And For G.M., Another $16.6 Billion
For Detroit’s automakers, the bad news just got worse. Just hours after Chrysler announced a request for $5 billion more in federal help to prevent bankruptcy, General Motors indicated it might need as much as $16.6 billion more. Combined, the two companies have already received $17.4 billion in emergency loans since December.
From The Associated Press:
General Motors Corp., presenting a dire outlook for the future, said Tuesday it may need $30 billion in total government financing to weather the economic downturn and would cut 47,000 jobs worldwide and shutter five more U.S. factories in a massive restructuring plan.
The automaker is already surviving on $13.4 billion in federal loans and said in a plan submitted to the Treasury Department that it would seek an additional $16.6 billion if economic conditions worsen, but it could achieve profitability in two years and fully repay its loans by 2017.
None of this would be terrible if the solution were as simple as retooling manufacturing plants to produce the cars that Americans want to buy, which is the oft-mentioned fix to Detroit’s ills.
But Americans, at the moment, don’t want to buy anything — not Hummers and not Priuses. Indeed, Toyota’s sales fell nearly 32 percent in January relative to the same month a year ago, and Honda didn’t fare much better, with January sales down nearly 28 percent from 2008.
The declines aren’t as large as those suffered by Big Three, but nor do they inspire much confidence that Detroit’s new long-term viability plans will spur some massive riot of new American car buyers.
Now the question everyone’s waiting to hear answered: WWOD? (What will Obama do?)