Embarrassed GM axes two private jets; UAW to axe jobs bank?

[Murrican]

http://www.guardian.co.uk/business/2008/nov/21/automotive-useconomy

Embarrassed GM axes two private jets

Show of contrition from aid-needing carmaker fails to stave off lashing from investors

Elana Schor in Washington and Phillip Inman
Friday November 21 2008 18.10 GMT

General Motors, the embattled US carmaker, buffeted by criticism for sending its chief executive on a private jet to plead for government aid, vowed today to stop leasing two of its five company planes.

GM is "very sensitive" to "the symbolic issue of people showing up in Washington in corporate jets", spokesman Tom Wilkinson said, promising more cuts to come at the company.

But the show of contrition has come too late to spare GM and its fellow Detroit giants, Ford and Chrysler, from a lashing as investors weigh up the pile of debts pulling the carmakers to the brink of insolvency.

GM and Ford fell in early trading before inching toward parity after Thursday's stock selloff. Yet their market values have been ravaged this year: GM shares have fallen below $3 (£2), down 88% for the year, while Ford has plunged $1.33, down by 80%.

The United Auto Workers union is reported to be considering a symbolic sacrifice, nine days after arguing labour costs were not hurting Detroit. The UAW could agree to cut its "jobs bank", which assured payments to laid-off employees for 48 weeks – and sometimes for years at a time.

That programme is as symbolic as the GM jets for many in Congress who are annoyed by the industry's unwillingness to admit mistakes. A year ago the union agreed to cut its healthcare benefits.


Ford, in fact, turned a $100m profit in the first quarter of this year before the global credit meltdown halted its progress. It cut pension commitments and began to move to fuel-efficient hybrid models.

[Murrican]

http://www.theglobeandmail.com/servlet/story/RTGAM.20081121.wgmoshawa1121/BNStory/National

GM closes Oshawa truck plant earlier than planned
SHAWN MCCARTHY
Globe and Mail Update

November 21, 2008 at 2:07 PM EST

General Motors Corp. will close its Oshawa truck plant three months earlier than expected and force workers to take an additional unpaid week of holiday as the Detroit-based auto maker makes new production cuts to cope with slumping sales.

GM, which is looking for a $25-billion (U.S.) bailout from U.S. and Canadian governments, made the announcement Friday as it attempts to persuade lawmakers that it has a sustainable business plan for the future.

GM Canada spokesman Stew Lowe confirmed that the faltering U.S. economy has forced the company to close the truck plant sooner than it had planned.

“Based on what we now see in the very volatile and somewhat unpredictable U.S. economy, we have established the last day of production as May 14, 2009,” he said in an email.

GM said it would shut down production at five plants for additional weeks, and would accelerate the closure of the Oshawa truck plant, but did not give a new date for the shuttering, which had been planned for next July.

But a local union official said he had been told the plant may close in May.

“The date that we were told back in the summer was that they were looking at July ‘09, and that was based on the market, and the market continues to get worse,” Chris Buckley, president of Canadian Auto Workers union, local 222, told Reuters.

[Murrican]

http://www.theglobeandmail.com/servlet/story/LAC.20081120.RTOYOTA20/TPStory/National

Ontario plants hit by Toyota cutbacks

GREG KEENAN
AUTO INDUSTRY REPORTER

November 20, 2008

A new Toyota Motor Corp. assembly plant in Woodstock, Ont., that opens on Dec. 4 will halt production for two days just weeks later as part of another cutback in North American production by the auto maker.

All Toyota's assembly and engine plants in Canada and the U.S. will close Dec. 22 and Dec. 23 as the company reacts to slow sales in the U.S. market caused by the credit crisis.

The new Woodstock plant, which will make RAV4 crossover utility vehicles, and another plant in Cambridge, Ont., that assembles Corolla, Matrix and Lexus RX350 models will be closed those two days as part of the reduction in output, Toyota spokesman Mike Goss said yesterday.

"We're thinking the earliest there's going to be any improvement is the middle of next year," Mr. Goss said.


The credit crisis, which sent overall U.S. sales sinking to levels not seen since the end of the Second World War, sideswiped Toyota in October when its sales fell 26 per cent. Corolla sales edged ahead 2 per cent, while sales of the RX luxury sport utility vehicle slumped 37 per cent and RAV4 sales fell 20 per cent.

Toyota sales in Canada rose 9 per cent in October and pushed the auto maker to a record annual level with two months left in the year.

But the production cutback is another indication of how the credit crisis and the economic slowdown in the U.S. are affecting even the world's healthiest auto makers and causing economic dislocation in Canada. About 85 per cent of the vehicles assembled in Canada are exported to the U.S. market.

[Murrican]

http://www.thestar.com/business/article/541440

GM bankruptcy likely imminent, expert warns

Catastrophic cash crunch before January would put thousands of Canadians out of work, analysts say

Nov 21, 2008 05:28 PM

Kristine Owram
THE CANADIAN PRESS

It's highly likely General Motors will be forced to seek bankruptcy protection if the U.S. and Canadian governments don't reach a decision soon on a multibillion-dollar bailout package for the auto sector, a move which could put thousands of Canadian GM employees out of work, plus thousands more in spinoff industries, analysts say.

Joe D'Cruz, a professor at the University of Toronto's Rotman School of Management, said there's a "high likelihood" the auto giant – which reported a US$2.5 billion loss in the third quarter – will run out of cash before January, leaving the automaker with few choices.

Legal provisions in both Canada and the U.S. protect large insolvent companies from going out of business – under Chapter 11 of the U.S. Bankruptcy Code and the Companies' Creditors Arrangement Act in Canada. But using those laws will force a massive restructuring to make the company viable again.

D'Cruz predicted that if the 266,000-employee GM were to file for bankruptcy protection in the United States, the best that Canada can achieve is "proportional pain."

"If 40 per cent of the employment goes in the United States, we should expect 40 per cent to go in Canada." he said.

In the process, many parts suppliers and dealerships would go under as well as the auto giant restructures its entire supply and distribution chains, D'Cruz said.

"Everybody in the GM ecosystem will be affected," he said. ``Some of them will lose their jobs and others will have a very significant cut in their income."

[Murrican]

http://www.chicagotribune.com/news/chi-ap-mi-cami-layoffs,0,3160763.story

Canadian workers smell the the coffee...

Workers at GM-Suzuki plant OK rotating layoffs

Associated Press
4:20 PM CST, November 23, 2008

INGERSOLL, Ontario - Workers at the CAMI Automotive Inc. assembly plant have voted to share the pain.

Members of Canadian Auto Workers Local 88 voted 99 percent in favor Sunday of rotating layoffs between January and April 2009. That means members will work in alternating two-week shifts.

Rejection of the plan would have meant four-month layoffs for 600 workers at the plant, a joint venture between General Motors Corp. and Suzuki Motor Corp.

Work is expected to pick up again in May 2009 when a new vehicle is to be launched at the plant 140 miles east of Detroit.

CAW Local 88 represents 2,400 hourly workers at the plant, which makes the Chevrolet Equinox, Pontiac Torrent and Suzuki XL7.

[Murrican]

http://www.chicagotribune.com/business/autocorner/chi-rides-funcars-1123nov23,0,352100.story


Appeal + function = sales

By Mark Phelan | McClatchy-Tribune News Service

November 23, 2008

DETROIT—In conference rooms, engineering centers and design studios across metro Detroit, Chrysler, Ford and General Motors are working to create a new generation of fuel-efficient vehicles without repeating the mistakes that crippled them during the oil-price and regulatory tremors of the 1970s and '80s.

They are honing new technologies, refining designs and scouring the Earth for fun, fuel-efficient cars they can build or sell in North America. From Chevrolet Corvettes and Ford F-150s to small cars engineered in Europe and Asia, every vehicle is being rethought as fuel prices gyrate and new fuel-economy rules loom.

Haunting their efforts is the ghost of failures past. Detroit's automakers reduced emissions and fuel consumption in the '70s and '80s at the cost of style, performance, quality and reliability—the things that make a car desirable. The things that keep a car company in business.

Chrysler, Ford and GM can't afford to blow it again, and getting it right this time presents huge opportunities. Unlike the 1980s, when small Japanese cars started the race a full lap ahead of the Detroit Three, these technological challenges are equally daunting for everyone. "They've all been dealt the same hand this time," said Michelle Krebs, editor of AutoObserver.com. "Now it's a matter of how they play it."

In labs and on test tracks around the world, GM and Toyota are racing to be first and best on the road with extended-range electric vehicles, cars that go up to 40 miles on battery power and use their engines only for occasional recharging.

Ford and GM have tapped their European operations for compact and subcompact cars such as the Ford Fiesta.

GM's Asian engineering centers are working on a funky little Chevrolet based on the Beat concept shown at the 2007 New York Auto Show to challenge Toyota's hip Scion brand.

[Murrican]

http://www.freep.com/article/20081122/BUSINESS01/811220326/1002

GM adjusts production schedules
Oshawa Truck closing is moved up

BY KATIE MERX
DETROIT FREE PRESS BUSINESS WRITER
November 22, 2008

General Motors Corp. announced a slew of production changes Friday and moved up the closing date for its Oshawa Truck assembly plant by a month and a half as it adjusts to slumping U.S. auto sales and struggles to remain solvent.

The announcements include production cuts and changing scheduled down weeks as well as the announcement that the company will keep scheduled overtime at four of its assembly plants.

"This is not an indication we think the market is coming back," GM spokesman Tony Sapienza said. "This is fine-tuning production adjustments where we think they're needed. ... We're trying to be as efficient as we can."

GM is likely to continue to adjust its production schedules regularly as it works to conserve cash and adapt to an auto market that has wilted to a 25-year low, Sapienza said.

GM has said it is low on cash and may not have enough to operate through the end of the year without outside assistance. The automaker said it would certainly run significantly short by the end of June without aid. GM and its fellow Detroit automakers are seeking $25 billion in low-cost loans from the federal government to help them survive the global credit crunch.

On Friday, GM said it has moved up the date to end production at its Oshawa Truck assembly plant in Ontario from July 1 to May 14.

The automaker also said it would extend the holiday breaks at its car plants in Orion Township; Lordstown, Ohio, and Kansas City, Kan., assembly lines until Jan. 12 and at the Oshawa Chevrolet Impala line until Jan. 20.

[Murrican]

http://www.freep.com/article/20081123/BUSINESS01/81123004/0/COL01


Car dealers outraged over aid hearings

November 23, 2008

DETROIT FREE PRESS

Jim Seavitt, owner of Village Ford in Dearborn, is a lifelong Republican.

And after watching the hearings in Congress this week over Detroit automaker's request for loans, he has never been so upset with his party.

"I was at the Firestone-Explorer hearings, and those weren't half as contentious as this," said Seavitt, who sent e-mails to seven senators and representatives complaining about their treatment of Detroit's automakers.

Seavitt, who watched the hearings in their entirety, said the questions were uninformed and the tone was rude.

"I think they're spoilsports over losing the election," Seavitt said. "There's a bias against Detroit."

Terry Kidd, who owns a Ford, Mercury and Lincoln dealership outside of Nashville, Tenn., had a similar reaction to the hearings, which he watched in his dealership office.

Kidd has calls in to his representatives to tell them how he feels about the hearings.

"It almost sounded like they were on a witch hunt," he said.