04-01-2009, 12:36 PM
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Head Coach
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Join Date: Apr 2004
Posts: 14,847
Points: 160,321.26
Bank: 0.00
Total Points: 160,321.26
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GMAC to resume car loans to subprime borrowers | U.S. | Reuters
Quote:
NEW YORK/DETROIT (Reuters) - GMAC Financial Services said it will resume making car and truck loans to subprime borrowers and will lower inventory financing costs for cash-strapped auto dealers, part of a series of moves intended to spur sales at General Motors Corp.
The moves announced Wednesday come as the embattled automaker races to restructure and get customers back into its showrooms amid growing risk that it will be pushed into bankruptcy by the Obama administration.
GM, whose U.S. sales plunged 51 percent in the first two months of this year, also began rolling out a program that will cover some payments for customers who lose their jobs after buying a car, an incentive intended to bring back shoppers worried about job security amid the recession.
GMAC, which provides financing to many GM vehicle buyers, said it would make at least $5 billion of credit available to customers over the next 60 days, a period during which GM has to prove to U.S. officials it can win sweeping concessions from bondholders and its major union.
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GM (govt motors) to get into the subprime car financing business again using 5b of credit over the next 60 days.
White House optimistic GM can avoid bankruptcy | U.S. | Reuters
Quote:
WASHINGTON (Reuters) - President Barack Obama's administration remains optimistic that General Motors Corp can restructure without going to bankruptcy court, a senior administration official said on Wednesday.
The official reiterated the White House's position, however, that "targeted use of the bankruptcy code" could be employed if necessary.
"We remain optimistic that significant re-structuring can be executed without the use of the bankruptcy code," the official told Reuters.
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Holman Jenkins Says Barack Obama Will Not Send GM into Bankruptcy and Risk Upsetting the UAW - WSJ.com
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Keep that in mind amid the defenestration of Rick Wagoner, who was not as popular with UAW Chief Ron Gettelfinger as Mr. Wagoner's replacement, Fritz Henderson. Keep that in mind amid reports the administration favors a "quick and surgical" bankruptcy. It's a bluff. The same administration that inserted itself into GM's corporate governance to order the resignation of a CEO is hardly likely to defer to the prescribed legal order for a failing company, namely bankruptcy. Even a "prepackaged" filing runs too much risk of a judge imposing more "sacrifice" on the UAW than the administration is prepared to tolerate.
GM bondholders understand this: They've been intransigent precisely because they calculate the UAW is too important to Democratic electoral politics for Mr. Obama to risk losing control of the reorganization process to a bankruptcy judge.
The GM bailout has become a political operation run out of the White House. It will stay that way. Talk of UAW layoffs already disguises the fact that UAW workers are actually offered generous buyouts and early retirement -- they aren't just sent away with a last paycheck. What about Chrysler? A few weeks ago, Fiat was saying it would consider a merger if a loan from Washington was guaranteed. Now Washington is saying a loan will be forthcoming as long as Fiat does a deal. That's not an ultimatum -- that's a nod and a wink.
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That captivity, imposed by the 1935 Wagner Act, is the sole relevant factor distinguishing the Detroit Three from the world's other auto makers. The result is downright weird: "Our" auto companies operate in a world that's less "American," in a sense, than the Japanese and German companies that come here and enjoy a free labor market.
The Wagner world was given a second lease on life by a peculiar feature of Congress's 1975 fuel economy law. Known as the "two fleets" rule, it effectively forces Detroit to make its cheap small cars in high-wage domestic UAW factories, even if it means losing money on every car. The rule has no fuel-economy function. Its only purpose is to shield the UAW monopoly inside each Detroit auto maker from global labor competition.
You wouldn't have noticed, but a legislative accident two years ago almost stripped away the two fleets rule. A couple of Republican senators from the South took the lead in crafting the Senate's new fuel economy bill, and built it to please Nissan, which had railed against two fleets for its own reasons.
In the final bill, to no one's surprise, two fleets was quietly restored by Rep. John Dingell and Illinois Sen. Obama (among others) as a political favor to the United Auto Workers.
The UAW's Mr. Gettelfinger had testified, coyly, during Congressional hearings that failing to renew two fleets might cost 17,000 auto workers jobs building small cars. He didn't say that two fleets is in fact the fulcrum by which, for the past 30 years, the UAW has been able to defeat globalization.
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what you have here is the current system obama cannot and will not let his legacy rest in the hands of the b court judge. obama played tough guy and ran wagoner out of town (and the board)-which apparently this may or may not have been "legal" and may have violated signed ocntracts-yet he has done nothing to address the other side. its a fact that the big three can make autos and turn a profit on them. three of the seven best selling vehicles last month were the big three american pickups. he needs to repeal two fleets. he needs to dump the CAFE and go to a system that is based on a gvw mpg basis. allow the automakers in detroit to make they vehicles they can economically make and ones that provide a sustainable business model under epa regulations delegated on a per gross vehicle weight metrics not on a two fleet system. the results if detroit wanted/needed to they could profitably build their small cars offshyore and the gas guzzlers (suvs, pickups, small dump trucks, etc) in the us. the result of the admins choices are simple-delay the problem beyond nov 2012...
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) - or just the increased market share, then Ford could be in for good days eventually. I know you are not my broker, but I was wondering about your thoughts on GM and Chrysler going [censored] up before it is over?
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