Partnership to Offer Auto Loans and Discounts
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by: laurawilder
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The automobile manufacturers in this country have fallen on difficult times. Both Chrysler and General Motors have been in Washington DC to request government loans to help them get back on their feet. They hope a loan will help them avoid layoffs and liquidation. The effects could trickle down to auto parts suppliers, dealers and mechanics. Car makers in the Unites States have been sluggish in adopting changes that left similar foreign car makers ahead of the game. Although GM was already in some financial trouble, the crises in the credit industry and downturn in the economy dealt it an even bigger blow. Getting consumers to purchase cars and take on auto loans is now more difficult, given the recent increase in gas prices and the economic slump.
While GM hopes to receive the federal bridge loan, it is also taking steps to encourage consumers to purchase their cars. The company is offering big cash rebates for customers and has expanded its employee discounts. The employee discount program is so broad that family members and friends of employees can often get in on the deals. GM also announced a joint venture with credit unions in the Midwest to offer discounted auto loans to consumers. The partnership is called "Invest in America." It will offer lower interest rates on auto loans and significant discounts on the retail prices of GM cars. Approximately $10 billion will be tendered in auto loans for car buyers. Currently, the auto loans and discounts will be offered in a handful of states in the Midwest, but it is expected to branch out to other states. It is rumored that the Michigan Credit Union League is in talks with Chrysler and Ford, as well, which could mean that more auto loans and discounts could be available to consumers.
History will be the judge of whether consumers will be enticed enough by low interest rates on auto loans and good deals on new cars to help jump start sales for the ailing auto industry. The major U.S. car manufacturers are hoping that a combination of boost in sales, modifications to their business strategies and a loan from the government will be enough to help them out of troubled waters. American car makers, once symbols of the power of the industrial revolution, now have to face the music after years of business as usual. The crises these companies are confronting will cause them to change or disappear. Hopefully it is not the latter, as the affects would be devastating to so many associated businesses and workers.
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