3 Dec 2008

Car bosses pledge to work for $US1 a year

8:18 pm on 3 December 2008

Chief executives of troubled American car makers have promised to work for $US1 a year, if the US Congress approves emergency aid to the industry.

Ford, Chrysler and General Motors, the so-called Detroit Three - are returning to Congress later this week to make a renewed plea for billions of dollars in government loans.

They have asked for a combined total of $US34 billion. Slashing costs, reducing levels of debt and investing in greener technologies form the centre-piece of each proposal.

General Motors pledged to reduce chief executive Rick Wagoner's annual salary to just $US1 if Congress approves the emergency aid.

Ford boss Alan Mullaly made a similar pledge - but only should it need to call on the emergency loan.

Ford also said it would sell its five corporate jets as part of its cost-cutting plan, and proposed other measures including selling some businesses, such as Swedish carmaker Volvo.

Sales at all three of the carmakers have plunged as US consumers tighten their belts in the face of the severe economic downturn.

Ford sold 31% fewer light vehicles in November compared with the same month last year. General Motors suffered a 41% drop in sales for the month, while Chrysler fared worse, with sales plummeting 47%.

Car makers' wish list

General Motors says it needs $US4 billion now and $US12 billion in total by March to stay in business.

GM also announced plans to shed up to 30,000 jobs and close nine plants by 2012 to cut costs. It will reduce the number of car brands it makes to just four and get rid of 1750 dealerships.

Ford requested a $US9 billion bridging loan, which it hopes it will not need, while Chrysler sought $US 7 billion to survive the dramatic slump in sales that has decimated its cash reserves.

Toyota sales drop

Toyota reported on Tuesday a 34% drop in November US auto sales to 130,307 vehicles amid a broad economic slowdown.

The Japanese automaker said sales at its Toyota division fell to 114,084 while its luxury Lexus brand saw sales fall 35% to 16,223.

Sales for the year to date were down 14% to nearly 2.1 million vehicles.