Deteriorating Auto Industry

Japan Times News Reviews (Dec. 6, 2008)

I. Honda to Exit F1 by the End of Year

"The sun goes down, everybody is gone, and now you are all alone with a few friends in the middle of nowhere. There is no way to contact friends, family, or ask somebody for help. And now you are in a critical situation, where somebody or something is hunting you down, one by one." Then what should you do to survive?

For me, "First stand still altogether and find ways to fight back not just to protect ourselves is the best strategy, I am so sure it works, somehow."

Adams

Honda (entered F1 in 1964, originally strong at motor bike) said Friday it will withdraw from the Formula 1 (F1), making 2008 the last season in F1 motor racing. The main cause is due to rapidly deteriorated amid the global economic downturn.

"Japan`s 2nd largest auto maker can no longer bear large operating costs for F1, $50 billion per year, Honda needs to spare more resources to develop environmentally friendly cars and other new technology." Honda`s President Takeo Fukui told reporters. "Moreover, Honda and its shareholders have no plans to come back to Formula 1 in the future." Takeo Fukui added.

Industry watchers warn that Honda`s move indicates the fallout from global credit crunch has begun to ripple over into sporting businesses, and may possibly spread to other non-core operation such as cultural activities. Honda`s exit highlights just how awful the situation surrounding the auto industry is, said Koji Endo (analyst). Other team may follow, and Formula 1 may not be held in the future.

On the other hand, Toyota, which entered the F1 business in 2002 and is also struggling with tough business situations, denied speculation on that it may follow suit and exit F1.

In October, Honda slashed its sales outlook for the business ending next March to $11.6 from $12.13 trillion it projected this July. One primary cause is that vehicle sales in the U.S., the most profitable market for Honda, plunged 32% in November, the most since 1981.


II. Senators Push Bankruptcy Plan for the Big Three:

"A guy was dying, and he asked a doctor for help", he could live no longer than 25mn by himself. Surprisingly, "What kind of man you wanna be and how do you live your life?. Tell me in the next 5mn" the doctor ordered him. The available time decreased to 15 mn, and the guy tried to explained logically, rationally, in some ways, somehow.

The next hearing, "You can control my life, to some extent, when I decide to do something, your voice would be prioritized" poor guy responded. The doctor said "Let`s me think,...by the way, I don`t think you can survive". Time is too short to talk with the one who does not know how it hurts or how a person feel when he is dying, one can conclude.

Now what do you think about this short story?
My opinion, "That is B.S. " (not Bachelor of Science, anyway). If you wanna know what B.S. stands for, read the following article.

Adams

Washington: Desperate U.S. carmakers ran into a fresh obstacles from skeptical lawmakers (skepticism about the bailout appeared to be as stronger as ever) as they appealed with rising urgency - a new dose of humidity - for a $34 billion auto-industry bailout. "Without help, we`re looking at a death sentence." said Chris Dodd, Chairman of the Banking Committee. "We`re not going t leave town (Detroit) without trying to help." Chris Dodd optimistically told the executives of the Big Three.

With lawmakers in both parties pressing the automakers to consider a pre-negotiated bankruptcy - something they have consistently shunned - the B3 were mulling a government-run restructuring that could yield result similar to bankruptcy, including massive downsizing, in return for bailout.

Moreover, Congressional officials said Thursday that one leading proposal-to tap an approved fund set aside for making cars environmentally efficient - would not give the carmakers as much money as they say they need. "In all due respect, I don`t think there`s faith that the next...3 months will work out, given the past history," said Democrat Sen.Charles E. Schummer. Along-with, "No thinking person thinks that all 3 companies can survive," Republic Sen. Bob Coker (Tennessee) told the Congress.

However, House Speaker Majority Leader Harry Reid wrote to George W. Bush on Thursday asking him to use the $700 billion bailout fund to rescue the auto makers - something the administration has consistently refused to do so. They argued that such a course was justified because of potential grave harm to financial sector when one carmaker collapses.

Under legislation enacted in October creating the financial rescue program, Congress can vote to block the Treasury Department from accessing the 2nd $350 billion, although 2/3 supermajority of the congress is needed to do so over a presidential veto. " No matter how important the autos are to our economy, we don not want to put good money after bad. In other words, we want to make sure that the plan they (B3) develop is one that ensures their long-term viability for the sake of the taxpayer," Bush told NBC.

President-elect Barack Obama was keeping his distance, prompting Rep. Barney Frank, Chairman of the House Financial Services Committee, who has been dealing with both the financial bailout and the auto rescue program to say "Obama is going to have to be more assertive that he has been."

Repentant after a botched first crack at bailout pleas, the executive from General Motor Corp., Ford Motor Co. and Chrysler LLC all agreed (during the session) that a multibillion-dollar bailout deal would include a supervisory government board as well. The board could order major overhauls of the companies if deemed necessary for survival.

B.S. is "BULL SHIT"

(Source: Japan Times, December 6, 2008)