The “Big Three of Detroit” ask for 34,000 million to subsist

David Halpern

The “Big Three of Detroit” met the deadline set by the Democratic congressional hierarchy last month to present their restructuring plans and justify how they would use the help of Congress.
In summary, the three companies reiterated their commitment to a reduction in executive salaries, the refinancing of debt, union concessions, the manufacture of hybrid and electric cars, and the elimination of some brands.

The CEO of Ford, Alan Mulally, who received a salary of two million dollars and a total compensation of 21.7 million dollars in 2007, kept his commitment to earn a dollar a year if they grant the loan.
GM CEO Rick Wagoner promised the same, while Chrysler’s Robert Nardelly has already received this salary. In addition, GM and Ford will continue their plans to sell their fleet of corporate aircraft.
The president of the House of Representatives, Nancy Pelosi, warned today that the bankruptcy of the sector “is not an option” and predicted that there will be some type of intervention.
“I think there will be an intervention, a bankruptcy puts everyone at a disadvantage, including our economy, so that is not an option,” Pelosi told reporters.
The money, he said, would have to come out of new loans or the financial rescue of 700 billion dollars already approved for Wall Street, something that the White House opposes- Shi624 installment loans for bad credit.
If an agreement is made, the Senate would vote for the car rescue plan on December 8, said Senate Majority Leader Harry Reid. But before the plans will pass through the screening of each audience on Thursday and next Friday.

As a whole, the “Big Three of Detroit” requested 34,000 million dollars in loans and lines of credit, which exceeds by 9,000 million the amount that the congressmen have been negotiating.
The Democrats demanded the delivery of the plans before studying a possible loan of 25,000 million dollars. The first brave was Ford, who requested a loan of up to 9,000 million dollars, which would only be used if his situation worsens. Ford, which has recorded annual losses since 2005, expects to produce earnings for 2011.

Its plan foresees, among other elements, an investment of 14,000 million dollars in high technology in the next seven years, an increase in the manufacture of small cars, hybrid vehicles and electric powered by a battery (BEV, in English).

would serve as a line of defense or an important safeguard against deteriorating conditions

while we implemented a transformation in our company,” Mulally explained.
GM, which detailed its plan in 37 pages, requested a loan of 12,000 million dollars and a line of credit of 6,000 million dollars to reach 2010 and which would be used if market conditions deteriorate.
This plan foresees for 2012 a reduction in the workforce of between 20,000 and 31,000 employees, the possible elimination of the Pontiac and Saturn brands, and the closure of some 1,750 dealers and nine facilities.

Chrysler requested a $ 7 billion “bridge loan” to respond to its liquidity and capital crisis and to continue its long-term restructuring and viability plan.
The company wants the loan no later than December 31 and affirmed that federal aid -according to Nardelli, “the least expensive of the options” – will serve as a “guarantee” for its suppliers, customers, and employees. Chrysler also expects a substantial reduction in operating expenses and benefits for employees.

Chrysler expects that, after making an initial payment of 1,000 million dollars to

the loan granted by the Government, “the company will have approximately 12,500 million dollars in cash for 2012, which will provide a solid foundation to continue paying federal loans”.
The executives of the three companies, who traveled to Washington by car when they did it in private planes last month, again warned of the situation facing the sector, aggravated by the global financial crisis.

Automobile sales suffered a 37% drop in November, to its lowest annual rate in 26 years, due to the recession and the credit freeze.
The Union of Workers of the Automotive Sector supports the efforts of the companies, insisting that, without the friendly hand of Congress, GM could declare bankruptcy before Christmas.

Real estate finance: credit by the insurer

David Halpern

Mortgage loans have always been the domain of banks. But now they get competition from insurers. These convey KfW promotional loans even directly.

He is looking for a real estate finance, is usually a bank, to extend the credit. But increasingly mix insurers and not only in the traditional way of lending a life insurance policy: “The share of real estate loans that have been completed in an insurer has increased compared to the same period earlier this year,” says Heidi Mueller of Interhyp , the largest broker of real estate loans in this country. “This is especially true for long-term loans with a duration of 20 years and more.”

The competition between banks and insurers continues to increase: Customers can receive directly from an insurer for mortgage lending business KfW loans in early April. So far the award of a KfW loan was possible only through a bank or a building society, says the Association of German Insurers (GDV). From the perspective of the insurer doing business with mortgages many advantages: There are well calculable investment with stable earnings.

slight variations

In addition, the property market in Germany has smaller fluctuations to offer than the capital market. “Even insurers must invest their clients’ money, and since the real estate sector is an important anchor for them,” says Max fall of the FMH financial advice. “Many insurance companies use the low-interest rates,” says Herbst, “insurers must provide their customers with a legally guaranteed interest rate of 1.75 percent or more. If they complete mortgage transactions with customers over 20 to 30 years, they will immediately receive interest rates of over 3 percent. “Since, in the debt crisis and low-interest rates hardly an investor would currently invest in the long term, are the long interest rates for homebuyers from the perspective of insurers ideal.

Financing: All eggs in one basket?

Meanwhile, the pressure on margins has increased in the business of mortgage lending to banks – to providers like Interhyp are increasing their contribution, will give customers real estate loans of about 300 vendors. In addition: “The capital requirements for banks have increased, in particular, due to new regulations such as Basel III,” says Thomas Schnarr, bank manager of the consulting firm Oliver Wyman. “The banks have to hold more capital when they make loans, such as in real estate financing.”

Offers only for three to six months

From the perspective that wants to take out a loan for their building or buying a home of customers, the competitive pressure in the industry is an advantage, there are better conditions for them- bang, I found it! For customers, it makes anyway not much difference whether they pay off their loan at a bank or an insurance company. but many insurers are less aggressive in marketing that advertise low-interest rate offers to mortgage customers as online banks. However, Müller reports of Interhyp, evacuate some insurers relatively long periods one in which they do not take fees for the provision of a real estate loan.

Usually, these offers are only valid for three to six months. “But there are insurers who take up to 12 months no fees for the provision of a loan.” This may be useful not only for homeowners who do not yet foresee exactly when they need the money. Even customers who want to replace a loan of forwarding loans and want to secure low-interest rates benefit. The longer the allocation of a loan is still outstanding, the higher the cost. But if the deployment costs up to 12 months eliminated, in this case, the choice of an insurer may be beneficial.

Until the classic banking

According to Max, autumn insurers have long penetrated into the traditional banking business, these include offers such an account for the daily allowance and the fixed deposit. For example, if a life insurance policy will be paid to a customer, the money usually goes to a bank account. The bank finds out and has the interest to sell the customer a new investment product. The money goes, however, to an account that the insurer offers to the customers, the insurer is able to advertise other products such as a pension.

Despite growing competition, it is unlikely that insurers will trump the banks in real estate financing. According to the GDV, life insurers had awarded end of 2011 mortgage loans for about 50 billion euros, equivalent to 6.7 percent of their investments. It is also unlikely that all insurers will expand its mortgage business. Some vendors even refrain entirely sure. Other insurers who have opted got sometimes also problems: had an insurer temporarily granting real estate loans stop because of the onslaught of customers was too big.