Ford saw double-digit sales increases from last August for its pickup trucks. Chrysler also sold a lot of pickups, as did GM.
A good month for pickup trucks means a good month for Detroit's Big Three — General Motors, Chrysler, and Ford. Although ironically, it was Ford and Chrysler reporting big gains in pickup sales from August of last year, while GM did well with its lineup of smaller, more fuel-efficient cars.
Longtime GM watchers are still scratching their heads at how a company that, pre-bailout and bankruptcy, had abandoned the small-car market to imports so it could concentrate on the fat profits that trucks and SUVs bring in. GM did okay with its main pickup, the aging Silverado. Just not as well as its Motown rivals.
Pickup truck profits are a good thing, for two reasons. Ford and Chrysler saw double-digit increases, while GM had to settle for the mid-single digits. That's money in the bank for Detroit 's carmakers. Meanwhile, pickups being sold means that contractors are trading in their aging wheels for new sheet metal — and that's a clear signal that the new-home market is regaining some strength. You can't haul stuff to the building site in a pickup that falling apart.
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STOCKTON, CA - APRIL 29: Cars drive through downtown Stockton April 29, 2008 in Stockton, California. As the nation continues to see widespread home loan foreclosures, Stockton, .California led the nation with the highest foreclosure rate. One out of every 30 homes in Stockton is in foreclosure, close to seven times the national average for a metro area in the U.S. (Photo by Justin Sullivan/Getty Images)
The town of Stockton is lurching toward a Chapter 9 municipal bankruptcy. But thanks to a law that Gov. Jerry Brown recently signed, before a California municipality can head to bankruptcy court, it needs to submit to mediation. What this means is that the city and its creditors sit down a less formal environment than a court of law and try to iron out a solution. Generally speaking, this means that bondholders (for example) will accept a "haircut" on debt up front, rather than fighting it out on court.
If a mediation can lead to a successful resolution, it can be a real boon for the city that's in trouble. Bankruptcy is expensive. The lawyers have to be paid and the whole process has to be financed so that the municipality can continue to operate while its litigating. We're talking tens of millions of dollars.
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LOS ANGELES, CA - JANUARY 13: Marti Eulberg (L) and Ciara attend Vanity Fair & Fisker Automotive Toast Dreamworks Pictures Golden Globes Best Drama Nominations 'The Help' And 'War Horse' at Cecconi's Restaurant on January 13, 2012 in Los Angeles, California. (Photo by Charley Gallay/Getty Images for Vanity Fair)
I don't really think this is good news. Fisker Automotive, the startup electric carmaker, is really starting to huff and puff just as rival Tesla Motors is preparing to blast off. Founder Henrik Fisker has handed over the leadership reins to Tom LaSorda, a veteran of Detroit and specifically of Chrysler. But LaSorda labored at Chrysler during the automaker's failed marriage to Germany's Daimler. And when Daimler dumped Chrysler in to the arms of private-equity firm Cerberus Capital Management, LaSorda was content to play second banana to what I consider one of the least effective CEOs every to grace the Motor City, Robert Nardelli, who previously had caused all manner of problems for Home Depot.
It should be pointed out that Fisker only current vehicle, the Karma, isn't even a pure EV. It's a plug-in hyrbrid, with a drivetrain similar to the Chevy Volt. Unlike the Volt, which sells for roughly $41,000 (before tax credits of up to $7,500), the Karma goes for $103,000. A cheaper model, dubbed "Nina," is on the drawing board, but as the Wall Street Journal reports, Fisker lost the $529 million Department of Energy loan guarantee it need to move forward on the vehicle.
Don't think cool cars can some in small packages? No so. The new Chevy Sonic is proof that General Motors can finally do a tiny ride that commands attention.
Good news today for General Motors: it generated its highest annual profit ever in 2011. That's $7.6 billion. And yes, you read that first sentence right: highest annual profit ever. Higher than when GM owned half the U.S. market. Higher than when it was the largest industrial concern on the planet.
This is remarkable for two reasons, one obvious, one not. First the obvious: three years ago, GM had to be bailed out by the taxpayer before entering bankruptcy. It was under fierce attack in North America from Toyota and others. The future looked, if not completely dim, then not exactly luminous.
Now the not-obvious. Most of GM's 2011 profit came from North America. Some analysts have pointed to this as a problem and highlighted GM's struggles with its main European division, Opel, which it decided to hold on to rather than sell, post-Chapter 11. (Other observers, notably Slate's Matt Yglesias, have complained that all the rah-rah around GM suggests that America is still too close to the auto-industrial business model that built the country in the 20th century.)
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Republican presidential hopeful Mitt Romney holds a Caucus election night at Red Rock Casino in Las Vegas, Nevada, February 4, 2012. AFP PHOTO/Emmanuel Dunand (Photo credit should read EMMANUEL DUNAND/AFP/Getty Images)
Mitt Romney is doubling-down on his negative view of the the 2009 bailouts and bankruptcies of General Motors and Chrysler. In late 2008, he argued in the New York Times that a bailout of Detroit would mean the end of the U.S. auto industry. Today, in the Detroit News, he refuses to back off from his earlier position, says that a "managed bankruptcy" of GM and Chrysler was what was needed all along, and that the Obama administration practiced:
"...crony capitalism on a grand scale. The president tells us that without his intervention things in Detroit would be worse. I believe that without his intervention things there would be better.
Before the companies were allowed to enter and exit bankruptcy, the U.S. government swept in with an $85 billion sweetheart deal disguised as a rescue plan.
By the spring of 2009, instead of the free market doing what it does best, we got a major taste of crony capitalism, Obama-style.
Thus, the outcome of the managed bankruptcy proceedings was dictated by the terms of the bailout. Chrysler's "secured creditors," who in the normal course of affairs should have been first in line for compensation, were given short shrift, while at the same time, the UAWs' union-boss-controlled trust fund received a 55 percent stake in the firm.