Marcie Belles's Blog – December 2008 Archive (7)

Dealership Group Stocks Buck Trend

Go figure: The stocks of publicly traded dealership groups have posted some pretty hefty gains during the past month.

In fact, the stock prices of nine dealership groups shot up an average of 40% from Nov. 25 to Dec. 19. The increases come despite the fact that some of these companies have shed dealerships and posted quarterly losses and lower vehicle sales volume.

To be honest, I’m not really sure how to explain the gains. The stocks of America’s Car-Mart [ticker: CRMT]… Continue

Added by Marcie Belles on December 22, 2008 at 12:30pm — 1 Comment

Automaker Bailout Will Do Little for Finance

The government finally bit the bullet — it agreed to shell out $17.4 billion from the TARP fund to enable GM and Chrysler to operate through March. But what will happen to improve the auto finance sector in that timeframe? Very little, I’m afraid.

You see, during the Congressional hearings a couple weeks ago, the CEOs of the Big Three made it clear that any loans granted would be used to pay for day-to-day operations. When asked outright whether some funds might be earmarked for… Continue

Added by Marcie Belles on December 19, 2008 at 11:19am — 3 Comments

A Rate Cut in Name Only

The Federal Reserve is set to wrap up its December monetary policy meeting today, possibly capping the two-day discussions with a half-point or three-quarter-point reduction in the fed funds rate. Either one of those moves would result in record low rates.

But will that help the auto finance sector? I doubt it. The reason people aren’t buying cars is because they hesitate to plunk down $20,000 at a time when the economy is so shaky. It doesn’t matter much if the interest rate is 6%,… Continue

Added by Marcie Belles on December 16, 2008 at 11:07am — 5 Comments

Outlook for 2009

Even if Congress approves a bailout for the Big Three, the auto market in 2009 will face significant challenges. All signs point to dragging vehicle sales and difficult credit markets.

Will there be a few bright spots? Offer your thoughts in this 12-question survey.

No doubt, 2008 has been a rocky year. Financiers could not have expected the severity with which the economy and financial sectors tanked. Here’s a look at some… Continue

Added by Marcie Belles on December 10, 2008 at 1:00pm — No Comments

Chrysler Inches Toward Bankruptcy

A day after appealing to the Senate Banking Committee for funds it needs to operate, Chrysler LLC has hired bankruptcy law firm Jones Day to prepare for a possible Chapter 11 filing, according to a report in the Wall Street Journal.

In an interview with CBS News yesterday, Chrysler CEO Robert Nardelli said that a bankruptcy “would cause tremendous dislocation in healthcare, pension, wages,… Continue

Added by Marcie Belles on December 5, 2008 at 1:34pm — No Comments

Plan Details

Here are links to the Big Three's restructuring plans, submitted to Congress today:

Chrysler LLC (14 pages)

Ford Motor Co. (33 pages)

General Motors Corp. (37 pages)

Added by Marcie Belles on December 2, 2008 at 10:09pm — No Comments

Deadline Day

After being grilled by Congress two weeks ago, the Big Three are submitting plans today that detail the specific uses of a potential $25 billion loan for their continued viability.

The plans will have to address the skyrocketing expenses that have brought the automakers to their knees, including labor, management, and dealer network costs, their product lineups, balance sheets, and debt structures. Congressional hearings to discuss the plans are slated for Thursday and… Continue

Added by Marcie Belles on December 2, 2008 at 12:00pm — No Comments