White-collar cuts at G.M.

Nick Bunkley and Bill Vlasic of The New York Times report:

"General Motors said Tuesday that it would reduce labor costs for salaried workers by 20 percent, eliminate its quarterly dividend and further reduce truck production to ensure that it has enough cash to finance its turnaround for at least two more years.

"The moves are expected to raise about $15 billion by the end of 2009, the chief executive Rick Wagoner said in an address to employees.

"Mr. Wagoner said the automaker would also stop providing health care coverage to salaried retirees at age 65, offer buyout and early retirement packages to reduce its salaried work force and freeze base pay for salaried employees through 2009."

Financing sales

Flint Expatriates reader slick told us last week that G.M.'s financing offer of 72 months at 0% interest was attracting buyers to Flint auto showrooms, and he was right.

Matt Franklin of ABC12 reports:

The week of the sale, dealers were very busy. A salesperson from Hank Graff Chevrolet in Davison says more than 100 cars were sold during the initial three-day period of the 72-hour sale.

At Saturn of Flint, since last week when the sale started, they sold more than 100 vehicles. It was a similar story at Applegate Chevrolet in Flint.

Many of the smaller cars were the vehicles of choice for customers, but just as many decided to choose pickup trucks and SUVs, despite the high gas prices.

This left me wondering just how high gas prices will have to go before people stop buying SUVs.

Drive-by economics

The New York Times tells us how the housing meltdown is "sideswiping" the auto industry and hurting Michigan:

"Auto lenders and banks, closing their wallets, have prevented hundreds of thousands of consumers from obtaining the financing for a car. Home equity loans, which had been used in at least one of every nine deals, when lenders were more generous, are no longer a source of easy money for many prospective buyers. And used-car prices have fallen nearly 6 percent as repossessed cars and gas-guzzling trucks and S.U.V.’s flood auction lots."

Gas is expensive! Who knew?

The Flint Journal reveals the shocking news!

At-home truck and SUV sellers...are finding out first-hand the same thing that new and used car dealers already have -- that demand for gas guzzlers (those getting far south of 20 miles per gallon) is dropping sharply as the price of motor fuel rises.

This is the kind of investigative journalism that America needs!