Chrysler to File for Bankruptcy

[Habsburg]

Patricia Neal was fabulous in Fountainhead.

I'm just sayin'

[DGuller]

This news is about clunkers and gas guzzlers, so I figured the Chrysler thread is the natural choice.  Will someone please pass me the barf bag?

Senate passes 'cash for clunkers' program

Senate passes $1 billion 'cash for clunkers' program over strong Republican opposition

WASHINGTON (AP) -- Congress approved a "cash for clunkers" program Thursday to provide government incentives of $3,500 to $4,500 to motorists who trade in their gas guzzlers for more fuel efficient vehicles after Senate Democrats narrowly defeated a Republican effort to kill the plan.

Auto state senators said the program would help hard-pressed car dealers and automakers by bringing buyers into showrooms, and they got help from President Barack Obama and Vice President Joe Biden, who made calls to wavering Democrats urging them to keep the plan alive.

"This is an emergency for families and small businesses -- for an industry that has been the backbone of our economy for a generation," said Sen. Debbie Stabenow, D-Mich., who sponsored the proposal.

Opponents said it would increase the federal debt without doing much to get expensive-to-operate vehicles off the roads.

Senate supporters of the program overcame a procedural hurdle by the plan's leading opponent, Sen. Judd Gregg, R-N.H., on a 60-36 vote, winning the minimum number of votes needed to keep the program in a $106 billion war-spending plan that the Senate passed later Thursday.

The House approved the cash for clunkers bill last week on a vote of 298-119 and Senate Democrats attached it to the war-spending bill. The overall bill now goes to the White House for Obama's signature.

Four Republicans -- Kit Bond of Missouri, Thad Cochran of Mississippi, Susan Collins of Maine and George Voinovich of Ohio -- voted with two independents and 54 Democrats in favor of the clunker measure, while Democrat Ben Nelson of Nebraska was opposed along with 35 Republicans.

Sen. Maria Cantwell, D-Wash., changed her vote to support the vehicle incentive plan and spoke by phone with Obama during the vote.

Cantwell spokeswoman Ciaran Clayton said Obama "acknowledged Senator Cantwell's concerns that the cash-for-clunkers program ... did not do enough to meet our nation's urgent need to reduce foreign oil dependence" and vowed to work with Cantwell and others to "maximize the number of efficient cars on America's roads."

In addition to Cantwell, Obama and Biden reached out to Democrats Patrick Leahy of Vermont, Claire McCaskill of Missouri and Michael Bennet of Colorado, according to two people familiar with the outreach. They spoke on condition of anonymity because they were not authorized to speak publicly.

Obama has encouraged Congress to approve the consumer incentives for new car purchases as part of the government's efforts to restructure General Motors Corp. and Chrysler Group LLC. The bill provides $1 billion for the program from July through November.

Sen. Dianne Feinstein, D-Calif., who supported a plan with more stringent requirements to receive the vouchers, said she received "absolute assurance" from Senate leaders that if the program was continued beyond November it would be modeled after the bill she pushed.

Supporters said the program, which would be implemented by the Transportation Department, was expected to be implemented by early August.

The auto industry and its union lobbied heavily for passage of the cash for clunkers plan as GM and Chrysler have received billions of dollars in government-led bankruptcies and the entire auto industry has dealt with plummeting car sales. In May, overall sales were 34 percent lower than a year ago.

Under the proposal, car owners could get a voucher worth $3,500 if they traded in a vehicle getting 18 miles per gallon or less for one getting at least 22 mpg. The value of the voucher would grow to $4,500 if the mileage of the new car was 10 mpg higher than the old vehicle. The miles per gallon figures are listed on the car window's sticker.

Owners of sport utility vehicles, pickup trucks or minivans that get 18 mpg or less could receive a voucher for $3,500 if their new truck or SUV got at least 2 mpg higher than their old vehicle. The voucher would increase to $4,500 if the mileage of the new truck or SUV was at least 5 mpg higher than the older vehicle.

Dealers participating in the program would receive an electronic voucher from the government for the trade-in to apply to the purchase or lease of a qualifying vehicle. The bill directs dealers to ensure that the older vehicles are crushed or shredded to get the clunkers off the road.

The program was intended to help replace older vehicles -- built in model year 1984 or later -- and would not make financial sense for consumers owning an older car with a trade-in value greater than $3,500 or $4,500.

The U.S. industry is expected to generate about 9.5 million vehicles sales in 2009, compared with more than 13 million in 2008 and more than 16 million in 2007.

Associated Press writer Matthew Daly contributed to this report.

The bill is H.R. 2346.

Congress: http://thomas.loc.gov

[Ed Anger]

Give me a Hummer, or give me death.

[garbon]

Give me a Hummer, or give me death.

That individual who calls you coach might take you up on that offer.

[Habsburg]

Rename Chrysler:



Merle Oberon

[Ed Anger]

Give me a Hummer, or give me death.

That individual who calls you coach might take you up on that offer.

[Savonarola]

This news is about clunkers and gas guzzlers, so I figured the Chrysler thread is the natural choice.  Will someone please pass me the barf bag?

I have some grave doubts about this; but NPR reported that there is a similar program in Germany that has had some spectacular results.  Zanza can you confirm or deny?

[jimmy olsen]

This news is about clunkers and gas guzzlers, so I figured the Chrysler thread is the natural choice.  Will someone please pass me the barf bag?

I have some grave doubts about this; but NPR reported that there is a similar program in Germany that has had some spectacular results.  Zanza can you confirm or deny?

What exactly do you mean by spectacular results? I'd imagine with a subsidy that big a ton of people will take the government up on that offer and trade in their vehicles, but does that necessarily mean that the government should have offered that program?

[Savonarola]

What exactly do you mean by spectacular results?

Thousands of happy Germans are kissing the Fräulein good-bye in the morning and goose stepping to their job in the automobile factory. 

Or maybe that's how NPR reported it and I'm trying to get better information from someone who lives in Germany; such as Zanza.

I'd imagine with a subsidy that big a ton of people will take the government up on that offer and trade in their vehicles, but does that necessarily mean that the government should have offered that program?

I don't know.  In your opinion what would justify the government offering this program?

[Zanza]

The program was a massive boost to car sales in Germany. They were up 40% year-on-year. However, this was not necessarily to the benefit of the German car industry. Our scheme was that you get 2500 euro if you trade in a car that was older than 9 (or 10?) years. That's quite appealing when you buy a 10,000 euro Fiat, it makes almost no difference in the decision to buy a 100,000 euro Mercedes. The result was that some manufacturers, most notably Volkswagen, benefitted, others like Mercedes or BMW didn't benefit much. The biggest beneficiaries were probably foreign firms building small, cheap cars. Fiat for example had a 200% growth year-on-year in Germany.

However there was lots of criticism too. Cars that were still perfectly workable were scrapped (which is against the stated intention of this - to protect the environment). Another thing that will hurt the beneficiaries of this scheme is that it is just realising the demand a bit earlier. I predict that the car market will crumble in the next two or three years. After all, a lot of people now have a new car and those people are unlikely to buy another car anytime soon.

What did help the German car industry quite a bit was the short work program we have which allows them to keep their qualified employees, let them work half time and the state pays them the difference for up to 90% of their normal net wage. All car makers in Germany used that earlier in the year and some are still using it (at least for some divisions).

[Savonarola]

However there was lots of criticism too. Cars that were still perfectly workable were scrapped (which is against the stated intention of this - to protect the environment). Another thing that will hurt the beneficiaries of this scheme is that it is just realising the demand a bit earlier. I predict that the car market will crumble in the next two or three years. After all, a lot of people now have a new car and those people are unlikely to buy another car anytime soon.

That is a good point; historically, in the United States, car sales have shown a saw toothed trend, rather than a smooth growth.  It's not unusual to see a drop of 40% in car sales between years.  Incentives to buy new cars now will most likely not lead to a sustained trend; instead it would diminish the growth in car sales during the recovery.