Forget $25 billion for the U.S.-owned auto companies. Small change. They've upped their request from the feds. GM alone now wants $18 billion. Doesn't that raise your confidence level that these guys are really on top of the situation?
Oh, by the way, Ford wants their own line of credit for $9 billion. Their CEO claims he'll work for a dollar-a-year if they take any federal loans. That makes it unanimous, the Big Three would have CEOs costing exactly $3 per year in toto, not counting overhead. Is this proof of that economic law: you get what you pay for?
Even CEO overhead would go down. The Big Three have volunteered to sell all of their corporate jets. Chrysler, which is not publicly traded, has earlier asked for $7 billion. It's not yet known if that figure has inched, or leaped, higher. Chrysler was jettisoned by Germany's Daimler after the DaimlerChrysler marriage proved to be less than amicable.
Sales down, stocks up
Wall Street seems to like the idea of the Big Three getting some of those fat federal dollars being spread like manure across the fields of the finance industry. Today the stocks of publicly-traded Ford and GM were up sharply on the backs of the heady lone requests. GM is now almost up to $5 per share, a 66% climb in one day. But let's recall GM was around $29 per share as recently as February 1 of this year. GM's market cap is now under $3 billion. That means the corporation has lost nearly $15 billion in market value this year.
Sales figures were way down for November compared to a year ago. Chrysler sales were off 47% year to year. The Big Two were each down about 30%. Everybody in the auto biz is hurting. Toyota sales in the US were off 34%. The big question: if sales recover, who'll get the most business. Detroit execs argue that formal bankruptcy would scare away car buyers from their offerings.
WHAT'S THE DEAL?
GM says it may kill off or sell Pontiac, Saab and Saturn. The Hummer brand is for sale already. Wanna buy a big brand, anybody? Ford's prescription includes quicker introduction of hybrid and electric vehicles. It promises to make more Ford Focuses, over 1 million a year. The Focus's emgineering would become simpler and cheaper.
Both the Ford and GM CEOs will travel to Washington this week via hybrid car. GM's boss will be in a Chevrolet Malibu hybrid sedan. Ford's chief will take a hybrid Ford Escape. No word from privately-owned Chrysler but the company says their man will NOT be in a corporate jet. The CEOs will not repeat that gaffe from their previous failed attempt to pry money out of the feds.
Now the game action moves to Congress. Senate Committee hearings Thursday, House on Friday. Possible action, or not, next week.
SWEDEN TO INTERVENE
The Swedish government will not let Saab and Volvo be shuttered. They account for 15% of all exports from the nation. Saab is a GM property right now. Volvo is owned by Ford and could be sold off.