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[0:06] ..." About two things related to the auto industry to preliminary reports that GM and Chrysler are due to submit. Regarding their use of federal bailout money and also president Obama's apparent intention to name an auto industry"...
[0:40] ..." hopefully this will be a collaborative effort. To get these companies specifically Chrysler and GM -- two up past. A financial viability when they can become more competitive. On a financial base that's because I think a"...
[1:27] ..." and nonunion and certainly -- he. -- thousands of nonunion. Employees -- GM and Chrysler within their jobs. And then you have to start looking at the union's and it's not -- single them out at this"...
[2:07] ..." can be done that can be fast tracked that can make both GM and Chrysler more competitive."...
[3:00] ..." would actually have to look back at how the large crossovers Ford GM performed in 2008. These are vehicles like that you conclave they'd GMC Acadia the Saturn outlook and then didn't late release of"...
[3:37] ..." QB's. So these are really nice -- for the American consumer and GM really has. Lock on that particular segment we also have the Ford -- in there and Hyundai is coming out with a portico next year but. Right now we really very very firm stance. On on GM having. A good handle on this segment."...
[3:58] ..." I know that died Tuesday is the day when GM and Chrysler going to be submitting those plans to the government. On obviously you have your -- to the ground what are you expecting"...
[4:15] ..." job layoffs we are expecting to see a brand strategy. Where potentially GM is. He's doing something with Saturn I hesitate to say exactly what because we've heard a couple of different. -- We certainly also know that they're downsizing Pontiac itself I think really looking brand strategy there. I think from Chrysler then we may get more details on the Christ or Fiat alliance. Which is that more the long term strategy but certainly provides. Chrysler with a with a a strong want a long term outlook that they can get by there. I you know it's it's"...
[5:48] ..." having some kind of significant need for restructuring. We're seeing that with Toyota. The Toyota also -- to to cut staff to lay people off to cut production and all of this teen issues are being safe spike -- that's and that's a very healthy company. Well when you -- company had a well management while and -- Toyota -- because it is same things then you know that this is an industry wide issue and not Jack specific to one"...
[6:30] ..." think Farrakhan. A lot a lot hinges on what we hear from Chrysler really because. I have I think we could see that they -- Chrysler isn't very vulnerable position because there management cerberus capital. Each day there are no different than making money they're not in the automotive business. Go cerberus is not really supporting. Chrysler anymore they are tolerating that that and I think that puts Chrysler in the most vulnerable position that being pad. We do you see a lot of potential for it says Fiat Chrysler a lot of hand. But very happy that the room. There yet the -- very difficult time right now it's sort of"...
[7:24] ..." With regard to the Fiat Chrysler arrangement would that be strictly monetary or would be somewhat similar to -- there. In that there were design and engineering questions"...
[7:49] ..." them product for god in Christ fact. And then its dodge and Chrysler -- making some product turf CI now for mail and also providing. Alf are now worth an outlet to sell their products here in the US. Swarm of the concern that we have with the committee if it. How can you have some people are better intimately familiar with the industry with the automotive industry. -- Like other industries. It's not like the automotive -- air airline industry where it's a short term commitment -- consumer. You know this -- that this is generally their second largest -- we knew"...
[8:51] ..." know act and specifically I'm talking about -- cafe standards when the fuel economy standards spurt came in in the seventies. And and the government said you know ID -- he began X amount of fuel economy"...
[0:00]" We're talking with auto industry analyst Rebecca Lynn land at global insight in Lexington. About two things related to the auto industry to preliminary reports that GM and Chrysler are due to submit. Regarding their use of federal bailout money and also president Obama's apparent intention to name an auto industry advisory group the idea of naming this -- advisory panel as opposed to the so called quote unquote car -- does that make more sense you."
[0:28]" I think the reaction when I heard there was that. He. If I'm thinking getting more difficult to get things generally you're trying to do you think by comedian proposed to collaboration. So hopefully this will be a collaborative effort. To get these companies specifically Chrysler and GM -- two up past. A financial viability when they can become more competitive. On a financial base that's because I think a very competitive on a product -- Although the public perception isn't always the same."
[1:04]" Competitive confidential basis sounds like. When a lot of your costs are related to personnel that. Maybe there needs to be three -- during there."
[1:13]" You know it. Everybody's going to have to make sacrifices -- and that's. They end the ongoing theme but of course he you have to look at -- the labor force says that you have to look at both. Union and nonunion and certainly -- he. -- thousands of nonunion. Employees -- GM and Chrysler within their jobs. And then you have to start looking at the union's and it's not -- single them out at this say. It's your turn. Now everyone's been making sacrifices. You have to start making sacrifices and there are significant. Painful sacrifices. And that's the step where we are right now is. Everyone has start kicking in including the union's."
[1:57]" I know that god is some people abuse the old analogy of trying to turn the battleship around on and that it can't be done immediately."
[2:06]" Do you think that there are things that can be done that can be fast tracked that can make both GM and Chrysler more competitive."
[2:14]" I do -- and you know again unfortunately these are very painful time is so that person -- you have to look at. -- and eating. Speed the collective bargaining agreement with the UAW. Have to be restructured. They aren't thinking companies that they were -- when he cream and a wave was agreed upon. Back in October of 2006 because very different world now. And so unfortunately. We're going to have to start looking at that agreement saying where can you cut costs can you have to be able to have some flexibility. To cut costs on the labor side."
[2:48]" You're saying before that there are competitive products out there that the auto industry is offering -- what in particular I I guess would you hang your hopes on."
[2:56]" If you were the executive of one of these two companies."
[2:59]" I would actually have to look back at how the large crossovers Ford GM performed in 2008. These are vehicles like that you conclave they'd GMC Acadia the Saturn outlook and then didn't late release of this heavy term Barrick which came out late 2008. These squad that we call them are incredibly popular vehicles they really -- the American lifestyle. They they feed eight people they have three residency. They have a nice level of comfort ride -- they do a lot of things really well. And crossovers. Are the beam replacements for those traditional truck based at QB's. So these are really nice -- for the American consumer and GM really has. Lock on that particular segment we also have the Ford -- in there and Hyundai is coming out with a portico next year but. Right now we really very very firm stance. On on GM having. A good handle on this segment."
[3:58]" I know that died Tuesday is the day when GM and Chrysler going to be submitting those plans to the government. On obviously you have your -- to the ground what are you expecting in those reports."
[4:08]" Lobbied to preliminary plan and they are good indication that where we see them going and you know we are expecting to feed. Good job layoffs we are expecting to see a brand strategy. Where potentially GM is. He's doing something with Saturn I hesitate to say exactly what because we've heard a couple of different. -- We certainly also know that they're downsizing Pontiac itself I think really looking brand strategy there. I think from Chrysler then we may get more details on the Christ or Fiat alliance. Which is that more the long term strategy but certainly provides. Chrysler with a with a a strong want a long term outlook that they can get by there. I you know it's it's difficult I think crisis and it's going to. Indicate they're going to trying go it alone. But the reality is that they are much stronger company with -- Seattle alliance."
[5:04]" Do you anticipate that given the fact that that sales are so flat for everybody. But are they going to have to come back and ask for more money."
[5:13]" I only thing known that they would that they would anticipate coming back for more money so it's not even more money it's kind of what they what they initially asked for. So you know it's. This is -- situation -- worry are in a market where January have to Humana at nine and a half million units. If it's January they'll portrait. Eighteen million units just a couple of years ago. Period than anybody on the east of the business world that can provide that kind of downturn. Without having some kind of significant need for restructuring. We're seeing that with Toyota. The Toyota also -- to to cut staff to lay people off to cut production and all of this teen issues are being safe spike -- that's and that's a very healthy company. Well when you -- company had a well management while and -- Toyota -- because it is same things then you know that this is an industry wide issue and not Jack specific to one or two companies."
[6:18]" Bottom line when we look at the Big Three. I know that it's question that was debated in the fall kinda went away do you think that the three of them will survive or will we wind up with a big two at some point."
[6:29]" I think Farrakhan. A lot a lot hinges on what we hear from Chrysler really because. I have I think we could see that they -- Chrysler isn't very vulnerable position because there management cerberus capital. Each day there are no different than making money they're not in the automotive business. Go cerberus is not really supporting. Chrysler anymore they are tolerating that that and I think that puts Chrysler in the most vulnerable position that being pad. We do you see a lot of potential for it says Fiat Chrysler a lot of hand. But very happy that the room. There yet the -- very difficult time right now it's sort of like you know. Meeting your cellmate at the teenager you gotta grow up intensity can get married shape it's kind of this game started feeling like okay that looks like a really good plan. Except he can't execute it right away."
[7:24]" With regard to the Fiat Chrysler arrangement would that be strictly monetary or would be somewhat similar to -- there. In that there were design and engineering questions that also came into play."
[7:36]" There's no money exchanged whatsoever it's strictly an asset swap its strictly an intelligent swapped its its engineering it's cut its. The making some products board dialect the Gramm I put the making them product for god in Christ fact. And then its dodge and Chrysler -- making some product turf CI now for mail and also providing. Alf are now worth an outlet to sell their products here in the US. Swarm of the concern that we have with the committee if it. How can you have some people are better intimately familiar with the industry with the automotive industry. -- Like other industries. It's not like the automotive -- air airline industry where it's a short term commitment -- consumer. You know this -- that this is generally their second largest -- we knew we would hope that some people on that committee would have real world industry experience. The other thing that they need to be cautious. Eight trying to get -- product. Because. We often have seen historically. Where you have unintended consequences. When the government tries to dictate consumer choice. They it what you know act and specifically I'm talking about -- cafe standards when the fuel economy standards spurt came in in the seventies. And and the government said you know ID -- he began X amount of fuel economy chuck -- get X amount. At one point said that's when you know -- started shining Carswell. Can do the actually started shouting. Station wagon that have forced cylinders they didn't shunned station wagon that was that they don't like under powered station wagons. And so they would go into the dealership and that dealership look at. Well we have estates under FTV do you want that instead. And the unintended consequence of that of the cafe and into the seventies and everyone turned as TV is can they were the kind of car that people want that so. We're really hoping that this committee is comprised. Of people that are intimately familiar with the history. And with that he is with the the issues that this industry basis because they -- different than any other industry."
[9:50]" I know the names that have come out are Larry Summers and Tim Geithner but -- you're hoping that there are plenty of industry people below them on the on the totem poll."
[9:57]" Absolutely and -- and how much that they be really high level executive types. -- you can get a lot of information and from a good solid middle management engineer who's down there on the ground and had seen the issues that they've been faced -- and so. It's it's a combination of people. That would -- and mostly really that what what one of the things we want to see if somebody who a lot of historical. Perspective on the industry because they can point. Q where things went bad are things went wrong. Or -- you have unintended consequences and that -- other kinds of people that we really would like to see on this committee."
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