The nation’s auto parts suppliers will ask President Obama’s auto task force this week to back as much as $10 billion in loan guarantees. U.S.-based automotive suppliers have already received $5 billion in federal aid, but are seeking loan guarantees to ensure production can continue uninterrupted.

In May 2009, U.S. car sales have dropped off 37 percent, but are expected to recover during the latter part of the year. However, reduced production due to bankruptcies at General Motors and Chrysler has left many suppliers low on cash, which could threaten their ability to ramp up production during the second half of the year.

“We have very good companies that can’t get financing,” Neil De Koker, president of the Original Equipment Suppliers Association (OESA), told Bloomberg. “It’s essential to provide support to suppliers in order to ensure that the money already spent on GM and Chrysler doesn’t go to waste.” De Koker warns that failure to put loan guarantees in place could disrupt production for GM and Chrysler when they finally emerge from Chapter 11 protection. Industry trade groups will meet with the President’s auto task force on Wednesday, followed by a meeting with House and Senate members later this week.

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General Motors has officially filed for bankruptcy today, paving the way for a “new GM” to be formed under majority government control. This is the largest such move in US industrial history, the firm entered Chapter 11 bankruptcy, allowing it to restructure without going into liquidation.

GM will move forward with four core brands: Chevrolet, Cadillac, Buick and GMC. The company plans to cut 21,000 employees, about 34 percent of its work force, and reduce the number of dealers by 2,600. GM was announcing plans to close 11 facilities, idle three others and name the buyer of its Hummer division.

GM’s reorganization plan will rely on up to $30 billion of additional financial assistance from the Treasury Department. This is on top of the $19.4 billion in taxpayer money it already has received in the form of low-interest loans. This is all a part of a plan that will eventually see the government own 60% of a streamlined GM after it emerges from bankruptcy. …click here to read more

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General Motors CEO Rick Wagoner announced his resignation earlier today, the latest change for the troubled automaker. Wagoner is being replaced by GM’s president and chief operating officer, Fritz Henderson. Kent Kresa will serve as interim chairman. …click here to read more

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General Motors CEO Rick Wagoner said that restructuring the company outside of bankruptcy court is the best option. However, Wagoner acknowledged that a pre-planned bankruptcy filing could work.

“If we can accomplish 99 percent outside of court that we would inside of court, why in the world wouldn’t we do it outside of court? To save the risk and, by the way, at a much lower expense,” Wagoner said. “I think it makes sense for everyones perspective to do this outside of court. We have to show we can do that though.”

General Motors has been studying pre-packaged bankruptcy filing which emerge within 30 to 60 days. Wagoner stated that if that doesn’t happen, the move could mean a long period of bankruptcy where GM would eventually have to liquidate. GM executives are in daily contact with Barack Obama’s auto task force and have been working with the UAW on necessary concessions to make the company viable once again.

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President Barack Obama said he remains strongly committed to providing the auto industry with “serious help.” Obama is eagerly waiting on plans from Chrysler and General Motors next Tuesday to justify a $17.4 billion loan to the two Detroit automakers.

Obama said that if their plans are realistic and show viability in the long-term the government could offer more help. If the government believes that the Detroit automakers still don’t get it he said “Then we’re going to have to ask them to go back to the drawing board.”

His message to the Detroit automakers was: “Get me a plan that works.” GM and Chrysler will be headed to Washington, D.C., next week with their updated restructuring plans.

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As Americans celebrate the inauguration of a new president of the United States next week, another new Cadillac will grace Pennsylvania Avenue to lead the proceedings. President Barack Obama will ride in an all-new Cadillac Presidential Limousine, continuing a long tradition of Cadillac limousines that have served many U.S. presidents. …click here to read more

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In a reversal on Bush’s prior commitment to make a decision on the issue of Corporate Average Fuel Economy (CAFE) standards, the U.S. Department of Transportation (DOT) today revealed it will not make a decision before President-Elect Barack Obama takes office later this month.

Proposed CAFE regulations on new cars would force fuel economy upward toward a goal of 35mpg fleet-wide by 2020. The debate exists on how to graduate the progression toward that goal. The NHTSA has proposed one avenue to raised standards, seeking a total of 25% improvement by 2015, but that would cost the industry about $47 billion over the five-year period. …click here to read more

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