GM and Chrysler are in talks with lawmakers to reach an agreement regarding the proposed closing of thousands of dealerships. This is obviously in an effort to avoid the proposed legislation that would put their plans on hot water. In case I didn’t go into this on Monday (which I don’t remember doing so) this legislation would take these close to 2,000 dealerships, and restore them to the status they had before GM or Chrysler filed for bankruptcy. Yesterday the Obama administration made it clear that they would be opposed to such legislation, even though the bill was sure to pass in the House.

The National Automobile Dealers Association has been showing up in full force to support this legislation. Their efforts seem to be working as their congressional support has been growing quickly all week. It is still unclear whether or not the measure will pass through the senate as it has only half of the votes needed to pass. We’ll see how this unfolds.

Curious about how the Cash for Guzzlers program (the one that I discussed on a couple of occasions) was panning out? According to a growing consensus, not well. The argument states that it is far to early in our economic recovery to count on a plan like this to work. The problem stated: people may own a gas guzzler that happens to be paid off, the incentive would not in any way be worth the accrued debt of buying a new car. Sounds like a pretty reasonable argument to me, but will this ever reverse the decision to implement this program? Only time will tell.

It’s Monday, July 13^th, and here is your automotive news for today.

It seems that GM’s bankruptcy isn’t going as smoothly as they may have initially wish it. During their bankruptcy hearings they announced their plans to close thousands of dealerships, ultimately saving the company billions of dollars (which makes even wonder if they considered other areas that they could cut back, perhaps we all need to read a little more deeply into this).

There has now been action on Capitol Hill. Some members of congress are fighting this possible incline in the unemployment rate and it’s a non-bipartisan issue. One congressman described this as strong-arming dealerships into signing a deal by giving them fear of their own closure. Charles Grassley, a Republican senator from Iowa, has already introduced legislation in the House Appropriations Committee that directly address this. Reportedly, out of the two bills in question, one has already passed committee, and is working it’s way up the legislature.

This legislation would restore terminated franchises to their status before GM and Chrysler file for Bankruptcy. Additionally, this would force any further hearings of the closing of these dealerships to be heard in State courts, rather than national bankruptcy courts which will probably make it much easier for the dealerships to have a fighting chance.

GM issued an opposing statement on July 6^th, 2009 through their National Dealer Council condemning the legislation. Which was quickly condemned by the Automotive Trade Association Executives Committee, who blast this letter claiming that this is just another example of GM’s heavy-handed tactics to get their way. However the spokesman for the company may not be lying when he says that if such legislation is passed, the company could be risking any progress they have made or would have made. I know the company doesn’t want to fire people, but this legislation would make it much harder to do so (maybe that’s a good thing) :/

Hello and thank you for visiting on this wonderful July, 9 2009. First big news of the day: GM is set to exit bankruptcy court. Apparently (and frankly, as expected) the company is now largely owned by the U.S. government. As this is a developing topic, I will have much better details next week so please check back. This is bound to get/remain ugly.

In other news, the Wall Street Journal recently released a report speculating the passage of a new Department of Transportation bill in congress. This was as of July 2^nd. This transportation bill, which was being introduced by House Democrats, is reportedly just in its beginning stages so there is bound to be plenty of development in this story. This bill would cost 450 billion dollar over the next 6 years (yes, yes, I know) if passed. What would this bill do you ask?

Included in the bill would be several initiatives to reduce oil consumption in the U.S.  This is reportedly in an effort to stimulate economic growth (and not for the purpose of conservation, that is way down the list of important things in this country at the moment it would appear).  Additionally, this bill would consolidate the number of Transportation Department programs used to disperse federal tax money to state programs (to under 6). This would be a positive thing as it would allow local agencies to give more specific attention to where the money is going exactly (which could wind up saving us tax money in the end). For some this is just another example of our big spending habits, which they believe will get us further and further into this mess we’ve created. To an extent, I agree.

That’s all for this week. Next week is sure to bring some excitement.

Happy July 4th.. err.. two days late. I hope you enjoyed your holiday as much as I know I did. It is the month of July, which can only mean one thing: a progress report of the first half of the year is in order. June offered the auto industry something special (according to analysts anyway). Last month was the month that those in know expected for the auto industry to break through the 10,000,000 dollar barrier and prove to the nation that we are finally seeing a long overdue recovery in auto sells.. Well, um.. to put it lightly that didn’t happen. In fact, overall auto sells fell from 9.9 million in May to 9.5 million in June. While this is not necessarily good news we can at least take solace in the fact that doom and gloom political pundits making predictions at the beginning of the year of our impending GREAT DEPRESSION BY JUNE were wrong. (something I always love to see)

So the entire industry fell a little lower but there has to be a silver lining! There is, and it is measured by the rate of failure. Ford had something to celebrate (sort of). While the entire industry was losing profit margins in the American market, they only fell 11%! The good news for them? Everybody else fell more, giving them a 3 point increase in overall market share: they now control 18% of the market. That means that Ford (a company that by many opinions should have failed like many of their models do years ago) has outsold Toyota in the first 6 months of this year to become the 2nd place automaker only to be outsold by GM! Toyota is not the only company losing ground in the American market though… Nissan has fallen out of the big 6! Who took their place: Hyundai. This marks the first time (EVER) that the 6 best selling automakers in the U.S. have not been based in the U.S. and Japan alone. One more shift that I find to be interesting and then I’ll leave you to your exciting life.. in the luxury category. Lexus has been outsold in the U.S. market by none other than the German automaker B.M.W. This must be exciting news for them, many (myself included) really didn’t think that luxury brands would survive in this GREAT DEPRESSION we are now going through.. And we thought they had it rough in the 1930’s…

Well hey there. As we enter the last week of June/ first week of July more changes to the auto industry are coming down the wire. As of yesterday, 6 of the biggest automakers have announced plans to cease production of all diesel-running vehicles in the US by 2010. What does this mean for the future of diesel; anybody’s guess at this point. This may be a hot button issue in regards to saving money on gas because diesel engines can get up to 30% higher gas mileage than a standard fuel vehicle. The issue that the auto companies are facing is the price of Diesel engines. On average many components of a diesel engine can drive the retail price of the vehicle up as much as $8,000, something auto companies aren’t willing to place any bets on (and who can blame them in this market). So far GM, Ford, and Chrysler as well as Japan’s Honda, Toyota, and Nissan are the companies I am talking about here. This is of course excluding German automakers such as BMW, Audi, Mercedes, and Volkswagen, all of whom are still producing diesel fueled engines in the US market. What we have yet to see is if they will follow in the example of these other 6 companies. Something I wonder, does this move away from diesel pave the way for the massive onset of the electric car? I guess we’ll be able to tell by next year.

In other news, the Italian automaker Fiat (which bought out Chrysler earlier this year) has announced plans to begin reintroducing themselves into the American market by 2011. Specific plans are at this point nothing more than speculation; I wager that we will hear much more on this in the coming months.

Finally I’d like to end today’s article on a positive note (something I so rarely get to do). Do you remember the American Recovery and Reinvestment Act (ARRA)? This was one of the first moves of the Obama administration in an effort to combat unemployment and stimulate the economy when it was signed into law on February 17. This agency has released a progress report regarding the release of funds into the economy. You can check out the specifics here www.recovery.gov . As far as the Department of Transportation: the agency is claiming that the massive infrastructure overhaul that was promised in campaign season last year, is being delivered upon with up to 50 percent of the highway reconstruction funds having been allocated within the first 150 days. This is very good news for the economy as it will definitely combat unemployment in a big way. You can read more about this on the DOT blog at http://fastlane.dot.gov .