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Woe is Motown

14 Dec 2008 - Preaching the News for Sunday

"In all circumstances give thanks," we are told in the Sunday reading from First Thessalonians. But with circumstances looking especially bleak for Detroit area residents who depend on foundering automakers for employment, many are turning to their pastoral leaders for guidance. Outside Corpus Christi Catholic Church last Sunday, a sign beckoned passersby inside to hear about "God's bailout plan." Catholic churches in the Detroit area distributed a four-page letter from Cardinal Adam Maida Sunday offering "some pastoral insights and suggestions about how we might prepare to celebrate Christmas this year when economic conditions are so grim." In the letter Cardinal Maida acknowledged that "things in Michigan will probably never be the same" but encouraged the region's 1.3 million Catholics to maintain their faith. "At this darkest time of the year, we proclaim that Christ is our light and Christ is our hope," he wrote. Greater Grace Temple, the largest church in Detroit, invited officials from the United Automobile Workers union to speak at the church. "We have done all that we can do in this union, so I turn it over to the Lord," General Holiefield, a United Auto Workers (UAW) vice president for Chrysler, told the crowd. UAW member James Settles Jr. asked those present "to continue your prayers, so we can see a miracle next week." By midweek it appeared the prayers had been partially answered. Democrats and the Bush White House signaled Wednesday that they had reached a deal to speed $14 billion in emergency loans to the struggling automakers. But strong opposition lingered among some Republicans. Money could be disbursed within days to cash-starved General Motors Corp. and Chrysler LLC, while Ford Motor Co.-which has said it has enough liquidity to stay afloat-would be eligible for federal aid as well. The bill would create a government "car czar" named by President Bush to dole out the loans, with the power to force the carmakers into bankruptcy next spring if they didn't cut quick deals with labor unions, creditors, and others to restructure their businesses and become viable. Source: Articles by Nick Bunkley for the New York Times and Julie Hirschfeld Davis for the Associated Press

detroit united auto workers adam maida automakers emergency loans ford general motors chrysler

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Let bygones be gone

22 Feb 2009 - Preaching the News for Sunday

Detroit automakers, who have admitted to poor management practices in the past, filed restructuring plans this week in hopes that the U.S. Congress—and U.S. consumers—will “remember not the events of the past” and give them more money to avoid bankruptcy. General Motors and Chrysler on Tuesday said they would need additional aid from the federal government to remain solvent. So far GM has received $13.4 billion in U.S. loans. Tuesday, the company said it needs $16.6 billion more. GM also said it needs at least $7.7 billion in loans from the Department of Energy to develop fuel-efficient technology. Chrysler has received $4 billion in loans and said it needs $5 billion more. In return, the two companies promised to make further drastic cuts to all parts of their operations. The recovery plans submitted to the U.S. Treasury would seal GM’s fall from the top of the global auto industry and transform it into a smaller, more flexible car company relying less on the U.S. market for sales. Chrysler in January announced plans to form a global alliance with Italian automaker Fiat SpA. Analysts said that Chrysler appears to be steering itself toward becoming the North American arm of Fiat. The government is not obligated to lend the carmakers any more money and could require immediate repayment of the existing loans, a demand that would probably trigger bankruptcy filings for both companies. “It is clear that . . . more will be required from everyone involved—creditors, suppliers, dealers, labor, and auto executives themselves—to ensure the viability of these companies going forward,” White House Press Secretary Robert Gibbs said Tuesday evening. Source: Articles by John D. Stoll, Sharon Terlep, and Alex P. Kellogg for the Wall Street Journal, Bill Vlasic and Nick Bunkley for the New York Times, and Ken Bensinger and Jim Puzzanghera for the Los Angeles Times

automakers general motors chrysler bailout robert gibbs fiat fuel-efficient

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Abandoned automobiles

05 Apr 2009 - Preaching the News for Sunday

Rick Wagoner, forced by the Obama administration to resign as head of General Motors Corporation (GM) on Monday, might relate to the psalmist's lament, "My God, my God, why have you abandoned me?" The administration put both GM and Chrysler on notice that they won't get another round of federal aid unless they come up with a more aggressive restructuring plan, and has made it clear they're prepared to let the companies fall into bankruptcy. Fritz Henderson, GM's new chief executive, said Tuesday that more of the automaker's plants could close and bankruptcy is "more probable" as GM works to meet new, tougher requirements for government aid. In his first news conference as CEO, Henderson said he expects GM would "need to take further measures" beyond the five plants the company said it would shutter when it submitted a restructuring plan to the government last month. GM also is likely to offer another buyout program to workers as it looks to cut labor costs, Henderson said. In an effort to increase sales, GM launched a "Total Confidence" program that will make car payments for customers who lose their jobs through no fault of their own. Ford Motor Co. announced a similar program Tuesday. Meanwhile, sales of new vehicles in the U.S. fell dramatically in March but picked up in the month's final week, giving automakers reason to hope the market may be at or near its bottom. "We think we're getting close to turning the corner," Ford's senior United States economist, Emily Kolinski Morris, said. Michael C. DiGiovanni, GM's chief sales analyst, said vehicle sales could start improving even before the overall economy does, provided consumers begin to see positive signs like more stable home prices. Source: Articles by Nick Bunkley for the New York Times and Kimberly S. Johnson and Tom Krisher for the Associated Press

automakers emily kolinski morris cars total confidence bankruptcy fritz henderson general motors corporation rick wagoner bailout chrysler ford michael c digiovanni

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The wheels come off

07 Jun 2009 - Preaching the News for Sunday

In this Sunday's reading from the Book of Deuteronomy, Moses marvels at God's creative activity in the world, asking, "Did anything so great ever happen before? Was it ever heard of?" Americans who grew up in an era when General Motors was the undisputed king of the global automobile industry marveled at the sight of the iconic corporation filing for bankruptcy protection Monday. GM's bankruptcy capped a frenetic few months in which the Obama administration scrambled to salvage GM as well as Chrysler LLC, the country's first- and third-largest car makers, at a cost to taxpayers of more than $62 billion. The bankruptcy filing represents a dramatic downfall for GM, founded in 1908 by William C. Durant, who brought several car companies under one roof and developed a strategy of "a car for every purse and purpose." GM officials, however, portrayed the bankruptcy as an unprecedented opportunity to reverse decades of decline. GM said it would close 17 factories and parts centers and cut 20,000 more jobs by the end of 2011 in Michigan, Indiana, Ohio, Tennessee, and other states. The government-orchestrated shrinkage will cost taxpayers $30 billion, on top of $20 billion in U.S. funds already put into the company. In exchange the U.S. will own 60 percent of the new GM. The government has needed to take ownership stakes in private enterprises during the economic crisis, President Obama said Monday, "for the simple and compelling reason that their survival and the success of our overall economy depend on it." GM, which hasn't made a profit since 2004, declared in its filing that it had $172 billion in debt and $82 billion in assets. Chief Executive Frederick "Fritz" Henderson appealed to consumers to "give us another chance." Source: Articles by Neil King Jr. and Sharon Terlep for the Wall Street Journal, Peter Whoriskey, Tomoeh Murakami Tse, and Kendra Marr for the Washington Post, and Dan Strumpf and Kimberly S. Johnson for Associated Press

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Clunker of an idea fueling a recovery?

09 Aug 2009 - Preaching the News for Sunday

The Lord saved the afflicted one from his distress, says the psalmist this Sunday. The unexpectedly popular "cash-for-clunkers" incentive plan may be doing the same for the distressed auto industry. Some environmentalists, however, are not entirely pleased. Ford Motor Company's July sales rose, while the positions of General Motors and Toyota also improved, in a sign that the worst might be behind the beleaguered industry. The incentive plan has proven so popular that its initial funding of $1 billion ran out in a week. There was every indication that lawmakers would extend the program with $2 billion of additional funding before leaving Washington this weekend for their August break. The extra funding would give as many as a half-million more Americans the chance to grab the new car incentives through September. Cash-for-clunkers may be popular, but it isn't necessarily environmentally friendly, critics say. They are not happy that the money to extend the program will come out of $6 billion the Department of Energy received from the federal stimulus plan that was supposed to fund renewable energy start-ups, such as companies that build lightweight wind turbines, design new ways to store energy on electric grids, and create cheap solar panels for rooftops. "If you're looking at it from the perspective of growing a green economy, spending money on innovative green technology is a better use," said Carol Lee Brown, senior manager for the transportation program at Ceres, a Boston-based environmental group. Preliminary figures from the Department of Transportation suggest that drivers are mostly opting for cars that get good gas mileage, data that has helped win over some original opponents of the plan. Source: Articles by Ken Thomas and Laurie Kellman for the Associated Press, Nancy Cook for Newsweek, and the Los Angeles Times

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Converting the Volt into a bestseller

16 Aug 2009 - Preaching the News for Sunday

We hear in this Sunday's reading from the Book of Proverbs that "Wisdom has built her house." General Motors Corp. (GM) is betting the house on the Chevrolet Volt, its plug-in hybrid due into production in late 2010. GM hopes early tests indicating a whopping 230 m.p.g. fuel efficiency in city driving will result in strong demand for the car. The Volt will be the "first mass-produced vehicle to claim more than 100 miles per gallon composite fuel economy," GM boasted. "From the data we've seen, many Chevy Volt drivers may be able to be in pure electric mode on a daily basis without having to use any gas," said GM chief executive Fritz Henderson. The model is expected to travel up to 40 miles on electricity from a single battery charge, according to GM. Nearly eight of 10 Americans commute less than that distance, according to U.S. Department of Transportation data. Source: An article by Amandine Ambregni for Agence France Presse

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GM gaining traction again

17 Jan 2010 - Preaching the News for Sunday

"Vindication" and "victory" are on the lips of the prophet Isaiah in this Sunday's first reading. After having suffered through the worst year in its 101-year history, General Motors (GM) may be ready to rise again, analysts say. The new GM has been stripped down to four core brands with a product lineup boasting many appealing and high-quality new cars, say analysts. "I think they're really doing a good job now," said John Wolkonowicz, senior automotive industry analyst with IHS Global Insights in Lexington, Massachusetts. "The challenge for them is marketing, getting consumers to believe GM products are on a par with imports, which they are," Wolkonowicz said. "Our break-even point has been dramatically lowered," said Mike DiGiovanni, executive director of global industry analysis for GM. "Our competitive situation now is equal to Toyota, cost-wise." GM could even reopen some shuttered factories because it can't produce certain vehicles fast enough, North American president Mark Reuss said Monday. Reuss mentioned an idled factory in Spring Hill, Tennessee but stopped short of saying any plants would be reopened. Source: Articles by Bob Cox for the Fort Worth Star-Telegram and Tom Krisher for Associated Press

general motors john wolkonowicz mike digiovanni mark reuss

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Analysts to investors: Don’t rush to “like” Facebook

20 May 2012 - Preaching the News for Sunday

The readings for the Solemnity of the Ascension are uplifting in every sense of the word: They tell how God showed great might in raising Christ from the dead and how the disciples enjoyed 40 days of revelation and instruction before the risen Lord ascended to the heavens. Investors eager to buy into Facebook when shares become available can expect to see the stock price skyrocket the first day or two, but analysts advise it may be best to wait to buy. Just days before Facebook was set to go public through an initial public offering (IPO), General Motors Co., highlighting the risk in buying Facebook stock early on, will stop paying for advertising on Facebook after deciding that paid ads on the site have little impact on consumers' car purchases, according to a GM official. The move by GM, one of the largest advertisers in the U.S., puts a spotlight on an issue that many marketers have been raising: whether ads on Facebook help them sell more products. Facebook’s IPO could put a market value on the company of as much as $104 billion. “This is about whether you are going to take your money and transfer it to Mark Zuckerberg,” said Lee Munson, who runs the asset management firm Portfolio LLC. Munson calls the offering “one of the biggest transfers of wealth in market history.” Zuckerberg will maintain effective control after the offering, with around 55 percent of the voting rights, and Munson has concerns about his wholehearted embrace of “the hacker lifestyle” that may not necessarily align with the interests of shareholders. “Who is going to boot [Zuckerberg] out if he’s not running the company the right way?” Munson asked. The important thing for most investors to remember, Munson believes, is that there will be an opportunity in the future to buy Facebook at a fair value if the growth potential bears fruit, “when it matures and figures out how to make money.” A pre-IPO report on Facebook from Morningstar echoed that assessment. Analysts said “the enthusiasm for Facebook is not misplaced, but the market may be underestimating several near-term challenges for the company.” Sources: Articles by Sharon Terlep, Suzanne Vranica, and Shayndi Raice for the Wall Street Journal, Steve Shaefer for Forbes, and Olivia Oran and Alexei Oreskovic for Reuters

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