Auto sales plunge, retail sales down

Wall Street may be dancing in the streets, economists may say the recession is over or about over, but the average Joe and Joesetta don't see that. Main Street is hurting and this is real.

Retail sales declined in September by the largest amount this year as car sales plummeted following the end of the government's popular Cash for Clunkersprogram.

The Commerce Department says retail sales dropped 1.5 percent last month. That's smaller than the 2.1 percent fall economists had expected, but still the biggest setback since sales dropped 3.2 percent in December.

Car sales plunged 10.4 percent, but excluding autos, retail sales rose 0.5 percent. That's better than the 0.2 percent increase analysts expected

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New job loss numbers continues the bad news for the economy

The economy may be on the mend for the economists, but out here in the real world, not so much. The job loss continues, the job fairs continues to bring out folks in the thousands, many 2-year colleges are seeing a boom of older students out of jobs, unemployment continues to extend, and the phrase, "there are no jobs out there" is becoming common.

First-time claims for jobless benefits rose more than expected last week in the U.S., a sign employers are reluctant to hire and the job market remains weak.

The Labor Department says initial claims for unemployment insurance rose to a seasonally adjusted 551,000 from 534,000 in the previous week. Wall Street economists expected an increase of 5,000, according to a survey by Thomson Reuters.

Ohio reported one of the largest drops in claims. read more here...

And the auto industry went back into the dumps since the closing of the Cash for Clunkers program.

Major automakers reported September sales declines on Thursday, revealing a tough hangover from this summer's buying spree driven by big discounts to consumers.

General Motors Co. and Chrysler Group LLC posted the biggest slowdowns during the month. Hyundai bucked the trend, reporting a 27 percent rise in sales last month over last year.

"It was a more difficult month than we anticipated," Mark LaNeve, GM's vice president of U.S. sales, told reporters during a conference call."

This is back to reality for the auto industry and for some folks sad to see GM closing down its Saturn line. One of their more reliable auto lines with devoted and repeat customers. Just a shame.

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Cash for Clunkers, Adios on Monday.....

This program got a lot of juice out of it.

The Obama administration will end the popular $3 billion Cash for Clunkers program on Monday, giving car shoppers a few more days to take advantage of big government incentives.

The Transportation Department said Thursday that the government will wind down the program on Monday at 8 p.m. EDT. Car buyers can receive rebates of $3,500 or $4,500 for trading in older vehicles for new, more fuel-efficient models.

Transportation Secretary Ray LaHood said the program has been "a lifeline to the automobile industry, jump starting a major sector of the economy and putting people back to work." He said the department was "working toward an orderly wind down of this very popular program."

The White House has touted the program's success in providing a targeted boost to the sluggish economy since its inception in late July. Through Thursday, auto dealers have made deals worth $1.9 billion and the incentives have generated more than 457,000 vehicle sales.

But the administration needed to put a halt to the program to avoid surpassing the $3 billion funding level. Consumers were on pace to exhaust the program's coffers in early September and dealers have complained about long delays in getting reimbursed for the car incentives. read more here...

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Senate to approve 2B more for "Cash for Clunkers"

Again, a very popular program that have folks buying or at least LOOKING at new cars.

The Senate reached a deal late Wednesday on saving the dwindling "cash for clunkers" program, agreeing to vote on a plan that would add $2 billion to the popular rebate program and give car shoppers until Labor Day to trade in their gas-guzzlers for a new ride.

Following lengthy negotiations, Senate Majority Leader Harry Reid said Democrats and Republicans had agreed to vote on the plan Thursday, along with a series of potential changes to the bill, which was passed by the House last week. Reid has said Democrats have enough votes to approve the measure and reject any changes that would cause an interruption in the rebates of up to $4,500.

Reid said the agreement "accomplishes what we need to accomplish." The vote was not expected to happen until after 7 p.m. ET. read more here...

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Cash for Clunkers a HIT!!!

Republicans try to shut it down if you WANT!!! If you want to expand your base, don't shut this down!!!!

Republicans against it, with some Democrats

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Cash for Clunkers, TIME!!!

Yes, this is the one program that many of my family members have been following and ready to deal, for a new vehicle.

Got an old gas guzzler in the garage? Car shoppers can take advantage of new government incentives worth $3,500 to $4,500. Owners can scrap their clunker in exchange for a new, more fuel-efficient vehicle, and lop off thousands of dollars from the sticker price. Congress approved the "Car Allowance Rebate System," or "CARS," program last month to boost auto sales and attempt to retire some inefficient cars and trucks. Here's a look at the program:

Q: Which vehicles qualify?

A: Cars and trucks must be 1984 models or newer to be eligible for a trade-in rebate. They must get 18 miles per gallon or less in combined highway/city rating — based on the "Estimated New EPA MPG" ratings available at http://www.fueleconomy.gov. The vehicle needs to be driveable, insured and licensed for at least a year — so forget about buying a clunker this summer for $500 and "flipping" it through the program. Violators face penalties if they submit false information.

Q: How do I qualify for the incentives?

A: For passenger cars, consumers can get $3,500 if the new vehicle gets at least 4 mpg more than the trade-in and $4,500 if the new vehicle gets at least 10 mpg more than the trade-in. For sport utility vehicles, pickup trucks or minivans, owners can get a $3,500 rebate if the new vehicle gets at least 2 mpg higher than the old vehicle. The rebate improves to $4,500 if the new vehicle gets at least 5 mpg higher than the trade-in. Large work trucks weighing at least 6,000 pounds can also qualify for rebates of $3,500 to $4,500. read more here....

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Obama creating a council to aid auto industry

Another council....

President Barack Obama is creating a White House council to handle issues that affect American communities and workers tied to the automotive industry.

The White House says Obama will sign an executive order Tuesday to establish the White House Council on Automotive Communities and Workers. The council will be chaired by the president's economic adviser, Larry Summers, and his labor secretary, Hilda Solis.

The executive director will be Obama's director of recovery for auto communities and workers, Ed Montgomery.

Vice President Joe Biden is traveling to Perrysburg, Ohio, to announce the committee's creation.

The recession has been particularly hard on the auto industry, which has lost more than 400,000 jobs in the last decade.

Source

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Good-bye Chrysler...... (Video)

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Cash of Clunkers bill passed in the House

We all know someone who has a clunker and may just benefit from this, especially if it helps in automobile sales. Now it is onto the senate.

The House passed a plan to boost auto sales by providing vouchers of up to $4,500 for consumers who turn in their gas-guzzling cars and trucks for more fuel-efficient vehicles.

The House bill, which passed by 298 votes to 119, is aimed at stimulating car sales during a bleak period for the auto industry and increasing the nation's fleet of cars that get more miles to the gallon.

General Motors Corp. and Chrysler LLC have received billions of dollars in government aid and the entire auto industry has watched car sales plummet during the past year. In May, overall sales were 34% lower than a year ago.

"Our industry has been stuck in neutral and really has not started to move,'' said Larry Kull, president of Marlton, N.J.-based Burns Kull Automotive Group, which includes General Motors, Honda and Toyota dealerships.

President Barack Obama has urged Congress to approve consumer incentives for new car purchases as part of the government's efforts to reorganize General Motors and Chrysler through the bankruptcy courts.

The vehicle scrappage bill has been under negotiations for months as lawmakers try to find a solution that boosts car sales while providing some environmental benefits. Proponents have pointed to similar programs in Europe that have enhanced auto sales.

Source

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GM CEO, Fritz Henderson's Remarks on General Motors filing of Chapter 11 bankruptcy (Video)

President Obama's remarks on GM's Chapter 11 Bankruptcy

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Propping up General Motors a risky business

My take on saving GM, risky.

We are looking at 20,000 people losing their jobs, permanently. There will be permanent layoffs, these folks are gone for good. We are looking at 12 plants to close permanently. No one is calling you back for work to rev up the plant, it is gone. We are looking at 3 plants idle. What does that mean? To me, it means that if things look good down the road that these plants can come back.

Today is a sad day. Today is a happy day.

Sad because a name that everyone in America knows, General Motors, is no more. Happy day because the government stepped in to save GM and Chrysler, by saving this industry came the one thing this country invented, the automobile.

We all can argue about GM's lack of vision, clarity, along with their greed on producing gas guzzling cars/trucks only to be hit with gas rocketing sky high and the consumer letting these cars/trucks go to the wayside. All of the above is true, but the major factor is the poor management of GM that got them here today.

We all can argue about the Obama Administration stepping in and owning 60% of GM and forcing restructuring, retooling, etc. This argument is valid, but remember it was the automotive industry that came running to the government for a bailout, in doing so they have no choice but to do what the Obama Administration says if they want the money.

My take, this is all risky. We have propped up banks and are still propping them up. We have propped up AIG and they are not out of the woods, yet. Now we are propping up GM. It is easy to shake that finger, but many of us know people that work in the automotive industry and this is their life. This is it for them.

I don't know if this will work. Me, personally, I would not purchase a GM or Chrysler car at this time. My attitude is the wait and see. Wait and see if they will produce fuel efficient cars. Wait and see if they produce affordable cars. Wait and see if they will even be around in the very near future. Just wait and see.

President Obama has assumed a platter of headaches, each being put on his plate. If GM does not shake out by 2012 in the right direction, he owns it, and the Republicans will continue to let him know this. (even though the Republicans said send them to bankruptcy from the beginning)

Just risky.

Finally, read what Michael Moore has to say about the closing of General Motors, as we know it, here. Worth a read.

GM Plants to Close

Assembly plants scheduled to close:

—Wilmington, Del. Scheduled to close in July. Cars produced at the plant include the Pontiac Solstice, the Pontiac Solstice Coupe, the Saturn Sky and the Opel GT.

—Pontiac, Mich. Set to shut its doors in October. Produces the GMC Sierra, a sports utility vehicle, and the Chevrolet Silverado.

Assembly plants expected to be idled:

—Orion, Mich. Assembles Chevrolet Malibu and the Pontiac G6. Will halt production in September.

—Spring Hill, Tenn. Assembles Chevrolet Traverse. Will halt production in November.

Two new stamping plants, which mold sheets of steel into different auto parts, are set to close permanently:

—Mansfield, Ohio. Will close in June 2010.

—Indianapolis. Will close in December of 2011.

One stamping plant will be idled:

—Pontiac Metal in Pontiac, Mich. Expected to shut down at least temporarily in December of 2010.

Five plants where powertrain systems are produced are scheduled to close:

—Livonia Engine in Livonia, Mich. Will close in June 2010.

—Four other powertrain plants will close in December 2010: Flint North Components in Flint, Mich.; GM’s Willow Run Site between Ypsilanti and Belleville, Mich.; Parma Components in Parma, Ohio (near Cleveland) and Fredericksburg (Va.) Components.

Three service and parts warehouses and parts distribution centers are also on the closure list:

—Warehouses in Boston, Jacksonville, Fla. and Columbus, Ohio. Set to close on the last day of this year.

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Obama's Remarks on Car Emissions (Video and Transcript)

Obama gets broad support on car emissions

Transcript

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Obama Administration requires cars to get 42 MPG

This is great news, all around. It should have been done YEARS ago with these automobiles. This is too long overdue.

New cars and trucks will have to get 30 percent better mileage starting in 2016 under an Obama administration move to curb emissions tied to smog and global warming, sources said Monday.

President Barack Obama was expected to adopt the higher mileage standards on Tuesday, administration sources said, speaking on condition of anonymity ahead of the official announcement.

The new requirement will mark the first time that limits on greenhouse gases will be linked to federal standards for cars and light trucks.

While the 30 percent increase would be an average for both cars and light trucks, the percentage increase in cars would be much greater, according to the New York Times, rising from the current 27.5 mpg standard to 42 mpg starting in 2016. The average for light trucks would rise from 24 mpg to 26.2 mpg.

California, 13 other states and the District of Columbia had earlier urged the federal government to let them enact more stringent standards than the federal government's requirements. The states' regulations would cut greenhouse gas emissions by 30 percent in new cars and trucks by 2016.
[snip]
Daniel Weiss, director of climate strategy at the Center for American Progress, described it as "a triple play: It will help move America off foreign oil, save families money and spur American businesses to take the lead in developing the job-creating, clean-energy technologies of the future."

Obama's plan also would effectively end litigation between states and automakers. The latter had opposed state-specific rules, arguing that having to meet several state standards would be much more expensive for them than just one federal rule.

SOURCE

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Bad news for the car industry continues....

First and I am not shocked, was the news from Chrysler and the closing of almost 800 dealerships.

Now comes General Motors (GM) and the closing of about 1,100 dearlerships throughout the United States.

General Motors Corp. is telling 1,100 dealers across the nation their franchises will be shut down next year.

The cuts will come just a day after crosstown rival Chrysler announced it was dropping 789 of its roughly 3,200 dealerships by around June 9. Both companies have too many dealerships for too few sales are slashing costs as they race to restructure.

Dealers around the country had nervously awaited news Friday morning, with some saying they were in the dark about how they would be notified. In Richmond, Va., Royal Chevrolet co-owner Del Mugford was slightly relieved when he sifted through FedEx packages Friday morning and hadn't received any bad news from General Motors. But he knew his future could be determined by a phone call or a piece of mail.

\"This is absolutely nerve wracking. It's like a death sentence. It's the worst feeling in the world," said Mugford, 45, who bought the dealership with his younger brother in 2002 after owning an Oldsmobile franchise down the street. GM closed its Oldsmobile line of cars in 2004.

GM's dealer cuts are part of the company's plan announced last month to cut more than 2,600 dealers by 2010. The remaining cuts will come from closed Saturn and Hummer dealers, along with 400 dealers that the company expects will close voluntarily. Another 500 would be consolidated into other dealerships.

The GM dealer cuts are likely to have a much greater impact than Chrysler's. While many Chrysler dealers also sell other brands and will stay open after losing their franchises, a large number of GM dealers sell only GM vehicles. So if their franchises are revoked, they run a greater risk of closing for good. read more here....

My thing is this, if you have a GM car does it not make it more difficult for service? Another caveat, it makes selling a GM car easier because the competition from other dealerships are not as demanding. At any rate, this is tough all over and expect unemployment rate to shoot through the roof.

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Obama's Statement on Chrysler's Bankruptcy (Video)

This was the most glorifying news conference on bankruptcy I have ever watched....

Obama's main goal was to make the public's mind safe to purchase a Chrysler automobile. We will see what happens.

Chrysler to file bankruptcy
The New Chrysler

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Official: Chrysler to enter bankruptcy

I know the Obama Administration will try to paint this as a "good thing", but who is going to buy anything from a company, especially a high ticket price tag as a car, when you don't know if the doors are going to close on you for good. Especially, if you need to take the car back for anything and what about your warranty on this vehicle? I said from the get, we are not going to be able to save EVERYONE. And let's not even start to think about the folks who are in retirement mode, I know they are very worried right now.

Chrysler will file for bankruptcy protection after talks with creditors aimed at reducing its huge debt burden failed, officials said on Thursday.

The No. 3 U.S. automaker faces a government deadline of 11:59 p.m. Thursday to have deals in place with labor, creditors and Italian automaker Fiat. Two of the three pieces appeared to be in place. A small group of debtholders were the remaining obstacle, as they hold out for a better deal from the U.S. government.

Talks between Chrysler LLC's lenders and the Treasury Department to reduce the automaker's secured debt and keep it out of bankruptcy protection broke down early this morning, a person familiar with the talks said.

President Barack Obama is scheduled to talk about the auto industry in remarks at 12 noon EDT.

Four banks with 70 percent of Chrysler's $6.9 billion debt had agreed to erase it for $2 billion, or less than 30 cents for each dollar held. That left Chrysler's fate in the hands of about 40 hedge funds with about 30 percent of the debt.

To entice the hedge funds into going along with the banks, the government on Wednesday afternoon added $250 million to the $2 billion that the banks had settled for and gave the hedge funds a 6 p.m. deadline to work it out, two people briefed on the talks said.

Source

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Goodbye, Pontiac and 21,000 more jobs

The auto industry as the banking industry have made bad choices by management. The auto industry was not forward thinking enough, never thought gas prices would climb so quickly and invested heavily in SUVs. The banking industry risked their shirts in the mortgage market and got burned for their greed.

Now we see GM eliminating the Pontiac brand, for good. Along with eliminating Pontiac will be slashes in dealerships and more jobs to the tune of 21,000.

The job loss continues to climb.

General Motors Corp. announced plans to phase out its Pontiac brand and cut 21,000 U.S. factory jobs by next year -- as part of a major restructuring effort needed to get billions more in government aid.

In total, GM is cutting more than 7,000 additional jobs than what it announced on Feb. 17, 500 additional dealers and closing another plant -- or 16 of its 47 U.S. manufacturing plants by 2012 -- and 13 of those plants by the end of the next year; GM hasn't named any of those plants yet.

GM launched its bond exchange offer this morning to its holders of $28 billion in unsecured debt, offering them 10 percent of the equity in the company and accrued interest -- in an effort to avoid a bankruptcy filing before the end of May.

GM said it plans to sell or close Hummer, Saab and Saturn brands by the end of this year -- faster than an earlier schedule.

"We are taking tough but necessary actions that are critical to GM's long-term viability," said Fritz Henderson, GM president and CEO. "Our responsibility is clear - to secure GM's future - and we intend to succeed. At the same time, we also understand the impact these actions will have on our employees, dealers, unions, suppliers, shareholders, bondholders, and communities, and we will do whatever we can to mitigate the effects on the extended GM team."

GM said it would cut its hourly employment by 21,000 to 40,000 in 2010 -- a 34 percent reduction, and level off at about 38,000 starting in 2011. GM plans a further decline in salaried and executive employment -- for 7,000 to 8,000 additional job cuts than what was announced in GM's Feb. 17 viability plan.

For middle class workers in the auto industry this is devastating news, but if the industry is to survive it is necessary.

Source

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GM closing plants for 9 weeks

In other words, most of the summer....

General Motors Corp. is planning to temporarily close most of its U.S. factories for up to nine weeks this summer because of slumping sales and growing inventories of unsold vehicles, two people briefed on the plan said Wednesday.

The exact dates of the closures were not known, but both people said they will occur around the normal two-week shutdown in July to change from one model year to the next. Neither person wanted to be identified because workers have not been told of the shutdowns.

GM spokesman Chris Lee would not comment other than to say the company notifies employees before making any production cuts public.

The automaker is living on $13.4 billion in government loans and faces a June 1 deadline to cut its debt, reduce labor costs and take other restructuring steps. If it doesn’t meet the deadline, the company’s CEO has said it will enter Chapter 11 bankruptcy protection.

United Auto Workers officials at several factories said they have meetings scheduled Thursday and Friday with plant managers and GM human resource officials to discuss production changes.

The automaker’s sales were down 49 percent in the first quarter compared with the same period last year, and GM had a 123-day supply of cars and trucks at the end of March, according to Ward’s AutoInfoBank. GM already has more than a six-month supply of several models.

Seperately, the troubled automaker said Wednesday it may miss a $1 billion bond payment due June 1 if it doesn’t complete a debt-for-equity exchange by then.

Bad news......

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Michigan, Wayland Chevorlet employees angry that car dealership is closing (Video)

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Michigan has to take responsibility, too.

I know everyone is up in arms over the Obama speech, but there is much more going on here.

The Automotive Industry, the big three, knew this was coming, this is nothing new.

Folks working for the big three saw folks not buying these cars, not with the price tag or bad mileage attached.

The economy is part of this, but folks had already started to ease away from those SUVs, Trucks, fancy price tags. This is nothing new, this was coming a while ago.

Al Gore got laughed in his face from the big wigs in Michigan. He told them about CAFE standards and they laughed him out of Michigan.

These fat cats did not want to change. They wanted to remain the same.

Well, when you come to the government for help to not prop you up, but pick you up before you hit the garbage heap, you must conform.

I feel the pain for those who are losing jobs, lost jobs, won't get jobs back, etc. But, the decisions in Michigan must be dealt with.

I know many are also angered at President Obama about not doing enough to Wall Street. I don't know how many times I must write this, Obama does nothing without all the facts. The banks have not opened up all their books, the stress tests on these banks are not done. When this is complete and they need more money, as the car industry does, you will hear the Obama blast to them, as we heard today to the car industry.

Also politicians in Michigan must take heat also. All of them. They have protected the car industry for decades. For Granholm to act shocked is a joke. There is no one on here who can write that Granholm did not know what was about to happen. She knew. This is about salvaging what she can. Both senators from Michigan are great, but they have stood with an industry that has REFUSED to change. This industry's refusal put them where we are at now.

Where is the UAW? I can tell you where they are at. Numb and quiet. They have seen the books and know that there is either concessions or bankruptcy. It is as plain and clear as that. The suppliers? It won't be like it used to be and there will be fewer of them when this is over. Retirees? They will see some cuts in benefits. It is either that or go bankrupt. Go bankrupt, who will cut your check then? Car dealerships will shrink tremendously in this country. And there will be more unemployment. Folks up in arms, keep the jobs!! What jobs? How can we keep the jobs when the supply is more than the demand and has been that way BEFORE the September hit? Who is out there buying a 30,000 car? NOBODY. Hard decisions down the immediate road.

None of us like what has happened but this is the reality of now. You can't suck blood from a turnip when it is dry or dead already. The auto industry put this country on the map of innovation, but in the end refused to innovate themselves. Now it is either bankruptcy or conform and change. They can either take it or leave it.

And the Republicans? They don't have a pot to piss in, nor a window to throw it out of. They can not come back to Michigan and say, "I was for you, saving your jobs", when they are on video saying let the automotive industry go bankrupt. Which do we want? The Republican way or the Obama Administration way to help this industry get back in the saddle?

This is tough love. This is what we voted for, leadership, this is what we are getting the hard decisions. And Waggoner had to go.

cross-posted @ Daily Kos

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