GM's Auditor Expresses Doubts Over Survival

In what I consider good news, GM's Auditor Expresses Doubts Over Survival.

General Motors Corp. shares fell as much as 18% on Thursday after the troubled automaker and its auditor stoked more doubts that the company can keep its assembly lines running amid a historic dearth of new-car buyers.

The stock moved down 38 cents to $1.82 in midday trading, as part of a broad pullback in the Dow Jones Industrial Average (INDU). Prompting the retreat, GM reiterated in a Securities and Exchange Commission filing that bankruptcy is a possibility if its viability plan, as submitted to the Congress, doesn't succeed.

The Detroit-based giant is seeking up to $30 billion in loans from the U.S. government, as well as loans from foreign governments including Canada, Germany, the U.K., Sweden and Thailand for up to $6 billion more.

Deloitte & Touche made a similar analysis, concluding that GM's "recurring losses from operations, stockholders' deficit and inability to generate sufficient cash flow to meet its obligations and sustain its operations raise substantial doubt about its ability to continue as a going concern."

"The best course of action, if such a thing exists, would be for the bondholders and the United Auto Workers to come to some sort of agreement to do what it takes to make GM viable," he said. "Given the current administration, what are the odds that the Democrats tell the UAW to dissolve the union? It's just not very likely."

I resent taxpayer money bailing it out just as I resent taxpayer money bailing out banks and homeowners. I consider this admission "good news" because I am hoping that the Obama administration finally comes to its senses and stops throwing money down black holes.

Unlike what CEO Wagoner is saying, we will find that a GM bankruptcy will not be the end of the world. Furthermore, a bankruptcy of Citigroup or AIG would not be the end of the world either.

The Obama administration has had too much reckless hope and not enough reality when it comes to handling the banks, the auto industry, and the housing industry. The sooner we get to the bottom, the better off everyone will be. We can only get to the bottom if we stop rewarding failed institutions with taxpayer money.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Top Secret Musings And Other Economic Insanity

Interesting stories are stacking up again so it's time for some economic potpourri starting with secret dealings by the Fed.

Fed Refuses to Release Bank Lending Data, Insists on Secrecy

The Fed refused yesterday to disclose the names of the borrowers and the loans, alleging that it would cast “a stigma” on recipients of more than $1.9 trillion of emergency credit from U.S. taxpayers and the assets the central bank is accepting as collateral.

Bloomberg sued Nov. 7 under the U.S. Freedom of Information Act requesting details about the terms of 11 Fed lending programs.

On Oct. 25, Bloomberg filed another request, expanding the range of when the collateral was posted. It sued Nov. 7.

In response to Bloomberg’s request, the Fed said the U.S. is facing “an unprecedented crisis” in which “loss in confidence in and between financial institutions can occur with lightning speed and devastating effects.”

Fed Chairman Ben S. Bernanke and then Treasury Secretary Henry Paulson said in September they would meet congressional demands for transparency in a $700 billion bailout of the banking system.

In plain English: Bernanke Lied.

Japan clears cash hand-out bill

Japan's parliament has passed legislation to give a cash hand-out to every resident in attempt to boost the recession-hit economy. Most people will get at least 12,000 yen ($121; £86) under the $20bn plan.

China Considering New Stimulus Measures

Chinese Premier Wen Jiabao is considering new stimulus measures, adding to a 4 trillion yuan ($585 billion) spending plan as the government tries to revive growth in the world’s third-biggest economy.

Wen will announce “a new stimulus package” in his annual address to the nation’s legislature tomorrow, former statistics bureau head Li Deshui told reporters in Beijing today. He didn’t say whether spending would increase or give further details.

“The existing stimulus package may not be adequate considering the total collapse of global trade,” said Isaac Meng, a senior economist at BNP Paribas SA in Beijing. “There should be more spending, especially on the social side to cushion unemployment. This is quite urgent.”

Doting On Animals In Hard Times

When markets drip tears and For Rent signs appear over products in shops that were once For Sale, people still spend almost as much resources, time and energy as ever on a completely wasteful economic category: pets.

I once did some consulting for the chairman's office of A&P and assumed that surely, in tough times, poor people would choose the generic cat food rather than Hill's Science Diet Culinary Creations cat food. But I was wrong. Consumers would rather buy plain-label generic creamed corn or tomato soup for themselves than subject their four-footed treasures to what they fear will be second-rate grub.

Ellen DeGeneres promotes her Halo line, with "holistic foods for pets' total well-being. Highest quality meats, grain and fresh vegetables." She could be joined by the producers of Haute Canine, the Natural Gourmet Dog Snack and Dandy Doggy Bowser Brittle (with rain-forest nuts).

Of course there are countless miserable stories of pets abandoned in foreclosed homes, left off from cars in parks and simply ignored once a summer vacation is over. The story is not wholly pretty and contains abundant cruelty, exploitation and heartlessness.

Nevertheless, for a sense of proportion about broad economic forces, go to a supermarket and watch the purchasers of pet food. Observe elemental mammalian life at work, for it has been around for an endlessly long time and will be present in the future.

Brown Will Urge World to ‘Seize Moment,’ Unite on Stimulus Plan

U.K. Prime Minister Gordon Brown will use a speech to both houses of the U.S. Congress today to urge countries to “seize the moment” following President Barack Obama’s election and agree on new global financial regulations.

“Now, more than ever, the rest of the world wants to work with you,” Brown, the fifth British prime minister to address Congress, will say, according to extracts of his speech released in advance. “Never before have I seen a world so willing to come together. Never before has that been more needed. And never before have the benefits of cooperation been so far-reaching.”

Never before has there been so much meaningless political sap.

Australian Economy Grinds To A Halt

THE global recession has caught up with Australia's economy, forcing the first fall in output in eight years and making the Rudd Government revise lower the budget forecasts it made only four weeks ago.

Wayne Swan said the downturn made it unlikely the economy would achieve the optimistic 1 per cent growth this year forecast by Treasury just four weeks ago.

The Treasurer said it was likely that revenue would also fall short of the latest forecast, which was itself a $115 billion downward revision from budget. This will push the deficit out from Treasury's estimate of $22.5 billion.

However, Mr Swan defended the Government's actions in launching its first economic stimulus package last October, in the face of criticism from the Opposition that it was spending too much, too soon.

"There is absolutely no doubt that things in this country would have been far worse had the Government not acted when we did with the economic security strategy announced last October," he said.

"If we pull together, if we keep doing whatever is necessary, we can come out of this stronger than ever," he said.

Swan needs to get together with Brown, Obama, and Bernanke to sing Kumbaya.

Hawaii: Teachers union unit files for bankruptcy

The union that represents Hawaii's public schoolteachers says the activities and finances of a subsidiary corporation had been ``grossly mismanaged.''

Member Benefits Corp., which filed for bankruptcy Monday, has been shut down. It had managed the Hawaii State Teachers Association's Voluntary Employees Benefits Association.

The HSTA decided to dissolve the corporation last year after determining the for-profit subsidiary didn't fit within the union's mission.

The union has told it members the mismanagement was discovered by an outside team of attorneys and accountants that was brought in as part of the process of closing the corporation.

Bernanke grilled on latest $30B bailout of AIG

Irritated lawmakers grilled Federal Reserve Chairman Ben Bernanke Tuesday over the latest bailout of American International Group, even as the Fed chief warned that an economic recovery hinges on the government's success in stabilizing shaky financial markets and their major players.

"I share your concern, I share your anger," Bernanke told the Senate Budget Committee. "It's a terrible situation, but we're not doing this to bail out AIG or their shareholders. We're doing this to protect our financial system and to avoid a much more severe crisis in our global economy."

Bernanke defended the government's repeated rescue attempts on AIG, saying "the failure of major financial firms in a financial crisis can be disastrous for the economy."

Sen. Ron Wyden, D-Ore., and others said the identities of banks and other so-called counterparties that do business with AIG and other bailed-out institutions should be made public. Those companies also should have to make some concessions, he added.

"They ought to ... have some kind of consequence," Wyden said. "The American people are in the dark on this issue, and I think it's time for some sunlight. I think that the public really wants to know why are these people so important."

Sunlight is illegal. Bernanke wants us in the dark. It's Top Secret.

Pressure to reveal major AIG counterparties grows

Calls increased Tuesday to reveal the financial institutions that got almost $40 billion in collateral from American International Group shortly after the government first bailed out the insurer last year.

AIG almost collapsed in September after ratings agency downgrades triggered demands for billions of dollars in extra collateral from firms that had bought derivative-based protection from the insurer on complex mortgage-related products known as collateralized debt obligations, or CDOs.

AIG didn't have that much money and faced bankruptcy. But it was saved by an $85 billion emergency loan facility from the Federal Reserve.

By Nov. 5, the insurer had paid out $37.3 billion of that money to counterparties who had purchased a certain type of derivative-based protection from AIG called multi-sector credit-default swaps, according to the company's third-quarter regulatory filing.

"AIG has given the counterparties $20 billion. Those people could be just about anybody in the world. Why won't the Fed disclose who those are?" Sen. Ron Wyden, D-Ore., asked Fed Chairman Ben Bernanke during congressional testimony on Tuesday.

Bernanke said the counterparties made "legal, legitimate, financial transactions" with AIG and presumed at the time that the contracts would remain private. "That is a consideration we have to take into account," he added.

Sen. Mark Warner, D-Va., suggested that AIG's counterparties should have to take a "haircut," rather than be made whole, because some of them probably didn't do enough due diligence on whether the insurer was financially strong enough to be selling such protection.

"In effect, what we're saying is, consequently, folks who bought these instruments and that, at some point in their process, should have been doing some level of credit analysis of what AIG was selling who didn't do that credit analysis are going to still come out whole for their lack of appropriate due diligence or responsible behavior," he said.

"I'm as unhappy as you are about that, senator," Bernanke replied. "I just don't know what to do about it."

There are many problems with the handling of AIG but it all starts with the initial decision to do something as opposed to nothing. Government has no business bailing out anyone and the decision is made all the more galling by making everything a secret.

Note that the Fed is picking winners and losers. There are other creditors of AIG who might have a better claim on its assets than who the Fed is picking. Remember that the Fed promised transparency. Instead, we have gotten noting but lies and secrecy from Bernanke, Paulson, and Geithner every step of the way.

Words cannot begin to express my disgust of the lies and secret shenanigans of the Fed and Treasury.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Cube Steak's Resurgence With Sinking Economy

Beef sales are up 3% but cube steak sales are up 10%. It's a fitting tribute to the economy according to the New York Times article Turning to Cube Steak, and Back to Childhood.

The cube steak is suddenly one of the hottest cuts of beef in the country, according to figures from the National Cattlemen’s Beef Association. The amount of cube steak sold during the last quarter of 2008 was up by almost 10 percent over the same period a year earlier. The overall amount of beef sold went up only 3 percent.

It doesn’t take a wizard to figure out that the economy’s swan dive has much to do with the cube steak’s resurgence. But even before kitchen budgets became tight, the cube steak had its fan base.

Through good times and bad, it has remained a wallflower among meat cuts. Old-fashioned and a little mysterious, it’s a steak without pretension, or maybe a hamburger with humble aspirations.

“Oh, I just really love them,” gushed Kathy Sullivan, 66. A Rhode Island resident, she has warm memories of cube steaks served alongside her father’s homemade piccalilli relish. Later, she pan-fried them for her own children. But only good ones, she said, made from slices of sirloin or round steak she had the butcher cube by hand.

Susan Schultz, who lives in Fort Atkinson, Wis., fondly described the slightly pink centers of cube steak sautéed in nothing more than butter and seasoned with a little salt and pepper.

“It was kind of an upgraded hamburger if you couldn’t afford steak,” said Mrs. Schultz, who raised two children on pan-fried cube steaks. “I’m going to have to have one now.”

The term “cube” can be a little murky. It doesn’t refer to the shape of the meat, which is usually beef but is sometimes made from pork, elk or other animals. Rather, it refers to both the shape of the dimples that checkerboard the surface of cube steak and the process that puts the dimples there.

Although pounding tough pieces of beef to make them more tender has a long history in the Southern and Western United States, it wasn’t until patents on mechanized cubing machines were handed out in the 1930s and 1940s that the cube steak became an inexpensive butcher shop staple.

The machines are usually stainless-steel cases with innards fashioned from rollers covered in dozens of teeth sharp enough to pierce flesh cleanly. There are top-feeding home machines with cranks that do the job, too.

It's an interesting article and although I posted positive excepts, I assure you it's not a one sided love affair. One person quoted said “I fed it to the dogs”.

Personally, I like cube steak fixed exactly like Susan Schultz in the article who sautées the steaks in butter, seasoned with a little salt and pepper. Coated in a bit of flour is fine too.

How Much For Cube Steak?

Kim Severson, the author of the article talks of paying $8 a pound for grass-fed cube steaks, and half that for conventionally raised beef. I am not sure where Kim shops but those prices are outrageous.

Traditionally cube steak is made from round and one can get round steak on sale for $2.00 to $2.79 a lb easily, and sometimes for much less. Moreover, it's a little known secret but you can buy round steak and have the butcher run it through the cuber twice for free.

You can also buy chuck roast at $1.69 or so on sale and have the butcher grind that into ground beef for free. The result is you get handpicked fresh ground chuck for $1.69 yet you might pay $2.59 or more for packaged ground chuck of questionable quality and age.

Cube Steak Recipes

For those looking beyond the simple recipes above please consider Beef Cube Steak Recipes featuring Beef Cube Steak Stroganoff, Ginger-Cinnamon Rice Cube Steak, Curried Beef Cube Steak with Sweet Potatoes, Zucchini Beef Cube Steak, Orange Braised Cube Steak, Cube Steak Parmesan, Beef Cube Steak with Mushrooms and Red Wine, and Whiskey Barbeque Beef Cube Steak.

If you insist on one more, please consider Country Fried Cube Steak with Mushroom Gravy.

Cube Steak, It's what's for dinner.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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ADP Reports February Nonfarm Private Employment Decreased 697,000

Nonfarm Private Employment Decreased 697,000 according to the February ADP National Employment Report®.

Nonfarm private employment decreased 697,000 from January 2009 to February 2009 on a seasonally adjusted basis, according to the ADP National Employment Report®. The estimated change of employment from December 2008 to January 2009 was revised down by 92,000, from a decline of 522,000 to a decline of 614,000.



Highlights

• February’s ADP Report estimates nonfarm private employment in the service-providing sector fell by 359,000.
• Employment in the goods-producing sector declined 338,000, the twenty-sixth
• consecutive monthly decline.
• Employment in the manufacturing sector declined 219,000, its thirty-sixth consecutive decline.
• Construction employment dropped 114,000. This was its twenty-fifth consecutive
• monthly decline, and brings the total decline in construction jobs since the peak in January 2007 to 1,004,000.

Sharply falling employment at medium and small-size businesses clearly indicates that the recession is spreading aggressively beyond manufacturing and housing related activities.

Medium Businesses Leading The Decline



The above chart, 4th in a series of 5 interesting charts (click on the first link above to see all the charts) shows that medium sized businesses, defined as 50-499 employees are now leading the decline in jobs lost as of summer 2008. Small sized companies (1-49) employees were hanging very tough until July 2008. That is no longer the case.

ADP vs. BLS

Here is an interesting chart showing ADP vs. the official BLS statistics.



click on chart for sharper image

The chart can be customized for date ranges and type of employment, at least in theory. I cannot get any parameters to work other than what shows on the link above.

Small Business Report

The ADP Small Business Report , a subset of the national report notes the following.

• Total small business employment: -262,000
• Goods-producing sector: -116,000 small business jobs
• Service-providing sector: -146,000 small business jobs

“Employment among small-size businesses, defined as those with fewer than 50 workers, declined 262,000. The magnitude of this month’s job loss indicates that the recession has spread aggressively to small-size businesses. Earlier in the recession these businesses had demonstrated more resiliency than medium and large-size ones, but that is no longer the case.”

Look for another grim employment report on Friday, perhaps in the range of 600,000 to 800,000 jobs lost. This will be the 14th consecutive months of jobs lost, and the numbers appear to be accelerating to the downside with no end in sight.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Bernanke Angry AIG Operated Like A Hedge Fund

In a case of the pot calling the kettle black, Bernanke Says Insurer AIG Operated Like a Hedge Fund.

“If there is a single episode in this entire 18 months that has made me more angry, I can’t think of one other than AIG,” Bernanke told lawmakers today. “AIG exploited a huge gap in the regulatory system, there was no oversight of the financial-products division, this was a hedge fund basically that was attached to a large and stable insurance company.”

The company “made huge numbers of irresponsible bets, took huge losses, there was no regulatory oversight because there was a gap in the system,” Bernanke said. At the same time, officials “had no choice but to try and stabilize the system” by aiding the firm.

My Comment: By attempting to bail out Fannie Mae, Freddie Mac, AIG, Citigroup, Bank of America, and Merrill Lynch, the Fed is making irresponsible bets, taking huge losses, and has no regulatory oversight. There is a huge gap in the system, and that gap is the Fed itself.

AIG is getting as much as $30 billion in new government capital and relaxed terms on its bailout announced yesterday.

In another sign of tighter regulation to come, Bernanke said supervisors should have authority to bar new financial products that may be destabilizing to markets.

My Comment: The first thing supervisors should do is eliminate the Fed for its role in destabilizing the markets.

“AIG is a huge, complex, global insurance company attached to a very complicated investment bank, hedge fund that was allowed to build up without any adult supervision,” U.S. Treasury Secretary Timothy Geithner said today during testimony to the House Ways and Means Committee. Because of “the risks AIG poses to the economy,” he said, “the most effective thing to do is to make sure the firm can be restructured over time.”

My Comment: The most effective thing to do is let AIG go under.

“Whether we like it or not, America’s federal policy is now driven by the need to avoid another Lehman,” said David Kotok, chairman and chief investment officer of Cumberland Advisors Inc., in Vineland, New Jersey.

My Comment: There is no need to prevent another Lehman. Instead, there is precisely a need for more Lehmans. The sooner we stop trying to prop up failed institutions, the sooner the economy recovers. This is the lesson of Japan. Kotok badly needs a history lesson.

Bernanke said the revised bailout gives taxpayers “the best chance” of eventually recovering “most or all of the investments” the public has.

My Comment: There is no chance of recovering the $163 billion taxpayers have wasted bailing out AIG and Bernanke knows it.

Banks relied on AIG’s financial products unit to back about $298 billion of assets through derivative contracts at year-end, making the firm a “systemically significant failing institution” that has to be propped up, the Treasury said.

My Comment: Bernanke ought to name the banks being bailed out on the other side of those $298 billion in derivatives. And the amazing thing is even with that $163 billion going Goldman, Citigroup, JPMorgan or whoever, and even with a further $300 billion in guarantees to Citigroup and another $100 billion in guarantees to Bank of America, the banking system is still insolvent.

“We’re doing our absolute best in partnership with the Fed and Treasury to unwind the very issues that Chairman Bernanke is talking about in a way that preserves systemic stability and pays back taxpayers,” said Christina Pretto, an AIG spokeswoman.

AIG has reduced the number of bets made by the financial products unit that sold credit-default swaps by more than 25 percent since October and cut expenses by “ hundreds of millions” of dollars, she said.

My Comment: Lovely. Taxpayers have shelled out $150 billion and AIG has only reduced its derivatives by 25%. Pretto has some gall to suggest taxpayers will be paid back.

AIG’s Fourth Rescue May Not Be Last

Taxpayers can expect to shell out still more as analysis shows AIG’s Fourth Rescue May Not Be Last.

U.S. taxpayers may not be done bailing out American International Group Inc. after the head of the Federal Reserve said a fourth rescue of the insurer was needed to keep the financial system from failing.

“We’re not done with AIG by a long shot,” said Phillip Phan, professor of management at the Johns Hopkins Carey Business School in Baltimore. “The problem is we still don’t know the extent of the risk AIG has. We don’t know where the bottom is.”

The rescue, which now leaves taxpayers on the hook for $163 billion at AIG, a government official said, was raised after the New York-based company reported a $61.7 billion fourth-quarter loss on March 2. AIG still has billions of dollars in unrealized losses on assets and faces declining revenue on premiums because of the slump in commercial insurance and the company’s struggle to attract new business.

Bernanke told the Senate Budget Committee yesterday that because AIG has so many counterparties, its failure “would have had very adverse effects on the banking system.” The company’s growth in risky markets is attributable to a lack of regulation, he said.

The insurer will probably need more government funds to cover contract liabilities and declines in asset values, according to Sean Egan, president of Egan-Jones Ratings Co. in Haverford, Pennsylvania. At the end of December, AIG had $27 billion in unrealized losses on swaps, options and forward contracts and $25 billion in pretax gross unrealized losses on bonds and equity securities. Credit-rating downgrades on structured finance products may also boost losses, Egan said.

“We expect the U.S. will continue to support AIG until it is no longer too big to fail,” Egan wrote in a March 2 report.

More Hedge Fund Insanity

Inquiring minds are reading Ackman’s Pershing Square Target Fund Fell 33.3% in February.

William Ackman’s hedge fund that invests solely in Target Corp. fell 33.3 percent in February, bringing the loss since inception to 93 percent, according to an e-mail sent to investors.

The decline in Pershing Square IV fund was more than three times that of Target shares in February. Ackman made his bet using options rather than the underlying stock, which can magnify gains or losses on an investment. Target tumbled about 9 percent last month.

Ackman last month told investors seeking redemptions that they would get their money back in March.

Ackman, 42, started his fund investing in the Minneapolis-based retailer in 2007 with $2 billion. A call to his office wasn’t immediately returned.

Hedge Funds typically take 2% of assets (annually) and 20% of profits.

In this case there were no profits. However, assuming the 2% figure is accurate, Ackman made a veritable fortune driving his target fund to a 93% loss. Not to worry, investors will "get their money back in March", whatever is left of it.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Stop The Seller Funded Down Payment Assistance (SFDPA) Scam

Aaron Krowne at Implode-O-Meter has asked me to help stop the Seller Funded Down Payment Assistance (SFDPA) scam.

Barry Ritholtz at the Big Picture, Dr. Housing Bubble, Patrick.Net, Blown Mortgage and the Mess That Greenspan Made have already written about this scam, so I am risking the dreaded "piling on" penalty but here goes.

In a Statement On "Seller-Funded Downpayment Assistance" Loans Aaron writes:

In SFDPA, a third party arranges for the seller to make a "donation" to the buyer (through the third party) equal to the FHA mandatory 3.5% downpayment, which is then used for the purpose of the downpayment, in direct violation of HUD policy. This means that the buyer does not make a true downpayment born of personal sacrifice, undermining its purpose. In the end, this is the same sort of "100% financed" lending that was a major contributor to the collapse.

In specific:

The home price is typically inflated. As a consequence, the borrower is likely to immediately start out with negative equity. Negative equity has been found to be the leading cause of foreclosure

The FHA has found that SFDPA results in losses running at a rate of 2-3 times normal FHA loans

SFDPA is a breeding ground for "straw buyer" fraud, which is now known to have been rampant amongst failed loan categories (especially subprime). SFDPA "legitimizes" the markup-and-downpayment-launder process which is central to most straw buyer scams.

I agree with Aaron's conclusions.

Furthermore, If HR 600 passes, seller-funded downpayment FHA loans are likely to be abused to an unprecedented level in what is less of an attempt to boost the housing market than a money grab by the real estate complex and the seller-funded laundering companies at taxpayers' expense.

Finally, loopholes are likely to be abused by banks to dump massive amounts of REOs at marked-up values, as Aaron points out in Misleading LA Times Article Distorts SFDPA Program.

Aaron has a Campaign To kill HR 600 with links for how people can help by contacting Congress to voice their opinion on this monstrosity.

Aaron writes "This bill is small enough that we have a real chance of rallying enough support to stop it. However, it will be outsized in terms of its damaging impact if it passes."

Those interested in stopping this ridiculous bill from passing can follow the above link and take appropriate action.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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GM Leads the Way with a 53% Sales Plunge

Congratulations of sorts go to GM for its industry leading sales effort. Please consider GM’s 53% U.S. Sales Decline Leads Industry’s February Plunge.

General Motors Corp., surviving with federal loans, said its February U.S. sales plummeted 53 percent as the recession pushed industrywide purchases toward the lowest in almost three decades.

Industry sales at last month’s levels make it more challenging for Detroit-based GM and Chrysler LLC to become profitable and pay back $17.4 billion in U.S. loans. President Barack Obama’s auto task force may approve as much as $21.6 billion more aid for the two automakers and support for the thousands of companies that supply car manufacturers with parts.

GM’s February sales of cars and light trucks fell to 126,170 from 268,737 a year earlier, the automaker said in a statement. That included declines of 69 percent for Hummer, 59 percent for Saab and 57 percent for Saturn, three units the company is seeking to shed.

At Ford, sales of cars and light trucks dropped to 99,050 from 192,178, according to a statement from the Dearborn, Michigan-based company. The sales were hurt by a 55 percent decline to 23,614 for its F-Series pickup trucks. Sales for the Volvo unit, which Ford wants to sell, were also down 55 percent.

Toyota reported a decline to 109,583 from 182,169. Sales for the Toyota City, Japan-based company were dragged down by declines of 60 percent for its Tundra large pickup and 51 percent for the Yaris small car.

Honda said deliveries fell to 71,575 from 115,397, and Nissan said its sales fell to 54,249 from 86,219.

Volkswagen AG said February sales for its namesake brand declined 18 percent to 13,660. Daimler AG said sales of its Mercedes-Benz and Smart vehicles fell 21 percent to 15,614. Bayersiche Motoren Werke AG’s U.S. sales were down 35 percent to 15,805.

Hyundai Motor Co., South Korea’s largest automaker, said it sold 30,621 vehicles last month, a 1.5 percent decline from a year earlier. In January, Seoul-based Hyundai was the sole major automaker to post a gain in U.S. sales.

Seeking To Shed Hummer, Saab, Saturn

What's with this seeking to shed nonsense? Just do it. GM needs to halt operations on all three. The brands are worthless. In fact they are less than worthless. GM has never in history returned a profit on Saturn.

How does GM do it? Volume, Volume, Volume. Volume on Hummer, Saab, and Saturn needs to be zero.

For more on this month's auto woes, please see Ford Sales Decline 48%, Toyota 32%, Honda 21%, Nissan 35%.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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