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Big Three Bailout is Near

DETROIT, Dec 18 (Reuters) – General Motors Corp and Chrysler LLC made significant progress late Thursday on a deal to secure emergency loans as part of a U.S. government aid package, people familiar with the talks said.

The package would demand sweeping restructuring at the troubled automakers in exchange for bridge loans to carry GM and Chrysler for several months, according to the sources.

Emergency federal loans for the two companies could be announced by the government as early as Friday, according to the sources who were not authorized to discuss the negotiations.

Chrysler Closing All Auto Plants for a Month, GM Delaying Volt Factory

Dec. 17 (Bloomberg) — Chrysler LLC, awaiting a federal rescue as its cash dwindles, will shut all 30 of its plants for at least a month starting Dec. 19 as unsold cars and trucks pile up at showrooms.

Production won’t resume until Jan. 19 at the earliest, Chrysler said today in a statement. General Motors Corp., also waiting for word on U.S. loans, said a new factory making engines for the Chevrolet Volt electric car is being delayed to conserve cash.

The cutbacks showed how far the automakers are going to save money and prune output as plunging sales threaten their ability to stay in business. Both companies say they may run out of operating funds in just weeks without emergency U.S. aid.

GM Plans to Idle 20 Plants, 6 in MI

DETROIT — General Motors Corp., awaiting word on whether the auto industry will get emergency federal aid to stay afloat, will temporarily idle 20 plants across North America and slash production early next year to adjust to plummeting vehicle sales.

The temporary closures are unprecedented in scope. When combined with moves announced a week ago the closures mean GM will build 250,000 fewer vehicles than usual during the first quarter of 2009, company spokesman Chris Lee said. Normal production volume during the first quarter would be about 750,000 vehicles.

The plants affected in Michigan include facilities in Detroit-Hamtramck, Flint, Pontiac, Orion Township and two plants in Lansing.

Republicans to U.A.W.-It’s Payback Time

A federal bailout for Detroit’s automakers appears close to dead, delivering a crushing blow to a Michigan economy reeling from high unemployment, skyrocketing home foreclosures and sagging tax revenue.

The obstructionists: Southern Republicans determined to use a financial crisis to rework corporate balance sheets and rewrite collective bargaining agreements on their terms and timetables.

Paybacks can be hell when business meets politics, as union leaders, their members and tens of thousands of folks associated with the Detroit-based auto industry are seeing clearly in the wrangling to craft an emergency bill to throw lifelines to beleaguered General Motors Corp. and Chrysler LLC.

Stripped bare and put in the regional context of union vs. nonunion and domestic vs. foreign, the toughened conditions pushed by Sen. Bob Corker, R-Tenn., are legislative cruise missiles aimed directly at Detroit’s business model, the UAW’s Solidarity House and 70 years of Big Three bargaining tradition.

How could they be anything else? Immediately match the pay and benefits of foreign-owned automakers operating in the South, his terms say. Reduce your expectations for Big Three contributions to the barely funded retiree health care fund and take some in stock. Eliminate the Jobs Bank and supplemental unemployment benefits.

And if UAW and company bargainers can’t get there by a March deadline — along with concessions from bondholders, management, shareholders and suppliers — GM and Chrysler must seek federal bankruptcy protection like almost every other private-sector player would under similar circumstances.

Apathy and Ignorance are Detroit’s Worst Enemies

WASHINGTON (CNN) — A national poll suggests that six in 10 Americans oppose using taxpayer money to help the ailing major U.S. auto companies.

Auto industry executives testify November 19 before Congress.

Sixty-one percent of those questioned in a CNN/Opinion Research Corp. survey out Wednesday are dead set against the federal government providing billions of dollars in assistance to the auto makers, with 36 percent favoring such a bailout.

“Only 15 percent say that they would be immediately affected if the auto companies went bankrupt,” CNN Polling Director Keating Holland said. “Seven in 10 say that a bailout would be unfair to American taxpayers.”

It is simply amazing that so many Americans still don’t understand the importance of the Big Three U.S. Automakers in this country.

The Big Three directly and indirectly employ millions of Americans who used to enjoy a middle class living. These are the same people who buy houses and pay mortgages. They also used to buy new vehicles, refrigerators, furniture, tv’s, home improvement supplies, and many other durable goods that make up the bulk of the U.S. Gross Domestic Product.

They are the same American Workers that used to be able to send their kids to college.

When is this country going to understand that we need labor unions and domestic manufacturing in the U.S.?

U.S. Steel Closing Great Lakes Plant in Ecorse Along With Two Others

U.S. Steel Corp. said late Tuesday that it will temporarily idle its Great Lakes Works plant in Ecorse and two other facilities in a move to reduce production amid falling demand for its steel products.

The action will affect roughly 3,500 workers at the three plants, the Pittsburgh-based company said. Great Lakes employs about 2,005 people. The plant produces sheet products primarily for the automotive industry.

Over the next several weeks, U.S. Steel is also idling Keetac, an iron ore mining and pelletizing facility in Keewatin, Minn., and Granite City Works near St. Louis.

U.S. Steel, which has more than 49,000 employees, said it plans to temporarily concentrate production at Mon Valley Works near Pittsburgh; Gary Works in Gary, Ind.; Fairfield Works near Birmingham, Ala.; and Lake Erie Works in Nanticoke, Ontario.

“The largest percentage of employees (affected) are union workers, but this idling cuts across all categories: hourly, management and professional,” said D. John Armstrong, manager of public affairs.

Armstrong could not project how long the idling would last, only that it would be determined by market conditions.

Bailouts for Bankers but Nothing for Detroit Automakers?

This is the part of our nation’s surreal economic crisis that seems particularly surreal:

The US auto industry, which employs 3 million Americans in auto plants, parts and supplier networks and dealerships nationwide is broadly understood as being essential to maintaining America as an industrial force.

It’s financial collapse, which even critics of moves to bailout the industry suggest is imminent, would devastate workers, retirees and communities in every state of the nation.

Despite the grumbling from anti-union zealots, the auto giants have radically retooled in a manner that makes the cost of producing a vehicle at a unionized plant of General Motors, Ford or Chrysler roughly equivalent to the cost of running a car off the line at a non-union plant.

And to top it all off: Auto plants actually produce something that most Americans consider to be useful.

Yet, proposals to provide what now seems to be a very small bailout — $25 billion — are currently stalled.

At the same time, the whole of the federal government is scrambling to buy as much as $50 billion in “toxic assets” — bad loans and other products of irresponsible financial practices that are of dubious value — from Citigroup, a global banking concern that makes money by charging working families exorbitant interest rates for credit.

Perhaps, in some wild calculation of American interest, Citicorp is worthy of a bailout.

But what mad calculus would make Citigroup more worthy than the auto industry?

Something is fundamentally wrong with a federal government that offers bankers a bailout and autoworkers as cold shoulder.