Ring in the new year? The party's over

Carmakers put on a brave face at the world’s biggest car show on Sunday, with the sales outlook bleak for the coming year and fabled firms struggling for survival despite massive government aid.

“All I can tell you is that demand is a little more robust than we expected,” Ford sales chief Jim Farley said of January sales at the North American International Auto Show. “I would say a little, not dramatically.”

United States car sales fell 18% in 2008 from the prior year to about 13,2-million vehicles, battered by a spreading credit crunch, US recession and plummeting consumer confidence.

Most carmakers expect sales to decline even more in 2009. Ford expects US car sales at 12,5-million at best.
GM officials said they could fall as low as 10,5-million.

“I have seen a better mood at funerals,” said Mike Jackson, president of AutoNation, the largest US car dealer group.

That downbeat tone pervaded the cavernous Cobo Centre in the Motor City, where the only buzz inside the building was again “electric” this year—as in electric cars, gas-electric hybrids and the promise of other developing green technology.

General Motors, Chrysler, Ford, Toyota and Honda all updated plans to offer all-electric or new hybrids in the next few years.

GM had garnered the limelight two years ago with the introduction of the Chevrolet Volt electric concept car, which on Sunday it again said it plans to have on sale by late 2010.

Cheering GM employees, as well as Michigan governor Jennifer Granholm, waved signs at the show that read: “We’re electric,” “Charged up,” “Game changer” and “We’re here to stay” as they walked ahead of the Volt.

GM has said the electric car will have a 64km driving range on one battery charge. Toyota announced plans for a car with a 80km range on one charge and Ford said plans were in the works for one with a 160km range—perhaps by 2011.

Bumpy road
If the mood was hopeful but downbeat inside, it was downright angry outside the hall and echoed the stormy days ahead as GM and Chrysler rush to meet terms of a government bailout by the end of March.

Detroit’s big three—GM, Chrysler and Ford—went hat in hand to Congress and the White House seeking emergency aid after the first two had warned of imminent bankruptcy.

The $17,4-billion federal bailout of GM and Chrysler announced in December included fresh demands aimed at the United Auto Workers union, including making UAW wages and benefits competitive with foreign carmakers’ US plants and eliminating the jobs bank, which compensates idled workers.

A group of about 50 or more workers marched up and down outside the conference centre in chilly but sunny weather, chanting slogans such as “Bush says cut back, we say fight back” and holding signs including ‘No millionaire left behind’ and ‘Out of a job yet? Keep buying foreign.’

Phillip Bailey, an unemployed healthcare worker who said he had come to the rally to support the workers, said he had heard complaints from UAW members about new concessions.

“A lot of the members of the union that I’ve met are angry at the government, the management of the auto companies and their own union leadership,” Bailey said. “There are plenty of workers who are tired of watching the leaders of the UAW roll over on important issues.”

“We have to maintain our wages, maintain our jobs and maintain our benefits,” said Brian Moore, a safety trainer at GM’s pickup truck plant in the Detroit suburb of Pontiac. “That’s supposed to be the American way.”

“The concessions that Bush wants us to make are just a slap in our faces,” said Tammy Jones, a furnace worker at Chrysler’s Hamtramck axle plant in Detroit. “People fought and died for our rights and we must fight to keep them.”

Back inside the arena, GM chief executive Rick Wagoner said GM was set to begin talks with the UAW this week but he stopped short of saying GM would be able to meet the specific targets for UAW concessions as outlined by the Bush administration.

“I think it’s fair to say everyone’s attitude has been cooperative,” Wagoner said. - Reuters

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