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Posts Tagged ‘stimulus package’

Opinion: Is GM Turning Things Around?

Was decision to skip $2 billion in aid more than PR ploy?

by on Mar.16, 2009

Is GM's economic pulse showing signs of revival?

Is GM's economic pulse showing signs of revival?

In a stunning, surprise move, General Motors announced, last week, that it would not need a $2 billion infusion of cash from the federal government.  Ever since then, my phone has been ringing off the hook, with friends, industry contacts and talk show hosts alike asking me what this news signifies.

In today’s 24/7 news cycle, the issue is proving to have plenty of “legs,” and when I was asked to comment on NPR, this evening, I thought it time to stop giving glib opinions and think more deeply about the meaning of impact of GM’s decision.

The most common question is why did GM decide to skip this tranche of aid?  According to the automaker, it has made far more progress than it originally anticipated slashing its costs and rebuilding its under-funded war chest.  Certainly, if the company has enough cash on hand to meet its obligations, it would seem logical to avoid borrowing still more money and running its huge debt load even higher.

But Is GM really that much ahead of where it expected to be right now? (more…)

Readers: Speak Out on the Bailout!

Is Obama’s $600 mil “green car” a boon or boondoggle?

by on Feb.06, 2009

boon-or-boondoggleAs it stands now – and things could change quickly – Pres. Obama is calling for the inclusion of $600 million in the proposed stimulus plan to fund the government’s purchase of new, fuel-efficient vehicles. In fact, there’ve been a number of auto-centric elements proposed or actually included in the stimulus package. One “cash-for-clunkers” proposal, to encourage Americans to replace older vehicles with newer, greener products, has been withdrawn. But there’ a good chance, with the President’s support, that as much as $2 billion could be included for advanced battery research.

Such proposals are taking heat from minority Republicans, Senate Minority Leader Mitch McConnell, of Kentucky, calling the government fleet replacement program “wasteful spending.”

In an energized speech to Congressional Democrats, Pres. Obama, sounding like he was back on the campaign trail, spoke out loudly for the stimulus package, Thursday night. And in another speech, to the Energy Dept., he lambasted GOP lawmakers for calling the green car program “pork.”

“You know the truth,” said Obama. “It will not only save the government significan money over time, it will not only create manufacturing jobs for folks who are making these cars, it will set a standard for private industry to match.”

Who do YOU agree with? Legitimate boon or boondoggle? We’d like YOU, the readers of to express their own opinions.

Can Congress Spur Car Demand?

Maybe, but only sound economic basics can sustain a healthy industry.

by on Feb.06, 2009

uncle-sam-saysAuto sales are one way we take the economy’s temperature. Hot sales mean hot activity overall while an economic chill sends the sales-volume mercury plunging. But is putting a flame to the thermometer — subsidizing car sales in particular — a good way to re-heat the economy as a whole? Many policymakers hope so.

This week the U.S. Senate passed a measure, co-sponsored by Senators Barbara Mikulski (D-MD) and Sam Brownback (R-KS), to make interest payments on new car loans and state new car sales taxes deductible through the end of 2009. Offering her proposal, Sen. Mikulski said, “no matter how much government aid we give to the Big 3 auto makers, they can’t survive if consumers don’t start buying cars. That’s where my amendment helps.”

The sales crash was dramatic and it doesn’t look like things will pick up soon on their own. 2008 was the worst year since 1992, with a 13 million unit tally well down from the 16 million or more cars and light trucks that had been moving annually. Analysts project even worse sales in 2009.

The collapse is hitting all automakers as well as the nationwide matrix of suppliers and other firms whose fortunes are tied directly or indirectly to the car market. And with the run-up in fuel prices that peaked just as the financial crisis hit, the impact shattered the truck-dependent Detroit 3 worst of all.