February 18, 2009
When Congress agreed in December to loan billions of dollars to Detroit automakers, it required them to submit a plan in March for turning around their failing business. The plan appears to be borrowing more money from the government.
General Motors said it could require up to $30 billion in aid more than double what it got from Congress in December, and said it could run out of money next month without a new cash infusion.
Chrysler said it needs another $2 billion. It received $7 billion from the U.S. taxpayers in December.
GM said it plans to eliminate thousands of dealerships and cut nearly 50,000 jobs worldwide. However, it came up empty in its efforts to renegotiate critical deals with the United Auto Workers union and its bond holders.
The company said it would eliminate its Saturn brand by 2012 and shrink Pontiac to a "focused brand" with fewer models. Hummer and Saab are expected to be sold or closed, leaving GM with four brands: Chevrolet, Cadillac, Buick and GMC.
No more muscle cars
Also, effective today, GM disbanded its High Performance Vehicle Operations Center.
The unit created low-volume vehicles to appeal to enthusiasts and bolster the company's image. Products included V-series Cadillacs and the Chevrolet Cobalt SS, HHR SS and a V-8 version of the Colorado.
A spokesman said there are no plans for high-performance versions of upcoming cars. GM said its future-product focus is on fuel-efficient cars and crossovers.
In a 100-page report filed with the Treasury Department, GM said it is trying to avoid declaring bankruptcy, arguing it would be more costly and drawn out than the alternative, which it sees as government-funded restructuring.
U.S. carmakers attribute their woes to a huge drop in sales in the fourth quarter of 2008, as well as in the first month of this year, brought on by the credit crisis and a deepening recession. But their problems may have begun before that.
Last August a University of Michigan customer satisfaction survey found U.S consumer satisfaction with domestic automakers dropping, with consumers favoring Japanese and German companies.
The survey asked owners to rate their satisfaction with the brand of vehicle they own. The survey measures opinions from consumers who have purchased their vehicle within the last six months to three years.
For the first time in the 15 years of the survey, no domestic brands ranked in the top four, ending two years of consumer satisfaction gains for U.S. automakers.
The Lexus brand and German automaker BMW tied at the top of the consumer satisfaction list. Toyota was third and Honda Motor Company fourth.
The General Motors Buick lineup scored the highest marks of any domestic brand. The GM Saturn, the most fuel efficient line offer by GM, was the most improved over last year with consumer satisfaction up almost 5 percent. Chevrolet lost the most ground, dropping 3.7 percent.
