Automotive Crisis? A Tale Of Four Companies

Randall Prince — Sat, 06 Dec 2008 13:20:07 +0000

Breaking news has Congress creating a tentative agreement between the US Government and the “Big 3″ that allows $15 billion of available loans. An agreement reached between the White House and Congress posed that the money should come from $25 billion in loans previously approved to help the automakers retool for energy fuel efficient vehicles, rather than drawing the aid from the $700 billion Troubled Asset Relief Fund for struggling financial institutions. Does this mean at some future time the US Government will be asked for yet another $25 billion for the retooling? The Senate and House of Representatives have confirmed they will be meeting on Tuesday to vote on the deal and finalize the appropriation of money. In addition, this is only part of the money that has been asked for. In March, after President Elect Obama takes office, a meeting to determine if additional money will be granted will take place.

However, on the other side of the world, as American automakers get $15 billion in federal loans, Kia has been setting the auto industry en-fuego on fire with it’s aggressive push into small and innovative cars that rival their Japanese counterparts. Looking at what the Japanese have been doing for the last 20 years, Kia (and Hyundai) have been slowly and silently creeping up behind Toyota and Honda with great looking cars and industry leading warranties. With the new Optima, Boreggo, Soul and Forte, Kia is slowly and surely clearing a pathway to the top of the entry level car market.

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Automotive Crisis? A Tale Of Four Companies