Report: Chrysler and GM might not need funding beyond White House’s $17.4b
01/06/2009, 7:18 PM
By Drew Johnson
When the CEOs of the Big Three appeared before Congress late last year, one of the biggest concerns voiced about the Detroit bailout was the possible scenario of a slippery slope. While the automakers were seeking somewhere in the neighborhood of $25 billion, many analysts warned the final number could be closer to $125 billion. However, so-called experts aren’t always correct, and it looks as though the White House’s $17.4 billion allotment will be enough to see General Motors and Chrysler through this rough stretch.
In an interview with Automotive News, UAW president Ron Gettelfinger revealed that GM and Chrysler may not need funding beyond the $17.4 billion already earmarked for the automakers. “If we can get by without more money, that’s what we want to do,” Gettelfinger told Automotive News.
Although GM was originally seeking $18 billion in order to survive until 2010, that plan included the automaker’s 49 percent stake in GMAC. However, since the White House approved the $17.4 bailout package — $13.4 billion of which is earmarked for GM – GMAC has achieved bank holding status, greatly reducing GM’s stake in the financing company. Additionally, GMAC has secured $6 billion in low interest loans itself, bringing GM’s total funding beyond the $18 billion it was originally seeking.
That being said, GM and Chrysler are not completely out of the woods yet. If new car sales fall below 12 million units in 2009, GM and Chrysler would likely have to ask for further funding to stave off bankruptcy. “The downside was 10.5 million, which is where most people are,” a source close to the situation told Automotive News. “What happens if that downside gets worse? That’s anybody’s guess.”
With new car sales expected to total between 12.5 million and 13 million units in 2009, it sounds as if the White House’s life raft will be just enough to carry the Detroit Three into 2010.
01/06, 7:27 PM
posted by:
Mutant@DCX
ridiculous, 100 billion or GTFO
01/06, 9:33 PM
posted by:
trantz
Nice to read “not-bad news”. Reading so much negativity has got my cup half empty I can’t even say “good news”…
01/06, 10:05 PM
posted by:
johnnycanuck
Who the hell takes Gettelfinger’s word for anything? The guy would hump your leg if he thought it would get him a sound bite.
01/06, 11:12 PM
posted by:
Xile
Good news but who thinks Chrysler will not be sold in a year? Besides the Ram truck, do they produce anything that remotely piques your interest?
01/07, 12:38 AM
posted by:
Commodore
^ Jeeps, Challenger, and the Charger/300 platform cars are what most people want from Chrysler, and it’s about the only thing.
01/07, 3:48 AM
posted by:
fan
posted by:
Commodore
^ Jeeps, Challenger, and the Charger/300 platform cars are what most people want from Chrysler, and it’s about the only thing.
—> “about the only thing? Thats quite some (at least for an american auto-maker…!)
Definitely more than the things people want from GM – which would be none at all…
01/07, 5:53 AM
posted by:
Wolverine
The problem is that these “so-called” experts cause a load of s..t when they open their mouth to say things like “GM stocks will reach 0″ or “They will need much more money than this…” The only thing they really know is to speculate…
01/07, 8:15 AM
posted by:
Gundy
It’s all one big smoke & mirrors deal anyway. Who here really believes that they’re really, deep-down, “as-God-as-my-witness”, on-my-deathbed-sort-of-thing, telling the 100% honest truth? I don’t, that’s for sure. Even the dollar amount is contrived, what if they would have said they needed $500,004,040 more or less than they said they needed? Would they still have gotten it? How do you take two of the oldest, most-entrenched American and global business interests and narrow down your needs to an exact amount like, “We need $17 billion. Not $17.02 billion, or $16.94 billion, if it’s not $17 billion we’ll have to shut the doors.” Give me a break. (man am I feisty this morning)..
01/07, 8:18 AM
posted by:
Gundy
AND ANOTHER THING… (just kiddin’)
01/07, 9:02 AM
posted by:
mayer_ray_nagin
Oh yeah, “Gettelfinger the finance guru.” Meh.
He’s saying this only because the first loan came with stipulations for wage concessions from the UAW, and he wants to make it sound like maybe that isn’t necessary.
As for the experts, according to them, oil costs $250/BARREL today, and the polar ice caps are all gone despite the FACT that they grew in 2008. Experts are full of $hit.
01/07, 10:37 AM
posted by:
A4
fan is an idiot…
Corvette
CTS
Malibu
Impala (still sells strong)
Cobalt SS
Solstice
G8
all the GMT900’s
including Tahoe, Silverado, Sierra, Denalis, Escalade
Camaro
nobody wants GM products?
I find that hard to believe.
01/07, 10:52 AM
posted by:
JakeK66
A4,
Let us not forget-
Entire line of large crossovers (Acadia/Traverse/Enclave/Outlook)
Sky
Upcoming LaCrosse, SRX, Equinox
HHR (Sells well in Fleets)
01/07, 10:59 AM
posted by:
Z06ified
As usual, the analysts are less than useless.
01/07, 11:21 AM
posted by:
Need more oil for GM
Guys around here are starting to break out the “30″ buttons again. It’s only a matter of time before GM blows the competition off the map.
01/07, 11:27 AM
posted by:
JakeK66
NMOGM is back!
And those analyst also said that there is no way oil would be under $200 a barrel and we would be spending at least $5 a gallon for gas. They overreact and make the bad even worse by causing fear and havoc to the consumer market.
01/07, 12:03 PM
posted by:
RaineMan
So… when do the people of the USA start getting their money back? When GM makes a profit? They’ve been operating in the red for 5 years!
01/07, 1:41 PM
posted by:
yarddog82abn
WTF?????????????……………………
“UAW president Ron Gettelfinger revealed that GM and Chrysler may not need funding beyond the $17.4 billion already earmarked for the automakers”
SINCE WHEN IS HE THE SPOKE’S PERSON FOR GM & CHRYSLER????
WHAT THE HELL DOSE HE KNOW WHAT THEY NEED? WHAT THEY NEED IS TO GET RID OF HIM, AND DOWN GRADE THE THE UAW….
Ron Gettefinger is a Domestic Terrorist !!!
01/07, 2:05 PM
posted by:
NRG
Don’t count on it and Gettelfinger can go an F himself.
01/07, 2:26 PM
posted by:
Need more oil for GM
30% FTW
35% by 2010
50% by 2012
GO GM! An American Revolution!
01/07, 6:01 PM
posted by:
Get Real
Gettelfinger is happy, he has enough money to keep the UAW country club open.
01/07, 6:12 PM
posted by:
400horseSS
Wrong Yarddog, people who buy foreign and are proud of it are domestic terrorist.
01/08, 8:56 AM
posted by:
Need more oil for GM
Everyone needs to get themselves some “30″ buttons. It’s the new cool in fashion.
01/08, 4:53 PM
posted by:
The Wudman
Getthefinger must be some snake oil salesperson! The only reason I see him talking this up is that he knows to get more money for his Union and maybe get his private golf course back he has to remove the need for the Government, I mean “We The People” to force changes.
I am guessing that Getthefinger and GM Management know they can’t show how they will be profitable by 2/17/09 and will just take the money and dance the best they can without the government.
The result is that “we” the People are probably going to get screwed this summer. if car sales go below the optimistic 10.5 million units, they will be crying the blues again and would have chumped us for cash without having to make any changes.
I’d bet that GM reached out for more than they really needed as any business would when the buffet of money is open and who knows what Chrysler is up to.
Getthefinger and GM management are scared of Obama because he already laid out that everyone is going to have to adjust and that is something that the Unions have already stated in words and in actions that they are not willing to do.
As a sales rep for Saturn, it is all about a ghost town these days. December was better than others, but I bet we take a giant hit this first quarter.