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Posts Tagged ‘General Motors’

By Lynnette Khalfani-Cox, The Money Coach

At a time when we have our worst unemployment rate (7.2%) in 16 years, the job cuts just keep on coming.

Today the following five companies alone announced a combined total of 45,000 job cuts:

• Caterpillar, the world’s largest maker of construction and mining equipment, said it was slashing 20,000 jobs after its earnings fell more than 32%.
• Sprint Nextel, the phone giant, revealed that it would be reducing headcount by 8,000 positions in the first quarter of 2009.
• Pfizer, the pharmaceutical company, told Wall Street it would remove more than 8,000 workers from its payroll – a move that will coincide with the company’s blockbuster $68 billion cash-and-stock deal, also announced today, to buy Wyeth, a rival drug company.
• Home Depot, the largest home improvement retailer, plans to close its Expo home-design business and cut 7,000 jobs, or 2% of its work force.
• General Motors announced that due to a drop in demand for its vehicles, it will cut 2,000 jobs at plants in Michigan and Ohio, and will halt production for several weeks at nine U.S. plants over the next six months. About a month ago GM temporarily closed 20 factories.

In 2008, 2.6 million jobs were lost, with 11.1 million unemployed at year end, according to a January report from the Bureau of Labor Statistics. The U.S. had not seen those many jobs lost in one year since 1945, when 2.8 million jobs were cut.

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By Lynnette Khalfani-Cox, The Money Coach

I find it quite interesting that more and more foreign auto makers are feeling America’s pain. And they’re trying to capitalize on the angst of the American consumer too.

Recently, Hyundai announced a new deal to ease the minds of Americans worried about layoffs. Under the deal, Hyundai will allow car buyers who get a pink slip within one year of purchasing a Hyundai to return the vehicle.

Hyundai offers return policy if you lose your job

Today, I heard a radio ad from Mitsubishi roasting the $700 billion federal bailout package for the financial industry. The ad said that while Congress is busy “bailing out Wall Street” and writing a check “with 12 zeros behind it,” the Japanese auto company had a bailout plan of its own for struggling consumers. Mitsubishi is offering consumers a “Zero Down” deal and financing from Mitsubishi to drive off the lot with a new car. “All you need,” the ad said, “is your signature.”

Ad Campaigns Touch a Nerve

Both the Hyundai and Mitsubishi offers are pretty savvy marketing strategies.

Hyundai’s campaign touches a nerve considering 11 million Americans are out of a job and hundreds of thousands more layoffs are expected in the next few months. Today alone, several companies announced major job cuts, totaling nearly  50,000 lost positions, including 2,000 announced layoffs at General Motors.

Mitsubishi offers a "zero-down" deal as answer to consumer bailout.

The Mitsubishi initiative clearly plays on the fact that most Americans did not support a bailout of the financial industry, and many also opposed billions of dollars going to American auto makers. Mitsubishi – in launching this somewhat unorthodox ad campaign – is trying of course to sell more cars. But the car maker is also trying to pose its own answer to the question millions of Americans have been asking, which is: “Where is my bailout?” Needless to say, this kind of in-your-face advertising is also taking an indirect jab at competing U.S. car makers Ford, Chrysler, and GM, all of whom went to Congress asking for money with hat in hand.

So should you buy a Hyundai or a Mitsubishi if you’re in the market for a new car? That’s up for you to decide – given your own personal tastes and budget. But one thing is certain:

U.S. auto makers better act fast if they want to catch up to their foreign competitiors, and tap into Americans’ growing unease about their financial situation.

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