The US used to be king of the worldwide auto sales market, but declining auto sales and mounting losses will surely affect the entire country. GM being dethroned by Toyota is just the tip of the iceberg when it comes to the unprecedented challenges facing American auto manufacturers. President Obama is now in the position of making sure that $13.4 billion in government loans that GM and Chrysler received under the Troubled Asset Relief Program is not wasted. Their new corporate plan for viability is due Feb. 17, and will be under great scrutiny not only by Obamas team but also the bailout-wary American public.
Obamas team is now responsible for the fate of Americas auto manufacturing industry, and GM and Chrysler need to make sure their plans include long-term strategies for improving the quality and energy efficiency of their vehicles. The Treasury Department is providing a $1.5 billion loan to Chrysler Financial and has already made a $6 billion investment in GMs lending arm, GMAC, to get these companies back into the business of selling and financing vehicles while holding on to as many jobs as possible.
These days, consumers can name their own price on the overstocked inventory flooding dealer lots and are usually able to secure competitive auto loans and financing. Car shoppers across the nation have been hesitant to take advantage of the bargains the American automakers have been promoting, mostly due to fear that their new warranties will become worthless if the auto makers go under.
Since the companies are trying desperately to stay in business, Obama's cabinet will most likely do as much as possible to halt the loss of jobs and other financial losses that are threatening this vital American industry. Have you recently bought a new American car? Please share your negotiation process and shopping experiences with us.
