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Ring in the new year? The party’s over for automakers

General Motors Chairman and CEO Rick Wagoner pauses before a vehicle reveal during press days at the North American International Auto Show in Detroit, Michigan, January 11, 2009.By Peter Bohan

DETROIT (Reuters) – Automakers put on a brave face at the world’s biggest auto show on Sunday, with the sales outlook bleak for the coming year and fabled firms struggling for survival despite massive government aid.

“All I can tell you is that demand is a little more robust than we expected,” Ford Motor Co sales chief Jim Farley said of January sales at the North American International Auto Show. “I would say a little, not dramatically.”

U.S. auto sales fell 18 percent in 2008 from the prior year to about 13.2 million vehicles, battered by a spreading credit crunch, U.S. recession and plummeting consumer confidence.

Most automakers expect sales to decline even more in 2009. Ford expects U.S. auto sales at 12.5 million or so at best. GM put the sales range lower, at between about 10.5 million and 12 million vehicles.

A downbeat mood pervaded the cavernous Cobo Center in the Motor City, where the only buzz inside the building was again “electric” this year — as in electric cars, gas-electric hybrids and the promise of other developing green technology.

General Motors Corp, Chrysler, Ford, Toyota Motor Corp and Honda Motor Co Ltd all updated plans to offer all-electric or improved hybrids in the next few years.

GM had garnered the limelight two years ago with the introduction of the Chevrolet Volt electric concept car, which on Sunday it again said it plans to have on sale by late 2010.

Cheering GM employees, as well as Michigan Gov. Jennifer Granholm, waved signs at the show that read: “We’re electric,” “Charged up,” “Game changer” and “We’re here to stay” as they walked ahead of the Volt.

GM has said the electric car will have a 40-mile driving range on one battery charge. Toyota announced plans for a car with a 50-mile range on one charge and Ford said plans were in the works for one with a 100-mile range — perhaps by 2011.

BUMPY ROAD AHEAD

If the mood was hopeful but downbeat inside, it was downright angry outside the hall and echoed the stormy days ahead as GM and Chrysler rush to meet terms of a government bailout by the end of March.

Detroit’s Big 3 — GM, Chrysler and Ford — went hat in hand to Congress and the White House seeking emergency aid after the first two had warned of imminent bankruptcy.

The $17.4-billion federal bailout of GM and Chrysler announced in December included fresh demands aimed at the United Auto Workers union, including making UAW wages and benefits competitive with foreign carmakers’ U.S. plants and eliminating the jobs bank, which compensates idled workers.

A group of some 50 or more workers marched up and down outside the conference center in chilly but sunny weather, chanting slogans such as “Bush says cut back, we say fight back” and holding signs including ‘No millionaire left behind’ and ‘Out of a job yet? Keep buying foreign.’

Phillip Bailey, an unemployed health-care worker who said he had come to the rally to support the auto workers, said he had heard complaints from UAW members about new concessions.

“A lot of the members of the union that I’ve met are angry at the government, the management of the auto companies and their own union leadership,” Bailey said. “There are plenty of workers who are tired of watching the leaders of the UAW roll over on important issues.”

“We have to maintain our wages, maintain our jobs and maintain our benefits,” said Brian Moore, a safety trainer at GM’s pickup truck plant in the Detroit suburb of Pontiac. “That’s supposed to be the American way.”

“The concessions that Bush wants us to make are just a slap in our faces,” said Tammy Jones, a furnace worker at Chrysler’s Hamtramck axle plant in Detroit. “People fought and died for our rights and we must fight to keep them.”

Back inside the arena, GM Chief Executive Rick Wagoner said GM was set to begin talks with the UAW this week but he stopped short of saying GM would be able to meet the specific targets for UAW concessions as outlined by the Bush administration.

“I think it’s fair to say everyone’s attitude has been cooperative,” Wagoner said.

(Additional reporting by David Bailey, Nick Carey, Kevin Krolicki, Ben Klayman, Soyoung Kim and Poornima Gupta)

(Writing by Peter Bohan; Editing by Phil Berlowitz.)



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