US Automakers Rush to Finalize the Restructuring Plans

December 2, 2008

New York (ChattahBox) — US automakers led by General Motors are rushing to finalize the restructuring plans demanded by the Congress. The auto makers need to present a complete plan before the lawmakers who open debate this week, can consider funding $25 billion so that the industry can survive.

General Motors has reviewed their business plan and has decided to drop off or sell brands like Pontiac, Saturn and Saab. Ford has decided to forgo the Swedish luxury brand, Volvo from its product portfolio. It is betting on surviving on its own due to its better cash position. It also aims to make more small cars that are fuel efficient and cater to the rising demands from the emerging markets like India, China, Russia and Brazil.

Chrysler LLC board members are also meeting to review the business plan demanded by the lawmakers. The company currently owned by Cerebrus Capital Management is usually seen as the most vulnerable company and would need a strong business plan to convince law makers to share the funding with the company, even if it decided to partner with other auto makers. As per the analysts, GM is too big to fail and Chrysler is too small to survive on its own.

All the three US major auto makers are making all efforts to convince the congress that any money they receive will not be squandered. Earlier the Congress has sent back the three Chief Executives to come back with a strong business plan to convince them how they intend to save the company with the funds handed over to them. Those plans are to be delivered today.  Hopefully the CEO’s won’t use private jets to come to Washington again, a dead giveaway that cutting excessive costs is not a priority.


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