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CEO Earl Hesterburg told the Wall Street Journal last week the charge means the company has written off the value of its GM, Ford and Chrysler stores.
"We have a Ford store in Lubbock that is very profitable, but that tends to be the exception," he said.
That little morsel was passed on to me by the Lubbock Chamber of Commerce, whose CEO, Eddie McBride, noted: "We get mentioned quite often lately."
That's encouraging news locally, but it doesn't change the complexion of the U.S.'s largest manufacturing industry.
Detroit's Big Three are hemorrhaging. General Motors Corp. could be out of funds by next summer, according to various reports.
GM is in negotiations to buy Chrysler LLC from Cerebus Capital Management LP.
GM, among other things, could end up being part of the Troubled Asset Recovery Program, better known as the $700 billion bailout ($2.2 trillion if you count the money shelled out to insurance giant AIG and others prior to the vote).
Reports say GM is seeking anywhere from $5 billion to $10 billion in government aid, whereby taxpayers could also end up owning a stake in that company as well.
I have mixed feelings about this whole auto mess because locally it affects the jobs of so many people who are employed at dealerships across this city and who are directly affected by sales and the future health of the domestic car/truck manufacturers.
The trickle-down effect of a collapsed auto industry would be felt for decades, not to mention crash and burn the economies of several states where millions of workers are engaged to make the whole industry run.
To put that into perspective, the Center for Automotive Research estimates every auto manufacturing job creates 7.5 other jobs involving parts makers and other ancillary businesses.
GM/Chrysler, which employ a combined 250,000 workers and operate 10,000 dealerships across the nation, are also weighed down by so-called cradle-to-grave legacy costs involving pension and health commitments made years ago that support hundreds of thousands of retirees.
WSJ reports GM and Chrysler pension obligations between next year and 2017 will cost a combined $78 billion, which will require the companies to set up separate trusts.
It is a messy situation, with no clear-cut answers.
One thing is for certain, the U.S. auto industry remains a major backbone of the nation's economy.
If it's left to fail, we'll all feel the tremors from that earthquake.
Find out what else is happening in local business on Chris VanWagenen's blog Open for Business at www.lubbockonline.com.
To comment on this story:
chris.vanwagenen@lubbockonline.com 766-8744
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