It has been nearly a year since the CEOs of the Big Three flew their over-sized private jets to Washington begging for bailouts. Now that the bailouts have had time to set in and reconstruction of these flawed companies has been under way, how are they doing? Have these three big automakers done enough to create companies that will be sustainable in the future?

Take a look at what’s been going on at the Big Three:

Chrysler

U.S. Brands: Chrysler, Dodge, Jeep

Headquarters: Auburn Hills, Michigan

Bailout: $15.2 billion (repaid $1.5 billion)

Declared Bankruptcy: April 30, 2009

Post-Bailout Company:
In June 2009, Italian automaker Fiat took a 20% stake in Chrysler in exchange for partnering with them on new products. In this partnership, Chrysler LLC has become Chrysler Group. Chrysler’s former CEO and Chairman, Bob Nardelli, has been replaced by Fiat CEO Sergio Marchionne, with former Chrysler President Jim Press as his Deputy CEO. Fiat brings to Chrysler billions of dollars worth of advanced technology, while Chrysler offers the Italian automaker opportunities to market more of their brands in the U.S. The company plans to unveil a revised business plan this November, though has done little to cater to the demands for smaller, more fuel-efficient cars.

August 2009 Sales: Down 15% nationwide from August 2008.

The Outlook: Predictions for Chrysler seem to be the most dismal. Upon acquiring a stake in Chrysler, Fiat was said to be “surprised” by the lack of effort that had been put into a recovery. “Chrysler is over, basically,” says Industry Analyst Todd Turner of Car Concepts Automotive Research of the Chrysler brand. “Within five years, you’re going to see nothing.”

General Motors

U.S. Brands: Chevrolet, Cadillac, Buick, GMC

Headquarters: Detroit, Michigan

Bailout: $49.9 billion

Declared Bankruptcy: June 1, 2009 (came out of bankruptcy on July 10, 2009)

Post-Bailout Company:
Former CEO Rick Wagoner resigned as a part of the bailout agreement and was replaced by GM’s President and Chief Operating Officer, Fritz Henderson. This past July, NGMCO Inc. purchased GM, changing its name to General Motors Company. A new strategy is in the production of smaller, more fuel-efficient cars, and the new Chevrolet Cruz is due out next year, as well as a plug-in model of the Chevy Volt. Having the long-standing reputation of being primarily a pick-up and SUV maker, this change could sustain the company.

An additional note, The New York Times reported recently that GM will be calling back 2400 laid off factory workers to meet a surge in demand after the recent Cash for Clunkers stimulus.

August 2009 Sales: Down 20% nationwide from August 2008.

The Outlook: Stephen Spivey, Senior Auto Analyst for business consultant Frost & Sullivan, comments, “It’s way too early to say if they’ve done enough in bankruptcy.” We’ll just have to wait and see if GM has made enough progress to have a future.

Ford Motor Company

U.S. Brands: Ford, Lincoln, Mercury, Volvo

Headquarters: Dearborn, Michigan

Bailout: None.

Declared Bankruptcy: None.

Post-Bailout Company:
Ford remains the only automaker of the Big Three to have avoided bankruptcy. In July 2008, Ford has taken the initiative to embrace the production of more fuel-efficient cars and announced in July 2008 that it would bring six of its models to the U.S. Recently, the Department of Energy granted Ford a $5.9 billion loan to help them reequip many of their factories to produce more fuel-efficient cars.

August 2009 Sales: Up 17% nationwide from August 2008.

The Outlook: Moody’s Investor Service has upgraded Ford’s ratings from “negative” to “stable,” stating that, “the period of greatest risk in Ford’s restructuring has passed.” Ford seems to have the best odds out of the three for long-term survival.

Photo by: madaise // CC BY 2.0
Sources: CNN Money/ Assignment Detroit. money.cnn.com. Wikipedia. www.wikipedia.com

You are a responsible homeowner. You work long hours to pay your bills on time, no matter if it means making tremendous sacrifices to do so. Lately, the economy has transformed your daily life into a struggle to keep your head above water. You see bailouts for banks who have mismanaged their finances, and stimulus packages for people who have twiddled away their funds—but where is the help for people who have been careful with their money and are still struggling? Who is looking out for you?

Well, someone is. That’s right, there is someone out there who understands your struggles and believes that the responsible people striving to maintain their finances are the ones who deserve assistance. In fact, they are even targeting the area of the U. S. that has been hit the hardest by the recession: Southeastern Michigan.

It gets better! This white knight of the recession is even a mortgage company—gasp! Shore Mortgage of Birmingham, Michigan, to be exact.

Shore Mortgage is a full service mortgage company that offers both new mortgages and refinancing services. In February of 2009, they implemented the program “We Understand” to assist ‘forgotten homeowners,’ the ones who have kept up with their bills, are working, and have been making timely mortgage payments. The initial goal was to award $100,000 of assistance to 100 families in southeastern Michigan. This goal was surpassed during that same month, and Shore Mortgage was able to grant 112 families up to $1000 each. It has been part of their effort, as the #1 FHA lender in Michigan, to give back to the community.

President of Shore Mortgage, Robert Rahal explains their objective:

“We are passionate about the people who do everything right. They go to work every day (many take on second jobs), cut back on their spending so that they timely pay their obligations, and their reward for being responsible is that they are ignored. Today’s national spotlight continues to be on foreclosures, but no one is talking about assisting these conscientious people as they have no foreclosure nor repossession issues. They have not overextended themselves. They simply go to work every day, and keep current on their obligations, handing down these responsible traits to their families. They are truly the forgotten people. It is this important middle class segment of our country’s population, the backbone of our society, who deserve some type of acknowledgement. We want to recognize and assist them in our small way.”

Now it’s YOUR turn to cash in! With the success of this program its first time around, Shore Mortgage has decided to extend their “We Understand” program in order to help even more homeowners in the southeastern Michigan area. A minimum of $20,000 will be given away to families by the end of 2009. The only requirements for applicants is that they are residents of Wayne, Macomb, Oakland, Washtenaw, Livingston, Genesee, Monroe, St. Clair and Lapeer counties in Michigan and are current with mortgage payments. The deadline for application is September 15, 2009. Here’s your chance for some well-deserved relief!

For more information on the “We Understand” program:
telephone 1-866-784-4132;
fax 1-866-784-4133;
email weunderstand@shoremortgage.com;
website www.shoremortgage.com;
or mail 770 S. Adams Road, Birmingham, Michigan 48009 Attn: We Understand Program.

With all the talk in the marketplace of all these bailouts, you have to ask yourself is it really a good thing?  The financial bailout that happened less than a month ago is now pouring over into a bailout of the automotive industry.  Does this make sense for us?

A good friend of mine told me the other day that if he could, he would go ahead and buy millions of dollars of stock in GM.  A year ago I would have said the same thing, but then I learned how to read financial statements.  Just because something is cheap, doesn’t mean it’s undervalued.  Go to the grocery store and you’ll know what I mean.  You see that bread for 10 cents?  Well, you better hope you can eat it all within a few hours before it goes rotten.

The problem here is that the lawmakers aren’t looking at the automotive industry with unbiased eyes.  Instead they see GM as a pinnacle of US manufacturing and they don’t want to see that go away.  Last time I checked you’re not supposed to value a company based on emotions but instead on the value that it brings to its shareholders.  Here we have a company that has been dragged down by poor management and terrible inefficiencies.  Is this a company that I want to reflect as a cornerstone of American ingenuity?  Hell no, I prefer to put that title on companies like Google and Microsoft.

How is it that the US car makers have been able to continue on this downward spiral and just as they hit bottom they get a bailout?  It makes absolutely no sense!  Granted, people will say that we can’t let this happen because more jobs will be lost in Michigan.  Well, I have a feeling that if GM went under some other automotive company (that actually makes money) might step in and save some of those jobs.  Sure it won’t be all of them, but it’s time that the Michigan economy starts doing things right!  Why keep pouring money into a business model that is flawed, it’s a proven fact!

In either case, I firmly believe that companies should be held responsible for their own financial woes.  I’ve worked at GM before; I have seen the ridiculous inefficiencies that they allow to happen it’s quite frightening! If they get a bailout today, we will see this same thing happen again in 15 years, count on it!