In today's economy it seems that some of the oldest and largest American staples are not safe from the financial meltdown the country is experiencing. Ford and General Motors announced today that their third quarter losses were bigger than originally anticipated. Not to mention that third largest American vehicle manufacturer, Chrysler has been is serious financial shape with its main investors looking for a buyer. Could this be the end for American motors as we know it? Are we all going to be driving Japanese vehicles in the future?
In GM's announcement today they reported a Q3 loss of 2.5 billion dollars and revenue of 37.9 billion compared to 43.7 billion in Q3 07. With these enormous losses GM also announced that it may be out of cash by the end of this year. Furthermore GM has stopped talks to purchase Chrysler.
In Ford's announcement today they had a Q3 loss of 129 million. Although this number is not as staggering as the GM number, Ford too is running out of cash, stating they can make it through 2009.
Meanwhile it seems that Chrysler is in far worse shape then its two American competitors.
Chrysler, its investors, and the government were all hoping for the GM purchase talks to become a reality. Chrysler has been losing market share with their trendy unreliable vehicles, which never seem to get a passing rating by consumer reports and lets not forget the dreadful merger with Daimler. The only thing left on Chrysler's plate now is major restructuring and Chapter 11.
As for GM and Ford, all hope is not lost. They have both announced to cut thousands of jobs and reduce spending. GM has gone as far as discontinuing employee 401k matches and tuition reimbursement programs. However spending is key, seeing how both companies spent billions over what they earned in Q3. It also seems that the government is going to lend a helping hand including loans up to 50 billion to help the companies stabilize.
As a child my grandfather used to tell me stories about his Ford Fairlane and his fathers Model T. I grew up dreaming about owning a classic muscle car. If our current state is any indication of the future all I will have is dreams and memories of American cars and trucks. The big three need to act now by cutting foolish spending and building efficient and dependable vehicles.
With Chrysler having already having a nail or two in the coffin, the others and our economy can not afford the same.
Subscribe to:
Post Comments (Atom)
1 comment:
Saving The Big Three Will Save Millions
With just over six weeks left in 2008, American taxpayers are holding their breath waiting for the other shoe to drop before heading into a new year with a new president. Only this time the shoe is the size of the country’s three largest automakers.
In an article published November 7, 2008 on the blog of Michael Cackler, a self-proclaimed Social-Conservative who follows current events, he lays out the case of “the end of American motors as we know it.” Michael points outs that the “Big Three” are running out of money and need, yes, the American government to put salve on their wounds, saving at least two of the three lives.
He talks of staggering third quarter losses for GM and Ford and fading hope for Chrysler, which has been down this road before. In 1979, Lee Iacocca, the head of Chrysler at the time, shocked the nation by asking Congress to do the unthinkable and guarantee loans for $1 Billion to save the failing company from bankruptcy. Although this was an unlikely venture for the U.S. government, Chrysler prevailed and was quickly able to begin the payback of loans and get back on track.
Now, almost thirty years later, Chrysler, along with GM and Ford, is once again asking Congress for a helping hand. Only this time it falls on the heels of trillions of dollars already committed by our government to bailout banks, mortgage companies and an insurance conglomerate that thinks it is okay to continue to do business as usual, provided the media keeps its’ collective noses out of their business.
As Michael clearly states, these auto manufacturing giants (GM, Ford and Chrysler) are some of the “oldest and largest” American companies that are caught up in the “financial meltdown the country is experiencing.” Whether or not these three can survive is questionable, even if they change their ways and learn how to run a better business model, while building a car model for the future rather than continuing to build autos that are better suited to our past.
The reminiscence of Michael’s grand-father’s “Fairlane” and his great-grandfather’s “Model T” are only one sad part of this story. The untold story is that of millions of families, who will suffer much more than shattered dreams of their kids not growing up to one day own an icon of history like the “muscle car.” It is the story of ‘would-have-been, should-have-been, could-have-been,’ if the taxpayers don’t step up to the plate to help out these giants.
I am not one to give over my hard-earned tax dollars lightly. I do not think that these companies truly deserve another chance to simply try to make big business a success. I think they should have paid attention in 1980 when Honda announced it would bring the international marketplace to their doorstep by building Japanese cars here in America. I think they should have countered then with a higher bid by building a more competitive auto for Americans to buy from them: More fuel-efficient, more durable, and more cost effective for consumers. This was the time to shore up their businesses.
I am not for having millions of American families lose their jobs, their homes, their hope for their children’s futures and their own retirement because “executives” refused to look out for their employees and for their customers. We will all be touched by this tragedy of the loss of these companies. Just look around to see the faces of family and friends who drive an American car now. What will happen to them when their car or truck needs to be repaired? Will the needed parts be available? What will happen to loans carried by Ford Motor Credit, GMAC and Chrysler Financial? The employees who work for these companies, dealerships and all vendors of these motor mile giants will be hurting and out there competing for your job!
Yes, I realize that the world is in the middle of a recession, but did no one in a position of authority see this coming? American voters spoke loudly on November 4. It is time that our President, the Congress and “big business” hear what was said. I heard clearly: “We have had enough; now fix it!” It is time for everyday Americans to take notice of what is happening in our country, our communities and our workplaces and to become accountable. If not, we shall soon wake up to find that we are in a foreign land.
Post a Comment