The Detroit Three automakers go to Washington today, armed with fresh restructuring plans they hope will convince federal lawmakers to open the bailout spigot. For General Motors, Ford and Chrysler the stakes couldn’t be higher.
GM has been reviewing its already revamped business plan and may take steps that include dropping or selling off the Pontiac, Saab and Saturn brands. Ford, seen as the strongest bet to survive of the three because of its better cash position, is considering the sale of Volvo. And Chrysler, seen as the most vulnerable of the bunch, finds itself having to spell out the reasons it needs federal funds even though it’s also looking to hook up with foreign automakers.
As IHS Global Insight analyst Aaron Bragman says: “Just as General Motors is too big to fail, Chrysler is too small to survive on its own.”
GM, Ford and Chrysler have all declined to discuss their restructuring plans before submitting them to key lawmakers today.
The cap-in-hand CEOs will be making their cases against a dire background for automakers globally. Consumers, shocked into hiding by the credit crisis, are reluctant to part with cash. Sales have registered double-digit drops in Germany, Europe’s largest car market, and South Africa, Africa’s top economy. U.S. auto sales, due later on Tuesday, are expected to be just as bad. Toyota Motor Corp, the world’s biggest auto manufacturer, has unveiled new production cuts to deal with the slowdown.