if the lifesavers are not sent out to pick the proper companies that really need help, chances are this financial bailout strategy is entirely useless and futile.

Stocks may be up today but who knows what tomorrow would bring. We have seen this trend before. Stocks rise after any enticing development comes up. Would this trend continue or follow suit the previous spikes in the endangered trading and finance system of the United States of America.

“With these transactions, the U.S. government is taking the actions necessary to strengthen the financial system and protect U.S. taxpayers and the U.S. economy,” the three agencies said in a joint statement. “We will continue to use all of our resources to preserve the strength of our banking institutions, and promote the process of repair and recovery and to manage risks.”

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[tags]financial_bailout, dow_jones_industrial, automobile_manufacturers, banking_institutions, finance_system, dow_jones, lifesavers, citigroup, general_motors, billions_of_dollars, taxpayers, chevrolet, united_states_of_america, stocks, ford[/tags]

In a move that has been hailed as visionary by some and Satanic by others, automotive company Ford has declared that they will be opening a new car plant in Mexico. Ford is expected to invest around $3 billion in the new plant, making it the single largest investment ever to be made in Mexican industry. It will also be the largest manufacturing gain that Mexico has had in awhile, with around 4500 new jobs being created by the plant’s presence.

For automotive workers in the United States, the news is quite bad as not only does it mean that no new investment will be happening in that country, but it also means that in all likelihood more layoffs will be coming at some point in the near future on the part of Ford.

The car company has lost approximately $15 billion over the last eight quarters due a number of different factors and it is precisely because of this loss that the company’s executives claim that the new plant is absolutely critical to the long term success of the company in the 21st century. Overall, it is one of the largest examples of outsourcing of jobs that at one point in time were unquestionably to be placed within the borders of the United States.

US giant Ford is to invest $3bn (£1.5bn) in a new car plant in Mexico, the biggest investment in the country’s manufacturing sector.

The move is a blow to American car workers who had hoped the factory would be built in the United States.

Ford has lost more than $15bn (£7.5bn) over the past two years and says the new facility is crucial to its future.

Mexican President Felipe Calderon hailed the announcement as a “turning point” for his country.

(Source) BBC News

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