April 6th, 2009
11:28 AM ET

Don't let GM go bankrupt

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/POLITICS/04/01/gm.ceo/art.fritz.henderson.cnn.jpg caption="General Motors CEO Fritz Henderson is hopeful the company's malaise won't be long-term."]

Jack R. Nerad
Special to CNN

The events of the past week have been unprecedented in the auto industry and in the annals of American business.

As the events have unfolded, there is the strong implication from the administration's automotive task force that Chapter 11 bankruptcy, followed by restructuring and "cleansing" of General Motors' balance sheet, is a potential scenario in the ongoing efforts to keep the giant automaker alive.

GM's new chief executive, Fritz Henderson, acknowledged as much on CNN Sunday. "You can't rule options off the table. So you basically say we will spend time to try to get it [done] outside of bankruptcy. But if we can't, we're not going to compromise our goals. We're going to get it done inside our bankruptcy. Our preferred approach is still to do it outside, but you can't rule out going in."

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Filed under: 360º Follow • auto bailout • Economy
March 31st, 2009
12:37 PM ET

Financial Dispatch: Lose your job, keep your car

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Andrew Torgan
CNN Financial News Producer

Ford and General Motors today introduced new incentive programs designed to lure car buyers worried about losing their jobs.

Ford, as part of its "Drive One" deal, says it will make as many as 12 monthly payments of $700 or less on behalf of new car purchasers who lose their jobs. The program begins today and will continue through June 1.

The offer applies to buyers of any new Ford, Lincoln or Mercury vehicle.

GM is calling its plan "GM Total Confidence." The automaker will make as many as nine monthly payments of up to $500 each for buyers who lose their jobs "for economic reasons" during the first two years of ownership. Only those eligible for state unemployment benefits will be able to have their car payments covered.

The incentive programs are similar to one introduced in January by South Korea’s Hyundai.


Filed under: Airline Safety • Andrew Torgan • auto bailout • Economy • Finance • Gas Prices • Oil • Unemployment
March 31st, 2009
10:38 AM ET

GM chief sacrificed because of Obama's AIG woes

Editor's note: Frank Micciche is managing director of the Next Social Contract Initiative at the New America Foundation, a think tank that promotes thought from across the ideological spectrum. He has worked for Sallie Mae and for two former governors, both Republicans: John Engler of Michigan and Mitt Romney of Massachusetts.
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Frank Micciche
Special to CNN

In a recent interview on "60 Minutes," President Obama laughingly lamented that, "The only thing less popular than putting money into banks is putting money into the auto industry."

Explaining the dissonance between his mood and the grim reality of the situation, he cited the need for "a little gallows humor to get you through the day."

In that spirit, evidently, the president today issued a fiat to Chrysler that it immediately finalize negotiations on a merger or lose any possibility of future federal government support. And the company with which they are being forced to consummate the merger? Fiat, of course.

And so the Woody Allen movie that is the auto bailout continues.


March 31st, 2009
10:31 AM ET

The double-standard question haunting today's Detroit announcement

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/POLITICS/03/30/obama.autos/art.obma.gm.chyrs.cnn.jpg]

Elana Schor

President Obama is about to administer tough medicine to GM and Chrysler, giving them 60 days and 30 days, respectively, to formulate workable plans for financial survival - in addition to securing the resignation of GM CEO Rick Wagoner.

Wagoner's departure hardly comes as a shock, given that the once-mighty General Motors began its current swoon under his stewardship. But Michiganders and Wall Street analysts alike are pointedly asking the same question Josh raised last night at the TPM mothership: Why did the Obama administration call for Wagoner's head but allow ineffectual banking CEOs to stay on the job and the government dole?

Here's how Rep. Thaddeus McCotter (MI), the third-ranked House Republican leader, put it to Reuters: Mr. Wagoner has been asked to resign as a political offering despite his having led GM's painful restructuring to date. Mr. Wagoner has honorably resigned for the sake of his company's working families. When will the Wall Street CEOs receiving TARP funds summon the honor to resign? Will this White House ever bother to raise the issue? I doubt it.


March 30th, 2009
01:09 PM ET

The wrong-minded auto rescue

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/images/03/30/art.getty.cars.jpg]
Ronald Glantz

Despite talking a tough line today, Washington seems determined to bail out Detroit, despite the objections of the public (61% opposed it, according to a CNN poll in February). The public is correct. Money diverted to a dying industry is taken away from areas with better prospects.

Unfortunately, changing the chairman is only window dressing at this point. Carlos Ghosn succeeded in turning around Nissan (NSANY) because the problem was only stodgy styling and high component costs - consumers knew the engineering, assembly, and dealers were terrific.

Detroit's problem is not just health care and retirement "legacy" costs. There is another legacy cost that is just as important – decades of bad cars and trucks. Does anyone remember Schlitz? It was the second-largest selling beer in the country as recently as 1976. Then the formula was changed so that it didn't taste as good. Schlitz restored the original formula, but it was too late. Consumers were unwilling to spend a couple of bucks to see if Schlitz was back to premium quality. Budweiser was good enough.


Filed under: auto bailout • Economy
March 30th, 2009
12:45 PM ET

Astonishing day for GM, America

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/US/03/30/gm.ceo.resigns/art.gm.gi.jpg caption="General Motors CEO Rick Wagoner's resignation statement is on the GM Web site."]
Bob Greene
CNN Contributor

The phrases have become part of the national lexicon:

"What's good for General Motors is good for America."


"As GM goes, so goes the nation."

Both are inexact translations of what GM's president in the middle of the 20th century, Charles Wilson, once said. His true words, according to many sources, were:

"For years I thought what was good for the country was good for General Motors, and vice versa."

So the meaning was the same, even as Wilson's sentences themselves were paraphrased. And perhaps the most instructive part about it - during this week in which the current head of General Motors, Rick Wagoner, is leaving the company under pressure from the White House - is the context in which Wilson was praising the power and the patriotic symbolism of GM.

He was appearing at a congressional hearing because a brand-new president of the United States - Dwight D. Eisenhower - had selected him to become secretary of defense. Wilson, who still had significant holdings in GM stock, had been asked, as he sat before Congress in 1953, if he would be able to make decisions for the country that might not be in the best interests of his old company; his instinctive response was that the question was largely irrelevant, because the welfare of the United States and the welfare of General Motors were in essence the same thing.


Filed under: 360º Follow • auto bailout • Economy
March 18th, 2009
05:07 PM ET

GM's China success

Program Note: Tune in to hear more from John Vause about how GM is doing in China tonight on AC360° at 10 p.m. ET.

The president of GM China Group tells John Vause that General Motors is doing well in China.

While General Motors is facing bankruptcy, and asking for government help in the US and parts of Europe, in China the company is making a profit, and has been described as one of the last jewels in the GM crown. It has also sent a clear message to policy makers in the US that this is a company than can compete globally, it's a company worth saving.

Filed under: auto bailout • John Vause • Road to Rescue
February 25th, 2009
02:49 PM ET

Financial Dispatch: Ford execs ask for pay cut

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Andrew Torgan
CNN Financial News Producer

Ford CEO Alan Mulally and Chairman Bill Ford, Jr. have decided to cut their pay by 30% for the next two years and to suspend bonuses for salaried workers this year.

Ford will also offer another round of buyouts and early retirements to all of its hourly workers and is suspending cash compensation for board members to help meet its goal of returning to profitability in 2011.

The moves come one day after the struggling automaker reached a deal with the United Auto Workers union that lets the company pay less cash into a retiree health care fund.


Filed under: Andrew Torgan • auto bailout • Economy • Finance • Gas Prices • Oil • Wall St.
February 23rd, 2009
08:27 AM ET

Wall Street got the better bailout

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/POLITICS/02/20/sou.gm.lansing/art.saturn.cnn.jpg]
Frank Micciche
Special to CNN

There was good news and bad news in the recent filings Chrysler and General Motors made with the federal officials overseeing their multibillion-dollar rescue.

The good news was that, if the federal government can see its way clear to adding another $21 billion or so to the more than $17.4 billion they received in bridge loans in December - including a cool $7 billion by the end of March to forestall their insolvency - the companies are confident that they will be able to retool, return to profitability and repay the money provided them.

The bad news: it won't happen until late in President Obama's first term, if at all, and in the meantime they will eliminate at least 50,000 jobs this year alone, close even more plants than previously announced and discontinue several of their most recognizable lines of cars.


Filed under: auto bailout • Bailout Turmoil • Economy • Wall St.
February 17th, 2009
12:47 PM ET

Financial Dispatch: Billions more or bankruptcy?

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/POLITICS/02/17/california.budget.crisis/art.schwarzenegger.gi.jpg caption="Gov. Arnold Schwarzenegger warned lawmakers about potential job cuts last week."]

Andrew Torgan
CNN Financial News Producer

It’s D-day for Detroit. General Motors and Chrysler today must submit plans to show the government how they can become viable and repay billions in federal loans. The two struggling automakers received approval for more than $17 billion in loans in December.

In addition, the Obama Administration intends to pay out the third installment of the loan to GM today. A senior White House official says the $4 billion dollar payment would fulfill the Bush Administration's agreement to give $13.4 billion to GM to help that company gear up for its restructuring effort.

GM and Chrysler have until the end of March to show that their plans are working. Otherwise, the government could recall those loans and force them into bankruptcy. But both automakers are still expected to say they need even more money - several billion dollars in fact - to avoid financial collapse.


Filed under: Andrew Torgan • auto bailout • Economy • Finance • Gas Prices • Oil • Wall St.
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