GM, Ford, Chrysler Restructure: No More Private Jets
Motoring Channel Staff - 3/December/2008
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Ford, Chrysler, General Motors expose
restructuring plans for the US Congress
No more private jets for the auto
industry's highest paid executives
The Private Jet DebacleFord and GM
have taken the moral high ground in the corporate world by promising to
sell off their fleets of private jet planes. "Due to significant
cutbacks over the past months, GM travel volume no longer justifies a
dedicated corporate aircraft operation," reads a GM statement. "GM is currently exploring
options for transferring its aircraft to another operator. The company
is pursuing sale of four of the aircraft so it can terminate the
leases." Ford has also said it will sell its five private jets. All
three top executives from Ford, GM and Chrysler flew to Washington in
their private jets in November 2008 to meet with the US Congress. All three auto bosses were
repeatedly derided by senators on both sides of politics for their excesses, who argued that pleading for $25 million
in bailout cash while flying on private jets was obscene. Ford's CEO will be driving from Detroit to
Washington in an Escape Hybrid and GM's chief Rick Wagoner will also
drive the 9 hour trek in a prototype Chevy Volt. - Motoring Channel Staff |
The inside of a private jet is seen by very few
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Melbourne, Australia —
As we reported last week, the rumours appear to be true. GM is
looking to sell off Saab and will definitely sell Hummer, while Ford wants to offload Volvo. Ford, Chrysler and General Motors submitted their restructuring plans to US
Congress to convince the senators to bail them out of their financial
woes to the tune of $25 billion after they were initially knocked back in November. The
big three North American automakers say they need $25
billion in low-interest loans in order to stay afloat in 2009 and avoid
bankruptcy, and US Congress told them to basically 'change their ways'
if they want financial aid.
Chrysler, General Motors, and Ford each claim they would be facing
insolvency within months unless financial support is forthcoming. However they have agreed that they will adapt their business plans to
include a raft of changes including fast-tracking electric vehicles,
making their cars more fuel efficient and selling off
underperforming assets. One
of the most interesting revelations in the restructure plans - apart
from the fast-tracking of electric and hybrid vehicles - was that
both Ford and GM executives will give up their private jets. When
America's big three CEO's initially went to the US Government in
November 2008, pleading for $25 billion in loans to turn around their
fortunes, there weren't enough votes in the US Congress to pass the
bill. But they told to return in early December and if their
restructure plans showed real progress the votes could be in their
favour and loans would come their way. General Motor's Restructure PlanGeneral
Motors made public its restructure plan that it will submit to the US
Congress, which will include the following measures:  Focus on four core brands: Chevrolet, Cadillac, GMC, Buick
Sell off Saab (looking for buyers)
Sell off Hummer (looking for buyers)
Accelerate development for Chevrolet Volt (electric car)
Accelerate development of 'green' cars
Reducing work force
Revising labor agreements with unions
General
Motors, which is Holden's parent company, will keep Pontiac but will
shrink the brand to a number of "niche" vehicles. Holden
will be hoping that its Holden Commodore exports, which are badged as
Pontiac G8s in the States, will be not be deleted from the line-up as
it has a lucrative export deal worth millions of dollars. However slow
sales of the G8 are creating doubt over the current deal. The
Saturn brand is likely to be sold off or simply shut down
and General Motor's CEO Rick Wagoner, along with all three CEOs,
said he would also work for an annual salary of $1.
Ford's Restructure PlanFord
is the best placed out of the Detroit big three to weather the huge
drop in US domestic car sales, and though it seeking billions of
dollars of loans, it released a statement saying "it hopes to complete
its transformation without accessing the loan should Congress agree to
make the funds available". "For Ford, government loans would serve as a critical backstop or
safeguard against worsening conditions, as we drive transformational
change in our company," said Ford President and CEO Alan Mulally. Ford's CEO also said that he would work for a
salary of $1 a year, significantly down from his $27,000,000 annual pay packet. Invest $14 billion on advanced technologies
Fast-track electric vehicles
Battery Electric Vehicle (BEV) commercial van by 2010
Battery Electric sedan by 2011
Improving fuel efficiency across its range by:
- 14% in 2009 (compared to 2005 levels)
- 26% in 2012 (compared to 2005 levels)
- 36% in 2015 (compared to 2005 levels)
Revising labor agreements with unions
Senior Executive's bonuses cancelled Ford is also considering the sale of Volvo, which is very likely given the current financial climate. The
Blue Oval brand has stated that at the 2009 North American
International Auto Show (NAIAS) in Detroit, it will reveal more details
of the company's accelerated vehicle electrification plan. FoMoCo's
new electric vehicle technology could also be incorporated globally,
resulting in a hybrid or an electric Ford Focus or possibly even a
hybrid Ford Falcon. Chrysler's Restructure PlanWhile
General Motors is slashing its product line-up, Chrysler's restructure
plan appears more like Ford's with plans to makes its fleet more fuel
efficient, but overall it appears to the be weakest and most vague plan
of the big three Detroit automakers. Full-function electric-drive vehicle by 2010
Improve fuel efficiency of its engines
Increase international partnerships (with Nissan etc) The
three CEO's of all car makers will submit their plans to US
Congress this week, but many financial analysts are skeptical that the
new bailout bill will be passed.
Related Links:
- Adelaide Motor Show Cancelled (2009)
- End Game for Saab, Pontiac? (2008)
- Car Dealers Face Finance Crisis (2008)
- US Car Makers: Grim Future (2008)
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