Sorkin, Andrew Ross (2008). A Bridge Loan? U.S. Should Guide G.M. in a Chapter 11. New York Times. Retrieved on November 8, 2010 at http://www.nytimes.com/2008/11/18/ business/economy/18sorkin.html?_r=1&adxnnl=1&adxnnlx=1289441268-oBqRBqTDOpq0plbC+uVAQQ.
The author, Andrew Ross Sorkin is The New York Times’s chief mergers and acquisitions reporter. In this article he makes a strong case for Chapter 11 proceedings to cure an ailing GM. The article also touches upon Chrysler, which the author thinks is in a worse financial state than GM. Sorkin is sharply critical of the management practices at American car manufacturers in general and specially at GM – quoting and giving examples of employee work attitudes. The author also makes it a point to compare the situation with Japanese carmakers in US, that are booming. It is important to note Sorkin is in favor of a government bailout (or a bridge loan) only the bridge clause, he says, must be bankruptcy filing.
The Associated Press (2008). Gas prices put Detroit Big Three in crisis mode. Autos on MSNBC. Retrieved on November 8, 2010 at http://www.msnbc.msn.com/id/24896359/
This focused article by the Associated Press builds upon the need for smaller and fuel efficient vehicles in face of rising gas prices and competition from Japan and Korea. While acknowledging that the three big American car manufacturers haven’t been entirely caught off guard, they’re still sluggish. The article points out that unlike as in the past, protective measures will not help save the situation. The article is interspersed with industry predictions against a demand for heavier and bigger vehicles, trucks, SUVs etc, while sales of smaller and fuel efficient vehicles continue to rise. The article pointedly mentions of all three, GM is the only one selling a subcompact car in the American market. The article ends on a lament almost – with several of these companies wishing to jum the cleaner technology bandwagon earlier on.
The industry of choice is the automotive industry. With plants all over the country but concentrated in the region around Detroit, the automotive industry employs several thousand skilled technicians and one of the most important sectors by revenue. Outside forces that affect the industry include tightening pollution control laws that restrict the sector into using costly research technology to build upon the lesser engine every few years. There are also rising prices of gas – and so long as a national economy depends upon importing gas or fuels, it’s probably the most important factor that influences car sales, or which types sell most. The industry is responsible for generating several hundred thousand jobs. In addition there are the service and after market jobs that are not even included in the analysis, but depend entirely upon the automotive industry. The industry is the leading revenue generator for the government, whether domestically or through imports. In leaner times, auto manufacturers have learnt they can be left high and dry. With no money to spend people cut back, putting off buying a new car until later, leading to significant inventory pileups. If not carefully gauged, the customer outlook is very fickle – going from traditional models to newer hybrids every year (Plunkett 2008).
1. Automobile Industry Introduction”. Plunkett Research. 2008. Retrieved 2010-11-09.