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For the third day in a row Detroit's imploding automobile industry was Story of the Day. All three newscasts led with Senate Banking Committee hearings as its trio of chief executives sought federal loans. Last month the three arrived by corporate jet, with no concrete plans, seeking $25bn. This time they carpooled in fuel-efficient vehicles, carrying restructuring blueprints--and asked for $34bn. NBC anchor Brian Williams took the day off as Lester Holt substituted.

In the two weeks since their bosses last testified, the three automobile firms have lost $3bn, ABC's Jonathan Karl (no link) reckoned. "This time they came with specific plans and a big dose of humility." CNBC's man in Detroit traveled to Washington too for NBC. Phil LeBeau pointed out that both General Motors and Chrysler are warning that they must have funds by the end of December to stave off bankruptcy. CBS' Sharyl Attkisson looked into the $34bn request and found "they are actually seeking way more money than you may think." Add in separate requests of the Department of Energy and the Department of the Treasury and "that puts the real taxpayer sticker shock somewhere above $55bn."

Only one of the Detroit CEOs moved on from the Senate panel to the media rounds on the nightly newscasts. That was Robert Nardelli, the boss of Chrysler. He granted a remote interview to CBS anchor Katie Couric in order to warn of the "cataclysmic impact" on the national economy if the loans were to be refused. "This thing has broad tentacles," he warned, envisioning a ripple effect of 3m layoffs. Why not reorganize under bankruptcy? "It would cost us in bankruptcy two or three times more than what we are asking for, Katie, up front."

A major obstacle standing in the way of Detroit's revival, CBS' Anthony Mason pointed out, is that the Big Three firms--General Motors, Ford, Chrysler--are riddled with brands that are too small. Altogether GM and Toyota have similar sales volumes--yet Toyota's three brands build 32 models; GM's eight brands build 57. Mason zeroed in on GM's Saturn brand, whose market share is just 1%. It is now up for sale. On NBC, Kerry Sanders turned to an even smaller brand that is an even smaller brand. The super-mini SmartCar--"a Tonka toy, a glorified golf cart"--has been imported from France for eleven months now. "The company has never bought a TV or print ad in the United States," yet has sold 22,000 vehicles. "It is made to order and has developed a cult-like following."


Andrew Tyndall 12/5/08 8:17:08 pm

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