DETROIT, June 2 (Xinhua) -- A
severe crisis beginning during the second half of 2008 has forced the world's
auto industry into a total shakeup, as new players and others compete in a
landscape under new rules.
The logo of General Motors Corp. (GM) is
seen in front of the GM headquarters in Detroit, the United States, April
15, 2009. The largest U.S. automaker, General Motors Corp., officially
filed for bankruptcy protection at 8 a.m. EDT (1200 GMT) on Monday, the
largest bankruptcy protection case in the U.S. industrial history.
(Xinhua/Gu Xinrong) Photo Gallery>>>
SWEEPING
CRISIS
2008 has been a difficult year for automakers around
the world. An unprecedented oil price rally forced Americans, who drive most in
the world, to drive less. And when oil prices took a free fall as the economy
hit a downward trend, so did the demand for vehicles.
With the financial crisis sweeping the world, the
auto industry was caught in the credit crunch -- consumers could not get loans
to buy cars while the companies faced a shortage of liquidity to keep operating.
And as reports of large layoffs were publicized almost on a daily basis,
cash-trapped consumers were reluctant to make large purchases like buying a car.
Car sales dropped to the lowest levels in nearly
three decades. Toyota, which replaced General Motors Corp. as the world's top
automaker, reported an operating loss for the fiscal year ending March, first
time in 70 years. Its sales fell 27 percent in the first quarter 2009.
Car companies from Asia, Europe, North America and
elsewhere have been forced to implement creative marketing strategies to entice
consumers to purchase vehicles, when many firms are experiencing double digit
percentage sales declines. Major manufacturers, including the Big Three -- GM,
Ford, and Chrysler -- and Toyota, are offering substantial discounts. Hyundai is
even offering to allow customers to return their new cars if they lose their
jobs.
GOVERNMENT
RESCUE
Despite much controversy on whether it is worth
pumping taxpayers' money into an industry which many believe is doomed to fail,
governments around the world have reached out to their troubled auto companies.
There was a wave of auto bailout on both sides of
Atlantic at the end of last year. In France, the government provided 1.5 billion
euros (2 billion dollars) in aid to its struggling automobile industry. In
Britain, a rescue package of up to 1 billion pounds (1.5 billion dollars) was
offered to the Tata group, Indian owner of Jaguar and Land Rover. Sweden, home
of Ford's Volvo division and GM's Saab division, has passed a 3.6-billion-dollar
aid package to prevent a collapse of its auto industry.
The U.S government has injected more than 20 billion
U.S. dollars into Detroit's Big Three. The Canadian government has provided
around 3.3 billion dollars to subsidiaries of General Motors, Ford and Chrysler
in Canada. And as GM and Chrysler could not manage stay above water, an
organized bankruptcy was pushed and directed by the government. The U.S. and
Canadian governments will own a combined 72 percent stake in the new GM once it
emerges from bankruptcy.
One day before GM's court filing, the German
government agreed to lend Opel, GM's European subsidiary, 2.1 billion dollars,
to pave the way for the acquisition of the company by Magna International Inc.,
a Canadian auto parts supplier.
¡¡¡¡FACE-OFF GAME
The bankruptcy filed by GM, once the largest
automaker and largest company in the world, has marked a new era in the world's
auto industry.
Japanese car makers are well-positioned for steady
steps through the crisis. Due to slow sales of its Tundra pickup, as well as
shortages of its fuel-efficient vehicles such as the Prius, Corolla and Yaris,
Toyota has seen sales falling at two digits. In response, the company has
announced plans to idle its truck plants, while shifting production at other
facilities to manufacture in-demand vehicles.
What's noteworthy is the rise of Italy's Fiat SpA,
once seen as aging, sick and outplayed. GM signed a joint-venture agreement with
Fiat in 2000 under which GM acquired a stake in Fiat Auto. But when Fiat tried
to sell GM the company, GM chose to pay a penalty of 2 billion dollars and
annulled the agreement.
But under the management of Sergio Marchionne since
2004, Fiat turned around and saw its first profit in 17 quarters in fourth
quarter of 2005. The success of the Grande Punto model, Bravo (successor to the
Stilo) and the award-winning 500 have further cemented it.
Fiat has formed a joint venture with India's Tata
Motors and China's Chery motors. It has also re-entered several large markets
that it had exited years before, such as Mexico and Australia.
Fiat is determined to return to the U.S. market by
2010 with the new 500. Though it lost in the bid for GM Europe's Opel, it will,
once the U.S. bankruptcy judge approves, get a 20 percent stake in Chrysler and
can become the majority owner once the government loans are repaid.
WASHINGTON, June 1 (Xinhua) -- U.S. President Barack Obama
promised on Monday that the U.S. government will invest additional30 billion
dollars in GM, which he was confident will emerge from the bankruptcy protection
process quickly. Full story
NEW YORK, June 1 (Xinhua) -- General Motors CEO Fritz
Henderson said Monday that China will continue to be a key partner of business
of GM.
Speaking at a press conference in GM's New York
building, Henderson said that GM's venture in China is a critical part of GM,
saying its business in China in "growing very fast."
"Our business in China continues to grow very fast, I
should say at torrid pace," he said. "And we are very appreciable of
that." Full story
A piece of news about the General Motors
Corp. filing for bankruptcy protection is seen on the front page of a
newspaper in Detroit, the United States, June 1, 2009. The largest U.S.
automaker, General Motors Corp., officially filed for bankruptcy
protection at 8 a.m. EDT (1200 GMT) on Monday, the largest bankruptcy
protection case in the U.S. industrial history. (Xinhua/Gu
Xinrong) Photo
Gallery>>>
NEW YORK/DETROIT, June 1 (Xinhua) -- In the largest
industrial bankruptcy ever seen in U.S. history, General Motors Corp., the top
U.S. automaker and once the world's largest corporation, filed for bankruptcy
protection on Monday.
The Detroit-based company, for decades a symbol of
American manufacturing supremacy, corporate culture and even lifestyle, filed a
Chapter 11 petition to the U.S. Bankruptcy Court for the Southern District of
New York early Monday morning. Full story
DETROIT, June 1 (Xinhua) -- The largest U.S. automaker
General Motors which has filed Chapter 11 bankruptcy will not abandon its
headquarters in Detroit's Renaissance Center as part of its restructuring, the
Detriot News reported Monday.
President Barack Obama told Michigan's senior members
of Congress during a call Sunday night that GM will remain in the RenCen,
despite enticements from the city of Warren to move there, a congressional aide
briefed on the matter said. Full story
DETROIT, June 1 (Xinhua) -- General Motors Corp. announced
on Monday that it will close or idle 14 plants in more than two years, just
several hours after the troubled carmaker filed for bankruptcy in New York. GM
also reaffirmed it will build a small car at one of its U.S. assembly plants as
it announced on last Friday. Full story
DETROIT, June 1 (Xinhua) -- Many are mourning the
iconic collapse of General Motors Corp. as it is just hours away from its
bankruptcy filing on Monday. But the once largest company in the world may have
been quietly betting on a quick comeback as a leaner automaker.
As 54 percent of GM bondholders announced their
support for a sweetened debt-for-equity offer on Sunday, the GM took another
step forward toward a quick exit from bankruptcy protection which the company is
expected to file on Monday morning. Full story
BEIJING, June 1 (Xinhua) -- The No. 1 U.S. auto
maker, General Motors Corp., is poised for bankruptcy protection on Monday as a
way to seek a rebirth in the wake of a similar move by its rival Chrysler about
one month ago.
The GM, with a history of more than 100 years, is set
to deliver paperwork for its bankruptcy protection at 8 a.m. EDT (1200 GMT), the
largest bankruptcy protection case in the U.S. industrial history, said informed
sources who asked not to be named. Full story
BEIJING, May 31 -- General Motors Corp.
president and Chief Executive Officer Fritz Henderson have scheduled a news
conference in New York on Monday, when the Detroit automaker is expected to file
Chapter 11 bankruptcy, according to media reports Sunday.
GM's board of directors met for a second day Saturday to
make the final decision. The outcome of the meeting could not immediately
be determined. GM and the Treasury Department, which has been guiding the
Detroit automaker toward a rescue plan that will give taxpayers nearly a
three-fourths stake in the company, went into secrecy mode. Full story
DETROIT, the
United States, May 29 (Xinhua) -- The United Auto Workers (UAW) union ratified a
labor deal with General Motors Corp. on Friday, which will help the largest U.S.
automaker to emerge more quickly from a possible bankruptcy.
The contract was approved with an overwhelming 74-percent
vote by its members, the UAW said after a conference at its Detroit headquarters
on Friday afternoon. Full story
