While we talked about how Ford has resisted the urge to go crawling to Capitol Hill and beg for taxpayer dollars yesterday in Part Two of our Auto Maker Shakeup Series, today we shall detail how Chrysler and General Motors got Uncle Sam to give them a billion dollar allowance.
On Tuesday, March 31, 2009, the Wall Street Journal reported that these two car manufacturers might be forced to declare bankruptcy. It is a stark contrast to early gains made by both GM and Chrysler after receiving an initial government-financed bailout.
With that in mind, we continue our look at the reorganization of car makers in our five-part Auto Maker Shakeup Series with a look at the two remaining members of the American Big Three Auto Makers and how they will affect car accident statistics.
General Motors Corporation
After months of economic turmoil, President Barack Obama appointed a new CEO for General Motors Corp. While the choice to announce GM’s new headman Fritz Henderson has come under fire, it is clear that this auto maker is in need of a new direction. GM may already be making strides towards hopefully avoiding bankruptcy.
Back on Thursday, March 12, 2009, GM announced that it had enough cash to operate through the end of March and rescinded its request for more government bailout funding for the rest of the month. While GM will, however, likely request more government money in the future, this is still a positive sign for the economic outlook of one of the world’s largest car manufacturers in the world.
To avoid asking the U.S. government for an addition $2 billion, GM delayed or canceled several major projects and eliminated an engine factory in Michigan (that alone saved GM $120 million). General Motors was also forced to halt almost all of its production in January.
Our car accident lawyers hope that under new leadership GM pulls through but only if it does so with the safety of car drivers in mind.
While Ford is looking to get rid of extraneous product lines, part of Chrysler LLC’s recovery plan is to have foreign designers redesign its product lines. Chrysler is in the midst of an outsourcing, of sorts, to another country, and it could affect car accident statistics.
The American auto maker plans to launch 24 new or redesigned automobiles in the next 48 months, and most of the development will come from Italy’s Fiat SpA, Japan’s Nissan Motor Co. and Britain’s Group Lotus PLC.
This effort by Chrysler mirrors that of Ford’s, in that, if a Europeanized American car market is viable, its development deal with Fiat, Nissan and Lotus could prove to be a stroke of genius. The future of American cars could very well be the automobiles currently driven in the Old World, Europe.
Our car accident lawyers hope that quality is not sacrificed in an effort to cut costs by Chrysler. Product liability and design defect-related car accidents will be an unacceptable outcome of this shakeup.
Unlike Ford, Chrysler has received $4 billion in U.S. bailout loans and is asking for an additional $5 billion in additional funding. Its restructuring plans remain “on target” for a March 31st completion if the U.S. government grants its $5 billion request.
Tomorrow, we will look at how the global recession is affecting European and Asian car makers in Part Four of the Auto Maker Shakeup Series.
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