Well, as usual I’m late to the party… But, I’m one of the few with the best advice and opinion. Yes, I am trying to be funny.
President Bush, after a good while of thinking, decided that it was right to give the Detroit 2 money to sustain themselves. I say Detroit 2 because Ford was never lobbying for aid. They were simply there representing the needs of Chrysler and General Motors. Let’s face it, if they go under, Ford has to pick up all of that slack, along with Toyota, Nissan, Honda, Acura, Lexus, BMW, Infiniti, Mercedes-Benz, Audi, Hyundai, Kia, and the likes. So, if the big guys in Detroit don’t get money, that means that the others who are picking up for their lost sales will need extra aid to keep running. Sure, they can support growth of certain car models for a little while, but that means that they have to be pumping out more than what they’re used to in cash flow, too.
So, GM and Chrysler received $17.4 billion from the U.S. government, and an extra $4 billion from the Canada. $2.7 billion comes from the Canadian government and $1.3 billion will come from Ontario. As the report states in the link above, suppliers will have access to the money as well, along with banks being given incentives to loan more money. That’s nice of them. This is no surprise to me since Canada has had a nice burst of energy in their auto sales department since automakers started taking down their high prices to coincide with the Canadian dollar getting stronger.
Now, the bridge loan that President Bush gave to GM and Chrysler isn’t just some crazy idea. It’s pretty intelligent. The U.S. government will get a small portion of each automaker to help their situation. If the two do not seem to be making enough money by March 31, the government can order more funds from TARP to help the two be more profitable. The biggest thing here is that the government is trying to secure the automakers future and help them become profitable. I really hope that GM and Chrysler will help themselves and one another with everything.
The respective amounts that go to GM and Chrysler will be roughly $13.4 billion to GM and $4 billion to Chrysler. The money is being payed out as we speak, and will continue into January.
Now, I know what you’re asking, “Wasn’t Detroit being offered $14 billion from Congress?” Yes, they were. But, as the Bush administration, Detroit, and many analysts said for a while, that amount was not enough. Don’t expect this to be over, though. Just because we’ve helped by giving them money now, doesn’t mean we won’t have to help in the nearby to distant future.
I still believe that we will be helping to loan GM and Chrysler money up until 2011, or so. I do believe that most analysts are a little off in their estimations of us handing over about $50 billion in total. I think it will be more in the $75 billion ballpark. But, who knows. I’m not a specialist that deals with all of these numbers all day. I just see the information, check things out, and then make an educated guess… Or sometimes just a simple guess. I’m awful with math. I wouldn’t have realized that 13.4+4 came out to be 17.4… Okay, so I’m not quite that dumb.
Now, here comes another good question. What are we as Americans going to do about this? How are we going to help. Well, most people…nothing. No matter what the advertisements will suggest, A Cadillac CTS just isn’t a BMW 3-Series or 5-Series to me. I’d rather have my BMW. Another thing is that we need to get the American automakers away from the pushy adverts that try and display how much better their car is than the Germans. As much as I hate to say it, Americans these days are too soft to enjoy that sort of advertising. Notice how in Europe the competitive advertising is so large and loud between Mercedes, BMW and Audi? Well, there’s a reason for that. They enjoy it. Over here, most people don’t enjoy that. They want to know whether their Toyota or Ford gets better gas mileage… It’s unfortunate, I know. But, as much as I hate to admit it, it’s the truth.
Jim Press, former corporate man for Toyota, now VP over at Chrysler claims that they are the American equivalent to Mercedes-Benz. Whoa there Jim! Just because Chrysler has 4 billion bucks in their pocket doesn’t mean you can start back with the false truths that you’ve put out for so long. Yes, a Chrysler 300 is off the chassis and platform of the Mercedes-Benz E-Class… The one before the current model… That’s the W210, which was offered from 1996-2002. That’s not bad. That was a nice car. A good chassis. Usually the American automakers are used to using old technology to say their cars are better. Now Chrysler can say that their technology is only 8 years old.
While I enjoy cracking on every automaker when I get the chance, the real fact of the matter is that we need to have a lot more compassion for the Detroit 3 than we currently have. I know, we’ve been jilted and taken advantage of before… I know. But, it’s time to set that aside and help them. Don’t be afraid to crack jokes, though. I know I certainly will not.
Now, can we get back to making some good ole’ American sports cars?
[Photos taken from: Net Car Show and Motor Trend]