Quote:

GM said it is putting the brakes on the construction of a factory in Flint, Mich., set to make 1.4-liter engines for the Chevrolet Cruze and the Chevy Volt plug-in electric car.

Brilliant!  Cut the one thing that may dig them out of the hole they're in.

Some key words from the article could imply the construction contractors want payment more up front.


Quote:

won't be able to pay its bills. GM has several billion dollars worth of supplier payments due shortly after the first of the year, and analysts have said the company probably doesn't have the cash to pay them. we don't have the cash,"

No lie.  A Chrysler exec calls for parts in another state and can't get them without payment, no credit extended.

The full text of the AP story sheds a tad more light on the one liner posted above....

Quote:

GM delays Volt engine factory Carmaker says still aims to bring the electric car to market by 2010 The Associated Press updated 3:58 p.m. ET, Wed., Dec. 17, 2008 DETROIT - General Motors Corp., anxiously awaiting a government loan so it can continue operations into 2009 said Wednesday it will halt one of its most important projects to save money should a Washington bailout fall through. The cash-strapped automaker is putting the breaks on the construction of a factory in Flint, Mich. set to make 1.4 liter engines for the Chevrolet Cruze and Chevy Volt plug-in electric car. The move comes as GM scales back on just about everything, from corporate sponsorships to vehicle production and utility costs — even pens — to save every cent it can to stay afloat. Some executives say the company may have enough money to make it through January without federal aid, yet GM must make payments to large suppliers in early January, further complicating its cash position. GM is seeking up to $18 billion in government loans as it tries to survive the worst U.S. auto sales environment in 26 years. The company has said it is running low on cash and may not be able to pay all of its bills after the first of the year without government help. GM is delaying the purchase of big-ticket items, such as structural steel to build the new Flint factory, located 50 miles northwest of Detroit. GM announced in September its plan to build the new plant on its existing Flint site, with production to begin sometime in 2010. “Those are huge cash outlays, and we don’t have the cash,” said spokeswoman Sharon Basel. But she said Volt and Cruze development will continue as scheduled and the company still plans to bring them to showrooms in 2010. The construction delay may be temporary until the company figures out its cash situation. “Everything that involves heavy cash outlays obviously is under review,” Basel said Wednesday. “Our intent is to still go forward with a new facility bringing that engine to Flint, Mich.” The plant’s engines will extend the range of the rechargeable Volt, which GM says will be able to travel 40 miles on electricity alone. They will also power the Cruze, GM’s next-generation small car that is supposed to get around 40 miles per gallon. Basel said she did not know if anything has been delayed at GM’s Detroit-Hamtramck assembly plant, where the Volt is supposed to be built, or at the Lordstown, Ohio, factory where the Cruze will be assembled. The construction delay was reported Wednesday by The Flint Journal on its Web site. Basel said it’s part of GM’s overall effort to conserve cash until a decision is made on the government loans. President Bush stepped forward to say he would act to save the domestic auto industry after a bill authorizing the loans was thwarted in Congress. Basel would not say when construction might resume if government loans are made available, but she said there is plenty of time to build the plant, install equipment and get it up and running in time to produce engines for the two new cars. The company already makes the 1.4-liter engine at a plant in Austria, she said, giving GM another option for supplying the engines.“We have lots of options. The construction of the new plant is not going to interrupt our plans for the Volt or Cruze,” Basel said. GM said in September it would invest $370 million in the new factory, which will employ 330 hourly and salaried workers and allow the company to double its global production of smaller engines by 2011. The plant will have 300 flexible work stations that will let GM build different four-cylinder engines without retooling. The United Auto Workers union agreed that new hires for the plant would be paid $14 per hour, about half the wages of a current UAW worker. It also agreed to a new flexible pact with GM that lets workers do multiple jobs. The new factory brings the prospect of more jobs to an industrial city hard hit by auto job losses. GM’s nearby Flint Engine North plant closed in August. The state of Michigan approved $132.5 million in tax incentives for the automaker to spend $838 million on the new plant and upgrade of four other facilities. More on: Chevy Volt  |  electric cars URL: START PRINTPAGEMultimedia File Viewing and Clickable Links are available for Registered Members only!!  You need to or END PRINTPAGE

Quote:

The company already makes the 1.4-liter engine at a plant in Austria, she said, giving GM another option for supplying the engines.“We have lots of options. The construction of the new plant is not going to interrupt our plans for the Volt or Cruze,” Basel said.

Cool!  Don't give them the money and let them work their own way out of the hole they dug.

Trouble with that Bob, is that all the manufacturers that supply the auto companies with the materials they fabricare the cars from...

from the steel mills, to the plastics and rubber factories, glass factories, the machienists who grind the valves and pistons and the aluminum molders who mold the casings...all will be vastly effected and their jobs would be just as at stake as the auto workers in Detroit.

It would be a catistrophic domino effect of job losses across the country in these and other industries.  

Redd wrote on Dec 17^th, 2008 at 7:14pm:

Trouble with that Bob, is that all the manufacturers that supply the auto companies with the materials they fabricare the cars from... from the steel mills, to the plastics and rubber factories, glass factories, the machienists who grind the valves and pistons and the aluminum molders who mold the casings...all will be vastly effected and their jobs would be just as at stake as the auto workers in Detroit. It would be a catistrophic domino effect of job losses across the country in these and other industries.

Okay, but, car sales are down 30%.  How can everyone keep their job?  

They make it up in volume!!  ;D ;D ;D

They are getting laid off already B$.  Just not in the mass numbers they would if the Auto industry failed completely.  Sort of like the Newspaper industry.  The last 2 quarters have seen an 13% reduction in workforce for Gannett alone (few if any of this is due to atrision because some departments were restructured to leave "open" positions that would go unfilled [read: the employee was fired so they could cut the job]).

Tribune company is in Banckruptcy.  Gannett has indicated that even more layoffs  are to come in the first quarter of 2009.  Who knows what will happen to the Tribune's workforce.  I don't follow that company as closely.

Newspapaers aren't gone...but many many of the jobs are.

Hey Bob,
Back in 1990 the Government seized the Mustang Ranch brothel in Nevada for tax evasion and, as required by law, tried to run it. They failed and it closed.

Now we are being asked to provide billion$ for a pack of nit-wits who drove the Big 3 into the ground and have government "experts" run the companies. The same jerks that couldn't make money running a whorehouse and selling booze.

Now if that don't make you nervous, what does???

Seems like they've been doing a poor job of running the whorehouse at 1600 Pennsylvania Avenue, too. Hrmph...

If it's auto workers being laid off, big deal!  Sorry, but all UAW workers are entitled to 90% of their earnings for up to two years (think it also includes benefits).  The only way they lose that is if they turn down 2 jobs within a 50 mile radius.  Think about that while you collect your own unemployment check, which I can promise you won't be 2 years at 90% of your prior salary.

Let the damned companies reorganize under Bankruptcy, like most companies have to do.

deltadarlin wrote on Dec 17^th, 2008 at 8:08pm:

If it's auto workers being laid off, big deal!  Sorry, but all UAW workers are entitled to 90% of their earnings for up to two years (think it also includes benefits).

This must be for auto workers only, because my husbands union is UAW (he works for a paper mill) and he's SOL if they go under... :-/

Honda just cut back from 6 days per week production to only 4 from now until end of march 09 rather than lay off staff, so my daughter (works at Honda)is looking for a weekend job to make up the difference.

Her husband just lost his job ( auto sector).

My other son in law lost his job this week (auto parts plant permanent closure) so it is really slowing down here in Canada too.

Bush and we are stuck having to dig into TARP. Everything from toys to half of our advertising business are dependent on these antique car manufacturers. A-printing we will go.

Bleaugh

Charlie

I fully understand the ripple effect that will be caused by the closure/slowing down of USA autos.  One of the local mills here has already closed (nothing to do with the auto industry) and there's talk of another closure in another town.  One of the local mfg. plants just got a reprieve (another plant in another city will be closed).  The local plant made some major concessions to keep their plant open.

How many/how long are we to continue bailing out mismanaged companies?  Realistically, do you really think that the American auto mfg. will just shut their doors and never reopen?  The UAW best come down off their high horses if they want to protect their current members.  Sure, they've given concessions on new hires, but that's not what' bankrupting the companies.

Prez sez he had to sacrifice free market principles to save the economy. Sounds vaguely familiar: We had to burn the village to save it. (Circa 1968)

Paco

Housing starts are way down.  We should probably throw some money that way so they can keep building houses even though there is a hugh surplus out there that nobody wants to buy.  But we have to consider the builders, the suppliers, wood, concrete, hardware, fixtures, truckers, mills, etc.

Maybe the Government should just pay everyone to stay home.  We could call it ummmmm, unemployment or welfare or something like that.

As my good friend with the aluminum pirate hat says - welcome to the United States of Socialism!