Ford, GM and Chrysler will close nearly 60 factories for the next month while executives try to wheedle the fed for a bailout, wire reports indicate. The car makers, among TV’s largest advertisers, are experiencing the worst sales they’ve had in 26 years.
Twice the car makers have been to Capitol Hill, imploring lawmakers to provide first $25 billion, then $34 billion, to keep them in business. Unfortunately, they arrived just as Congress discovered it had been duped by Treasury Secretary Henry Paulsen into giving $700 billion to his pals at Goldman Sachs.
Automakers and dealers normally contribute more than $10 billion in ad spending to TV networks and stations. Stations report that amount is dropping precipitously.
Closing plants for a month is one way to stave off bankruptcy, which the car makers are trying to avoid so that Toyota, Honda and Nissan don’t completely eat their lunch. Who would buy a car from a bankrupt company, the conventional wisdom goes. The Japanese automakers have assembly plants in the Southern states, which tossed a monkey-wrench into a quick bailout.
Chrysler will shut down all 30 of its plants Dec. 19. Ford will close 15 plants in January, but is in better shape than Chrysler and GM, which don’t have enough cash to continue operating.