Chrysler has warned that it may need to cut more jobs and trim other costs should US lawmakers fail to approve a proposed US$25billion in loans to help the auto industry develop fuel-efficient vehicles. GM CEO Rick Wagoner will also be meeting members of Congress today (Wednesday, 17th) to pursue the subject further.
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Chrysler Chief executive Bob Nardelli said yesterday: “If we don’t get the funding, we will continue to have to resize and reduce our fixed costs. We’ll have to make some tough, gut-wrenching trade-offs, which may include eliminating jobs.” Mr Nardelli joins United Auto Workers leaders and some lawmakers in saying jobs will be threatened without the loans.
While GM has marked its 100-year anniversary with a glitzy rollout of its Volt range-extended electric vehicle, the outlook for the US auto industry has worsened in recent days with the unfolding financial crisis on Wall Street and concerns over tightening in credit markets. Tighter credit threatens the ability of big corporations to get loans but it could also make US market conditions worse as credit becomes less available to consumers.
“The number one issue for us as an industry is credit availability,” said Mike Jackson, chief executive of dealer group AutoNation Inc. said yesterday at the Reuters Autos Summit in Detroit.
“The consumer is spooked. They are struggling with the value of their house, they are struggling with credit availability.”
Many potential car buyers are finding they cannot get approved for financing, Mr. Jackson said, adding that US vehicle sales will not pick up until the housing market stabilises and buyers can get easier access to loans to buy cars.
