Chemically Green’s previous post on the bailout, Don’t Be Duped! U.S. Government Lying About Bailout, is proving to be accurate and, as expected, no one is purchasing new manufactured automobiles. Their numbers continue to multiply in auto lots and shipping ports all over the country. Layoffs becoming synonymous with America, very few people are shopping for new vehicles and I would not expect it to get better anytime soon.
Collapsing Demand from Hybrids to SUVS.
LONG BEACH, California (Reuters) – From pricey luxury sedans to popular hybrid cars, automobiles made overseas are stacking up at ports and parking lots around the United States as supplies far outstrip demand amid the nation’s worst auto market in more than 25 years.At the Long Beach port near Los Angeles, Toyota Motor Corp vehicles including Prius hybrids (Prius sales are down 48% in the U.S. this year), FJ Cruiser sport utility vehicles and Lexus IS 250 luxury sedans are being stored on a vast construction site that will one day be a new container terminal. The port has not counted how many additional cars were being stored, but Wong said Toyota has leased an additional 23 acres of space while Mercedes-Benz has leased about 20 more acres.
Global automakers have been sideswiped by the collapsing demand for new cars and trucks. A market slowdown that began in the United States has spread to Europe and Asia.
Detroit’s embattled automakers have been pushed to the brink of failure by the downturn and are asking the U.S. Congress for a $34 billion rescue package.
But the sharp decline in sales in October and November blindsided even the industry’s better-performing manufacturers like Toyota and Honda. Source: Reuters
What a farce! The feds dupe the poor American public again. Just like the original financial market bailouts, it’s not working and the automotive bailout won’t work either. Let the cards fall the way they should. Don’t enable poorly managed companies to hang on.
“Any intelligent fool can make things bigger and more complex… It takes a touch of genius – and a lot of courage to move in the opposite direction”. Albert Einstein.
Well, our save-all Congress decided to assist the Big 2 with enough bailout funds to keep their heads above water for about 3 months. Ford declined the bailout money.
Ford Motor Company is currently offering cars with 0% car loans.
Want to know how they pulled this off? With GMAC, that’s how. It seems that General Motors only has a minority stake (49%) in GMAC, and GMAC is now using bailout money to make these car loans available to Ford buyers. So, what’s wrong with this? Well, if you will remember, Ford said it didn’t need any bailout money. They were going to do this on their own. So now we have Ford competing against the other two-thirds of the Big Three with 0% car loans made possible by government bailout money. In short, the politicians picked a winner here, and the winner was Ford. You didn’t get to pick… the government picked for you. The one company that didn’t need bailout help now has a government-funded advantage over the two companies which did.
To top all of this off, GMAC received a bailout from the feds today!!!
The government will invest $6 billion to prop up GMAC, the auto financing giant, the Treasury Department said last night, expanding its bailout of the troubled U.S. auto industry.
The Treasury said it would use $5 billion from the $700 billion financial rescue fund it oversees to buy preferred stock from the company. It said it would also lend $1 billion to General Motors, which owns 49 percent of GMAC, to allow it to invest further in the firm.
How long will it take for the Big 2 to want another fix? You have got to be kidding! Payback is hell and the UAW wants their just dues for services rendered!
Planning to buy a new automobile anytime soon? Would it not be prudent for U.S. automakers to have a tremendous fire sale and get rid of their existing inventory to raise some cash?