A Week with the “Big Three”. GM, Ford and Chrysler

This has been a huge week for the Big 3 Auto manufacturers. Reports have surfaced on numerous news media forums regarding Penske who is set to purchase the Saturn line from GM. What does this mean for NASCAR? Penske has taken an active role in the automobile industry since 1969 when he started the Penske Corp. as a distributor for the GM’s Detroit Diesel. From there he expanded into truck leasing in the 70’s, diesel engines in the 80’s and acquired chief executive of the second largest US auto dealer United Auto Group in the late 90’s. At the age of 70, he is noted to be one of Forbes 400 ranking in at 149 as of mid 2007. With control of more than 300 retail auto dealerships and 26 collision repair centers, he is currently one of the worlds leading contributors to the auto industry.

With GM declaring bankruptcy early last week, a lot of avid NASCAR fans were up in arms. “What’s going to happen to NASCAR” and “Does this mean my team now runs with a Ford?” were the big questions on everyone’s mind.

On June 1, 2009 NASCAR remained confident as the second of four manufacturers entered into Chapter 11. In an article posted on the official NASCAR website on June 1, 2009 NASCAR is quoted saying "Our hope and expectation is that we will fare at the top of the list as to things you would not want to cut. I believe that to be true," France said. "They're still going to be a company that needs to sell cars and trucks. We're still the best place in the country to do that from a sponsorship standpoint and the related benefits that you receive."

Currently Toyota, Ford, GM and Dodge make up the four automakers that sponsor NASCAR. There were 16 Chevys at Dover last Sunday out of the field of 43 cars. Chevy finished the race holding 7 of the top 12 spots with Johnson, the three time defending series champion taking the checker flag. Driver Stewart was there to claim his second win this season.
Read More http://www.nascar.com/2009/news/business/06/01/gm.files.bankruptcy.ap/index.html?eref=/rss/news/business

With Ford being the last of the “Big Three” still standing, we have to ask ourselves why. With both GM and Chrysler both being supported by the American people in what you might call ICU condition, Ford is still in the Red. Free and clear from government interferences, Ford can now focus on regaining the slumping market shares that have continued to drop year after year. If you look at the history of Ford, decisions that were made were troubling at best. Taking on a new CEO, Alan Mulally, is making positive impact on the company as a whole. Ford unlike their competition is still running plants and looking to add capacity to fill the void that GM and Chrysler is leaving in the market place. Even though, this market void will not be nearly as big as you may think because of automakers like Toyota, Nissan and Honda, Ford is ready to step in and once again become the Nations largest automaker.

There are many things to consider here. One being the car enthusiast and this goes a long way to how a person makes a decision to purchase a car. Buying a car is not just another purchase to the American people. It’s a deep set passion for most people. The loyalty of the customer to a particular brand of auto is fierce in some cases. If you are a Chevy man, there is no doubt you will never own a Ford and vise-a-versa. The loyalty of every automakers customer base is unlike any other industry. There have been many sayings over the years from “Built like a rock”, “Ford tough” and Mo Power To Ya”. There have even been some not so nice ones passed down from generation to generation like “Found On Road Dead”, “Condition Hopeless, Entire Vehicle Relies On Leftover Engine Technology” and “Drips Oil, Drops Grease Everywhere”. No matter what your preference is, you have at one time or another probably said one of these statements in jest taking a poke at one of your buddies at least a time or two.

GM and Chrysler are making cars and will continue even while in Chapter 11 Bankruptcy. However, Ford continues to be the only one of the “Big Three” who offers a warranty not subsidized by the Federal Government.

Read More
http://www.bloggingstocks.com/2009/06/06/comfort-zone-investing-is-ford-a-buy/

As reported on June 7, 2009, Three Indiana State pension and construction funds asked the Supreme Court to block the sale of Chrysler to Fiat. The funds filed emergency papers with the high court early Sunday in hopes they can appeal and get a better deal. It’s now day 37 and counting since the Auto giant has filled for Chapter 11 bankruptcy protection. Chrysler says the sale is its only hope of avoiding liquidation. If the sale doesn’t close by June 15, Fiat has the option of pulling out of the deal.” While Chrysler attempts to sell most of its assets to Italy’s Fiat Group, SpA, Indiana funds lawyers vowed to appeal to the U.S. Supreme Court claiming the deal unfairly favors the interests of the companies unsecured stakeholders ahead of those of secured debt holders such as themselves.

Read More
http://www.shreveporttimes.com/article/20090607/NEWS05/906070307/1064/NEWS05


On a better note, Auto week as posted its top picks for “After Bankruptcy” what to look forward to.

http://www.autoweek.com/article/20090603/CARNEWS/906039995

As Chrysler and General Motors sort through messy restructuring processes in bankruptcy court, it’s worth noting that there is a bright light at the end of the tunnel for both companies, if everything goes well.
1. Chevrolet Volt
2. 2011 Chevrolet Cruze
3. 2011 Chevrolet Camaro Convertible
4. Cadillac CTS coupe
5. 2010 Cadillac SRX
6. 2010 Buick LaCrosse
7. Chevrolet C7 Corvette
8. 2011 Jeep Grand Cherokee
9. Dodge Circuit EV
10. Fiat 500

With our passion for cars being such a huge part of our American Culture and with the events of the past weeks, we have to wonder if the Auto industry can regain any sort of balance and start to rebuild the industry. As the stock prices fall more and more each day and we have watched the CEO’s walk away with millions in their pockets from Government Bail outs, is this a good time to have faith in the Auto industry and invest? In recent weeks many of the dealerships have been given the “pink slip” and forced to close their doors. Due to the fact the dealerships have a time line they have to abide by, this has caused a large increase in discounted sales on new cars. Every day as you drive down the street you see these sales for new cars but with the recent activities of the Automakers, had this shaken your loyalty?

Tova Rogers
T Glass Creations – Sea Glass Beach Jewelry
http://tglass.synthasite.com