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Episode 38 – Big 3 Loan Looks Likely, Sen. Dodd Wants Wagoner to Resign, Union Opposes Bailout

December 8th, 2008 at 12:00pm

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A bridge loan for the Big Three took a step closer when Nancy Pelosi agreed to tap the $25 billion slated to retool Big Three factories for fuel efficient cars. GM CEO Rick Wagoner faces calls to resign from Senator Christopher Dodd. Nearly 60 percent of union members oppose a bailout. All that and more, plus a look at Lincoln’s redesigned 2010 MKZ.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. A bridge loan for the Big Three takes a step closer. GM CEO Rick Wagoner faces calls to resign. And union members oppose a bailout.

Up next, we’ll be back with the news behind the headlines.

This is Autoline Daily for Monday, December 8, 2008. And now, the news.

A bridge loan to GM, Ford and Chrysler took a giant step forward over the weekend when House Speaker Nancy Pelosi agreed to tap the $25 billion slated to retool Big Three factories for fuel efficient cars. Pelosi caved to pressure from President George Bush who did not want the money to come from the $700 billion TARP fund for the finance industry. It’s all about politics. The way I read it, Bush wants to force a split in the Democratic Party, between the labor union wing, and the environmental wing, which did not want the money earmarked for green cars to be used for a bridge loan.

Now Senator Christopher Dodd from Connecticut, who co-chairs the Senate Banking Committee, is saying GM CEO Rick Wagoner has got to go. He says GM needs a fresh team to restructure. But I think there’s more going on behind the scenes. Senator Richard Shelby from Alabama seems to be hinting at a filibuster to prevent the Big Three from getting help. It’s all about politics. Senator Dodd may need Rick Wagoner’s head on a pike to derail any threats of a filibuster.

With gas prices plummeting, and big discounts on big SUVs, sales of the big trucks are growing again. On a month-over-month basis, from October to November Ford Expedition sales were up 30 percent last month. Cadillac Escalade up 30 percent, Chevy Suburban up 70 percent and the Dodge Durango up 82 percent. These are the biggest SUVs out there, folks. Oh yeah, remember those hybrids? Last month sales were down 50 percent across the board.

OK, the Big Three are begging for a bailout. The credit market collapsed their sales. The market is crashing and their dealers are dying. So who do you think gained market share last month? Yes, Big Three sales were down. But the Asians and Europeans were down even more. Month over month the Big Three gained over a point of market share, the Asians lost nearly a point and the Europeans lost three tenths of a point. Maybe it’s because the Detroit automakers have been through big recessions before and the import brands have not.

South Korea is considering cutting taxes on vehicles (subscription required) due to falling sales in that country. According to Ward’s, taxes on vehicles sold in Korea account for a whopping 25 percent of the selling price. And the Korea Automobile Manufacturers Association says South Korea’s vehicle production is expected to decline 5 percent this year, the first decrease since 2001.

A recent ATI-News/Zogby poll shows that a majority of Americans are opposed to bailing out the Big Three. No surprise there. Overall 62 percent of people surveyed were against it. But incredibly, 58 percent of union members say they’re opposed to loaning money to the Detroit automakers. Only 30 percent of union members approved of the bailout. Whatever happened to Solidarity forever?

Coming up in our feature story, a look at Lincoln’s redesigned 2010 MKZ. We’ll be back right after this.

Lincoln is refreshing its entry-level sedan for 2010. The company has updated the midsize MKZ with new technology and more confident styling.

Designers looked to the car’s big brother, the MKS, for inspiration – especially with exterior styling. You can see it in the sleeker front end, the split grill and the familiar, angular headlights.

Underneath the new bodywork the same basic parts carry over. The only powertrain offered is a 3.5-liter V6 with a six-speed automatic transmission. Surprisingly, even though the engine still makes 263 horsepower, Lincoln says the car is half a second faster from zero to 60.

The redesigned interior also borrows from the MKS. The styling looks similar and the seats are covered in the same premium leather. The 2010 MKZ also offers some added safety features. Like a cross-traffic alert system that watches your blind spots when backing out of parking spaces.

The redesigned MKZ will probably start arriving at dealerships early next year.

One more thing before we go. Our recent prize giveaways have been so popular that we’ve decided to open them up to all our e-mail subscribers. This Friday you’ll have a chance to win some cool Autoline gear with our new trivia contest. So this week if you can identify who made this vehicle, you’ll automatically be entered for a chance to win. We’ll pick the winner at random from the list of correct responses and I’ll announce their name on Autoline Daily this Friday.

Anyway, that’s it for today’s show. Thanks for watching, we’ll see you tomorrow.

6 Comments to “Episode 38 – Big 3 Loan Looks Likely, Sen. Dodd Wants Wagoner to Resign, Union Opposes Bailout”

  1. glen kingswood Says:

    I am amazed at how poorly informed the congress and senate are about the fuel efficiency of the many models the big three have available and the quality of these vehicals

  2. Ed Says:

    So the union members that oppose the bailout want to lose their jobs? Do they think they are going to get paid to just sit at home and watch TV? Oh wait, they already do. It’s called the Jobs Bank. My mistake.

  3. Don B. Says:

    Senator Dodd should resign too.
    Several years ago Dodd single handedly pigeon holed a bill that would have created oversight, checks and balances for the credit industries.
    This bill would have also limited or stopped the below prime lending.
    Well thank Dodd for the financial mess we have now. If Wagoner has to go so does Dodd.

  4. Art Donnelly Says:

    So Sen Dodd thinks Government can do a better job of running GM. Shall we really give him a chance and see who bails him out?

  5. nck Says:

    To whom it may concern:
    The auto industry doesn’t deserve a bail out.
    THEY HAVE RIPPED THE AMERICAN PUBLIC OUT OF $8000 FOR EVER VEHICLE SOLD AND SOMETIMES MORE.
    WHY SHOULD WE HELP THEM.I WILL NEVER BUY AN AMERICAN BIG THREE CAR AGAIN AS LONG AS I LIVE.
    THANK YOU

  6. Matt from MA Says:

    John,

    You act surprised that a majority of the UAW members don’t want a bailout. It makes perfect sense from a bargaining standpoint. Normally concessions come from both sides during negotiations for a new contract, but now you have the government making demands of the UAW directly to make this bailout happen. The UAW is going to have to give concessions to get the money, and ultimately save the Big Three and save their jobs. And yes, you would think saving ones job would be the ultimate priority, but it appears that the UAW would rather cut off its nose to spite its face. They’re not in the driver’s seat on these negotiations, and they have no real say in the process since it’s either agree and get the money and both sides win, or don’t get the bailout, and everyone loses.

    It’s all about who calls the shots and in this battle, the government is calling all of them. That’s why they’re so against it.