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U.S. Big 3 automakers prepare for the worst

U.S. Big 3 automakers prepare for the worst


A lot has been reported in the general media about the American ‘Big 3’ automakers asking for U.S. government loans to help them survive the current economic crisis, considering the companies were in bad shape to begin with. While almost everyone expected them to get the loan, politicians blocked the money in the end just yesterday.

Basically, the American government has already agreed to hand over $700 billion in ‘bailout’ money to incompetent financial institutions such as Citibank and others to cover their massive losses. These stupidly-managed institutions have made world stock markets collapse, which is why people can’t get car loans or home mortgages even in this part of the world right now, as all banks cut down on spending.

Due to this, the ‘Big 3,’ namely General Motors, Ford and Chrysler, asked for a total of $34 billion from the government to continue their restructuring plans, currently being hindered by the crisis. However, unlike the dimwitted banks, the Big 3 had to suffer various sessions of public questioning to beg for the money. Having passed through various levels of politicians, the amount eventually came down to $14 billion, and now to zero.

Reports also suggest that the UAW — a powerful and greedy auto-workers union that forces the Big 3 to pay high salaries and benefits to blue-collar factory workers — have refused to take further pay cuts that would make their salaries similar to that paid to workers in American factories for foreign automakers.

Chrysler and GM have already hired bankruptcy lawyers, while Ford says they can hold on a little longer. For decades, the American car companies made awful products and managed their costs poorly. Now they are paying the price, just when they finally are building class-leading products. Analysts say the Big 3 going bankrupt will worsen the recession, which means the world will continue to go down with the Americans.

Whether you love or hate American cars, everyone will be affected. We assume at least some of the popular brands will survive after bankruptcy, including Jeep, Chevrolet and of course Ford. Car prices overall are coming down right now in the GCC, since demand has fallen and few can get bank loans. But imagine the prices other car companies will ask for, once a huge chunk of their competition is gone in the near future. Here’s hoping for the best.

What do you think?

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Comments

  1. Dont worry nothing will happen to USA its just a drama for time being nothing is gonna happen them.

  2. Hope nothing bad happens to Ford.

  3. I agree with sohi. They won’t let the Big 3 sink…the American Economy can’t afford it…

  4. especiallly when the Fords are finally coming out with gr8 cars!

  5. As long as most people simply get fooled by advertising; As long as most people doesn’t care much about the performance of the vehicle or their safety as much as they care about maintenance cost; the big 3 should be in trouble like this. I hope they survive. What kind of auto-life can it be without Mustang, Corvette and Charger…

  6. I guess its hard to believe anything will happen to such big companies, but in the end of the day its a business, if it’s not making profit, obviously its going to shut down. Only way they can stabalise that is reducing operation costs, but with workers refusing paycuts, its kind of tough. Then what’s going to happen, car models will get cancelled, meaning factories will shut down and people will lose their jobs. I think in this economic crisis, its better to get a paycut than be jobless. Of course the workers are looking at their own personal benefit, but they have to start looking at the bigger picture..

  7. Well if the Big three are going to sink is because of these greedy unions.

    They looking the problem at a small window and should be looking at the bigger picture because they are partly to blame of American products in the car industry and wanting more for that is just foolish especially at this time of crisis where American car company cant afford further loss than this

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