After the much awaited transition of power, changes are underway in all facets of the American community. One of the changes that we can believe in, as his campaign suggested, is in the car industry. But does Obama bring good news or otherwise?

“Everybody, from labor to management to creditors to shareholders, giving something up,” stressed Obama. He thinks that shared sacrifice among every industry including the car industry would have to be considered.

Ironic as it may sound, Obama has his own reasons. Automakers would have to wait and see what happens because this may mean that tougher conditions on federal loans will be imposed in his administration. To backtrack in Bush’s administration, he allowed automakers to get a specific loan so that they can keep up in spite of the recession. These loans had strict conditions that involved time tables as well.

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The US Senate has decided to approve $350 billion more of bailout money for the automobile industry. The budget, which is the second round of federal funds, is set to be released this year.

Sources say that the federal funds will be used to provide loan grants to automotive suppliers, auto finance companies and automakers.

The first $350 billion funds were released to fund emergency loans to automotive companies such as Chrysler LLC an General Motors.

The second round of $350 billion was released after aids to new President Barack Obama ensured that the funds will strictly be controlled, insiders say.

Obama designee National Economic Council Chairman, Larry Summers, said in a letter that the second $350 billion funds will not be allocated to industrial policies. He also said that the automobile companies will only receive the additional aid provided that they have a concrete reconstruction for long-term viability.

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During a recent speech engagement in front of the joint session of the U.S. Congress, President Barack Obama holds accountable the car manufacturers for their bad practices that pushed them to the brink while fighting the current recession.

The US President promised though to help them regain their grounds to be able to compete again and win the auto industry. Obama also pinpointed the millions of jobs depending on car manufacturing.

The Obama led government is taking actions to help revive the ailing car industry. The US President backed up the plans of former president George W. Bush in pushing for the emergency loans amounting to $17.4 billion to GM and Chrysler LLC.

The federal government has activated several taskforce to study the restructuring plans of the car manufacturers which are asking for an additional loan of $21.6 billion. They are also looking into the call for help coming from suppliers amounting to $18.5 billion.

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In the US, two factors pivot researches for alternative car fuel blends this year: the fast decline the world’s Petroleum content and the deterioration of air quality in all of US airport vicinities.

NASA (National Aeronautic Space Administration) worked with 11 research groups to test two synthetic fuels derived from natural gas and gasified coal. These gases were extracted using the Fischer Tropsch process. The research groups involved in this project included the US Department of Defense, the Federal Aviation Administration, and the Environmental Protection Agency.

These tests are being conducted at the NASA Dryden Flight Research Center in California. The main point of the research is to test the emission levels and performance of both alternative fuels.

It has previously been studied that synthetic fuels emit fewer harmful particles compared to standard jet fuel. This research, aside from looking into alternative jet fuels once Petroleum runs out, also considers environmental factors.

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Fritz Henderson, GM’s COO, foresees the future of the car manufacturer relying on four car brands: Cadillac, Chevrolet, GMC, and Buick. The statement was done after a strategic review of the Hummer and Saab brands.

He further discloses that Pontiac will experience significant production cuts while the Saturn line will have a different loom. GM is also collaborating with the Swedish government to help the Saab brand. Around 75% of the Saab sales is in Europe so the plan will not be a US approach.

The company will push with its plans of heavily investing on the Buick brand in China. This move will have a positive effect on the brand in the United States.

The four core brands of the auto maker comprise 83% of its sales in the United States in 2008.

The plan of the GM group revolves around the price of oil being around $130-$160 per barrel. The company forecasts oil prices to be at the level of $53 per barrel in 2009. The low oil price will be a big challenge for their plug-in vehicle, the Chevrolet Volt.

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Major car manufacturers like Ford, Toyota, American Honda, and General Motors all reported decline of sales in December 2008 as the whole auto industry suffers with sales plummeting by as much as 31%. The drop is the worst of the car manufacturing sector since 1992.

It was a picture of bad going to worse going worst for major players in the car industry. GM had its darkest dropped in sales since 1959 while Ford had their most horrible performance since 1961.

Toyota’s sale was down by more than 30 months for two consecutive months so is Nissan’s which was struggling for 4 consecutive months. Chrysler sold 53.1% lower compared to 2007.

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