D-Day For Big 3: Will They "Land" Congress With New Plans?
Today is the day we see in clear detail how bad things are for Detroit's auto maker, and what they plan to do to fix the mess. It's a mix of bad news and hopeful promises. And at the end of the day, we'll see if more of the public buys into the idea of the government bailing out the Big 3.
First, the bad news. November auto sales will be terrible. The estimate is for sales dropping 25% and the sales pace being around 11 million vehicles. Both would be in line with the weak numbers we saw in October. Bottom line: little is moving right now and the consumer has little interest in signing up for $20,000 or $30,000 auto loan.
The hopeful news comes later today when the Big 3 send Congress their business plans for getting back in black. We know they will all include commitments to going green with more fuel efficient cars, limiting executive pay, and right-sizing their companies. For me though, the real story is in the details.
Will GM sell some of its brands? Will Ford be able to turn a profit with small cars? What is Chrysler's cash on hand?
The answers to these questions will go a long ways toward determining whether the public buys into the idea of lending the Big 3 billions of dollars. My gut says the reaction to the business plans will be mixed.
- Big Three May Need to Trim Number of Brands
- Toyota to Cut Bonuses Amid Reports of Output Cuts
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- Ford Motor
- General Motors
- Honda Motor
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