Given the magnitude of the crisis hitting the financial markets and Detroit, all of the Big Three automakers may not — or perhaps should not — survive, according to Bank of America Corp’s top executive.
Bank of America’s CEO Kenneth Lewis said he would support a bailout for the U.S. auto industry if the American public backed one, but some conditions must be met.
“The first thing would be that they (the U.S. automakers) acknowledge that there is one too many auto companies and that consolidation needs to take place,” he told reporters at a Detroit Economic Club event.
Lewis didn’t specify which automaker was “one too many,” although closely held Chrysler is the smallest of the three and is widely seen as the weakest. GM had been in talks to acquire Chrysler, but those talks have been put on ice for now as the car companies have gone to Washington , hat in hand.
“‘I’m just trying to make sure the (U.S. auto) industry survives,” he added, but stressed that any bailout package must be based on viability and sustainability to make the three U.S. automakers competitive against their German and Asian rivals.
Executives from General Motors Corp, Ford Motor Co and Chrysler LLC — which is owned by private equity firm Cerberus Capital Management LP — pleaded their cases for an industry bailout at a Senate Banking Committee hearing.
GM and Chrysler, in particular, are bleeding cash and questions have been raised about their ability to survive without an infusion of government aid. The industry has been battered by soaring gasoline prices, the credit crisis and economic slowdown. In the past 12 months, GM shares have lost 90 percent of their value and Ford is down more than 80 percent.
Lewis, whose own bank’s shares have tumbled some 64 percent this year, had few words of comfort for the industry. He said he believes the U.S. economy will get worse before it gets better. Trying to survive a financial crisis of this magnitude is like “trying to defend against a tsunami with a thimble,” he said.
(Full disclosure: the reporter has relatives who work for GM)
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2 comments so far
Who the heck does Bank of America’s CEO Kenneth Lewis think he is? I’d think that maybe there are too many large banks and Bank of America should be absorbed by Citibank or another bank larger than them.
Lets not forget that the banks including BANK OF AMERICA go the US into this mess in the 1st place.
Try giving consumers some credit to make purchases and giving the auto companies some credit as well instead of saying monopolies are the best thing for Detroit!
Bank of America is one of the WORST BANKS in the US, I think Lewis the CEO is still getting millions of dollars even after they’ve begged the US government for their bail out.
Even after the US tax payers bailed out the Bank of America, they’re using Tax payer dollars to aquire other banks!!!!!!
“Bank of America will exercise an option to buy China Construction Bank shares from Beijing, raising its stake to 19.1%, from 10.8%. It will pay more than $7 billion for 19.6 billion Hong Kong-listed shares, which cannot be sold until 2011 without CCB’s approval.”
WHAT A JOKE, this joker is saying that 3 Auto manufacturers is one too many, while he’s mis managed his own company and is using Tax payers money to buy out other banks!!
Kenneth Lewis doesn’t know the 1st thing about the auto industry or the banking industry either!
- Posted by antonio311Narcicism Preavils! Sickening, isn’t it?
- Posted by Anubis