28 Mar Even though the three automakers submitted detailed plans to
Q Detroit Continues Its Rescue Campaign
The CEOs of Ford, General Motors and Chrysler are back on Capitol Hill asking for $34 buy canada goose jacket cheap billion in loans. canada goose coats Last month, Congress turned down the automakers’ request for a $25 billion cheap canada goose uk bailout because of questions over canada goose uk black friday whether canada goose factory sale the industry could restructure in a way that would keep it solvent.
This time around, canada goose clearance however, they have the backing of the United Auto Workers union. The union said Wednesday that it was prepared to make uk canada goose outlet concessions to assist the beleaguered automakers.
Congress will decide whether it will hold a special session next week concerning a bailout for the automakers. Even though the three automakers submitted detailed plans to Congress earlier this week about how they would use federal funds to reorganize, a number of questions linger. Here, a look at some of the issues.
Why not let Detroit go canada goose uk outlet bankrupt?
There are some critics who say that’s exactly what should happen. But industry advocates say Chrysler, uk canada goose Ford and General Motors Canada Goose Coats On homesite canada goose outlet https://www.canadagoosejacket-outlet.ca Sale cannot Canada Goose Outlet be allowed to fail.
On Wednesday, buy canada goose jacket the UAW announced a canada goose store number of concessions that it would make to assist the automakers, Canada Goose Jackets including delaying the cheap Canada Goose automakers’ payments to a multibillion dollar health care trust; suspending a jobs bank program that lets laid off workers collect almost all of their pay for extended periods; and renegotiating part of contracts that were signed in 2007 that could result in changes to wages.
Can Ford and General Motors survive without a canada goose clearance sale bailout?
Ford has requested a $9 billion line of credit that it may canadian goose jacket need to tap as a safeguard in case one or both of its rival Detroit automakers become insolvent or if auto Canada Goose online sales remain low.
In a Canada Goose Online research note on Tuesday, Brian Johnson, a senior equity analyst who watches the auto industry for Barclays Capital, said, “Ford has positive equity value without government assistance,” but he added that such assistance could canada goose black friday sale give the company additional funding resources and help prevent Ford and its parts suppliers from “feeling the negative effects of a potential competitor bankruptcy.” Another Canada Goose sale reason Ford may not need government funds is that it has $10.2 billion canada goose it can borrow from a line of credit it canada goose coats on sale negotiated with banks, he said.
What Canada Goose Parka shape is GM in?
GM says it needs $4 billion to pay its bills by the end of the month. GM has requested up to $18 billion in loans (that includes a $12 billion loan and a $6 billion line of credit) from the government.
Of the restructuring plans that the Big Three automakers submitted to Congress this week, “GM’s plan has evolved the most,” said Johnson. Its new plan calls for selling its Hummer, Saab and Saturn brands and radically downsizing Pontiac. That would leave GM with four core brands (Buick, Cadillac, Chevrolet and GMC), reducing its highly leveraged balance sheet, trimming labor costs and consolidating canada goose uk shop its dealer network, he said.
But even if GM avoids bankruptcy with the plan, the company still faces a very steep climb back to profitably, Johnson says. “While government assistance would lower the likelihood of bankruptcy, we continue to see little equity value in the recapitalized GM,” he wrote in a research note Wednesday.
What about Chrysler?
Chrysler, a privately held company, is in a weaker position. Chrysler said that it needed $7 billion in cash right away to be able to survive into 2009.