Big Three Bailout Bonanza: February 19th Edition
As noted earlier, we may not be trained "numbers people", but TCC staffers can usually hold their own on the brave frontier of math. Still, we've had a tough time wrapping our heads around the Big Three bailout bottom line, thanks largely to conflicting dollar figures floating across the interwebz and the He Said/She Said nature of the whole ordeal. So we did what any sensible team with access to Microsoft Access would do: we made a bar chart.
The top half is pretty accurate, based on congressional hearings and multiple reports from venerable financial outlets. The "Looming Costs" section, however, is much more nebulous: for example, the figure at the very bottom--the $9 billion associated with tax deductible interest for new car loans--is an approximation, since that provision was struck from Obama's economic stimulus package. Rumor has it, however, that it's headed back to the floor as a bill in its own right.
There are numerous other expenses we could've included, too, since there are plenty of bailout dollars headed to sister sectors of the auto industry. If you see something important that we've left out, drop us a line or make a note in the comments below; we'll try to include it in updates.
And believe us: there will be updates.
This story originally appeared at The Car Connection
Volvo, Saab to Be Rescued by Swedish Government
Showing that economic troubles and auto industry woes are not confined to the U.S., Sweden just announced that it is releasing a 2.1 billion euro credit line/emergency loan for Volvo and Saab. AutoCar claim the money is both to help the automakers and safeguard Swedish jobs.
A statement from the Swedish government assured a "clear assumption that the state does not intend to acquire any of the existing automotive manufacturers." Interesting--and similar to U.S. Congressional mandates for efficient vehicles--is Sweden's pledge of 250 million euro for a government-backed automotive research company set to develop green technologies for future vehicles. This should dovetail nicely with Volvo's trio of DRIVe concepts and Saab's extensiveresearch and development of gasoline engines that actually make more power and better mileage while running on ethanol.
Both Swedish auto firms are currently controlled by U.S. automakers; GM owns Saab, while Ford owns Volvo. But in drastic attempts to stay alive and cut back costs, both domestics have put these European brands up on the auction block, showing the worldwide ripple effect of troubles in the U.S. auto industry.--Colin Mathews
---
Make sure you check out our partner sites dedicated to focused news, reviews and more for Ford, Chevrolet, Toyota, Honda, and the Toyota Prius.
This story originally appeared at The Car Connection
GM Might Kill Saturn, Pontiac, Saab Says Rumor Mill
According to Bloomberg News on Wednesday, by way of Detroit News, GM is considering eliminating its Saturn, Pontiac, and Saab divisions. The move would ostensibly help it receive as much as $12 billion in federal assistance. As of late Wednesday, GM spokesman Steve Harris had no comment on the possible move.
Bloomberg's article quoted sources who came forth only under condition of anonymity. Axing divisions may be a part of GM's formal plan to be presented to Congress this coming Tuesday, December 2, as the Big Three return (hopefully on a commercial airline, or perhaps Greyhound) to make their case once more. After the first monetary request to Congress, Nancy Pelosi and other congressional leaders refused assistance to the Big Three and asked for fiscally responsible plans that show they will be good stewards of loaned monies, able eventually to pay it back.
Part of GM's enormous daily cash burn is supporting a behemoth dealer network--as well as vehicle R&D--for a grand total of eight brands. Paring down to five brands in all will conceivably make GM a leaner, meaner operation, bringing it closer to Ford (four brands) and Chrysler (three).
So what important vehicles might we lose in this scenario? Nothing that couldn't be shifted to another division or that isn't already just a rebadge. The most unique models that come to mind are the Saturn Astra (a rebadged Opel), Saturn Sky/Pontiac Solstice, Saab 9-3 and 9-5, and the Pontiac G8. I think the G8 would be the only significant loss, as it would leave GM without a rear-wheel-drive V-8 performance sedan, apart from the awesome (but twice-the-price) Cadillac CTS-V. Could the G8 be morphed into the next-gen Impala, which should always have a been a rear-driver anyway?--Colin Mathews
---
Make sure you check out our partner sites dedicated to focused news, reviews and more for Ford, Chevrolet, Toyota, Honda, and the Toyota Prius.
This story originally appeared at The Car Connection
