By Associated Press,
DETROIT — The auto industry looks set to ride the appeal of smaller cars to its best monthly performance in almost four years.
General Motors Co. says its U.S. sales rose 12 percent in March on solid demand for cars and small crossovers that achieve 30 miles per gallon or better on the highway. Chrysler Group’s sales jumped 34 percent on strong sales of Fiat small cars and Chrysler sedans. Sales at Ford Motor Co. rose 5 percent as sales of the Focus small car rose sharply compared with a year ago.
Americans who couldn’t bear a new car payment during the economic downturn are back on the market. With gas above $4 in some parts of the U.S., buyers are leaning toward new fuel-efficient compacts like the Chevrolet Cruze and sub-compacts such as the Honda Fit to save money. Also, incentives on trucks are good enough to lure buyers who want something bigger.
The consulting firm LMC Automotive predicts U.S. sales of new cars and trucks reached 1.37 million last month, up 6 percent from March of 2011 and the highest number since May of 2008. Industry analysts say sales could run at an annual rate of 14.1 million to 14.5 million vehicles, continuing the strong performance in January and February. Some companies could break sales records.
Compact and subcompact models combined are expected to account for 23 percent of retail sales for March, according to LMC.
For Chrysler, it was the best month for the company in four years, while Ford had its best March performance since 2007. Other automakers report later Tuesday.
Chrysler says Fiat sales hit 3,712, compared to just 500 last March when the car was first on the market. The subcompact Fiat is growing in popularity as new dealerships open and fuel prices rise.
Sales of Chrysler’s 200 and 300 sedans each doubled over last March. Both cars have recently been revamped and have better fuel economy than previous models, which is attracting new buyers. Jeep brand sales rose 36 percent on the strength of the Jeep Grand Cherokee.
Ford says sales of the F-Series pickup, which is the best-selling vehicle in the U.S., rose 9 percent. Truck sales are up as small businesses and construction crews continue to grow more confident about the economic recovery.
Incentives also helped boost truck sales. Chrysler said its Ram pickup sales were up 23 percent over last March.
March also saw more growth in loans to subprime buyers. Jefferies analyst Peter Nesvold wrote in a note to investors that non-prime buyers, or those with less than stellar credit, are coming back into the market after being shut out for several years due to lack of loan availability.
AutoNation, the Fort Lauderdale, Fla., auto retailer, said Tuesday that its sale rose 15 percent in March, mostly on the strength of Detroit brands, which were up 26 percent.
March could be a month of records. It could be the best sales month in the history of Hyundai Motor Co., Nissan Motor Co., and Volkswagen, said Jesse Toprak, vice president of market intelligence for auto buying site TrueCar.com.
A quick look back in time. As I said, thanks Democrats (some Republicans as well).
House passes Detroit bailout
Bill would provide $14 billion in loans to keep GM, Chrysler out of bankruptcy. But Republican opposition in Senate threatens chances of approval.
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By Chris Isidore, CNNMoney.com senior writer
Last Updated: December 11, 2008: 7:52 AM ET
NEW YORK (CNNMoney.com) -- The House passed a stopgap $14 billion bailout to U.S. automakers Wednesday evening, but Republican opposition cast doubts about its fate as it moves on to the Senate.
The House vote came in the wake of an agreement on the measure earlier in the day between Democratic Congressional leaders and the Bush administration.
The bill is designed to keep General Motors (GM, Fortune 500) and Chrysler LLC out of bankruptcy through at least March to give the new Congress and Obama administration a chance to craft a more long-term solution.
The measure passed by a count of 237 to 170 thanks to overwhelming Democratic support. But only 32 Republicans joined Democrats in voting for the bill.
Eight of those Republicans are from Michigan, joining the six Democrats in the state's delegation in voting for the measure.
A ninth Michigan Republican, Timothy Walberg, did not vote. Seven other Republicans that voted for the bill are from nearby Midwestern states that are also home to auto plants. But outside of the auto belt, the bailout had little Republican support.
Senate rules would allow the Republican minority to block or even kill the legislation. And even with the support from the White House, Republican anger seemed to grow throughout the day.
During the House debate, Democrats and Republicans from Michigan both expressed heavy support for the bailout. But virtually all other Republicans who spoke during the debate argued that it would not solve the problems dogging the industry.
The $14 billion is $1 billion less than what was being discussed earlier in the week, and less than half the $34 billion requested by automakers last week. Still it may well be enough to stave off the immediate threat of bankruptcy.
GM has said it needs $4 billion by the end of the month to continue operations, and believes it'll need an additional $6 billion in the first three months of 2009. Chrysler has said it needs $4 billion by the end of the first quarter.
Ford Motor (F, Fortune 500), which has more cash on hand than its U.S. rivals, is not expected to tap into this bailout in the coming months.
What is in the bill
The stopgap measure is designed to let the new Congress and incoming administration of President-elect Barack Obama to craft a longer-term solution.
It would also give the companies time to negotiate with creditors and the United Auto Workers union on additional concessions needed to stem their ongoing losses.
But the bill also sets strict oversight of the companies.
There would be limits on executive pay, prohibitions for so-called golden parachutes and requirements that the automakers get rid of their corporate aircraft and not pay dividends while loans are outstanding.
The bill also provides for a presidential appointee, popularly referred to as a "car czar," to oversee the company's efforts to restructure their operations. If the car czar determines that the companies have not made progress on cutting costs, the loans would be recalled within 30 days.
In addition, the government would receive warrants - the right to buy a stake in the companies at a certain price - equal to 20% of the loan's value.
Still plenty of opposition
While most House Republicans have been strongly opposed to the auto bailout from the beginning, multiple Republican aides say that the Michigan Republicans and others from the Midwest auto belt are expected to vote for the agreement. Such support would give House Democrats the votes needed to pass the bill.
The agreement came after Democrats dropped a provision in a previous draft of the bill that would have prohibited automakers from continuing their support of lawsuits against states with emission standards more stringent than current federal rules.
Still, some Senate Republicans have threatened a filibuster, which could delay and even potentially block a vote on the bill. Five Senate Republican critics of the measure vowed Wednesday to do what they could to defeat the measure.
"What I've seen thus far is a travesty," said Sen. Richard Shelby, R-Ala. "This is an installment on a huge bailout that will come later. This will not make Chrysler, General Motors or Ford competitive. This is only delaying their funeral."
Shelby would not predict whether critics had enough votes to block passage. But he cautioned "I think we're going to have a lot more friends than you probably think."
Vice President Dick Cheney and White House Chief of Staff Josh Bolton attended a Senate GOP policy lunch in the Capitol Wednesday to try to persuade skeptical GOP senators to support the bill.
After the meeting, two Republican senators said they believed the bill was in trouble.
"I don't think the votes are there on our side of the aisle," reported Sen. George Voinovich of Ohio, one of few vocal Republican backers of the bill. Shelby added that he, too, thought the bill would not pass.
The big question is whether supporters of the bill can convince enough Republicans to get 60 votes to overcome opposition among those GOP senators.
Sen. Harry Reid, D-Nev., said if Senate Democrats and Republicans can not reach an agreement to cut through the procedural steps opponents of the bill are likely to require, the Senate won't have final passage until late Saturday night or Sunday.
Reid held out hope that an agreement will be reached to require a 60-vote threshold -- the same vote total needed to break a time-consuming filibuster -- but allow final passage by perhaps Friday.
The Bush administration vowed Wednesday evening to keep pressing lawmakers in coming days.
"We believe the legislation developed in recent days is an effective and responsible approach to deal with troubled automakers and ensure the necessary restructuring occurs," said Dana Perino, White House press secretary.
Last edited by Havakasha; 04-03-2012 at 12:20 PM.
As I said before, thanks President Obama.
Clinton: Obama's biggest achievement is saving U.S. auto industry
By David Shepardson
Detroit News Washington Bureau
Former President Bill Clinton speaks to the 2012 United Auto Workers union (UAW) National Community Action Program Conference. (Jacquelyn Martin / Associated Press)
Washington — The decision to save the U.S. auto industry is President Barack Obama's biggest achievement — bigger than landmark health care reform, former President Bill Clinton told more than 1,600 current and retired autoworkers Thursday morning.
In a 50-minute speech to the United Auto Workers union's Community Action Program convention here, the former president also criticized a Republican presidential candidate for opposing the $85 billion auto bailout.
"Every time I hear Mr. Romney talking about this, I think his daddy must be turning over in his grave," Clinton said of Mitt Romney's late father George, who was a three-term governor of Michigan and chief executive at American Motors. "We could not afford to lose a million and a half to 2 million jobs."
Romney, a Detroit native, has repeatedly said the auto bailout was a bad idea — and that the companies should have gone into bankruptcy before receiving government assistance. But he's insisted he would not have allowed the auto industry to collapse.
Clinton said Obama's greatest achievement was his decision to save General Motors Co. and Chrysler Group LLC.
"I happened to think this auto industry package is the most important thing that was initiated by President Obama and the administration. I am glad they passed health care — that was just a question of waiting until we had 60 votes," Clinton said. "(The auto bailout) did not have to happen. The president could have walked away from this."
From The Detroit News: http://www.detroitnews.com/article/2...#ixzz1qzXLxR38
Three years after GM and Chrysler filed for bankruptcy and received $25 billion in government loans, all of the U.S. automakers have restructured their labor contracts and pension costs, putting the Big Three on the road to recovery.
“Probably the most important part of federal assistance [that GM and Chrysler received] was the ability to maintain their product programs,” said Sean McAlinden, chief economist at the Center for Automotive Research. “Detroit had been criticized for years for not making smaller, fuel-efficient cars, and they’d finally gotten around to it by the time of the crisis. But these cars take about four or five years to develop.”
The Big Three have also managed to trim costs by seeking concessions from unions. The UAW has allowed GM, Chrysler and Ford to hire new workers at lower wages to compete with foreign manufacturers. In factories around Detroit, starting employees make $14 per hour, half of what more experienced union workers can make. And the automakers managed to close many of their unprofitable factories.
As result, McAlinden said, Ford, GM and Chrysler now have a far lower “break-even point” for each car they sell.
Dean Baker, co-founder of the Center for Economic and Policy Research and a frequent liberal critic of the Obama administration, said the bailout illustrates the need for government intervention in times of crisis.
“This is one you’ve obviously gotta give Obama a lot of credit for,” he said. “It’s worth rubbing Republicans’ nose in this. Even within the administration, it was a tough debate. There were a lot of people who wanted to let Chrysler go down. They made the call — in retrospect the right call — to save them both. … That’s not an argument for everywhere and always you want the government to step in but you have limited cases where it’s worth the government making an intervention.”
Baker sees a fair arrangement, not an overreach. “Providing financing at below market rates and gaining nothing? It’s hard to see what the benefit of that would’ve been.”
It’s also hard to brand the government’s actions as inefficient or overly intrusive when the results have exceeded even its supporters’ expectations. The government didn’t force the newly successful products on the companies, but those products would never have reached the market if the government had stepped back entirely.
The critics who argued the government should have stepped back continue to second-guess the Obama administration’s actions and mischaracterize its role in shaping the new fleet.
For instance: Among GM’s new products is the hotly anticipated 2014 Chevy Impala, which was unveiled at the New York International Auto Show on Wednesday, following years of delays.
Mitt Romney attacked the Volt the same day the big three released their new numbers. “I’m not sure America was ready for the Chevy Volt,” he said. “I mean, I hope it does well, I don’t want to disparage any product coming out of Detroit. But I think instead of having politicians tell us what kind of cars we ought to make, we ought to let the people who are trying to understand the market make that decision.”
Romney also continues to struggle with his original position on the bailout — outlined in a memorable 2008 New York Times op-ed, “Let Detroit Go Bankrupt.”
“If by chance people don’t remember that editorial, we’re going to remind them of it,” said Don LaForest, chairman of the UAW’s bargaining committee at the Detroit Hamtramck plant, where the Volt is made.
Rattner believes it’s a safe bet that the bailout will become a major campaign issue.
“That the auto bailout has had a very positive impact on the country is the message you’ve seen the White House use and they should continue to use it,” Rattner told TPM. “There were some pretty amazingly incorrect predictions made by people who were against the bailout. They should step back and rethink their hypotheses.”
Rattner pointed out that the auto bailout was wildly unpopular when it was greenlit and said Obama “deserves credit for making the decision even though it was so unpopular,” though polls have shown that it’s become much more popular.
Still, Rattner said he would caution against anyone thinking that another bailout should ever be repeated.
“I don’t think anyone should think about this as another tool that should be employed in the future,” Rattner said. “These were very, very unique circumstances. Nobody should go through life thinking the government is going to be in reserve to bail out failed companies left and right.”