2. Start of the Automobile Crisis By August 1929 Just Prior to Great Depression Car Crisis Begins From 1930 to 1932 Sales dropped 73.2 percent Similar to Our Crisis Because People Stopped Buying Cars Due to Extremely Poor Economy 1970 “Gas Scare” triggers another American Car Crisis Large American Cars Ineffective Majority of Cars on Production Line were larger cars Smaller Cars receive large demand
3. Common Cars Built Through 1950-1970 1953-Chevrolet Builds Corvette and BelAir 1955- Ford Designs Classic Thunderbird 1959- Chevrolet introduces the Corvair and the El Camino Both Cars had V-8 engines 1960- Ford Builds Falcon 1960- Chrysler Designs Valiant 1964- Chrysler Builds Barracuda 1965- Ford Introduces popular Mustang 1966- GM introduces classic American muscle cars Pontiac Firebird and Chevrolet Camaro
5. Recent History:Three Reasons for Auto Crisis Health Care GM spends $5 Billion on Health Care Annually Ford and Chrysler have health care obligations of $90 Billion Auto Industry can be described as a “health insurance provider that happens to make cars.” Credit Crunch Lack of Good Credit for Potential Cars Buyers Cannot Get Loans to cover loss of car sales Low Efficiency Cars Gas Guzzlers Commonly Purchased Car
8. Tough Competition Honda and Chery Motor Corp. on Rise Honda Posts 17% Sales Increase Since Beginning of 2009 Honda Accord Posts 38% Sales Increase Chery’s Six Sigma Production Systems Struggling Toyota Still Manages Better Than Detroit Motors Sales Worldwide Better Than GM, Ford, and Chrysler Toyota Leads US Sales For First Time in History However Toyota Still Asks For Aid
9. Original Bailouts General Motors and Chrysler Seek Bailouts From Federal Government $15 Billion Bailout Proposed by Congress December 10th House passes the bailout bill to GM and Chrysler Bill Fails due to majority vote TARP (Troubled Asset Relief Program) to the rescue Car Czar By January General Motors And Chrysler Receive Government Aid Of $17.7 Billion
10. Future Bailouts GM Request $16.6 Billion More in US Aid GM to cut Saturn, Hummer, and SAAB Lines From Business Pontiac On Verge of Being Cut Also Laying Off 47,000 Jobs GM and Chrysler Must Submit Recovery Plans to Receive Government Aid By 31st March Or Face Having To Return Any Aid Received To Date And The Possibility Of filing For Bankruptcy
11. The Chrysler Situation Taken Off NYSE Following Take Over By Daimler In 1998 Private Equity Firm Ceberus Buy 80.1% And Take Control In 2007 Daimler Continues To Hold 19.9% Stake Ceberus Is A Hedge Fund Who Holds Controlling Or Significant Minority Interests In Many Large Commpanies
12. Chrysler And Fiat Fiat Are Currently In Talks With Chrysler Over The Possibility Of Gaining a 35% Stake Deal Would Allow Fiat Access To US Dealer Network It Would Also Give Chrysler Access To Platforms For Smaller More Efficient Cars And Access To Fiats Global Distribution Network
14. Ford Strays From Pack Ford Receives No Government Aid Ford Remortgaged Plants To Raise $26Billion Cash In 2006 Able to Use This Cash to Help Through Recession Volvo on Verge of Being Sold Which May Raise Up To $30Billion If Turnaround Plans Fall Through… GM and Chrysler May Be Forced to Declare Bankruptcy Ford Has More Options and Flexibility Available
15. Others Effected By Auto Industry Crisis Delphi Corp. Declares Chapter 11 Bankruptcy Parts Division Supplier to GM, Chrysler And Many Others Daimler Post Huge Losses Due to Chrysler 50,000 People Laid Off and Counting in Detroit
16. Other Governments Effected GM Would Sell Opel Stakes to Get Aid From Europe Sale of Opel, the GM unit in Europe, would rewarded GM in $4.18 Billion from Germany Sale of Volvo Could Grant Ford Approximately $30 Billion From Chinese Company
