To help meet customer needs and increased federal fuel economy standards, Chrysler plans 24 vehicle launches in 48 months, and announced electric technology as a primary strategy for developing fuel-efficient, low emission vehicles, including an electric-drive vehicle in 2010. The viability plan shows compliance with current federal fuel economy requirements as set fort in the Energy Independence and Security Act of 2007. Going forward, Chrysler supports the development of a uniform national standard that reflects the input of all constituents. ... Chrysler has sign a non-binding agreement to pursue a strategic alliance with Fiat that represents significant strategic and financial benefits to stakefolders. ...The proposed Fiat Alliance would enhance Chrysler's viability plan and would provide the Company with access to competitive fuel-efficient platforms, distribution capabilities in key growth markets and substantial cost-saving opportunities.... [W]e will require incremental financial support to continue our orderly and effective restructuring and are therefore now seeking an incremental $2 billion in addition to the remaining $3 billion that was within the scope of our original December 2 [2008] plan submission. ... Restructuring Actions ... Management Concessions Chrysler will fully comply with the restrictions established under section 111 of EESA [Bailout Bill, Oct 2008] relative to executive privileges and compensation. In addition, the Company has suspended the 401k match, incentive bonuses, merit increases and has eliminated retiree life insurance benefits. ...
Chrysler has sign a non-binding agreement to pursue a strategic alliance with Fiat that represents significant strategic and financial benefits to stakefolders. ...The proposed Fiat Alliance would enhance Chrysler's viability plan and would provide the Company with access to competitive fuel-efficient platforms, distribution capabilities in key growth markets and substantial cost-saving opportunities....
[W]e will require incremental financial support to continue our orderly and effective restructuring and are therefore now seeking an incremental $2 billion in addition to the remaining $3 billion that was within the scope of our original December 2 [2008] plan submission. ...
Restructuring Actions ...
Management Concessions Chrysler will fully comply with the restrictions established under section 111 of EESA [Bailout Bill, Oct 2008] relative to executive privileges and compensation. In addition, the Company has suspended the 401k match, incentive bonuses, merit increases and has eliminated retiree life insurance benefits. ...
Reportedly, GM is soliciting $16.6B more from US Treasury and predicts profitiability in 24 months. pdf, "2009-2014 Restructuring Plan," (117pp) "as required under section 7.20 of the Loan and Security Agreement Between General Motors and the US Department of the Treasury Dated December 31, 2008".
Contents of interest --
General Motors is also investing significantly in hybrid and plug-in vehicles for both cars and trucks and offers 9 hybrid models in 2009 ...a number which will increase to 14 models in 2012 and 26 models in 2014. The Chevrolet Volt is included in this count, as are two additional models sharing the Volt's extended range electric vehicle (EREV) technology. ...One item of particular note is the Company's announcement on January 12, 2009 to construct a new manufacturing facility in the United States to build Lithium-Ion battery packs for the Chevrolet Volt. ...The Company has already submitted two Section 136 [Energy Independence and Security Act of 2007] applications to the Department of Energy in support of various 'advance technology' vehicle programs ... These two requests combined total $8.4 billion, and a third application is planned for submission by March 31, 2009.
I don't think that a solution where the US government puts in money that is used to prop up foreign divisions (the European divisions were profitable, but now everything is operating at a loss) is going to be politically viable.
And GM has the nuclear option to play. Give us money or we close our factories and take the machines back to the US. With global auto demand down substantially, there's a real argument to make the cuts overseas.
Not to mention, that machinery located at Opel and Vauxhall plants could be shipped to the US and save an enormous amount of retooling costs that the company will have to deal with if existing machines are retooled instead of bringing machines that have already been put through their paces back to the home market, to secure the future of the company in the US. And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
It certainly seems that GM is playing a game of pattern negotiation here.
Great observation. The strategic advantages of transnational incorporation over geographic incorporation of stakeholders know no boundaries. The securities owners of the holding company --consolidated revenues-- are everywhere. Driving the perceived value of a company's "nationalization" and industry consolidation.
there's a real argument to make the cuts overseas.
Looks like rationalizing [read: reducing number of] GM assets --P&E by brand rather than regional revenue shares-- in order to satisfy equity- and bondholders' demand for profitability [read: uninterrupted interest payments] amounts to holding hostage employment guarantees by brand.This makes politically motivated counter offers to assure so-called social benefits of "nationalizating" a global enterprise difficult to quantify. Meanwhile, FRB handed GMAC a bank charter -- all the more reason to unwind GM manufacturing.
viz. SAIC, Saab, Opel, Saturn and HUMMER (no love lost there).
machinery located at Opel and Vauxhall plants could be shipped to the US and save an enormous amount of retooling costs ...to secure the future of the company in the US.
Not likely. GM will abandon that P&E. Although I haven't read the plans entirely, both GM and Chrysler explicitly tie existing covenants and new financing to launch of 'advanced technology', i.e. hybrid and plug-in EVs, multiple new make and models by 2012, and Li-Ni batteries. Ha.
US Treasury source: GM (117pp), Chrysler (177pp) Diversity is the key to economic and political evolution.
And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
