General Motors and Chrysler have failed to lay out viable plans for their ailing companies, the White House said Monday, in a tough review which could shake up the nation’s key auto industry.

In two separate reports, a task force set up by President Barack Obama analyzed the future prospects for both companies and warned they had failed to comply with the terms of a 17.4 billion dollar government bailout.

Obama is due to unveil his plan for the future of the key industry at 11:00 am (1500 GMT) Monday with both companies seeking an additional 21.6 billion dollars to survive the economic downturn which has sent global car sales plunging.

The task force concluded both companies had failed to meet the conditions for the bailouts by a March 31 deadline, and as a result neither company had “satisified the terms of its loan agreement.” Read the rest of this entry »

Chrysler LLC today reported total December 2008 U.S. sales of 89,813 units, up five percent versus November 2008 (85,260 units), and down 53 percent from the same month in 2007. For the year, Chrysler, Jeep® and Dodge U.S. sales decreased 30 percent (1,453,122 units) compared to total 2007 sales (2,076,650 units). Total sales were significantly affected by the industry’s largest reductions in fleet sales, 63 percent for December and 31 percent for the year.

“Last year Chrysler and all of our stakeholders persevered through extraordinarily difficult economic conditions, made the necessary adjustments and always kept our focus on serving our customers,” said Jim Press, President and Vice Chairman, Chrysler LLC. “As a result, our Company and our dealer network start this year stronger and better positioned to succeed in today’s marketplace.” Read the rest of this entry »

General Motors dealers in the United States delivered 221,983 vehicles in December, down 31 percent compared with a year ago. However, total deliveries were 67,000 vehicles more than November’s result, up more than 43 percent month over month. GM December car sales of 87,506 were off 25 percent and truck sales of 134,477 were down 35 percent compared with a year ago.

For the year, GM delivered 2,980,688 vehicles while maintaining an expected market share just above 22 percent. Annual deliveries were down 23 percent compared with 2007, largely due to building weakness in the marketplace throughout the year spurred by economic headwinds such as the dramatic reduction in credit availability experienced in the fourth quarter, coupled with historically low levels of consumer confidence. Additionally, the American Axle strike and several supply disruptions impacted GM’s performance in the first half of the year. Read the rest of this entry »

President Bush will announce later this morning he has approved short-term loans to prevent automakers from collapse, rejecting the idea of a managed bankruptcy.

Bush is expected to tap some of remaining funds in the $700 billion Wall Street rescue package — about $15 billion — to aid automakers. General Motors Corp. said it needs $4 billion this month and $4 billion next month, while Chrysler LLC said it needs $7 billion to survive through March 31. The loans will come with significant strings and will be called back if automakers don’t make significant progress on long-term restructuring plans.

The White House said a 9 a.m. event was scheduled “on the administration’s plan to assist automakers.”

via detnews.com

Fuji Heavy Industries Ltd. (FHI), the maker of Subaru automobiles, today announced the withdrawal from the FIA World Rally Championship (WRC) at the end of the 2008 season. Read the rest of this entry »

Suzuki have announced they are pulling out of the World Rally Championship due to the worldwide economic crisis.

The Japanese company, who only joined the championship in 2008 after several successful seasons in the junior category, have decided to maximise funds for “core business functions”.

A statement from Suzuki read: “In responding to the contraction of the automotive sales caused by recent global economic turmoil, Suzuki has been promptly taking possible countermeasures including the reassessment of its global production output.” Read the rest of this entry »