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Feb 18, 2009 9:13 pm US/Eastern
Struggling Auto Industry An Opportunity For Buyers
PITTSBURGH (KDKA) ―
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GM plans to sell or phase out its Saturn, Hummer and SAAB brands.
CBS
Two of the nation's Big 3 automakers are making tough choices and calling for more help from Washington.
General Motors and Chrysler announced cost-cutting moves while requesting $39 billion in government aid.
The companies say they need the money to stay alive even though they've already received more than $17 billion so far.
The companies also filed restructuring plans with the government.
GM is calling for cutting 47,000 jobs – nearly 20 percent of its global workforce. The plan also would close five more plants and sell or phase out its Saturn, Hummer and SAAB brands.
Chrysler is cutting 3,000 jobs.
But the automakers' struggles could be a buying opportunity for consumers.
The dealers say if history is the teacher, the vehicles on the chopping block may become some of the best buys around.
"Incentives go way up which we've already seen that - maybe they'll go even higher, they're already at record highs. And two they'll support the car for the life of the car," says Rob Cochran, owner of #1 Cochran.
Buyers should quiz their dealers about that, according to Jeff Inman at Pitt's Katz School of Business.
"Buying a car now I think a little ways down the road when I'm looking to either resell that car or to get that car serviced - who's going to do those things, who's going to service my car, who's going to be willing to buy my car four, five, six years from now," he said.
"With Chrysler, you buy a PT cruiser right now you get the lifetime warranty so as long as they own the car Chrysler's going to stand behind the vehicle," Larry Winter from South Hills Chrysler said.
"Warranty service, parts will continue to be available for as long as these cars are on the road," Cochran adds. "With Oldsmobile, the parts are still being made for cars that were discontinued 10 years ago."
The fact is right now, it's a buyers market and you're in the driver's seat.
"Rebates, finance rates - all that – they are continuing to put more and more on the car to keep the product flowing cause they need to build cars," Winter said.
"Everyone knows the economy has been challenged so these manufacturers are really trying to move product," Cochran said.
But as Inman points out, there is a dark side to the GM and Chrysler plans – a Plan B and it's an ugly Plan B.
"If GM or Chrysler go into bankruptcy then all the cars they make will be giving people a reason to think twice," he said.
"If something like that happened I'm sure there would be some kind of plan that the government would work with GM on and we'd move forward from there," Cochran said.
"I'm really positive about what they got planned, the way the company is going to come out of this we're going to be a better leaner company," Winter said.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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