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U.S. automakers meet officials on aid
Flags fly in front of the General Motors headquarters in Detroit, Mich.
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Steve Chiotakis: Another problem industry right now is cars. The Obama administration's auto team is in Detroit today. They're going to try and sort out some of the uncertainty surrounding rescue plans for General Motors and Chrysler. Ashley Milne-Tyte reports.
Ashley Milne-Tyte: GM and Chrysler want another $22 billion in aid. The government has until March 31 to decide whether to hand it over.
The auto team will spend the day meeting company executives. The question is how much further restructuring can be achieved in the next few weeks. The team will also talk to members of the United Autoworkers about wages, possible layoffs and the fate of the retiree health plan.
Yesterday was a good day for GM in Canada. It came to an agreement with union members there that takes it a step closer to receiving aide from the Canadian government.
But on this side of the border, GM still has a lot of work to do. The company is hoping it can restructure billions in debt and health care obligations before the end of the month, without filing for bankruptcy.
I'm Ashley Milne-Tyte for Marketplace.
I am not convinced that Chrysler Financial deserves a bailout. They appear unable to understand the concept of economic stimulus.
Keep your car. Keep your job. Keep your house.
Their policy is to refuse to negotiate lease buyouts down to FMV. They would rather take the vehicle back and sell it for a loss at auction than use the aid to insure people can keep their cars. People who have demonstrated ability to meet their financial obligations and who need that vehicle to keep working.
Frazier Plan Auto and Economic Recovery Plan As an observer of the economic recovery efforts currently underway I have not heard a single plan that seems to be working. Funding banks that are not loaning money is not working. The populace won�t borrow money because they worry about looming layoffs. So here is the �Frazier Plan� The Plan This plan does not prop up the auto makers waiting on the economy to turn around. What they need is sales! The proposed loans to auto makers do not stimulate movement in the economy. A coupon program will help the one buying a car, dealers, suppliers, shippers and lenders. The auto industry is large enough to jump start the economy. GM, Ford, Chrysler, Toyota and other companies have models that are fuel efficient Each card carrying tax payer that is a US citizen could apply on line for a coupon valued at $8,000 to $12,000. The coupon would have an expiration date on it that assures the holder will move in a timely manner. The coupons should also specify a fuel efficient vehicle. The difference in the purchase price of the auto would be paid by the coupon holder. Customers would visit their local show room to order the car they want. Upgrades can be made with the purchasers cash as long as the car meets the fuel efficient requirements. Benefits of the Plan This plan will greatly reduce oil imports, by accelerating the transition to fuel efficient vehicles. The customer matching funds will get cash off the sidelines and into the system. The tax payer funding the stimulus will be one of the principal beneficiaries. The automakers would have a four year manufacturing back log insuring sustained employment and incentive to transition to producing more fuel efficient autos. The Cost Economics of the plan Unit cost Daily BBL 112,000,000 US Homes 30,000,000 Minus non citizen HH 82,000,000 Net Households Cost of Coupons $12,000 $ 984,000,000,000 Total Cost New Money from buyers $ 8,000 $ 656,000,000,000 Purchaser contribution $ 1,640,000,000,000 Total Stimulus Value State Sales Tax Revenue 8% $ 131,200,000,000 Oil Import Savings annually $ 45.00 4,000,000 $ 65,700,000,000 The Frazier Plan Ed Frazier Author edfra@tx.rr.com www.eiradioshow.com
