GM, Ford, Chrysler Depart From Congress Empty-Handed

Nov. 20 (Bloomberg) — U.S. lawmakers deadlocked on a plan to bail out the Big Three automakers, leaving General Motors Corp. facing the prospect it could run out of cash before a new Congress can come to the rescue next year.

Democratic congressional leaders disagreed with Republicans and President George W. Bush’s administration over how to provide $25 billion in aid to GM, Ford Motor Co. and Chrysler LLC. Only two days remain in a lame-duck session for lawmakers to resurrect a compromise, though Senate Majority Leader Harry Reid said today Congress might return in December to complete its work.

“We are in a situation where we don’t know procedurally what we are going to be able to accomplish today,” the Nevada Democrat said on the Senate floor.

Reid earlier suggested the situation was dire and refused to set aside time today to debate a compromise proposed by Senator Kit Bond, a Missouri Republican. Reid said Bond’s plan hasn’t been put in writing and the House of Representatives is about to adjourn.

Bond and fellow Republican George Voinovich of Ohio insisted they weren’t giving up on their proposal to speed up and broaden access to $25 billion already approved for fuel-efficient vehicle development that was a compromise.

“We’ve made great progress,” Bond said. “We are down to the point now where wording challenges are about the only remaining things to deal with.”

Plunging Shares

GM’s German-traded shares fell 7.9 percent to the equivalent of $2.57 as of 11:09 a.m. in Frankfurt. GM has plunged 89 percent this year in New York trading. Ford shares rose 3.2 percent in Germany. The stock has declined 81 percent this year in the U.S.

A Democratic plan to help the automakers with funds from the recently approved $700 billion bank-rescue package stalled in the face of Republican opposition and a Bush veto threat. It may be revived next year after President-elect Barack Obama takes office in January and Democrats install a strengthened majority in both houses.

GM Chief Executive Officer Richard Wagoner said automakers would like action before Obama takes over because a global credit crunch that has slammed sales in the U.S. is spreading to global auto markets.

GM, the biggest U.S. automaker, said Nov. 7 it may run short of the $11 billion minimum cash it needs to pay its bills each month by the end of this year and will fall “significantly” short of that level by the middle of next year.

Cash Augmentation

The Detroit automaker burned through $6.9 billion in cash in the third quarter and had $16.2 billion on Sept. 30. Wagoner said yesterday he expects the automaker to slow its cash use to the $3.6 billion a quarter rate of the first half of this year.

“We’re continuing to do everything we can to augment our cash position,” Wagoner said in an interview yesterday after eight hours of testimony split between the U.S. House and Senate over two days.

“We’ve been stretched to do stuff that we thought was very difficult and painful to do already this year,” he said. “People are thinking every day of new ideas.”

Wagoner, Ford CEO Alan Mulally and Chrysler CEO Robert Nardelli left the Capitol after two days of appeals for help were rejected.

The companies are seeking aid as industry-wide sales have plummeted to a 17-year low. GM this month said it lost $4.2 billion in the third quarter and almost $73 billion since the end of 2004.

One Chance for Aid

Senate Republican leader Mitch McConnell of Kentucky urged lawmakers to let automakers shift the previously approved loans intended to promote fuel efficiency for day-to-day operations instead.

“It is the only proposal now being considered that has a chance of actually becoming law,” he said.

White House spokeswoman Dana Perino endorsed the Bond- Voinovich plan yesterday. “If the Congress fails to act, the most logical interpretation would be that they don’t agree that an additional $25 billion needs to be given to the auto industry,” she said.

Reid responded that the White House has authority to funnel the financial-rescue money to car companies without congressional action.

“No one should be overly concerned if we are unable to reach agreement,” Reid said in a statement. “It will still be up to the White House and the Treasury Department to take the steps that I believe are necessary.”

Environmental Initiatives

“There will be a great deal of resistance in the House” to redirecting the fuel-efficiency loans without previously approved environmental safeguards, said House Financial Services Chairman Barney Frank, a Massachusetts Democrat.

Wagoner wouldn’t rule out shifting the previously approved funds to keep his company afloat. “It could work,” he said.

Representatives including Democrats Gary Ackerman of New York and Bradley Sherman of California criticized the auto chiefs for taking private jets to Washington to plead their case.

“Couldn’t you all have downgraded to first class?” Ackerman said. Added Sherman, “I don’t know how I go back to my constituents and say the auto industry has changed.” The auto chiefs didn’t talk about their jet use in response.

Representative Peter Roskam, an Illinois Republican, challenged Wagoner and Mulally to forgo pay for a year, saying he understood Nardelli was agreeable to the idea.

Wagoner said he had “no position” on that. Mulally said, “I think I’m OK where I am.”

Jets and Salaries

The GM CEO got $14.4 million in compensation in 2007, including a salary of $1.56 million. Mulally received $21.7 million for 2007, including $2 million in salary.

Wagoner said he recognizes the government will play a greater role in telling the automakers how to run their business in the future, if aid is approved.

“Certainly at minimum they are going to want to look at your future plans and how are you delivering against those future plans as steward for the taxpayers,” he said.

“In a certain way, being able to lay out the business issues as we see them, in some sort of setting where confidential data can be shared, I think people would understand our business and maybe that in the end would be helpful.”

The Canadian divisions of all three automakers have asked for loans or loan guarantees from that country’s government, the Globe and Mail reported. Chrysler is seeking C$1 billion ($797 million) in aid, the newspaper said, citing people familiar with the discussions.

`Back at the Trough’

U.S. federal aid for the Big Three would remove much of the urgency for tough restructuring decisions, said Representative Michele Bachmann, a Minnesota Republican.

“It’s easy to predict that you will be back at the taxpayers’ trough in no time at the rate that money is being burned in Detroit,” she said.

Carmakers are cutting production to cope with declining demand, including a 33 percent reduction in North American output by Ford this quarter. GM said today it’s suspending production of cars and trucks in Thailand for a month and cutting 8 percent of the workforce there because of falling demand in Asia.

Wagoner said the trip to Washington taught him that Detroit’s plight isn’t translating well outside the Midwest.

“What I learned, I think we get out and tell our story pretty well, and then something like this happens and you say `Well geesh’ it’s like nobody knows what we did,” Wagoner said in the interview. “Well, then, it has to start with us. We have to do a better job, a more regular job, of keeping people update, listening to their concerns, trying to respond to them.”

Before calling it quits for the year, the Senate plans to approve a seven-week extension of unemployment insurance benefits that would cost around $6 billion.

MITI Reviewing National Automotive Policy, Says Muhyiddin

KUALA LUMPUR, July 15 (Bernama) — The International Trade and Industry Ministry is reviewing the National Automotive Policy (NAP) for consideration by the Cabinet before year-end.Minister Tan Sri Muhyiddin Yassin said the NAP, introduced by the government in March 2006, was biased towards protecting the local automotive industry and did not encourage the overall development of the industry.

He said Malaysia had missed many opportunities because of the NAP as many potential investors had diverted attention to other countries in the region.

“The policy seems to be too protective. It does not encourage development of the industry as a whole,” he said when opening the Cartrade-ABT showroom.

In the long-term, Muhyiddin said the NAP must be progressive and dynamic while driving the growth of the local automotive industry.

The NAP was formulated to provide a clear direction for all industry participants to make optimal plans and investment decisions for the future in line with the government’s aim of positioning Malaysia as a regional automotive manufacturing and assembly hub.

On Proton’s vendor system, Muhyiddin said it needed further discussions as an independent study by a Japanese company showed parts and components cost 50 per cent higher in Malaysia than in Japan.

“That sounds odd. As you know, Japan is an expensive cost centre. We must know why this is so,” he said.

Earlier, in his speech, Muhyiddin said the Malaysian automotive industry had continued its upward momentum in the first five months of this year.

During the Jan-May period, Muhyiddin said motor vehicles production totalled 217,637 units compared to 166,716 in the same period last year.

Motor vehicle parts sales from January to May increased by 29.4 per cent to 229,061 units compared with 177,023 in the corresponding period in 2007.

Sales of national cars registered 130,613 units, accounting for 62.3 per cent of total passenger cars sold, he said.

Higher production and sales performance indicated the automotive industry continued to remain resilient despite the prevailing market conditions, he added.

– BERNAMA

Tujuh Syarikat Malaysia Diiktiraf Dalam Anugerah Automotif Asean

 

PENGIKTIRAFAN… Menteri Perdagangan Antarabangsa dan Industri Datuk Seri Rafidah Aziz menyampaikan anugerah kepada Naib Presiden Bahagian Pemasaran dan Perancangan Toyota Motor Asia Pacific Pte Ltd Vince S. Socco pada majlis Anugerah Automotif Asean 2007 Frost & Sullivan yang berlangsung di Kuala Lumpur. Foto: Zainol Bidin

KUALA LUMPUR, 28 Jun (Bernama) — Tujuh syarikat Malaysia diberikan pengiktirafan kerana amalan terbaik dan prestasi cemerlang masing-masing dalam industri automotif pada Anugerah Automotif Asean 2007 Frost & Sullivan yang berlangsung di sini.

Syarikat-syarikat itu ialah Perusahaan Otomobil Kedua Sdn Bhd (Perodua), Naza Kia Sdn Bhd, Ingress Corporation Bhd, UMW Toyota Motor Sdn Bhd, Automotive Synergy Sdn Bhd, Public Bank Bhd dan Automotive Corporation Malaysia Sdn Bhd (ACM).

Rakan kongsi dan ketua amalan automotif dan pengangkutan Frost & Sullivan bagi Asia Pasifik, Kavan Mukhtyar, berkata penerima-penerima anugerah itu jelas memperlihatkan kepimpinan cemerlang dalam segmen pasaran masing-masing.

“Satu persamaan yang ada pada syarikat-syarikat ini ialah tumpuan yang tidak pernah goyah terhadap strategi pertumbuhan yang mementingkan pelanggan dalam persekitaran yang amat mencabar pada tahun 2006,” katanya.

Anugerah Strategi Pembangunan Perniagaan bagi Pasaran Pemanduan Arah dimenangi Automotive Synergy manakala Toyota Corolla Altis 1.8 G (A) keluaran UMW Toyota Motors merupakan pemenang bagi ciri Keselamatan Terbaik dalam Segmen Kereta Pertengahan.

Kereta keluaran Perodua, Perodua Myvi, memenangi Anugerah Model Terbaik (Malaysia).

Public Bank Bhd menerima Anugerah Syarikat Pembiayaan Automotif Terbaik (Malaysia).

ACM merupakan pemenang Anugerah Peneraju Pasaran bagi Kenderaan Komersial (Malaysia) manakala Ingress menerima Anugerah Pembuat Komponen Automotif Terbaik (Malaysia).

Naza Kia Sdn Bhd terpilih untuk menerima Anugerah Pengedar Automotif Terbaik (Malaysia).

BERNAMA

Vehicle Sales Down 17 Percent In March 2007

KUALA LUMPUR, April 18 (Bernama) — Vehicle sales continued to decline in March this year, recording 38,619 units compared with 46,306 units in the same month last year. The Malaysian Automotive Association (MAA), in releasing the figures Wednesday, attributed the lower sales performance to the higher volume in March 2006 due to the pre-National Automotive Policy (NAP) announcement. Year-to-date, vehicle sales declined by 15 percent to 104,950 units from 123,952 units, the association said in a statement. However, vehicle sales in March 2007 improved by 7,331 units or 23 percent compared to the previous month, MAA said. It cited the full working month and slight easing of hire purchase financing as factors for the improved sales figure. Of the vehicles sold in March 2007, passenger cars accounted for 35,159 units and commercial vehicles for 3,460 units, the association said. In terms of production, total industry production in March 2007 dropped to 37,280 units from 52,978 units in the same period last year, MAA said. Of this, passenger cars accounted for 34,210 units and commercial vehicles for 3,070 units. Production in the first three months of this year saw 83,062 units of passenger car and 9,084 units of commercial vehicle, providing a total of 92,146 units as against 141,484 units in the same period last year. On the outlook for April 2007, MAA said the sales volume is expected to be maintained. – BERNAMA