October 2008 Archives
I've always been up front with our readers about my "home town slant", as I live and work in Metro Detroit. As we approach the elections, and the "leaders" of all parties continue to promise a few chickens in every pot, regardless of the rationality of the promises, real, live companies like Ford, GM and Chrysler LLC are getting, relatively, precious little ink. Even this week "uber CEO" Carly Fiorina was here in Detroit giving a speech with, at best, lukewarm support to the industry. She seemed to do such a good job running her last gig, didn't she?
I'm aghast at how little forward thinking our pols are when noodling through an American economy scenario without GM, Ford or Chrysler.
Read on:
http://money.cnn.com/2008/10/29/news/companies/bigthree_bailout/index.htm?postversion=2008102907
There's been a chorus of articles in the last few days about a potential merger/absorption/call it what you will between GM and Chrysler. Just today, courtesy of NADA Headlines, we read:
DETROIT – Chrysler LLC Chief Executive Bob Nardelli said Thursday that a steep decline in U.S. auto sales has created an environment for industry consolidation, but he would not comment on reports that talks are accelerating for General Motors Corp. to acquire his company. "It certainly creates an environment for consolidation where you can get synergies of productivity that will allow you to be more competitive, not only here in the U.S. market, but on a global basis," he said. The Wall Street Journal reported on its Web site Thursday night that potential lenders are eager to see the deal finished, and that GM wants it done as early as the end of October. GM is trying to raise additional capital as it faces potentially huge losses when it reports third-quarter earnings in the coming weeks.
Source: Associated Press
.......we'll see what happens!
Three months ago we rarely read about the threat of bankruptcy in one of the Detroit-based Big Three. But, just read the last couple of paragraphs of this article...
...and not only does this article join many others in that "bankruptcy" chorus, but, it indeed speaks of a domino effect if one goes, the other two will.
Unthinkable years ago, what about today?
This isn't about the car business specifically, but the below article is well-written, provides good historical perspective on what's been going on in the financial markets. I hope you take a moment to take a breath, and read it.
http://money.cnn.com/2008/10/10/pf/minds_over_money.moneymag/index.htm?postversion=2008101010
Being a home-town Detroit guy, it's tough to see this headline...
http://money.cnn.com/2008/10/09/autos/jdpa_sales_down/index.htm?postversion=2008100913
...but let's just hope that the fledgling "recovery" we're seeing this morning has a long run. Most worrisome for us is the clamp down on lending that's pervading the auto dealer world right now. Get that right, and the engine that drives much of the economy, auto building and sales, can work wonders.
The stupid situation many many people have put us in (not just "Wall Street Bankers", but the the idiot on my street that bought a house he couldn't afford, the mortgage broker who found him a "nothing down" mortgage, the mortgage company who designed such a stupid plan, the re-bundlers of those mortgages that sold them, the people and institutions who bought them, the auditors and bond raters who rated them "fine", and every government and regulatory entity and person who watched the whole thing go nuclear....) is now showing up on Main Street...where people want to buy cars.
Read a good article about that...
http://money.cnn.com/2008/09/30/autos/car_dealer_pain/index.htm?postversion=2008100112
