Auto sales increase pressure on CEOs, Congress

U.S. automakers returning to Washington this week to ask for taxpayer funds will do so in more dire straits than just two weeks ago, when their pleas were rejected.

Industry reports released Tuesday found that more Americans bought new automobiles in November than in October, but sales have fallen hard from a year ago.

{mosads}Slashed prices helped sales grow fractionally from the month before, according to industry analysts. Still, the industry experienced a drop in sales for the 17th time in the past 18 months.

General Motors was hardest hit, with sales declining a whopping 41.3 percent over the previous November. Ford reported a 31 percent drop in sales over the previous year, while analysts expected privately-held Chrysler sales to fall 40 percent.

The figures come as chief executives from GM, Ford and Chrysler prepare to testify before congressional panels later this week in hopes of securing a federal bailout.

All three companies will submit final bids for bailout money to the House Financial Services Committee and the Senate Banking Committee today.

Hearings on the proposals, which range from increasing production of popular hybrid vehicles to selling product lines and dumping debt, are set for Thursday in the Senate and Friday before the House panel.

Ford’s bid, submitted first on Tuesday morning, projected a return to profitability by 2011. Earlier this year, the company said it would not meet its goal of achieving a profit by 2009. The company is seeking $9 billion in federal loans and says it will launch a fully battery-operated van by 2010.

The company will also sell its corporate aircraft in order to raise some cash, according to the report submitted this morning. The planes were a source of embarrassment for the companies when all three CEOs arrived for their testimony last month on separate luxury planes. Ford CEO Alan Mulally will drive to the hearings from Detroit in one of his company’s hybrid vehicles.

Ford announced Monday it would go so far as to reevaluate its relationship with subsidiary Volvo. Mulally said the review would take several months; the Swedish-based automaker, which is undergoing its own restructuring, is already going through a process that would make it more independent. Volvo sales slumped 47 percent from last year, the company reported Tuesday.

Both Ford and GM have approached the Swedish government seeking financial aid, the Financial Times reported Monday. GM’s Swedish-based unit, Saab, has also fallen on hard times.

The slide in sales is affecting more than just American automakers.

Analysts projected Honda, Nissan and Toyota sales would plummet from the year before as well, but by smaller margins than the Big Three. Earlier today, Toyota and Nissan reported the biggest drop in auto sales in Japan in more than three decades, Bloomberg News Service reported.