Jeep Patriot image from Flickr.

The Insurance Institute for Highway Safety has come out with its annual list of Top Safety Picks. Eight SUVs and 19 cars have been given Top Safety Pick awards for 2010. People who want to make sure they’re getting the safest cars before filling out a personal loan application for a car loan should definitely check out this list.

The Insurance Institute for Highway Safety named six vehicles made by Ford, which makes Volvos, Top Safety Picks. Subaru and Volkswagen each had five vehicles named on the list. The Institute picked four Chrysler vehicles.

The Insurance Institute for Highway Safety

For 50 years, Insurance Institute for Highway Safety has operated for the purpose of reducing automobile accidents and injuries. The Institute is a non-profit organization that gets its funding from insurance companies. Each year, four tests are conducted to determine the Top Safety Picks:

1. Frontal offset impact test
2. Side impact test
3. Rear crash protection and head restraint ratings
4. Roof strength test

The Insurance Institute for Highway Safety also rates child booster seats for cars and other consumer products. Of course, the Insurance Institute for Highway Safety has been accused in the past of serving the interests of the insurance companies rather than the public, which is why vehicle testing is highly regulated. It has also come under scrutiny for being unfairly hard on motorcycles, but who are we kidding? Motorcycles are not known for their safety features.

New safety requirements

The New York Times noted that there were some major changes in the Insurance Institute for Highway Safety’s list. For instance, last year 94 vehicles were named on the Top Safety Picks list, and this year there were only 27. Furthermore, Toyota and it subsidiaries last year earned a total of 11 Top Safety Picks awards, and this year the company, which includes the Lexus and Scion brands, got none at all.

In order to make the Insurance Institute for Highway Safety’s Top Safety Picks list this year, vehicles had to get a rating of “good” on the roof strength test, which measures rollover protection, was required in order to make the list. “Good” is the highest rating. This change caused Toyota vehicles to be shut out, the length of the list to be reduced dramatically and the Honda Accord to be left off the list after it made the 2008 and 2009 lists.

Auto industry impact

Naturally, safety ratings play a big part for many consumers when they are considering vehicle purchases. After a couple of tumultuous years in the auto industry, the stellar safety ratings for Ford should help the company stay afloat while we ride out the rest of the recession.

Chrysler should be particularly encouraged by its four wins after it had to file for bankruptcy protection this year. Sales of the four vehicles that made the list should help stabilize the company. Those four vehicles are:

• Chrysler Sebring 4-door with electronic stability control
• Dodge Avenger with electronic stability control
• Dodge Journey
• Jeep Patriot with side torso air bags

Check out the full list of vehicles that made the Insurance Institute for Highway Safety’s list in the New York Times’ Wheels column.

Small business owners are looking to installment loans to make it through the rough economy. With industry giants like GM and Chrysler falling into bankruptcy, it’s easy to see how smaller businesses are in precarious financial situations. Part of the problem is cyclical. As business owner Terry Grant, owner of a small chain of dry cleaners in Orlando, Florida, stated, “It’s hard because to get more business we have to advertise; but to advertise we need more business.” Many businesses have the same problem and are looking for ways to afford the advertising needed to reach more customers.

Advertising is being cut from budgets

Unfortunately, every business is suffering and advertising outlets of the past, like magazines, newspapers and radio stations, are also suffering. They are trying their best to give customers small perks in efforts to keep their business. Meg Schaeffer, manager of the sales department of WBRT Radio said, “It’s hard because we want to keep people buying our ad-time, but the first thing people cut in times of trouble is marketing. We are trying to throw in perks and bonuses, but only our most loyal customers are still here.”

Advertising is changing

One popular way to advertise is online. Many small business owners are turning to free advertising online with social marketing and blogging. Nancy Everett, owner of a graphics design firm in Seattle, Washington, stated, “We need free marketing and online tools are the best…all it takes is time and you can create an online buzz about your product quickly and easily.” There are some simple ways of using the internet to build a brand and they are becoming more and more popular as internet usage expands.

Social marketing works

Using Myspace, Twitter, Linkedin and Facebook to market is the simplest way of getting a name out. Each of these social marketing sites boasts millions of users who check in daily to communicate, market, and build their businesses. The key is consistency. Everett confirmed this, adding, “I dedicate two hours every other day of my work week to social marketing and networking. Whether it’s tweeting people or uploading new pictures to Myspace, I make sure that there is activity on my online presence….and I always communicate with those who talk to me.”

Consistent communication is the key

That’s another key for business owners who use online marketing—consistent communication with potential buyers. Many owners realize the importance of using any communication wisely and following up. Everett added, “Even if it’s just to say ‘Thanks’, it’s all about relationships and building them… you don’t know if that one ‘thank you’ will lead to a new contract or job.” By making the most of an online presence, businesses can use funds procured through installment loans, bank loans and grants for running the business, rather than supporting a heavy advertising budget.

Blogging is user-friendly and it attracts business

Blogging is one of the most effective ways of maintaining a user-friendly and pleasant website for a business. Some tips to blogging are:

1.  Always provide fresh content. Marcus Gentry, marketing professor at Pepperdine, stated, “You want to make the customer glad they went to your website. Outdated content won’t help that cause. You need to post something as often as possible to engage your viewers.”

2.  Stay connected to visitors by asking for input, feedback and opinions. One of the best ways of captivating an audience is to ask for their opinions. Business owners should incorporate a “comment” section on their website that gives visitors an outlet.

3.  Owners should use blogs as a way to reach search engines. Blogs can keep a website popular because of the constant addition of content with keywords. There are plug-ins available to create keyword friendly URLs and business owners should find them and use them wisely.

Try social marketing – it’s free!

These are all great ways for business owners to find free advertising and marketing possibilities. In times like these when businesses need installment loans or bank loans and may even have to liquidate assets to stay alive, it’s good to know that marketing does not have to come to a standstill. Marketing and advertising are what will bring new customers in and, hopefully, generate more income.

Apply Below for your Installment Loans!

(Photo: autos.blackvoices.com)

Were you able to take advantage of Cash For Clunkers when it breezed through town? That’s what it seemed like: a breeze that came to call for but a moment. Once that moment was gone, the government put the entire thing on hold. Things like that happen when you burn through $1 billion in less than two weeks – particularly when the plan was for that money to last four to five months. Now the president feels the auto industry needs the cash advances and short term loans Cash For Clunkers provides to keep them going.

Want to know what’s on the Cash For Clunkers car list?

At the moment, it really doesn’t matter, does it? There’s a great deal of question as to whether the program will be approved by the Senate for another $2 billion, even though opponents of Obama’s original plan like Sen. Dianne Feinstein are now in support of the $2 billion expansion. The president is going to attempt to rally senate support this week, but there is a strong possibility that another $2 billion in taxpayer dollars going toward putting more cars on the road (instead of improving mass transportation) won’t fly.

No guarantees after this Friday

In a recent Los Angeles Times story at http://www.latimes.com/classified/automotive/highway1/la-hy-auto-sales4-2009aug04,0,4883093.story, White House Press Secretary Robert Gibbs was quoted as saying that Cash For Clunkers would be guaranteed through the weekend of August 8-9, but only a positive vote in the Senate would extend the program beyond that.

“If the Senate hasn’t acted by this Friday, I would not give people the same assurances of going into a dealership this weekend,” Gibbs said.

Yet there are those who are positive that the Senate will pass the additional funding. Transportation Secretary Ray LaHood said to MSNBC, “We’re encouraging senators to listen to their car dealers and the people they represent. If they do that, it will pass the Senate.”

Oh really? Listen to the people?

And what is it you think they’re going to ask for? Why, indefinite extension of the program – that’s what. People love free money, yet the catch here is that it’s taxpayer money. So it isn’t free money, is it? Let’s go crazy, folks! That’ll save this economy – fiscal irresponsibility.

And Chrysler was doubling the discounts

Chris Woodyard writes in his “Drive On” column for the USA Today that while Chrysler had been matching the government’s $4,500 Cash For Clunkers car list incentive, that program is headed for the station. It was simply too effective.

Yet it differed from the Cash For Clunkers car list program in that you didn’t even need to trade in a car to get Chrysler’s $4,500 incentive. “It cut through the clutter,” said spokeswoman Kathy Graham. And it caused Chrysler vehicles to fly off the lots, including the PT Cruiser, whose sales beat last years at this time by more than 24 percent.

Here’s Chrysler’s new deal

The double incentive will remain in effect for the PT Cruiser and bigger SUVs and trucks. However, the matching will no longer apply to “some of the bigger clunker incentive replacements,” says Graham.

In those cases, Chrysler will provide  $3,500 for a Dodge Avenger or Chrysler Sebring sedan. It will put up $3,000 for Dodge Nitro SUVs and Jeep Liberty. The Dodge Caliber will net $2,500 in incentive discounts. Jeep Wrangler, Dodge Sprinter, Dodge Challenger and SRT vehicles were never part of Chrysler’s incentive program.

Cash For Clunkers? That money should be going to healthcare!

That’s right. One shot was enough. If more taxpayer money is going to be thrown around, it should be thrown at universal healthcare. People cannot be trusted to escape from their own greed; let’s not make it an official mandate by making the Cash For Clunkers car list program a perpetual monument to our love of debt. If short term loans or cash advances can help now and again with a down payment, that’s fine. Apply below!

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Single salary homes are looking more and more to installment loans as a way to pay bills. The unemployment rate is affecting Americans in a big way. Kelsey David of Pontiac, Michigan stated, “We were used to having two salaries. We didn’t live like kings or anything, but we were comfortable. Then my husband lost his job and he earned most of our money. We had to do some drastic reorganizing of our finances to make it through.”

Chrysler to cut dealers

According to lawyer Stephen Lerner, Chrysler will soon announce it will be cutting 800 of its 3,200 dealers throughout the country. Lerner is representing the auto giant’s soon to be fired dealers, The company has a list and will reject at minimum 800 franchises currently in business. As part of their bankruptcy, Chrysler will submit a list of dealers that they will continue to retain. A spokesperson stated that the company is working hard to “reduce the number of dealerships along with other restructuring actions” and that “800 is just speculation.”

Regardless of speculation, Lerner is already soliciting dealers who believe their franchises may be cut, asking them to contribute $4,000 to begin a legal fight. The business climate of Chrysler has been difficult at best throughout the past year. It already closed 400 dealers last year, but there remains too many showrooms particularly in heavy-traffic areas. The dealers who will be asked to continue operations are the ones who have shown the most promise in terms of profits and capitalization.

Dealers respond

David Kelleher, Chrysler dealership owner, stated he “wants to stay optimistic amid the uncertainty.” His hope is that since he built as strong a business as he could in the area, he will stay in business. “This is craziness,” he added. “You’re talking about 800 or 1,000 small-business owners being knocked out of business, I guess to serve the greater good.”

Despite the pending closing, many Chrysler dealerships are having a high in sales. They attribute this to all the press the company is getting, noting that “all publicity is good publicity.” A lot of Americans are taking advantage of the downfall in the auto giant, believing this to be the best time to take advantage of low prices. They are using their nest-eggs and installment loans to find deals on lower-priced vehicles.

The NADA, National Automobile Dealers Association

The NADA is set to begin lobbying against the huge cuts in Chrysler franchise locations this week. Martin Glorman of the NADA stated, “We know that some cuts need to be made, but the sheer number of what they are speculating would be disastrous. Imagine 800 franchises putting all their employees, from the owner down to the porters, out of business.” Workers are already bracing themselves in case their locations are the ones to close. Some have already quit and some are actively seeking alternative employment. “It’s not easy,” said Michael Drury of Pensicola, Florida. “We know what could most likely happen, but there just aren’t a whole lot of options out there. We are saving like crazy as much as we can now so we have some cushion in case the worst happens.”

In the end

Chrysler is filing bankruptcy, and surely this will take a toll on the market. Hopefully, the market will be healthy enough in coming months to absorb the additional unemployed Americans. Employees are already looking to family loans and installment loans as a way to pay bills, so unemployment would be an even heavier burden to bear.

Sunshine Dodge faces shutdown

Last week I wrote that Chrysler would not renew its franchise agreements with 789 Dodge dealers. This week, the owner of Sunshine Dodge-Isuzu in Melbourne, Florida, has written a letter demanding to know: “HOW IN THE UNITED STATES OF AMERICA CAN THIS HAPPEN?”

The owner of Sunshine Dodge is George C. Joseph, and  his “letter to the editor,” which I found posted on Prison Planet gives a very real, personal perspective on the meltdown of the auto industry.

Who needs Chrysler?

While Chrysler’s actions aren’t directly shutting down dealerships like Sunshine Dodge, that’s the inevitable outcome — not even guaranteed loans will help — and Joseph explains why in his letter:

On Thursday, May 14, 2009 I was notified that my Dodge franchise, that we purchased, will be taken away from my family on June 9, 2009 without compensation and given to another dealer at no cost to them. My new vehicle inventory consists of 125 vehicles with a financed balance of 3 million dollars. This inventory becomes impossible to sell with no factory incentives beyond June 9, 2009. Without the Dodge franchise we can no longer sell a new Dodge as “new,” nor will we be able to do any warranty service work. Additionally, my Dodge parts inventory, (approximately $300,000.) is virtually worthless without the ability to perform warranty service.

Just think, there are 788 other Chrysler dealership owners facing the same situation.

Adding to unemployment

Joseph expresses his concern for himself and his family, who he says will go bankrupt because of this. He adds that the 50 employees who work for him will now be unemployed.

“How will they provide for their families?” Joseph writes. “This is a total economic disaster.”

Insult to injury

Unfortunately, that’s not all. Joseph writes:

Our facility was recently totally renovated at Chrysler’s insistence, incurring a multi-million dollar debt in the form of a mortgage at Sun Trust Bank.

He also emphasizes that before Chrysler made this decision, Sunshine Dodge was doing just fine:

We deal with several dozen local vendors on a day to day basis and many more during a month. All depend on our business for part of their livelihood. We are financially strong with great respect in the market place and community. We have strong local presence and stability.

A call to action

If you are sensitive to caps lock, you’d best stop reading now. Joseph ends his letter with some lines obviously meant to highlight his anger, resentment and disbelief over what is happening to Sunshine Dodge:

HOW IN THE UNITED STATES OF AMERICA CAN THIS HAPPEN?

THIS IS A PRIVATE BUSINESS NOT A GOVERNMENT ENTITY.

This is beyond imagination! My business is being stolen from me through NO FAULT OF OUR OWN. We did NOTHING wrong.

…

HOW CAN THIS HAPPEN IN A FREE MARKET ECONOMY IN THE UNITED STATES OF AMERICA?

I beseech your help, and look forward to your reply. Thank you.

A prediction, if I may

Seeing how popular “Letter from a Dodge dealer” has become, I think it won’t be long before we hear from other owners of franchises that will meet the same fate as Sunshine Dodge. You can read the full letter at Prison Planet.

General Motors headquarters in Detroit, Mich.

Yesterday, one of the United States’ largest automakers released the Chrysler dealerships closing list. Today, the largest U.S. auto maker will release the GM dealer closing list.

Chrysler is shutting down 789 dealerships. Check out the Chrysler dealerships closing list. General Motors, sometime today, will release the GM dealer closing list. That list will include names of 1,100 to 1,200 dealerships in the U.S. Unfortunately, for people working at of those dealers, it means they are out of jobs.

Jump on low interest loans

The GM dealers closing and the Chrysler dealerships closing means people in the market for a car may be able to get easy loans and low interest loans as the GM dealers and Chrysler dealerships closing try to liquidate their remaining inventory.

However, that’s where the good news ends. Everyone who works at a franchise on the GM dealer closing list or the Chrysler dealerships closing list will soon be collecting unemployment.

A word from the workers

Franchises on the Chrysler dealerships closing list have already been informed of their fate. That includes the oldest car dealership in Chicago and Island Jeep Lindenhurst in New York.

“My franchise was basically stolen from me, and it’s gonna be given to a dealer down the street for free,” said James Anderer, owner of Island Jeep Lindenhurst, N.Y. “I have 48 people here who are going to be unemployed. We didn’t do anything wrong, but we’re being punished. Chrysler won’t even take the cars back. So the 100 cars I have in inventory I have to retail out of them in the next couple of weeks, either throw them in a Dumpster or sell them for pennies on the dollar. And Chrysler got a bailout. I’m not asking for a bailout. I don’t need a bailout. I run my business properly.”

Holding on to hope

As for the GM dealer closing list, franchise owners don’t know yet whether they are on it. One GM dealer owner, Bob McGuire, says he doesn’t think he will have to close his dealership. But he has considered the possibility.

“I would probably cry and then regroup and sit down with my wife and son and determine what corrective actions we can take to overtake this. I am not going to give up. I have made my life’s work here,” McGuire said.

Warranty holders

KTRK in Houston, Texas, addresses concerns from car owners who hold warranties from franchises that are on the GM dealer closing list or the Chrysler dealerships closing list:

So what if you bought your car from one of the Chrysler or GM dealerships that’s closing? Is your warranty still good?

Yes. But that doesn’t mean your local dealer will be around to service your car. If you live in a metro area, there should be another dealer nearby to fix your car. But if you live in a rural area, getting that tune-up might now require a long drive.

Check back later for the GM dealer closing list.

Short term loans are becoming a quick answer to consumers in need. With the banking crisis still in full swing, people are in need of bill payment options that are outside of the norm. It used to be that when people needed funding, they went to the bank. That is not the case anymore because more and more banks are tightening up funding and even high-credit applicants are having a difficult time finding underwriters.

Another problem with the economy comes from auto companies. The auto giants are suffering and governmental bailouts helped, but did not stop their problems. Although they are still trying to find a way to recover, auto companies are under heavy pressure and strict deadlines. Their struggle is contributing a lot to the faltering economy.

Chrysler trying to swap debt

Chrysler had a government imposed deadline to restructure by April 30th. Banks and hedge funds are proposing forgiving Chrysler of $2.5 billion in debt for a 40% share of the Chrysler-Fiat company. The government is expecting the car company to restructure using a debt swap, cutting labor costs or negotiating some alliance with Fiat Group. Should they be unable to do so by the deadline, they almost positively face total liquidation.

Right now Chrysler is managing by relying on $4 billion in loans and is hoping to receive an additional $500 million in funding. They are set to receive the additional monies, but only if they are able to meet strict deadlines and requirements of restructure as set forth by the government. A series of offers and counter-offers have brought Chrysler to the state it is now: under pressure to get the restructure done. They risk losing the money that was apportioned for their salvation.

“Taking equity is a risky proposition,” stated spokesperson for Chrysler-Fiat. “The goal is close to 40 percent of the equity.” Fiat CEO Sergio Marchionne from Italy is in the U.S. and participating in the negotiations. It is their hope to find a reasonable way out of this dilemma, reap the benefits of the government bailout and avoid complete liquidation.

Short term loans

With the auto industry still up in the air, consumers are suffering also. All major business entities are going through the same recession and their unbalanced positions in the market are affecting the economy drastically. With normal options on hold, short term loans are one of the few options consumers have left to find money to pay bills. Loan supporter Carrie Gillis of Portland Ohio stated, “I never thought short term loans would be so important to my family. But when those bills come in, we have no option but to extend payment until our payday.” Gillis is not alone. Many consumers are finding the short term loan to be a stress-free option when looking for cash.

Balancing the economy

It’s going to take a lot for the economy to balance itself out and without a lot of proactivity by the government, citizens and businesses, it will not happen easily. Industry giants are under pressure to meet the government’s deadlines and need to find quick and reasonable solutions. Consumers are under their own pressures of having to find money to pay bills as the recession holds the economy in limbo. Many are looking for short term loans as a quick and reliable answer. Hopefully once the dust clears and all are returned back to normalcy, the economy too will see a much-needed improvement.

A quarter of Chrysler dealerships closing

United States automaker Chrysler says it will close 789 of its U.S. dealerships, which adds up to about a quarter of its total dealerships.

According to the Washington Post, Chrysler has 3,181 dealerships in the U.S.

Who will be hit hard

Toledo.com, a news outlet in Toledo, Ohio, says that 47 dealerships in Ohio, mostly in the northeastern part of the state, will close.

The Chrysler dealerships closing include Jeep and Dodge. Many Jeep, Dodge and Dodge Truck dealerships across the country will be shut down.

Check out a PDF of the list of all the dealerships that will close.

Does Chrysler need debt relief?

The dealership shutdowns are the result of Chrysler rushing to pare down business and cuts costs. Chrysler has already filed for bankruptcy protection and gotten $4 billion in federal installment loans.

Chrysler received bankruptcy protection April 30. Chrysler has been conducting a project called “Project Genesis” to determine which dealerships are the “most desirable,” according to The Washington Post. That helped the automaker determine which Chrysler dealerships are closing.

Project Genesis

The Washington Post says:

Over the past eight years, Chrysler consolidated its dealer network within the limits of existing contracts and rules, an effort that cost the company $216 million, Chrysler said. In recent months, the automaker has worked with its would-be owners — a coalition lead by Italian automaker Fiat — to “refine” the evaluation of dealers, Chrysler said.

Though Chrysler recently entered a partnership with Fiat, the automaker is working on reducing its dealership network to a more appropriate size as it works through restructuring following its bankruptcy filing.

More trouble in auto land

General Motors is making significant changes to its franchise agreements. According to the Washington Post:

At the same time, General Motors is telling 1,100 dealers that it will not renew their franchise agreements when they run out next year.

Yesterday, dealers from across the country flew into Washington to lobby lawmakers against closing large chunks of GM and Chrysler’s dealer networks.

War on recession?

The head of a large auto dealers’ association thinks that shutting down the dealerships is not a wise move.

“What we’re finding is fundamental misunderstanding of the automobile business and how it operates,” said Gerard Murphy, president of the Washington Area New Automobile Dealers Association. “People are looking at the automobile business like a Starbucks model, where it makes sense to divest yourself of locations.”

Murphy said dealers are driving revenue to the automakers, not taking it away.

“This is tantamount to divesting yourself of troops when you have a siege at the gates,” he said. “How does that help?”

History of an American automaker

According to Wikipedia, Chrysler was:

first organized as Chrysler Corporation in 1925. From 1998 to 2007, Chrysler and its subsidiaries were part of the German based DaimlerChrysler AG (now Daimler AG). … Under DaimlerChrysler, the company was named “DaimlerChrysler Motors Company LLC”, with its U.S. operations generally referred to as the “Chrysler Group”. On May 14, 2007, DaimlerChrysler announced the sale of 80.1% of Chrysler Group to American private equity firm Cerberus Capital Management, L.P., although Daimler continued to hold a 19.9% stake. This was when the company took on its current name. The deal was finalized on August 3, 2007.

America’s big automakers have all been in serious need of cash advance loans and debt relief for some time now. Overproduction of consumer vehicles that burn through gasoline and take up too much room on the country’s current highway system has been the byproduct of poor planning by top automobile executives. Now the time has come for them to reap what they have sown.

Unfortunately, this means that many honest, hard-working employees are losing their jobs, thanks to the economic corpulence of those who may never have known what it truly means to struggle to survive. This time, there’s no bailout: Chrysler has bankruptcy on their minds. Chapter 11 bankruptcy.

Average taxpayers may get nothing

Following the trail of Chrysler news, Michael de la Merced blogs for the New York Times that the restructuring battle has changed locales, from board rooms to bankruptcy court. Chrysler and the Obama administration did not obtain the consent they needed from secured lenders, so Chrysler is bankrupt.

de la Merced wonders what will happen when it comes to the company’s assets. The government has poured billions into Chrysler and Chrysler Financial, and investors are out there. The taxpayers should have a say in who gets their hands on the company’s assets, but a bankruptcy court will not likely grant this. I say the people should voice their displeasure.

Follow the Chrysler stock symbol

Investors will argue that they have first claim because they’d “see greater recovery in liquidation,” which they contend would yield about 65 cents on the dollar. By contrast, the Treasury’s most recent plan for creditors via Chrysler’s main bank lenders (JPMorgan Chase, Citigroup, Morgan Stanley and Goldman Sachs) would have supposedly delivered only 33 cents on the dollar.

But investors hold “first lien” on Chrysler’s assets, so they’re first on the list to be repair for their investment. They hold a more senior position than the government for Chrysler debt. And since so much of Chrysler is already “on dibs,” the government is likely to provide unsecured debtor-in-possession financing that comes with Chapter 11 bankruptcy.

The government would then be able to enforce their will on investors (by law). If Chrysler can come up with two-thirds of the amount of the debt and a majority of stockholders can agree on reorganization terms to foist that plan upon holdouts. Such a simple majority is much easier to come by that the near unanimous agreement usually needed for out-of-court debt consolidation to work.

Is this surgery a success?

But will the government’s plan succeed? They may not have the majority they need by law. Many of Chrysler’s senior creditors voted against such a plan, as have big banks.

The government is pushing a prearranged bankruptcy plan where a new corporate entity for Chrysler would be formed, containing positive assets. United Auto Workers would hold 55 percent equity through its health-care fund, Fiat would hold up to a 35 percent and the government would the remainder. This agreement would open the door for Chrysler to drop its liabilities and unfavorable contracts easily. The government wants this to happen quickly; it’s what experts have called “surgical bankruptcy.” Time will tell if they get it.

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Number crunchers at GM think bankruptcy may be the only way out.

General Motors is proving to be a good example of what can happen if you take on more debt than you can handle. Unfortunately for the automaker, I don’t think any amount of debt consolidation can dig this company out of the hole.

GM has a $1 billion debt payment coming up; it’s due June 1. Finance Chief Ray Young says GM might not be able to make the payment and is instead relying on a debt-for-equity exchange.

Headed for

GM will need to undergo some serious credit repair if it does default on a $1 billion payment. That $1 billion is only a small fraction of the company’s total debt, which is $28 billion.

GM spokeswoman Renee Rashid-Merem says that the company won’t be able to pay if the debt-for-equity exchange doesn’t go through or if the company goes bankrupt before the June 1 deadline.

Bankruptcy rumors

Young told reporters at a Chinese auto industry summit in Detroit that bankruptcy is “probable” for GM. The U.S. government is backing the company, and Young said that GM will get back on track “in court or out of court.”

Goldman Sachs also said today that both GM and Chrysler will likely file for bankruptcy in coming weeks.

“While there is significant operating upside at GM …, we see a high likelihood that the current class of common shares will be terminated through bankruptcy, [or significantly diluted in a best case],” Goldman analyst Patrick Archambault told clients in a note.

What about the bailout?

The government has been in talks with GM regarding more funding from the White House for the flailing corporation. However, GM’s CEO Fritz Hendersen has said that because of the Obama administrations demands and conditions regarding the funding the company will most likely go bankrupt.

GM already received $13.4 billion from the government, and it is vying for another $5 billion to stay afloat. He said reports that the automaker had been approved for the funding were premature.

“One of the things that was clear … from the task force findings [in February] is that we needed to go deeper and faster with respect to balance sheet restructuring, and so, anything that had been on the table up to that point was off the table,” Henderson said.

Chrysler prepares for merger

Chrysler is also reportedly facing the possibility of bankruptcy. However, the government previously agreed to supply funding aid if the company reached a deal with Fiat by the end of this month. Those negotiations are on track.

If GM and Chrysler go bankrupt, that will leave Ford Motor Co. in the position to capitalize (big time) on the market-share front.

Chrysler’s new Peapod car, which debuts today, is many things. It is electric, small and cute. However, it’s not really a car. Well, at least I don’t consider it a car. It’s a Neighborhood Electric Vehicle that only goes 25 miles per hour and can only travel 30 miles on a charge.

The   Peapod “car” goes on sale today, Earth Day, which is appropriate because its best qualities are its eco-friendly ones. It emits no pollutants and uses no gas.

Price of personality

This slow-moving, short-distance traveling little pod costs $12,500. It seats four (small) people, and Kevin Allen at “Shiny Objects” calls it a “four-seat hipster carrier.”

To me, $12,500 seems pretty steep for a vehicle that can’t go fast enough to hit the speed limit on major streets. However, the thought of never needing a payday loan to buy gas again is pretty attractive. Nonetheless, I’d probably need credit repair and a personal loan to afford a Peapod.

The company

The Peapod car is created by Peapod Mobility, which is a spinoff of GEM. GEM is a division of Chrysler. GEM has been producing small electric vehicles for a decade, and so far it has strong sales on college campuses and in retirement communities.

Geeking out

Besides its other unique qualities, such as its happy-face grill and ability to keep you from ever getting a speeding ticket, the Peapod has a little something for the technophiles out there. Owners of iPods have the option of using it as a key.

EcoGeek clears up some of the confusion surrounding the iPod feature, saying that Peapod owners have the option of just using a regular key or their iPods. Apparently, Wired reported that an iPod was required.

More bells and whistles

Peapod owners will be able to see exactly how much money they’re saving and how much good they are doing for the planet. After each trip the Peapod reports the carbon emissions that have been avoided and money saved.

Inspiration

The director of Peapod Mobility, Peter E. Arnell, designed the vehicle. He says he was inspired by Japanese bullet trains, storm troopers from the film Star Wars, space helmets and turtles.”

The Peapod does indeed have a turtle-esque quality to it. And if you ever meet Arnell, make sure you don’t use the phrase “neighborhood electric vehicle” or the abbreviation NEV. Arnell says the Peapod is a “Mobi,” the new nickname for vehicles of its kind that Arnell dreamed up. Arnell is hoping “Mobi” will replace the term “NEV” much like the term “SUV” has replaced “four-by-four.”

Not on the streets just yet

Aspiring Peapod owners can start placing orders today, a proper way to celebrate Earth Day. The vehicles will arrive in October.

Isn’t this downright rude? Just a week after the White House scolded Chrysler for relying too much on gas guzzlers, the company is heading to a marquee car show to launch yet another SUV. I will be there if the Online Cash Advance I applied for comes through.

According to Chrysler, its Jeep Grand Cherokee is a crowd favorite and a crucial part of its lineup. “It’s a very important vehicle for us. It’s one of the primary legs of the Chrysler stool,” Chrysler spokesman Rick Deneau said. “Customers have told us they want this vehicle and that it’s the right size.”

Merge or else

It’s true that Chrysler has tried to reduce consumption and that the 2011 model is 11 percent more fuel efficient than its predecessor and is powered by a cleaner and more powerful engine. But this debut is odd timing. At the end of March, the Obama administration rejected the company’s survival plan and gave it 30 days to secure a merger with another automaker, most likely Fiat of Italy.

In addition, Chrysler was slammed for its heavy product lineup of trucks and SUVs. But Chrysler stands by the Grand Cherokee. It’s not only profitable and highly recognizable, it’s the No. 2-selling vehicle in the Jeep lineup.

It’s hard to argue with popularity

John Wolkonowicz, senior automotive analyst for the consulting firm IHS-Global Insight, says, “It’s one of their most important vehicles. The market for SUVs still exists, particularly for smaller ones like the Grand Cherokee.”

Once the Chrysler-Fiat deal is sealed it will be the Fiat end that supplies the small-car offerings. Small fuel-efficient Fiat cars, like the two-seater 500, are expected to sell well on this side of the Atlantic. But the Fiats are not expected to make it to the U.S. until 2011, so until then, Chrysler has little choice but to survive on revenue from its current vehicle lineup.

The comfort factor

The new Grand Cherokee’s engine does achieve higher fuel economy on top of additional power. The Cherokee does not compare with say the 2009 Toyota Camry when it comes to gas mileage.

Chrysler, the weakest of the Big Three automakers, says it plans to unveil two dozen vehicles over the next four years. The Cherokee is the first of this series. If the automaker goes ahead with its merger plans and all the concessions promised by union and other stakeholders, and the $6 billion in additional loans promised by the federal government, will help it reach that goal.

Who to please first

Karl Brauer, editor in chief of the automotive Web site Edmunds.com, said it’s hard for Chrysler to please both the government, which is demanding greater fuel efficiency from the Big Three auto manufacturers as well as its customers, many of whom still demand big cars.

“It would be far more foolish for Chrysler to abandon its core competencies in the Jeep brand lineup than it is to come out with a new” Grand Cherokee, Brauer said.

Walter Chrysler could fix it

The company was founded by Walter P. Chrysler in 1925, when the Maxwell Motor Company was re-organized into the Chrysler Corporation. Walter Chrysler had originally arrived at the ailing Maxwell-Chalmers company in the early 1920s, having been hired to take over and overhaul the company’s troubled operations after he had completed a similar rescue job at the Willys car company.

2008 Jeep Grand Cherokee

Chrysler has a lot on the line as it unveils its 2011 Jeep Grand Cherokee. Unless the company can reorganize debt, win labor concessions and form a partnership with Turin, Italy-based Fiat before May, the U.S. president has said he will allow the company to go bankrupt.

More efficient vehicles

Besides the specific requirements the government has outlined in order for Chrysler to receive bailout money, it has also put pressure on the company to make more fuel-efficient vehicles. Chrysler touted the 2011 Jeep Grand Cherokee in its recovery plan for its improved gas mileage.

The mid-size SUV gets up to 23 mpg.The company hasn’t revealed the price of the new model, but average consumers probably will need personal loans in order to afford them. Previous Jeep Grand Cherokee models have sold for $30,000 to $45,000.

Big car, big promotion

In its viability plan, Chrysler said the 2011 Jeep Grand Cherokee would be one of the “most successful, most iconic” models yet. The viability plan was submitted to the government in February.

“It’s a critical, core product that has to be done right,” said Stephanie Brinley, an analyst at Autopacific Inc. “You can’t mess up a Wrangler and you can’t mess up a Grand Cherokee. They are too important to Chrysler.”

Aaron Bragman, a product analyst with IHS Global Insight Inc., doesn’t think the new Grand Cherokee is messed up.

“It’s remarkable in terms of the progress they’ve made, especially on interiors. They are trying to move Grand Cherokee upscale. The interior on this Grand Cherokee looks like you could have lifted it from an Audi,” Bragman said.

More work to do

2007 Fiat 500

Chrysler must reach a deal with Fiat by the end of the month, President Barack Obama says. Otherwise, the company will be allowed to go bankrupt and will be sold off in pieces.

Chrysler Vice Chairman Jim Press said the end-of-the-month deadline gives the company plenty of time to strike a deal with Fiat.

Signs of partnership

Press showed up to the unveiling of the 2011 Jeep Grand Cherokee, at the New York International Auto Show, driving a Fiat. Press says Chrysler has had “nothing but good news” this month. If the companies reach an agreement, Chrysler will get $6 billion in bailout funds from the federal government.

Finally, the verdict has come out and President Barack Obama has said a big ‘no’ to any kind of payday loans to the troubled automakers. Considering the fact that General Motors and Chrysler are surviving on the bailout money that they received in December 2008, their latest requests for another round of bailouts were definitely nothing less than payday loan applications.

But the Obama administration has shattered their hopes by stating that both the auto makers have not done enough to save themselves since the last bailout. However, the underlying truth is that the government has actually bowed down to Main Street standing against Wall Street at the moment.

Taxpayer’s outrage

Opinion polls conducted after President Obama gave more time to GM and Chrysler, for restructuring themselves to be able to justify the additional investment of taxpayers’ money, had clearly suggested that the majority of the Americans were strictly against funding the US automakers any further. Many even opined that if the government goes ahead with the plan, it would be like cheating the taxpayers.

A CNN/Opinion Research Corp. poll conducted prior to the news of Rick Wagoner’s exit under White House pressure had revealed that 49% of the respondents were against Obama’s auto plans compared to 46% who supported it. Whether the government expresses it or not, such outrage has definitely worked somewhere or the other leading the government to deny yet another round of virtual payday loans to the automakers.

What Obama wants

Rejection of GM and Chrysler’s plea for additional aid clearly suggests that the last minute arrangements made by the two automakers have failed to impress the government. Perhaps the top brains sitting in Detroit have not understood until now what Obama wants?

Meanwhile, to cut their task short, Mr. President has said on the CBS program ‘Face the Nation’ that without any ambiguity he certainly wants to keep the US auto industry alive, “But it’s got to be one that’s realistically designed to weather this storm, and to emerge at the other end much more lean, mean and competitive than it currently is.” And this actually means, “Sacrifices from all parties involved — management, labor, shareholders, creditors, suppliers, dealers. Everybody is going to have to come to the table and say it’s important for us to take serious restructuring steps now, in order to preserve a brighter future down the road.”

Detroit’s last hope

Despite the rejection, Obama has still left a trail of hope for both GM and Chrysler, who had applied for $30 billion and $9 billion respectively to see through the worst time for the automakers in the last 30 years. The government has now given 60 days and 30 days to GM and Chrysler respectively to prove that they are worthy enough to get a chunk of the taxpayers’ money.

This means, it is the last chance for both of the auto giants to understand that now if they fail to act fast and accurate, their last hope to get official payday loans will be destroyed leaving just one option for them, filing for bankruptcy.

President Obama’s cash advance bailout of America’s automobile industry giants has left a sour taste in the mouths of many. Why should financially irresponsible automakers that flood the market with metal hulks that lose value fast be allowed to spend the taxpayers’ money in ways that fail to fix the original problem?

The Mainstream Conservative Blogs like http://mainstreamconservative.blogspot.com/2009/04/obama-orders-gm-and-mopar-out-of-nascar.html say that President Obama is cracking down on yet another way GM and MOPAR have continued to abuse the public trust by using their money for purposes other than bailing out the brand. Obama says NASCAR participation and sponsorships by GM and Chrysler must end at the close of the current stock car season if the automakers hope to continue to receive government aid. Beyond the advertising for the automakers, the companies (and America itself) are not reaping the benefits of NASCAR technology, said Obama:

Automakers used to operate on the principle of “win on Sunday, sell on Monday,” but the Auto Task Force’s research just doesn’t validate that as true. NASCAR is a racing series that regulates down to the smallest detail of the cars, where a car badged a Chevrolet or Dodge differs only marginally from a Ford or a Toyota. There’s no technological development to speak of…

In order to receive the government’s money, corporations must demonstrate they will spend it wisely. Racing has been said to improve on-road technology, but frankly, NASCAR almost flaunts its standing among the lowest-tech forms of motorsport. NASCAR is not proven to drive advancements that transfer from the racetrack to the road, and this nation’s way forward does not hinge on decades-old technology. We need new, and we need innovation.

This is an obvious cut to make, but it is not an easy one. This administration is not ignoring the tremendous sentimental value and emotional appeal NASCAR holds for so many Americans. But now is not the time for sentiment and nostalgia; now is a time for decisive financial action. If our automotive industry is to emerge from this recession intact, then these difficult decisions must be made.

Save $250 million taxpayer dollars now

Automakers worldwide are cutting their racing operations in the face of plummeting sales and their own mismanagement. NASCAR itself has mandated reductions in team spending. With GM and Chrysler out of the picture, it is estimated that $250 million can be saved between them. Their departure will leave only Ford as the lone domestic name in NASCAR.

Oh, I bleed for you, NASCAR. I can think of nothing more boring than one of your Sunday telecasts. That $250 million (part of it my own) should no longer feed that which makes America mediocre.

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Unionized workers at Ford voted on changes to their contract, including cutting cost-of-living increases, reducing benefits and eliminating cash bonuses.

The company says the move will help it to stay competitive. According to the UAW, 59 percent of production workers and 58 percent of skilled-trades workers voted “yes,” and the new contract passed.

No government loans

General Motors and Chrysler have both asked the government for quick loans to help their companies stay  afloat. Ford says these changes will prevent the company from having to ask the government for money as well.

“By working together with our UAW partners, we identified solutions that will help Ford reach competitive parity with foreign-owned auto manufacturers and that are important to our efforts to operate through the current economic environment without accessing a bridge loan from the U.S. government,” said UAW President Ron Gettelfinger in a written statement.

More contract details

The ratified deal ended the jobs bank program, and it now allows Ford to make payments in stock to a retirement fund. The fund will extend health benefits to retired workers.

Now the UAW must attempt to reach a deal with both Chrysler and GM.

Making an example

The deal UAW reached with Ford will serve as a guideline for deals with GM and Chrysler. In the agreements reached with the government over more than $17 billion in loans, it specifies that the companies must work out new agreements with the union.

The companies are seeking more funding from the government. In order to get it, Chrysler and GM have to bring their labor costs in down to the same level as foreign auto companies’ plants in the U.S.

Under terms of their loan agreements, progress must be made by March 31. The companies are seeking an additional $21.6 billion in government aid.

If automakers in the U.S. want more easy loans from the government, they may face some big changes. As General Motors seeks to separate itself from European brand Saab, some government officials are considering uniting GM with another company: Chrysler.

As one might imagine, the automakers are not crazy about holding hands with their competition.

Why merge?

The most compelling argument for merging the two companies is to retain jobs. Chrysler is struggling even more than GM, and facing a lot more layoffs on top of the ones already made. Officials think that uniting the two companies could possibly save Chrysler, and thus save lots of jobs.

Why not merge?

The government already issued bailout money to both auto companies in December. At that time, the idea of merging the companies was brought up. The reason they didn’t follow through with this idea before was cost. It will cost billions of bucks to close extra factories and dealerships and combine operations.

Kimberly Rodriguez, head of the global auto practice at Grant Thornton Advisory Services, said she thinks the government will at least consider whether it would be better to loan them even more money so they can combine and emerge as a stronger company down the road, according to CNNMoney.com

More money and still more problems

The U.S. Treasury  gave Chrysler and GM a combined $17.4 billion in easy loans last year. And still, the U.S. auto industry is clamoring for more money. The two companies have asked for up to $21.6 billion more. Both companies were required to draw up viability plans, and they submitted those plans, funding requests in place, to the government last week.

Chrysler’s viability plan

In the viability plan Chrysler submitted last week, the company mentioned the possibility of a merger. However, this was only a minor footnote, not a main component of its plan for survival.

Chrysler did quote one analyst, saying combining its company with GM could produce between $40 billion and $58 billion in extra profit by 2016.

GM’s viability

It seems a tad risky to say that GM is in the position to save anyone. Right now, GM is getting rid of partner companies, not gaining them. GM has already cut loose its Swedish auto brand Saab. Rumors are circulating that it is considering unloading its German unit, Opel.

GM also says in its plan that it is not pursuing any kind of combination with Chrysler. It also seemed more dismissive of the idea than Chrysler, according to CNNMoney.com.

GM spokesman Tom Wilkinson still says he wants to hear suggestions from the federal auto task force on what would best for the company.

More layoffs on the horizon

Both companies are making cuts as the economy, the auto industry and sales outlooks continue to grow weaker.

Chrysler says it plans to cut about 3,000 more U.S. workers. GM said it is planning to lay off about 20,000 U.S. workers this year. GM also says it will close five more plants by 2012. It previously named 12 other plants it expects to shut down. David Cole, chairman of the Center for Automotive Research thinks that as the companies get smaller, it will only get easier to merge the two.

If the companies can save more jobs with their easy loans by merging, do you think it’s worth it? Leave your comments.

Payday loans can help families that run into financial emergencies, but unfortunately that can’t keep employers from laying off workers.

In fact, if legislators keep making laws that run payday loans companies out of business, even more workers will be out of a job.

Almost 5 million unemployed

The first week in February, the number of people remaining on the benefits rolls after drawing an initial week of aid was 4.99 million. That’s the highest number on record since the data started being collected in 1967.

New unemployment claims held steady at 627,000 the second week in February, nearing a 26-year high. Luckily most unemployed workers can get by without payday loans because most states pay claims weekly.

Grim comparison

Last year at this time, 2.77 million people in the United States were continuing to collect unemployment benefits.  And the 5 million who are continuing to file jobless claims don’t even tell the whole story.

An additional 1.5 million people are receiving benefits under an extended unemployment compensation program approved by Congress last year, bringing the total number of people receiving unemployment benefits to 6.54 million for the week ending Feb. 7, according to the Associated Press.

The economic stimulus package approved this week also further extends unemployment benefits.

Dreary forecast

The U.S. Federal Reserve  Wednesday updated its economic forecast. Basically, the Fed said things will be worse than they thought. The report says the economy will contract even more in 2009 and unemployment will keep going up.

“The new forecast predicts that unemployment will hit between 8.5 and 8.8 this year, up from the current level of 7.6 percent,” says the Associated Press.

Contributions to unemployment

October 2008. Unemployment not looking good in the rest of the world, either.

The biggest tire maker in the U.S., Goodyear Tire & Rubber Co., says it’s going to cut nearly 5,000 jobs, nearly 7 percent of its work force. The cuts will be made this year. The company posted a fourth-quarter loss and revenue sank 21 percent. Goodyear already cut about 4,000 jobs  last year.

More trouble for automakers

General Motors Corp. and Chrysler  with both make some hefty contributions to the unemployment rolls. GM said it will cut 47,000 jobs globally this year. Chrysler says it will cut 3,000 more jobs.

Sounds like GM and Chrysler employees might want to grab payday loans to help with finding a new job.

The United States government has already shelled out massive cash advance loans to players in the U.S. auto industry to keep them solvent. And after gorging themselves, GM and Chrysler are asking for seconds. Will President Obama continue to fatten up the insatiable on the taxpayers’ money? Surely someone else needs to take the reins of the auto industry if the problems are to be fixed, yes?

That isn’t going to happen yet. John Hughes reports for Bloomberg that President Obama decided not to name a “car czar.” What will happen for now is that Treasury Secretary Timothy Geithner and White House economic adviser Lawrence Summers will head a task force on how to fix the industry. Early word on Geithner – tax snafu aside – has not been positive, so I’m not sure whether this decision fills me with confidence.

Pressure to name a “main man”

According to Hughes, President Obama was “under pressure to say who would handle the issue before tomorrow, when General Motors Corp. and Chrysler LLC must give progress reports on plans to restructure as a condition of $17.4 billion in U.S. Treasury loans.” One thing that’s positive: those two diseased behemoths aren’t dictating policy here.

Geithner will be the next best thing, for now. It will be within his power to recall any monetary aid if the automakers fail to show they have a sound profit plan by March 31. That is without the expectation of further advances of cash to stimulate their bottom line.

Driving into the future without cash advance

Five Democrats in the Senate, including Michigan’s Debbie Stabenow, have urged the president to appoint a manufacturing expert to the auto industry oversight panel. The reasoning behind this, as Stabenow explained, is that “This advisory group provides a tremendous opportunity to bring together our country’s greatest manufacturing leaders to help our domestic automakers create the vehicles and technology of the future.”

Do the current auto industry leaders have the ability to drive the American automobile industry into the future? Most see them as the joyriders who ran the industry through the guard rail in the first place. They cry for cash advance loans now, and they still want more. Their history of unwise spending and production has created a huge mess. I say President Obama takes over, whether it’s through a “car czar” or some other means. The usual suspects should not run this asylum.

Related articles

• REPORT: Obama dropping “car czar” in favor of task force (autoblog.com)
• Obama drops plans to name a single car czar to oversee the restructuring of GM and Chrysler. (slate.com)

Having trouble thinking of British automakers? Here's one: MG makes the Midget Roadster

The U.K. and the U.S. have a lot in common: Both places are experiencing a surge in online payday loans, and both places have auto industries on the verge of meltdown. Yep, the global recession is having a lot of similar effects on places where there are lots of people and cars.

American automakers Chrysler and General Motors are still in negotiations with the government over several billion dollars in bailout money they requested. Now the U.K. has “outlined a package of government support” for its own auto industry.

A sprinkle of cash and a pinch of denial

The United Kingdom will dedicate 2.3 billion pounds, or $3.24 billion, to rescue car manufacturers from loans and provide other kinds of aid. However, Business Secretary Lord Mandelson insists that “this is no bailout”

The automotive industry is “in the frontline of the downturn” and has fallen “faster and further than any other sector since the summer,” Mandelson said.

So, the U.K.’s auto companies are about to crash and burn, and the government is giving them money so they don’t collapse. No, that’s not a bailout. Not at all. And when you apply for short-term loans on the Internet and promise to pay them back the next time you get paid, those aren’t online payday loans. They’re “financial support.”

Piecing things together in the U.S.

Back in the land of calling it like it is, United States car parts companies that are on the brink of bankruptcy are now asking the government for a bailout.

Naturally, as the auto industry has sped downhill, the auto parts industry has crashed right along with it. U.S. companies are asking for the government to bail them out to the tune of $10 billion to $12 billion in cash and guarantees.

Check back with your payday loans source for more news  on the economy.