Archive for the ‘auto’ Category

Obama adviser: Auto industry must restructure

February 15, 2009

President Barack Obama‘s senior adviser said Sunday that any plan to shore up the auto industry will need to require sacrifice by all involved, from auto workers and industry executives to shareholders and creditors.

By DOUGLASS K. DANIEL, Associated Press Writer

General Motors Corp. and Chrysler LLC are expected to submit plans to the government by a Tuesday deadline to show how they can repay billions in loans and become viable in spite of a drop in auto sales not seen for a generation.

“We need an auto industry in this country. There are millions of lives, livelihoods that depend on it,” White House adviser David Axelrod said on “Meet the Press” on NBC. “We have a real interest in seeing the auto industry survive, but it’s going to require a major restructuring of the auto industry.”

Asked if the U.S. economy could withstand a bankruptcy at GM, Axelrod didn’t respond directly. Executives at the two automakers have said bankruptcy would not benefit their companies because consumers would be reluctant to buy cars from an automaker that might go out of business.

“How that restructuring comes is something that has to be determined,” he said. “But it’s going to be something that’s going to require sacrifice not just from the auto workers but also from creditors, from shareholders and the executives who run the company. And everyone’s going to have to get together here to build companies that can compete in the future.”

Axelrod wouldn’t say whether the administration would offer the auto industry more bailout money. GM already has borrowed $9.4 billion to stay in business, and it would receive an addition $4 billion if the Treasury Department approves its viability plan. Chrysler wants $3 billion more on top of the $4 billion it has already borrowed.

“We need to see what it is that they come up with this week,” he said.

Read the rest:
http://news.yahoo.com/s/ap/20090215/ap_o
n_go_pr_wh/obama_autos

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Obama’s Stimulus: Pray for a Miracle This Christmas and Beyond

December 24, 2008

Barack Obama’s economic stimulus will have to work wonders to even make a dent in this lousy economy. The rate of existing home sales plunged a record 8.6% in November.  Unemployment is getting higher, shops are closing, the Christmas retail season may turn out to be a disaster, the auto unions will fight to preserve their pay even if that means bankruptcy for their industry and….  Well, you know the rest.

But Barack “The One” Obama has hired Pastor Rick Warren to pray at the inauguration and his prayer better be a good one….

In this  Saturday Dec. 20, 2008, file photo, Evangelical Pastor ... 
Rick Warren: Looking to heaven and to the economic numbers…
(AP Photo/Hector Mata, File)

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Will The Obama Stimulus Work fast Enough?

By JEANNINE AVERSA and ANDREW TAYLOR, Associated Press Writers

President-elect Barack Obama‘s plan for economic revival puts a big emphasis on public works projects. It also would rely on tax cuts.

But with the nation bruised by recession, with hundreds of thousands of jobs vanishing monthly, Obama’s plan raises an urgent question: Will his remedies work fast enough?

The answer won’t be clear for months or longer. In the meantime, pressure on the Obama team to deliver help quickly is intensifying.

At least as designed, the Obama plan, like a calibrated drug regimen, aims to deliver both short- and long-term relief.

The short-term help would flow partly from tax cuts of $1,000 for couples and $500 for individuals, costing about $140 billion over 2009-2010. The Obama team, said two congressional Democratic aides familiar with the discussions, will likely deliver those tax cuts by reducing the tax withheld from paychecks.

This would put more money in paychecks, unlike the lump-sum rebates issued earlier this year. Many people used those rebates to pay down debt, rather than spending them as the administration had hoped.

In addition, states would get up to $200 billion over two years for Medicaid health coverage for the poor and to narrow state budget gaps, which are forcing layoffs and cuts in services. The aides spoke on condition of anonymity to candidly discuss the evolving plan.

Also in the short term, the nation’s governors are pushing a wish list of $136 billion in jobs-producing public works projects — chiefly road and bridge repairs — that they say are ready to go.

But even if they are, the Obama administration faces a much harder task, too: creating jobs that won’t disappear once a bridge is fixed. What’s needed are millions of permanent jobs that would put legions of laid-off people back to work for years to come.

It’s too soon to know whether many of the 2.5 million jobs the president-elect has said he intends to “save or create” within his first two years would become permanent. And with economic signs worsening, Obama wants to raise the goal to 3 million jobs, a presidential transition official said.

Related:
Will Obama Help? Labor Seeks to Renegotiate Auto Bailout

Obama’s Stimulus Plan Compared to other Government Programs

Read the rest:
http://news.yahoo.com/s/ap/20081224/ap_
on_bi_ge/obama_economic_revival

Will Obama Help? Labor Seeks to Renegotiate Auto Bailout

December 24, 2008

The nation’s automakers are preparing to ask for wage and benefits concessions from their workers in early January to meet the conditions of a $17.4 billion federal aid package, but labor officials say they will seek to renegotiate the terms of the bailout rather than make those sacrifices.

The remarks by union leaders have set up yet another contentious battle in the auto industry.

In agreeing to provide federal assistance to General Motors and Chrysler, the White House demanded the firms cut worker compensation to the levels paid at the U.S. divisions of Toyota, Nissan and Honda. But Ron Gettelfinger, president of the United Auto Workers, said earlier this week that he would seek to remove the wage-reduction provision of the loan, calling it “an undue tax on the workers” who have already made “major” sacrifices for the benefit of the auto industry.

Gettelfinger said that what is being asked of the autoworkers — who agreed to concessions in 2003, 2005 and 2007 — is “unrealistic.” He has said he wants to work with President-elect Barack Obama to remove the wage provision.

Public agree with auto bailout….so far.  From CNN:
http://www.cnn.com/2008/POLITICS/12/2
2/poll.auto.bailout/index.html

Read the rest:
http://www.washingtonpost.com/wp-dyn/content/articl
e/2008/12/23/AR2008122302475.html?hpid=topnews

Obama’s New Vision for Vice President Joe Biden

December 21, 2008

Vice President Joe Biden will be the new “White House Task Force on Working Families.”

Bravo to President-elect Barack Obama.

History tells us that the Vice President of the United States is not always as important as he seems to think….

Remember Dan Quayle?

Dan Quayle

President-elect Barack Obama will have to define the role of his Number Two.  He and Vice President-elect Joe Biden seem already to agree on one thing for sure: the Vice President in the Obama Administration will have a smaller role than Dick Cheney.

Cheney responded:  “President-elect Obama will decide what he wants in a vice president and apparently, from the way they’re talking about it, he does not expect him to have as consequential a role as I have had during my time.”

Vice President-elect Joe Biden listens as President-elect Barack ... 
Vice President-elect Joe Biden, in focus but in the shadow, listens as President-elect Barack Obama makes remarks.(AP Photo)

Biden says the move is toward a more historical and constitutional role for the vice president.

Biden cited Article I of the constitution as the source of the Vice President’s power and role.

But it is Article II deals with the Executive Branch of government.

Article I deals with the legislative branch.

Vice President-elect Joe Biden “teaches constitutional law” back in Delaware “but can’t keep the articles of the constitution straight,” said Vice President Dick Cheney on Fox News Sunday.

With two wars boiling, the economy is its worst shape since the Great Depression and the former Chairman of the Senate Foreign Relations Committee at his side one might think Obama would put Biden to the plow.

And Obama ha done just that.  Joe Biden will chair The White House Task Force on Working Families.

Image 
Joe Biden – AP

But it is certain, Obama aides say: Biden will be smaller in stature than Cheney.

Auto Bailout

In an interview with Chris Wallace on Fox this past Sunday, Cheney also said that Congress had a chance to act on the bailout of the auto industry “and failed.” 

“They had ample opportunity to deal with this issue and failed,” Cheney said in an exclusive interview with FOX News Sunday host Chris Wallace. “The President had no choice but to step in.”

Democrats in Congress disagreed.

But Sen. George Voinovich, R-OH, who represents a large auto industry constituency in his home state, was first out of the gate with an e-mailed statement, saying he was “grateful” for the president’s action “to help thwart a disaster that would have sent our state over the cliff.”

Asked about Biden’s role as Vice President, Cheney said that he had heard that Biden was seeking a smaller role as Vice President but that “it will be President-elect Barack Obama’s choice to diminish the office of the Vice President”….

Sure.  Joe Biden will be busy with the White House Task Force on Working Families.

A spokeswoman for the vice-president-elect said “Biden had no intention of continuing the practice started by Vice President Cheney of regularly attending internal legislative branch meetings — he firmly believes in restoring the Office of the Vice President to its historical role.”

Maybe we are returing to the era of Vice President John Nance Garner who was quoted as saying his job was “not worth a bucket of warm spit.”

Garner once described a writer who quoted it this way as a “pantywaist.”

Garner apparetly used a word that began with a “p” and ended in “ss.”

John Nance Garner
John Nance Garner
.
By John E. Carey

Related:
Biden to oversee efforts aimed at middle class

Vice President Dick Cheney attends the unveiling of President George W. Bush's
AP – Vice President Dick Cheney

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From Politico
Outgoing Vice President Dick Cheney poked at Vice President-elect Joe Biden for muffing his constitutional facts on the campaign trail during a wide-ranging interview on “Fox News Sunday.”

Biden, who criticized Cheney for being the “most dangerous vice president” in American history, also has taken issue with Cheney’s expansion of the powers of the vice presidency.

The vice president-elect hasn’t, Cheney said, asked him for any advice.

Asked about Biden’s criticism, Cheney pointed out that Biden also said the powers and responsibilities of the executive branch are in Article One of the Constitution – and as a longtime chairman of the Senate Judiciary Committee and professor of constitutional law, should know that Article One applies to the legislative branch.

“I’d write that off as campaign rhetoric,” Cheney said.

He added: “If he wants to diminish the office of the vice president, that’s obviously his call. I think that President-elect Obama will decide what he wants in a vice president. And apparently from the way they’re talking about it, he does not expect him to have as consequential a role has I’ve had during my time.”

Host Chris Wallace also asked Cheney if he was bothered by his outgoing approval ratings – a dismal 29 percent.

“We didn’t set out to achieve the highest level of polls that we could during this administration,” Cheney said. “Eventually you wear out your welcome in this business.”

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Dialing back his predecessor’s expansive view of the office, Vice President-elect Joe Biden plans on “restoring the Office of the Vice President to its historical role” as adviser to the president and tie-breaker in the Senate, an aide to Biden said…..

See Politico:
http://www.politico.com/news/s
tories/1208/16261.html

>
Biden has called Cheney “the most dangerous vice president we’ve had probably in American history.” Biden also has said he couldn’t name a single good thing that Cheney had done.

Cheney says he strongly disagrees with the idea that he dangerously expanded the powers of the executive branch. Cheney also says he doesn’t think Barack Obama will give Biden as consequential a role as Cheney has had under President George W. Bush.

See:
http://news.yahoo.com/s/ap/20081221
/ap_on_go_pr_wh/cheney_biden_1

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Vice President Dick Cheney says it ultimately will be up to the new Obama administration to resolve the crisis in the U.S. auto industry.

Cheney says it’s a difficult problem and that President George W. Bush has done his best to manage it. It was just on Friday when Bush ordered an emergency bailout of the industry by offering $17.4 billion in loans. The aid comes with tough concessions from the carmakers and their workers.

Cheney notes that the Bush administration has less than a month left in power. He says the bailout is only a short-term plan and only goes so far. The vice president says it will be a problem that Barack Obama will have to deal with after he takes over on Jan. 20.

Cheney made the comments on “Fox News Sunday.”

–Associated Press

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Vice President Dick Cheney accused Congress of failing to help a dying U.S. auto industry, leaving President Bush no choice but to step in with billions of dollars in loans, he told FOX News on Friday. 

The vice president spoke with FOX News Sunday’s Chris Wallace, shortly after Bush announced that the federal government would offer $17.4 billion in rescue loans to automakers. 

Wallace said Cheney also took a newsworthy shot at his successor, Vice President-elect Joe Biden. The comments will air on FOX News Sunday. 

See:
http://www.foxnews.com/politics/2008/12/19/ch
eney-white-house-offered-auto-loans-congress-failed-act/

Government Considers ‘Orderly’ Auto Bankruptcy

December 19, 2008

A week ago today the world was shocked when the United Auto workers refused pay and bnefit cuts and the Senate rejected an auto bailout bill.  Now the White House is seriously cosidering what is being called an “orderly bankruptcy”….

The Bush administration is looking at “orderly” bankruptcy as a possible way to deal with the desperately ailing U.S. auto industry, Treasury Secretary Henry Paulson said Thursday as carmakers readied more plant closings and a half million new jobless claims underscored the deteriorating national economy.

Cars are parked in the car park of Simon car re-import company ...
Too many cars….not enough buyers….

With General Motors, Chrysler and the rest of Detroit anxiously awaiting a White House decision on billions of dollars in emergency federal loans, Paulson said bankruptcy for Detroit automakers should be avoided if possible but that an orderly reorganization may be the best option to keep them from collapsing.

By JENNIFER LOVEN, AP White House Correspondent

“If the right outcome is reorganization or bankruptcy, then isn’t it better to get there through an orderly process?” Paulson said in a speech to a business forum Thursday night in New York.

Paulson said it was too risky to simply let the automakers fail.

“When you look at the size of this industry and look at all those that it touches in terms of suppliers and dealers … it would seem to be an imprudent risk to take,” he said.

President George W. Bush, asked earlier about an auto bailout, said he hadn’t decided what he would do….

Read the rest:
http://news.yahoo.com/s/ap/20081
219/ap_on_bi_ge/meltdown_autos

Could $14 Billion Auto Bailout Reach $40 Billion?

December 15, 2008

The Bush administration is trying to determine whether to push U.S. automakers to file for bankruptcy, or send them government funding that could be worth more than the $14 billion package that was rejected by the Senate. 

A brand new Chevrolet is displayed at Santa Rosa Chevrolet December ... 
A brand new Chevrolet is displayed at Santa Rosa Chevrolet December 12, 2008 in Santa Rosa, California. The White House said Monday it was studying options for a bailout of the US auto industry without indicating when an announcement would be made.(AFP/Getty Images/File/Justin Sullivan)
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In weighing a much larger rescue effort for U.S. auto makers than originally envisioned, the Bush administration faces a complex set of decisions over what terms to seek — including whether to push the companies to file for bankruptcy — and how to raise necessary funds.

The administration is trying to determine how much money it will take to help the car companies, and is discussing a rescue totaling $10 billion to $40 billion or more.

One possible source of funding is the Treasury Department’s $700 billion fund set up to rescue the financial industry. Only about $15 billion remains uncommitted from the first tranche of $350 billion, so the Bush administration could be forced to request the second half to cover the car companies’ needs, people familiar with the situation said.

That likely would compel the administration to outline its plans for a range of other needs, including foreclosure prevention for struggling homeowners and possibly aid for state and local governments. That could spark another confrontation with lawmakers, who are increasingly divided over industry bailouts. Senate Republicans blocked a proposed bailout for the auto makers last week.

With Detroit’s car makers facing bleak short-term prospects due to a collapse in consumer demand for vehicles, the Bush administration was rushing to determine the extent of the companies’ financial problems. Late last week, some officials thought the government might be able to provide as little as $8 billion to tide the companies over until early next year. On Sunday, a person familiar with the situation said the companies’ collective needs could range from $10 billion to more than $30 billion. The administration spent the weekend poring over the auto makers’ books to assess their financial needs.

The Bush administration must also figure out whether, and how, to try to wring concessions from affected parties, including factory workers, dealers and holders of the companies’ debt. Without such concessions, the companies are likely to need cash infusions long into the future, congressional critics say. 

Read the rest:
http://online.wsj.com/article/SB122930098160805305.html

WTO Sides With U.S., Rejects China Appeal Against Auto Parts Ruling

December 15, 2008

The World Trade Organization has rejected an appeal by China against a ruling that favored the United States in a dispute over car parts, the European Union and Canada.

The WTO appeals panel recommended in a ruling released Monday that China be asked to bring its import tariffs for foreign auto parts into compliance with international trade rules.

Associated Press

Volkswagen cars are seen at a dealership in Shanghai December ... 
Volkswagen cars are seen at a dealership in Shanghai December 14, 2008. REUTERS/Aly Song (CHINA)

U.S. and European trade officials welcomed the decision.

“Especially in light of the current problems faced by the U.S. auto industry, I expect China to comply promptly with its WTO obligations by removing an unlawful and unfair trade barrier that is harming U.S. workers and manufacturers,” said U.S. Trade Representative Susan Schwab.

Her European counterpart, EU Trade Commissioner Catherine Ashton, said, “China should now put an end to the discrimination and ensure a level playing field in its automotive sector.”

Officials at China’s mission to the WTO could not immediately be reached for comment.

Beijing had appealed the original ruling made in July, arguing that the taxes were needed to stop whole cars being imported in large chunks, allowing companies to avoid the higher tariff rates for finished cars. It was the first time China lost a case before the world trade body.

Under the import rules, cars made in China must contain at least 40 percent Chinese-made parts or they are taxed at the rate of imported finished cars.

The U.S., the 27-nation EU and Canada argued that the tariffs made it cheaper for car parts companies to shift production to China, costing Americans, Canadians and Europeans their jobs.

China now has a “reasonable period of time” to make legislative changes, after which a separate WTO panel has to determine whether Beijing has come into compliance or is still breaking the rules, in which case sanctions can be imposed.

Read the rest:
http://news.yahoo.com/s/ap/20081215/a
p_on_bi_ge/eu_wto_china_auto_parts_2

“Bailout Fatigue”: Automakers’ Treatment May Extend To Other Industries

December 15, 2008

In punting on a $14 billion rescue plan for the US auto industry, the US Senate has signaled that the struggle over who gets federal help – and who is left to take their lumps in the marketplace – is likely to be an acute and ongoing issue for lawmakers into the next Congress.

The auto bailout now falls to the Bush administration, at least for the moment. The White House said Friday it may tap part of the $700 billion meant to buttress the shaky financial-services sector for the purpose of saving any of Detroit’s Big Three from collapse. At time of writing, the administration was deciding what mechanism to use to help the industry.

By Gail Russell Chaddock
Christian Science Monitor

General Motors workers file out of the General Motors Assembly ... 
General Motors workers file out of the General Motors Assembly Plant in Arlington, Texas, during shift change Friday, Dec. 12, 2008. Festering animosity between the United Auto Workers and southern Senators who torpedoed the auto industry bailout bill erupted into full-fledged name calling Friday as union officials accused the lawmakers of trying to break the union on behalf of foreign automakers.(AP Photo/Tom Pennington)

Regardless, this month’s fight in the lame-duck Congress over the auto bailout is a cautionary tale for how lawmakers are likely to deal with future calls for help. Lesson No. 1 is that swift congressional action based on the premise that an industry is too big to fail – or that job losses in the absence of a government bailout would be cataclysmic for the economy – cannot be counted on.

It’s an argument that worked for the financial-services industry, which in early October extracted from Congress as much as $700 billion in government funds to save it from ruin tied to mortgage-related debt. But the way the Treasury Department has allocated the first $350 billion in the Troubled Asset Relief Program (TARP) has led to buyers’ remorse among many lawmakers – and appears to be making them more reticent to dole out dollars to ailing industries.

Read the rest:
http://news.yahoo.com/s/csm/2008
1215/ts_csm/awhyone

Senate Fails To Bailout Automakers But Bush May Fund Shortfall

December 12, 2008

The Bush administration would consider using money from a fund intended to rescue U.S. financial markets to prevent the collapse of the nation’s auto companies, White House spokeswoman Dana Perino said.

Bloomberg

“Under normal economic conditions we would prefer that markets determine the ultimate fate of private firms,” Perino told reporters aboard Air Force One. “However give the current weakened state of the U.S. economy we will consider other options if necessary, including use of the TARP program to prevent a collapse of troubled automakers.”

General Motors Corp. and Chrysler LLC have said they need a total of $14 billion in loans to keep operating. An aid package for the automakers failed in the Senate last night.

Bush was pressed by House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid to tap funds from the Treasury’s $700 billion bank-rescue fund.

The Bush administration had warned of a million lost jobs if the industry imploded. The Senate vote was a repudiation of Bush, who personally lobbied for the bill. Only 10 Republicans in the Senate voted to move forward on the auto-rescue plan.

Read the rest:
http://news.yahoo.com/s/bloomberg/20081212/pl_
bloomberg/avqpiejeowq

Cheney on Auto Bailout Failure: It’s ‘Herbert Hoover’ time

December 12, 2008

Senate Republicans’ dramatic revolt against a White House-backed auto industry rescue plan is fraught with political risk.

While the high-stakes gambit places them squarely within the mainstream of anti-bailout public sentiment, at the same time it exposes the party to potentially devastating criticism that its failure to compromise doomed the Big Three automakers and deepened the economic recession.

Republicans argue that their rejection Thursday evening of a $14 billion loan package came in response to the concerns of angry taxpayers who are unwilling to pay for an auto industry bailout on the heels of October’s $700-billion financial bailout package.

By Manu Raju, Politico

Auto bailout 

Above: Lawmakers in a car wreck.  Photo by Associated Press

“I think it would appear that the people who voted against this are carrying out the will of the voters as expressed through the phone calls to our offices,” said Sen. Charles Grassley (R-Iowa).

But that sentiment betrays the deep rifts the issue has revealed within the party, pitting Rust Belt and auto-state senators who joined Democrats in a plea for federal aid against their Southern colleagues who represent states where foreign-owned automakers constitute a significant economic presence. All of this takes place against the backdrop of an intraparty debate over whether the GOP has lost its core value of limited government.

Read the rest:
http://news.yahoo.com/s/politico/16515