We have heard a lot of news over the past 12 months about the slowing economy and the effect it is having on major American automakers like Ford Motor (NYSE: F) and General Motors (NYSE: GM), but how are some smaller overseas automakers performing? As you may have guessed, the pain is not solely being felt by American automakers, and several European automakers are taking some measures to offset the slowdown.

PSA Peugeot Citroen SA, France's biggest carmaker, warned it expects a decline of 4% for West European sales this year, while Fiat SpA, Italy's biggest automaker, announced it plans to shut Italian plants on concerns about soaring record oil prices and increased inflation.

Hurt by declining consumer spending, Fiat saw its sales plunging 16.5% in June. But this was not the worst and Peugeot warned about "an even greater slowdown" for European demand in the second half of the year. "The rest of the year is going to be a disaster for European manufacturers,'' Stephen Pope, London-based chief global market strategist at Cantor Fitzgerald Europe, stated in a report on Bloomberg.

Toyota Motor Co.'s (NYSE: TM) Prius hybrid is by far the world's most successful hybrid vehicles, with sales numbering over one million units. In addition to the great gas mileage these gas/electric vehicles provide, could these cars become even more efficient? According to Toyota, that's already in the works.

The Japanese automaker was featured in Japan's Nikkei newspaper yesterday as saying it will begin installing rooftop solar panels on its next-generation Prius vehicles. Starting with the high-end model, these solar panels will be used to power the air conditioning systems of the car. According to the Nikkei report, these solar panel arrangements may start showing up as next spring.

If Toyota can pull this off, it will mark yet another milestone in automotive history: including solar panel technology in a mass-produced car. It could also set off a trend to power automotive subsystems directly from solar power instead of internally generated power from the gas engine/alternator system or the onboard electric motor. Solar power is abundant and free -- why not use it as much as possible?

Now, where are the other automakers with this? General Motors (NYSE: GM)? Ford Motor (NYSE: F)? A show of hands, please.

Before the bell: Futures lower ahead of Bernanke speech, Alcoa; Indymac plunges

Industrial conglomerate Siemens AG (NYSE: SI) said Tuesday it would cut 16,750 jobs, or 4.2% of its global work force of 400,000 people. Most of the cuts would be administrative jobs. Siemens is attempting to cut nearly $2 billion in costs by 2010 as a slowing economy is affecting its business.

Office Depot (NYSE: ODP) shares are sinking 13.5% in premarket trading after the office-supplies retailer said that "pressure from weakening business conditions" has hurt second-quarter sales, and forecast a nearly 10% drop in second-quarter North American same-store retail sales.

General Motors (NYSE: GM) and Ford (NYSE: F) shares are declining 1.5% and 2.2% respectively in premarket trading despite reporting strong first-half sales in China, where the auto market is booming. GM said sales of its brands rose 12.7%, and Ford said its sales rose 21%.

General Motors (NYSE: GM) may be faced with cutting thousand of white-collar jobs and selling or closing some of its brands. According to The Wall Street Journal, "Management may also present the board with options for raising additional cash to help GM make it through the downturn."

All of these plans, except raising money, may be a little late for shareholders. GM's stock has dropped over 75% from its 52-week high and now trades just above $10. Changing over from a product mix that is heavy in trucks to one that emphasizes light sedans with good gas mileage could take the better part of a couple of years. While GM may make money outside the U.S., that does not offset huge losses in its home market.

GM was caught flat-footed when oil prices spiked up. That might be forgiven, if competitors like Honda (NYSE: HMC) had not made certain that they had large numbers of fuel-efficient vehicles in their product mix. GM must now attack a market that is already occupied by successful competition.

With a $6 billion market cap, if GM has to raise $10 billion, the stock price is going way, way down.

Douglas A. McIntyre is an editor at 247wallst.com.

TheStreet.com's Jim Cramer says beyond the long tradition, it's what we need now as a nation.

How did "bailout" become such a curse? The U.S. has a long history of bailouts, the big ones being most successful. The U.S. government saved Lockheed (NYSE: LMT) (Cramer's Take) in 1974 -- we need all the competition in military procurement we can get, considering how precious little of it there is -- so it's hard to judge that one a loser. The feds profited from the Chrysler bailout five years later .Not just profited, but had a huge success. The Mexican bailout in the 1990s saved that country's financials and gave the U.S. a tidy profit. The Resolution Trust bailout worked perfectly in restoring the banking system at a small cost, in retrospect, to the chaos we could have had.

Yet here's JPMorgan (NYSE: JPM) (Cramer's Take) taking on a lot of risk, in retrospect, given the junk nature of Bear's portfolio, and there's a tremendous amount of hand-wringing about it?

I say get used to it. General Motors (NYSE: GM) (Cramer's Take) and Ford (NYSE: F) (Cramer's Take) can't cut their way out of their jam, not with the F Series down 40% and GM still paying more for its labor force than it thought would have to. Both have strong, salvageable franchises, but they need capital, a la Chrysler in 1979. I think the feds should give it to them with contingencies that allow the U.S. to profit from any rebound.

U.S. stock futures were mixed early Monday morning after the long holiday weekend to start a week that is also set to kick off second quarter corporate earnings. While oil weakness and the dollar strength helped the mood on the Street, there is much concern over earnings.

U.S. stocks ended mixed on a short trading day Thursday. The Dow Jones Industrial Average climbed 73 points, or 0.65%, but it wasn't enough to pull it out of bear-market territory it fell into during last week. The S&P 500 also climbed 1 point, or 0.11%, but the Nasdaq composite fell 6 points, or 0.27%, on Thursday.

No economic data is scheduled for release Monday, so investor will likely continue to focus on energy prices while anticipating the beginning of earnings season. Oil prices fell more than $2 a barrel Monday to just over $143 a barrel as the dollar strengthened. Still, the dollar is expected to resume its decline and as Mideast tensions continue, traders don't expect oil to decline much further.

Meanwhile, investors in general don't anticipate corporate America to deliver good earnings. The season will officially kick off Tuesday, when Alcoa Inc. (NYSE: AA) reports after the close. General Electric (NYSE: GE), reports Friday. The question seems to be more how bad results will be, and if they would signal a bottom from which stocks could recover.

When my wife and I were in Europe a few years ago, we saw the "Smart Cars," vehicles so small that they look like they could have come off an assembly line at a toy plant. The reason we were told that they were so popular in Europe was that gas was expensive and people there did not need to drive huge distances over crowded highways. Well, I thought these sort of vehicles would never sell in the U.S. where we like our cars as wide and free as freeway at the crack of dawn.

Thanks to $4 gas, my theory has been proven wrong.

General Motors Co. (NYSE: GM) may start producing the Chevrolet Beat in the U.S., a vehicle which according to Bloomberg News is more than a foot shorter than any other vehicle and whose 40-mile-per-hour fuel efficiency is only topped by hybrids. The new service points out that the the automaker has little choice because its current market value is SMALLER than Matchbox car maker Mattel Inc. (NYSE: MAT) and a 10th of what it was in 2000. It only took GM billions of dollars in losses but hey better late than never, right?

Don't get be wrong. I have nothing against the Chevrolet Beat. Judging from the pictures I have seen online. it looks okay, not my cup of tea, but then again that's why we have chocolate and vanilla. Thanks to Al Gore, I understand about global warming and feel guilty that I own the small SUV that I drive. Nonetheless, the Chevrolet Beat and other cars like it scare me.

I was actually in Detroit on Monday. I'm not going to write about the urban decay and the deterioration of the city. Many have researched and documented this far better than I ever could. But even in my short three-hour visit, the evidence was all too clear. Personally, I think Detroit has more character than many other richer and far more maintained and manicured cities. Even abandoned and in shambles, many of the buildings are architectural gems. Perhaps because one can still see the glorious past through the ruins, that it is so affecting. Or, as the website names them, they are The Fabulous Ruins of Detroit.

It is for this reason that the recent talk of bankruptcy for one of the Big Three has been so disturbing.

This week has been very busy for automakers, starting with June car and truck sales reported on Tuesday. General Motors Corporation (NYSE: GM) reported an 18.2% drop in sales, which was actually better than expected, and Ford Motor Company (NYSE: F) a drop of 27.9%. Meanwhile, Japan's Toyota Motor Corporation (NYSE: TM) posted a 21.4% sales decline. GM shares actually got a boost from the sales figures, but that didn't last long.

TheStreet.com's Jim Cramer says he has no confidence in these hated names, and neither should you.

The financials are flying -- there are finally bids for most of them underneath. Many, including Lehman (NYSE: LEH) (Cramer's Take), are running. What a great time to put the negative cards on the table and put the negatives in perspective. That's right, let's look at the financial Achilles' heels. What could go wrong? In other words, here's the companion piece to Doug Kass' positive conversion. Here's what I am worried about even as Doug thinks everyone's too worried and the bottom is being put in.

To get started, let's look at what's not causing the endless declines in the stocks -- don't worry, we will get to the financial dirty dozen when I finish this preamble.

First, it ain't earnings. Earnings aren't going to be that great. But that's why the S&P is at 14 times. It can go to 12 or 11, or most likely stays at 13-14, but the E goes down (earnings).

Second, it ain't oil. The stocks sensitive to the increase in oil have room to go down, but the price of oil is being factored in slowly but surely.

Third, it isn't inflation or recession. Those two are being baked in each day.

Stock futures were mixed early Thursday morning, the last and shortened day of trading this week -- markets will close at 1 p.m. EDT. Oil, again, has reached new highs as investors awaited the ECB decision on interest rate. Wall Street is also anxious about the upcoming jobs report, especially after Wednesday the ADP employment figures were worse than expected. Today's session will likely be choppy.

Despite starting the day on a positive note Wednesday, U.S. stocks ended sharply lower after the ADP employment figures damped mood on the Street. Also, crude oil prices rose sharply and an analyst warned that General Motors (NYSE: GM) may have to consider bankruptcy at some point; GM stock closed below $10 a share. The Dow industrials tumbled 166 points, or 1.46%, entering bear territory -- down over 20%, the Nasdaq Composite lost 53 points, or 2.32%, and the S&P 500, fell 23 points, or 1.82% - the only major index still not in bear territory.

Soon, at 7:45 a.m. EDT, the European Central Bank will announce its decision on interest rates. The ECB is widely expected to increase rates, which in turn could further weaken the dollar, driving oil prices higher.

Then, at 8:30 a.m., the Labor Department will release the June payroll figures. Economists expect the unemployment rate to fall to 5.4% from 5.5% last month, but job losses are expected to rise to 60,000 positions, up from 49,000 in May, according to Briefing.com.

At 10:00 a.m., the June ISM services index will be released, and another decline is expected.

General Motors Corporation (NYSE: GM) investors, as well as auto industry trackers, will want to read Jonathan Rauch's "Electro-Shock Therapy" in the July 2008 issue of Atlantic Magazine. Mr. Rauch was given unprecedented access to all personnel involved in GM's company-wide commitment to have a market-ready electric car by late 2010. GM personnel note the Chevy VOLT, as the car is named, will not be a hybrid per se, but will be the first mass market electric car with a range of 40 miles per charge, enough to cover the daily commute of 75% of American workers. The car's small gasoline engine will be used to recharge the battery, while only electricity will be used to power the wheels. GM is trying to wow consumers by manufacturing an affordable electric car that will sever the connection between driving and the gas pump.

GM lost the engineering and publicity wars on electric cars to Toyota's Prius years ago. Toyota has been eating GM's lunch ever sense. According to GM's VP Bob Lutz, it's payback time. Using the same rhetoric President Kennedy used to launch the Apollo space program and race to land on the moon, GM has sectioned off the Volt division and given it complete decision-making and spending authority to reinvent not only the electric automobile, but also the company itself. In one Volt engineer's words: "Go big or go home."

Yes, there are problems with the weight to power ratio in the battery. And yes, production of both the battery and the car body are being rushed towards production without the normal period of evaluation. But GM has staked its future on the Volt, and unlike my colleague Michael Rainey who isn't that positive on the Volt, there's reason for at least cautious optimism, a quality currently in short supply coming out of Detroit.

After a brief refreshment, today just ended up being ugly rather than what many were hoping would be a boring day. Today's action was likely due more to analyst concerns, but a late-day news report on a security breach scare at LAX airport may have added stress to a trading day that would have otherwise been quiet. The markets are grossly oversold, but there just seems to be very few reasons for traders to hit their "BUY" buttons on keyboards.

These are UNOFFICIAL closing bell levels for major index readings:

• DJIA 11,218.77 (-163.49)
• S&P500 1262.24 (-22.67)
• NASDAQ 2251.46 (-53.51)
• 10 YR T-Note 2.959% (-0.033%)
• 52-WEEK LOWS
• Top 10 Analyst Calls

General Motors (NYSE: GM) was the daily disaster due analyst call. Merrill Lynch downgraded the stock to Underperform and noted that "the chances of bankruptcy aren't impossible." 24/7 Wall St. noted the same weeks before, and we even posted odds on what the chances are that major auto or airline companies would have to file for protection by the end of 2008 to early 2009.

It probably should come as no surprise, but June was a tough month for automakers, and all signs are pointing to more troubles out on the horizon.

All but one major automaker saw their sales drop last month, with Honda Motor (NYSE: HMC) being the sole exception. For the month, Honda actually had a 1% year-over-year sales growth, which given the current market place was an exceptional feat.

So just how bad was June for the automakers? Pretty bad. During the month, combined auto sales fell to 1.19 million vehicles sold, a 266,000 decline from the same period last year. This just continues the trend that we have been seeing all year, amounting to roughly a 10% sales decline during the first half of the year.

MOST NOTEWORTHY: Concur Tech, Groupe Danone and General Motors were today's noteworthy downgrades:

• Piper downgraded shares of Concur Tech (NASDAQ: CNQR) to Neutral from Buy after transferring analyst coverage, as they believe potential upside to estimates is priced into shares while competitive concerns from American Express (NYSE: AXP) are not.
  
• Morgan Stanley downgraded shares of Groupe Danone (OTC: GDNNY) to Equal Weight from Overweight to reflect reduced visibility in the company's core business.
  
• Merrill downgraded General Motors (NYSE: GM) to Underperform from Buy citing the company's deteriorating US auto sales, resulting in a higher cash burn, which could result in a larger than expected capital raise. The firm believes GM capital raise could be in the range of $15 billion and notes that bankruptcy is "not impossible."

OTHER DOWNGRADES:

• Progenics Pharma (NASDAQ: PGNX) was lowered to Underperform from Market Perform at Friedman Billings.
  
• UAL Corp. (NASDAQ: UAUA) was cut to Neutral from Buy at Goldman.
  
• Lehman downgraded Apria Healthcare (NYSE: AHG) to Underweight from Equal Weight at Lincare Holdings (NASDAQ: LNCR) to Equal Weight from Overweight.

The Wall Street Journal was good enough to humiliate General Motors (NYSE: GM) CEO Rick Wagoner by pointing out that he still has his job. The company's share price is down almost 85% since he took over. The newspaper writes that Mr. "Wagoner's decision a few years ago to tilt GM's product mix more toward trucks and SUVs isn't looking good."

Fair enough. But there are two critical elements to Wagoner still having his corner office. One is that the rest of the US car industry is as bad off as GM, maybe worse. The other is that no CEO in his right mind would leave a good job to take over GM. Boeing (NYSE: BA) exec, Alan Mulally, moved to Ford (NYSE: F) as the head man and he must regret the decision every day.

Wagoner is part of the "dumbing down" of the American CEO. If the man can't do well, blame it on the industry. That makes it seem that individual companies are powerless to make decisions that will put them ahead of the competition, even in tough markets.

Tell that to the guys at Honda (NYSE: HMC).

Douglas A. McIntyre is an editor at 247wallst.com.