12:01 am, December 8, 2008
TODAY, America’s big three car manufacturers will find out if they are to receive up to £23bn of state aid.
US Congress has been in talks over the weekend, to discuss terms of a bailout plan.
The future of GM and Chrysler in particular depends on the aid package. Ford is less perilous, but still on the critical list.
A fund set up to promote environmental fuel technology looks likely to be used to bail out the makers.
The car makers have already been turned down by Washington, earlier in the month. Politicians were unimpressed by company execs flying for meetings in their private jets.
Now, the aircraft have gone. The CEOs have met again, to plead for what industry analysts say is their last shot at saving the companies.
GM is losing $2 billion a month. Over the last three years, it has lost nearly $75bn. Experts reckon it has just a few months’ cash left.
The brand has a heavy European presence, with Vauxhall, Saab, Chrysler, Cadillac and Corvette. It already seems likely the brand will have to sell Saab.
Chrysler is equally perilous. A merger between GM and Chrysler has already been mooted, and may be a longer-term condition of any bailout.
Any aid now will be a stop-gap measure, until the Obama Government takes over in January. Then, far wider reaching reforms of the industry will be imposed.
President-Elect Obama has already vowed to ‘save’ the American car industry, upon which millions of jobs depend.
Today, Obama told NBC news that he would not let the makers go bankrupt.
‘We’re going to have to figure out how to put the pressure, in the same way a bankruptcy court would,’ he said. ‘But do so in a way that allows them to keep their factory doors open.’
Today, the future of the American car industry will not be determined. Whether it still has a future will be.
By Richard Aucock
