Chrysler Starts Production of New-Age V6
A crucial symbol of Chrysler Group LLC's prospect for survival as a car company with a future came today with hitting the start button on the Trenton, MI, assembly line for Chrysler's all-new Pentastar V6 engine.
The new-generation Pentastar eventually will supplant no less than seven dated V6 engines, Chrysler says, but its first application is a critical one: the Pentastar is the standard engine for the 2011 Jeep Grand Cherokee, due for showrooms in the second quarter.
"The Pentastar engine is a cornerstone of Chrysler's efforts to re-invent its business model with strong, brand-focused, world-class quality products," Scott Garberding, head of manufacturing, summarized in a statement.
(Read more...)
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Nissan Scoops Up Hyundai Marketing VP
High-flying Hyundai Motor America took one on the chin this week as Nissan North America Inc. pirated Hyundai Marketing Vice President Joel Ewanick -- father of the company's cogent Hyundai Assurance buy-back program -- to become the new vice president of marketing for the Nissan division.
Word is that Hyundai is not amused to lose Ewanick, whose work netted him a handful of awards last year, including Chief Marketer of the Year from Forbes, Grand Marketer of the Year from Brandweek and Advertising Age's Marketer of the Year.
Ewanick, who had been with Hyundai since 2007, held positions outside the auto industry and also worked for Porsche Cars North America Inc.
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IHS Global Insight Buys CSM Worldwide
Industry consultant IHS Global Insight announced this week it is acquiring auto-supplier data and forecasting firm CSM Worldwide for $27 million.
Global Insight delivers financial and economic analysis for a broad range of industries and entities, but its automotive-sector consultancy is one of its better-known businesses. The acquisition of CSM Worldwide will give Global Insight direct access to CSM's supplier-focused data and market information.
"CSM's strengths in the supplier market, production and powertrain analysis, and North American and Asian customer markets are highly complementary to services provided by IHS," the company said in a statement.
"Becoming a part of IHS creates tremendous opportunity and allows us to leverage the experience and expertise of both organizations to better serve our customers around the world," said CSM Worldwide founder, president and CEO Craig Cather, who will direct the combined automotive forecasting and analysis operations of CSM and IHS. "Our combined automotive forecasting business will offer clients unparalleled intelligence related to the global automotive market."
Posted by Bill Visnic at 7:09 AM under Business , Companies , News | Comments (0) | digg this | del.icio.us
Jerry York, Industry Exec, Straight-Talker and Critic, Dies at 71
Former auto executive Jerome York is dead at the age of 71 after suffering a brain aneurysm on Tuesday.
In the 1970s, York held high executive posts at Ford Motor Co. and Chrysler Corp. and was a central player in Chrysler's early 1980s turnaround, yet always was a vocal and strident critic of Detroit automakers for what he characterized as a myopic management culture.
York's seemingly perpetual prediction that Detroit would fall if it did not change essentially came to fruition with last summer's bankruptcies at General Motors Corp. and Chrysler.
York had a colorful career for someone who often was characterized as relentlessly methodical and calculating - a perception that may have cost him the CEO chair at Chrysler when legendarily emotional Lee Iacocca retired in 1992.
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Posted by Bill Visnic at 3:31 PM under Business , Chrysler , Ford , GM , In the Media , News , Personalities | Comments (0) | digg this | del.icio.us
Edmunds.com Predicts Average Transaction Price Declines
It's definitely not what a battered auto industry wants to hear after months of scrabbling for the start of a rebound, but analysts at Edmunds.com project, through the new True Market Value Predicted Price Trends metric -- that average transaction prices, even for plenty of usually strong-selling models, will fall in April.
Common sense might suggest with improving weather and the coming of spring that auto sales would tend to start increasing in April, but historically, such is not the case. Analysts at Edmunds.com note that in just the past eight years, sales have declined in April from March in seven of those years. Hand-in-hand with a decline in sales volume comes a typical reduction in average transaction prices during April.
April also is a poor springboard for auto sales because there are no long holiday weekends and the month holds, for many, the ominous prospect of filing tax returns.
(Read more...)
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J.D. Power: Vehicle Dependability Improves Industry-Wide; Caddy DTS, Porsche Tops
Overall vehicle dependability has improved 7 percent and for the first time in more than a decade, a domestic vehicle is the industry's dependability leader, says the latest Vehicle Dependability Study from J.D. Power and Associates.
Power's latest version of its widely-watched dependability study was based on 52,000 responses from owners about their experience over the last year with their 3-year-old, 2007-model vehicles.
General Motors Co.'s Cadillac DTS was the study's leader, beating all individual models with 76 problems per 100 vehicles; the industry average was 155 problems per 100 vehicles, a 7-percent improvement over the average 165 PP100 reported by owners last year.
Porsche was the overall nameplate leader at an average of 110 problems per 100 vehicles and Ford Motor Co.'s Lincoln brand climbed six rungs since last year to finish in second place with a 114 PP100 rating. Overall, 25 of 36 brands improved their rating from last year and 14 brands performed better than the industry average.
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Posted by Bill Visnic at 11:47 AM under Business , Companies , GM , Hyundai, Kia , News , Toyota , Volkswagen, Audi | Comments (0) | digg this | del.icio.us
Volkswagen Getting Cozy with New Big Stakeholder
The Volkswagen Group and its recently acquired Porsche Automobil Holding SE, owner of Porsche Cars, said this week a delegation that included the German State of Lower Saxony traveled to the Emirate of Qatar to "intensify cooperation" with the Emirate in the areas of research, development and education.
Last year, the complex financial and investment arrangement that led to VW's takeover of Porsche (after an improbable attempt at the opposite was aborted) led to Qatar becoming VW's third-largest shareholder - after the Piech family and Lower Saxony - with about 17 percent of VW. Through the deal, Qatar also holds about 10 percent of Porsche Automobil Holding SE.
Volkswagen said in a statement, "Topics discussed included possible research cooperation into new materials, energy production and storage, fuel economy optimization in engines, and the medium-term openings for establishing a vehicle materials test laboratory."
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European Car Sales Rise on Extended Scrappage Schemes
New car sales in Europe rose 3 percent in February to 1 million vehicles due largely to the return of Cash for Clunker-like programs in some countries.
Sales were up double digits in France, Italy, the United Kingdom and Spain where the programs were in effect. In contrast, sales in Germany fell 30 percent where the scrappage program had expired in late 2009.
A downturn in vehicle sales this year is predicted for Western Europe.
(Read more...)
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Saab: Getting Back to Business
Swedish automaker Saab is showing signs of life.
With its sale by General Motors to Dutch sports-carmaker Spyker complete, Saab now is setting up its North American shop away from GM headquarters, building its management team in Europe and preparing to build and sell cars again.
(Read more...)
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Despite Whitacre at GM Helm, AT&T Buys Ford Transit Connect Electric Vehicles
AT&T has agreed to buy two of the first electric-powered Ford Transit Connects, despite the 
fact that the company's former CEO, Ed Whitacre, is now CEO of Ford-competitor General Motors and, it was revealed this week, still flies AT&T corporate planes as his retirement perk.
GM, where insiders have criticized the Transit Connect for its raw simplicity, almost crudeness, has nothing to directly compete with Ford's clever compact cargo van. The Transit Connect is carving out a new segment for urban delivery vans and, largely for that reason, was voted by journalists as the 2010 North American Truck of the Year in January.
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Toyota: Some Recall Fixes Done Improperly; Prius Runs Wild?
Well underway with the colossal job of attending to more than six million vehicles recalled to address either potentially sticking accelerator pedals or wayward floormats, a Toyota spokesman yesterday admitted some of the repairs may not be properly conducted.
The spokesman, in attendance of a media event where engineers demonstrated how unintended acceleration simulated by one researcher using a Toyota electronically controlled throttle system is virtually impossible to happen in real-world conditions, said the company is aware of multiple reports of continuing incidents of unintended acceleration in vehicles that had undergone the stipulated warranty repairs.
He added that only a few of the claims had been verified, but seemed to admit not all repairs are being properly carried out, saying that for some of the vehicles reported to still be accelerating of their own accord, "it had to do with the repair not being done properly."
(Read more...)
Posted by Bill Visnic at 10:39 AM under Business , In the Media , News , Technology , Toyota | Comments (4) | digg this | del.icio.us
Ford, Porsche Make Enviro-Muscle Statements
The composting-saves-the-world neighbors won't be able to sneer (as much) at the gas-sucking muscle car in the driveway after Ford Motor Co. crowed today that a Mustang sporting the nameplate's new 3.7-liter dual-cam V6 churns out 305 horsepower - yet was just certified by the Environmental Protection Agency as earning a highway fuel-economy rating of 31 miles per gallon.
Ford says the car is history's first example of a production model that exceeds 300 hp yet also tops 30 mpg.
The number actually beat Ford's earlier expectations for 30 mpg from the V6 Mustang, the number the company was proudly promoting in January at the Detroit auto show.
(Read more...)
Posted by Bill Visnic at 10:55 AM under Analysis , Business , Ford , News , Technology | Comments (0) | digg this | del.icio.us
Notable Numbers from February Sales
The story that Ford Motor Co. outsold General Motors Co. (by 471 units) for the first month since August, 1998, has made the rounds.
But February's sales charts served up some other noteworthy numbers. Here is a selection:
Ford and GM's totals were No.1 and No. 2 in the market, and figures for the "Big 7" automakers were rounded out, in descending order, by Toyota Motor Sales USA at 100,027; Chrysler Group LLC at 84,449; Honda Motor America at 80,671; Nissan Motor Co. Ltd. at 70,189 and the Hyundai Group (Hyundai and Kia brands combined) at 58,056.
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Posted by Bill Visnic at 3:05 AM under Analysis , Business , Chrysler , Ford , GM , Hyundai, Kia , Mazda , News , Toyota | Comments (6) | digg this | del.icio.us
Even Blizzards Can't Obscure This: Ford Tops GM in February Sales
February marked the first month since August, 1998, that Ford Motor Co.'s monthly sales topped those of chief rival General Motors Co., providing an unexpected jolt in a month when the broad industry was handicapped by severe winter weather in the northeast regions of the country - and by the spillover from Toyota's safety-recall debacle.
Total U.S. auto sales for the month were 779,743 units, an increase of about 13.5 percent from year-earlier sales of 687,182, when the American automotive market was at the very bottom of one of its biggest slumps ever. And the February pace represented a seasonally adjusted annual sales rate of 10.4 million units, a number at the upper middle of most SAAR projections.
"The good underlying news is that the industry hasn't gone into reverse in terms of its recovery," said Jessica Caldwell, senior industry analyst for Edmunds.com.
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Posted by Bill Visnic at 5:50 PM under Business , Chrysler , Companies , Featured , Ford , GM , Hyundai, Kia , News , Toyota , Volkswagen, Audi | Comments (13) | digg this | del.icio.us
Another GM Management Shuffle Coming?
General Motors Corp., prodded by impatient chairman and newly named CEO Ed Whitacre to start hiking sales and market share, reportedly is planning a new management restructuring that will place more power with GM North America president Mark Reuss.
Automotive News reports Reuss will take over responsibility for sales from vice president of sales and marketing Susan Docherty, who will continue to head GM's marketing functions.
Each of GM's four remaining sales divisions -- Buick, Cadillac, Chevrolet and GMC -- will have newly appointed chiefs for both sales and marketing, with divisional sales bosses reporting to Reuss and divisional marketing heads reporting to Docherty.
Currently, division heads are in charge of both functions.
(Read more...)
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Lux and Little the Focus at This Week's Geneva Motor Show
There aren't that many true concept vehicles slated for the Geneva motor show this week. The few that are unveiled are bookended by a heavy presence in two sectors: small cars and luxury models.
Most of the attention in Geneva is concentrated on the small-car sector, thanks to continuing environmental pressure on both sides of the Atlantic. Europe continues to press with carbon-dioxide reduction measures, while financially battered U.S. customers evidence a downsizing mindset and the nation glides inexorably closer to a 2016 deadline for all automaker fleets to average 35 miles per gallon.
So while the Geneva show is mostly about what makes sense for an auto sector evolving toward less dependence on fossil fuels, the makers of luxury performance cars continue to respond with their own individual visions of how that future will be addressed. In many senses, it's becoming evident the makers of premium vehicles may in fact have more of an opportunity to capitalize -- as customers able to spend but unwilling to compromise may represent the best market to accept pricey new fuel-saving innovations.
The possibilities for synergy between the environmental movement and the luxury auto market may be almost limitless: even Ferrari, after all, is showing a hybrid-electric concept at this week's Geneva show.
(Read more...)
Posted by Bill Visnic at 12:00 PM under Analysis , Business , Companies , Featured , Ford , News , Technology , Volkswagen, Audi | Comments (0) | digg this | del.icio.us
Hyundai Spending Big To Launch 2011 Sonata; Promises Unique "Experiment" With Equus
Even in a wobbly U.S. auto market, Hyundai Motor America is pretty confident about the prospects for its all-new 2011 Sonata sedan. But not so confident the company doesn't think its best-selling model couldn't use some support, so it's rolling out its biggest budget ever to launch the new version of its best-selling model.
That would be about $160 million, said CEO John Krafcik during a media event today for the 2011 Sonata, which he said is just now reaching dealers.
"In Hyundai terms, this is really big money," Krafcik said. He compares the figure to the $80 million Hyundai recently spent to launch the Genesis premium sedan and $120 million to roll out the previous-generation Sonata in 2006.
(Read more...)
Posted by Bill Visnic at 6:24 AM under Business , Companies , Hyundai, Kia , News | Comments (0) | digg this | del.icio.us
Fiat To Build Jeeps in Russia, Report Says
Fiat's new venture in Russia with OAO Sollers plans to produce as many as 150,000 Jeep SUVs a year, the Russian business newspaper Vedomosti reported Wednesday, citing analysts who participated in a company conference call.
Chrysler, under Fiat control, is looking largely at Jeep to help it more than double its international sales to 500,000 vehicles a year by 2014.
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Posted by Michelle Krebs at 5:38 AM under Business , Chrysler | Comments (0) | digg this | del.icio.us
Dealer Association Forecasts 11.9 Million Vehicle Sales for 2010
U.S. light-vehicle sales will reach just short of 12 million units in 2010 as credit becomes more available and consumer confidence improves with rising employment, said Paul Taylor, chief economist for the National Automobile Dealers Association.
"Industry sales will increase to 11.9 million light vehicles for 2010," Taylor said at the association's convention in Orlando this weekend.
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Posted by Michelle Krebs at 9:22 AM under Analysis , Business , Companies | Comments (0) | digg this | del.icio.us
Chrysler-Fiat CEO Ditches Chicago To Do Russian Deal
In conjunction with the 2010 Chicago Auto Show, the Economic Club of Chicago was geared up for a Thursday speech from Fiat Auto Group and Chrysler Group LLC chief executive Sergio Marchionne.
Instead, Marchionne traded one snowy city for a place probably a lot snowier, bowing out of the Chicago engagement in order to attend the signing of a new Fiat venture in Russia.
Marchionne plans to be on hand tomorrow for the signing of a joint venture with Russian automaker OAO Sollers to produce Fiat cars at an existing Sollers assembly plant in Naberezhniye Chelny, located in west central Russia. Russia Prime Minister Vladimir Putin reportedly also plans to visit the plant tomorrow.
(Read more...)
Posted by Bill Visnic at 3:00 AM under Business , Chrysler , Companies , News | Comments (3) | digg this | del.icio.us
Despite Quality Woes, Toyota Turns a Profit, Admits Prius Brake Problems
Despite recalls, stop-sales orders on some of its best-selling models and other mounting quality concerns, Toyota 
announced Thursday it had earned money in the previous quarter and raised its earnings forecast for the year, saying it will return to profitability this year.
Toyota's profit forecast comes as the automaker's quality issues are increasing. Toyota's latest quality problem involves its high-profile Prius -- the world's best-selling hybrid car -- that company executives admitted Thursday has brake issues.
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Posted by Michelle Krebs at 4:07 AM under Business , Featured , News , Toyota | Comments (4) | digg this | del.icio.us
Toyota Supplier 'Has Fix' For Faulty Accelerators
Elkhart, Indiana's CTS Corp., the supplier at the unfortunate nucleus of a massive recall involving eight Toyota Motor Corp. models and that also has forced Toyota to suspend production of new vehicles, reportedly has redesigned the component and is ready to begin production of the redesigned parts, according to a report from Reuters and confirmed by Toyota in a statement.
"We have the fix. It is a much more robust pedal that is meeting the tougher specifications from Toyota," CTS Chief Executive Vinod Khilnani said.
Not yet known, however, is if the redesigned accelerator pedal module also will be the remedy for the 2.3 million existing models affected by the recall.
(Read more...)
Posted by Bill Visnic at 2:15 PM under Business , Companies , Featured , Technology , Toyota | Comments (1) | digg this | del.icio.us
Saab Revived, New 9-5 Coming to U.S. Next Quarter
General Motors Co.'s completion of a deal to sell its Saab Automobile AB unit to Dutch exotic-car 
maker Spyker will see production of the all-new 9-5 flagship begin in volume in April and U.S. sales in the second quarter.
"I'm happy for Saab employees and Saab customers all over the world," said John Smith, GM vice president, global planning and alliances.
Smith also said the Saab 9-4, a crossover based on GM's "Theta Premium" or TE platform that underpins the Cadillac SRX, also will soon be produced by the new company, although he was not specific about when the 9-4X will begin production.
(Read more...)
Posted by Michelle Krebs at 6:54 AM under Business , Companies , Technology | Comments (0) | digg this | del.icio.us
GM Sells Sweden's Saab to Spyker Cars
General Motors and Spyker Cars confirmed Tuesday that GM has agreed to sell Swedish automaker Saab to the Dutch sports car maker.
"Today's announcement is great news for Saab employees, dealers and suppliers, great news for millions of Saab customers and fans worldwide, and great news for GM," said John Smith, GM vice president for corporate planning and alliances, who will hold a press conference later in the day.
Spyker told Bloomberg News it has agreed to pay $74 million in cash and $326 million in preferred shares in the new company that would emerge from the deal, to be called Saab Spyker Automobiles, which will carry the Saab brand forward. The sale is subject to Sweden agreeing to guarantee a 400 million-euro ($563 million) European Investment Bank loan for Saab.
The sale is expected to close in February and Saab will exit an orderly wind-down process in line with the timetable, the Dutch company said.
(Read more...)
Posted by Michelle Krebs at 9:30 AM under Business , GM , News | Comments (3) | digg this | del.icio.us
GM Says No Deal With Spyker for Saab Yet
General Motors Chairman and CEO Ed Whitacre said at a Monday morning press conference that the automaker has no announcement regarding Saab despite media reports swirling around the globe that a deal to sell the Swedish automaker to Spyker is imminent.
"As of today, we have not changed our direction on the wind-down (of Saab)," Whitacre told reporters in Detroit. "There have been advanced talks but we do not have a deal to announce this morning. If and when that changes, we'll let you know. And that's my only comment on that issue."
Posted by Michelle Krebs at 10:20 AM under Business , GM | Comments (0) | digg this | del.icio.us
GM Prices Buick Regal; Losing Money on Every One?
General Motors announced an attractive price on its 2011 Buick Regal, which is generating a lot of positive buzz. But the automaker likely will lose money or at least not make much on every one it sells in the early going.
The Regal, which begins arriving in dealerships in spring, will start at just under $27,000. But pricing the Regal was tricky business.
The new Regal is based on the German-made Opel Insignia, and the earliest versions to be sold in the U.S. will be made in Europe. That means the dollar-euro exchange rate is highly unfavorable. The situation changes in the first quarter of 2011 when Regal production shifts from Russelsheim, Germany, to GM's plant in Oshawa, Ontario, Canada.
(Read more...)
Posted by Michelle Krebs at 10:43 AM under Analysis , Business , GM | Comments (5) | digg this | del.icio.us
GM Starts Opel Restructuring with Closure of Belgian Plant
General Motors' restructuring of its Opel operations in Europe have begun with Thursday's 
announcement that the automaker - as expected - will close an assembly plant in Antwerp, Belgium, mid-2010, eliminating 2,600 jobs.
The Belgian plant builds the Opel Astra, which had been sold in the U.S. as the Saturn Astra before the Saturn brand was eliminated. The plant was selected because Astra and other models it assembles are made elsewhere so capacity shifts can be easily accomplished, Opel CEO Nick Reilly said in a news conference in Brussels.
"The decision to announce this today, was not taken lightly; instead, it is the unfortunate result of the current business reality," Reilly said. "We must make this announcement now so that we can secure a viable future for the entire Opel and Vauxhall operations."
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Posted by Michelle Krebs at 8:09 AM under Business , GM , News | Comments (0) | digg this | del.icio.us
Mercedes-Benz E-Class Leads Daimler Out of Profit Doldrums
Strong sales of the newest generation of the Mercedes-Benz E-Class in the fourth quarter 
last year will boost Daimler's earnings for the quarter and signal an earnings recovery for the German automaker, an analyst in Europe predicts.
"The sales improvement at the Mercedes-Benz brand throughout last year was attributable to a rapidly improving model momentum, reflecting the roll-out of the new E-Class family," Creative Global Investments analyst Sabine Blumel told Just-Auto in Europe.
(Read more...)
Posted by Michelle Krebs at 9:55 AM under Analysis , Business | Comments (0) | digg this | del.icio.us
GM Talks Concessions for Reacquired Former Delphi Plants
Even as it talks of the need to ramp up production at several U.S. assembly plants, General Motors Corp. is sending another message to the handful of former Delphi Inc. plants it "reacquired" as part of Delphi's departure from bankruptcy: costs have to be reduced.
The Detroit News reports today GM is seeking wage concessions from the United Auto Workers union workers who staff the components plants. The gambit likely was inevitable: GM spent billions to purchase the plants when Delphi exited its protracted bankruptcy late last year in order to assure the orderly delivery of vital parts - but GM reportedly is seeking to sell many, if not all of the facilities. The company already announced earlier this month it is selling the Nexsteer steering-components plant in Saginaw, MI.
The report that GM wants to reduce labor costs hardly is a surprise, then, as it brings these plants - and the thinking that originally created Delphi - full circle.
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Posted by Bill Visnic at 10:17 AM under Business , Companies , GM , News | Comments (0) | digg this | del.icio.us
Detroit Auto Show: Eleven Vehicles That Matter - Or Don't
The 2010 North American International Auto Show is one of the most restrained editions of 
the Detroit confab many can remember.
But the show's comparative scarcity of high-impact concept and production vehicles didn't stem the avalanche of opinion on the most notable vehicles.
After scores of media outlets have weighed in, AutoObserver cuts through the clutter to give the real score on the 10 most significant - for better or worse - vehicles of the 2010 Detroit auto show.
(Read more...)
Posted by Bill Visnic at 11:31 PM under Analysis , Business , Commentary , Companies , Ford , GM , Toyota , Volkswagen, Audi | Comments (0) | digg this | del.icio.us
In Dismal Year, Subaru Sets New Sales Records
Subaru of America was first to announce December and full-year 2009 sales. And not surprisingly. The Japanese automaker is proud that it not only bucked the downward trend of the industry in 2009 -- one of the worst years in three decades; it shattered its own records.
Subaru sold 216,652 vehicles, an increase of 15 percent from 2008, surpassing the previous 2006 record of 200,703 vehicles. .
(Read more...)
Posted by Michelle Krebs at 8:11 AM under Business , Companies , News | Comments (1) | digg this | del.icio.us
Apple COO Rumored To Be Top Pick for GM CEO Job
The speculation on who will become the next chief executive officer of General Motors has 
begun with the latest rumor putting Apple COO Tim Cook at the top of the list for the job.
Cook, who took the reins of Apple when CEO Steve Jobs was on medical leave, is the first choice of GM's executive search firm Spencer Stuart for the top post at General Motors, an anonymous reader of The Business Insider's Silicon Valley Insider told the blog.
"We have no idea whether this is true or not, but it makes sense," wrote Senior Editor Nicholas Carlson, the December 31, 2009 post.
A GM spokesman said the automaker had no comment on the rumor.
(Read more...)
Posted by Michelle Krebs at 9:04 AM under Business , GM , Personalities , Rumors | Comments (0) | digg this | del.icio.us
Saab Suitor Seeks To Leverage Existing New-Model Investment
The Netherlands' Spyker Cars, the small exotic-car maker cajoling General Motors Co. to allow it to purchase GM's failing Saab Automobile AB unit, would at the beginning set its sights on nothing more radical that selling the two wholly new products in Saab's pipeline that are ready to go, according to a report over the weekend from AOL Autos.
After setting an end-of-2009 deadline to complete a viable deal to sell Saab, GM extended the cut-off date to this Thursday as the two companies try to hammer out an agreement the Swedish government also would like to see happen in order to save thousands of jobs in Saab's hometown of Trollhattan. The town also is the site of Saab's "home" assembly plant, where the 9-5 is slated to begin production.
(Read more...)
Posted by Michelle Krebs at 8:07 AM under Business , Companies , GM | Comments (1) | digg this | del.icio.us
Government To Give GMAC Another $3.5 billion in Aid
GMAC Financial Services, which provides vehicle loans to General Motors and Chrysler dealers and customers, reportedly is close to receiving $3.5 billion in additional aid from the U.S. government, on top of the $12.5 billion already received since December 2008, the Wall Street Journal reports.
The new capital likely will go its ailing mortgage business, not its car-loan business, the paper said.
Posted by Michelle Krebs at 9:27 AM under Business , Chrysler , GM | Comments (0) | digg this | del.icio.us
Still Weak Consumer Confidence Picks Up Slightly
Reinvigorating the housing sector and boosting confidence are considered key components to revitalizing the economy and auto sales, economists say.
To that end, the monthly survey by the Conference Board showed consumer confidence picked up slightly in December after rising in November, but still remains weak, largely due to the job picture.
The Standard & Poor's/Case-Shiller home-price index, which tracks sales in 20 major metropolitan areas, showed that prices of single-family homes were largely flat in October compared with September, another factor that undermines consumer confidence.
Posted by Michelle Krebs at 9:25 AM under Analysis , Business | Comments (0) | digg this | del.icio.us
Clean Up on Pontiac, Saturn Aisles!
General Motors Co., in an effort to clear the decks for the new year, is offering hefty 
incentives to dealers to sell thousands of vehicles from its discontinued Saturn and Pontiac brands.
In a December 23 letter to dealers, obtained by the Wall Street Journal, GM said it would pay dealers $7,000 for every new Saturn or Pontiac that it moves to a rental-car or service-vehicle fleet operated by the dealer and then sells as a used vehicle to a customer. The offer expires January 4.
There's no guarantee the $7,000 will go from the dealer to the customer. However, a dealer can use some or all of the cash to make the deal more attractive to the customer. In the case of Pontiac's cheapest vehicle, the G3, that would mean almost half off if the dealer passed along all of the incentive.
(Read more...)
Posted by Michelle Krebs at 8:30 AM under Business , GM , News | Comments (0) | digg this | del.icio.us
Ford Set to Close Volvo Sale to China's Geely by June
Ford Motor Co. confirmed Wednesday details of its sale of Volvo to China's Zheijang Geely 
Holding Group Company Ltd. have been settled, and the deal likely will close in the second quarter of next year.
Saying more information would be revealed when the final documents are signed in the first quarter of 2010, Ford provided no details about the terms of the sale, including the price. Experts estimate the price $1.8 billion, making it the largest overseas acquisition by a Chinese automaker.
(Read more...)
Posted by Michelle Krebs at 6:05 AM under Business , Companies , Ford , News | Comments (2) | digg this | del.icio.us
GM's Sale of Saab Fails; Swedish Brand to Die
General Motors announced Friday its planned sale of Saab has failed, and the Saab brand 
will be eliminated, resulting in the loss of 3,400 jobs and 1,100 dealers globally.
After Swedish sports car maker Koenigsegg Group AB last month withdrew from negotiations for Saab, GM took up discussions with Dutch sports car maker Spyker Cars. The deal, which failed Friday morning, was considered a long-shot due to the short timeframe to close the deal -- GM set a Dec. 31 deadline. In addition, Spyker is a small and unprofitable company, plus financing in any deal is challenging in these times.
"Despite the best efforts of all involved, it has become very clear that the due diligence required to complete this complex transaction could not be executed in a reasonable time. In order to maintain operations, Saab needed a quick resolution," said GM Europe President Nick Reilly.
(Read more...)
Posted by Michelle Krebs at 5:58 AM under Business , Companies , Featured , GM , News | Comments (2) | digg this | del.icio.us
This Week's AutoObserver Reader Favorites: GM Plans; Award Finalists; VW-Suzuki
Not surprisingly, this week's favorite post by AutoObserver readers was our coverage of 
General Motors Chairman and Interim CEO Ed Whitacre's outline for the automaker's short-term game plan.
The former AT&T CEO held his first media roundtable since adding the CEO title two weeks after the ouster of Fritz Henderson.
At the press briefing, Whitacre said GM's priorities are paying back $6.7 billion in government loans by June and selling more cars and generating more revenue. He also called GM's sale of Saab to Dutch sports car maker Spyker is "possible" by year-end, but, if not, Saab would be eliminated.
(Read more...)
Posted by Michelle Krebs at 5:07 AM under Analysis , Business , Companies , Ford , GM , News , Personalities | Comments (0) | digg this | del.icio.us
Trucks Deemphasized in Chevy's New Direction
Chevrolet's "Like A Rock" trucks and SUVS may be gathering a little moss in the coming 
years as General Motors Co.'s most important division shifts gears to concentrate on cars and crossovers, said new Chevrolet general manager Jim Campbell at a media event in Detroit Wednesday.
Noting that many would be surprised to know the now fully global Chevy sells 61 percent of its volume outside the U.S., Campbell said the home turf will be where the action is in the coming years.
"Chevrolet's biggest growth opportunity is right here in our own country," Campbell said, adding that new expansion will come "on the back of cars and crossovers."
(Read more...)
Posted by Michelle Krebs at 3:39 AM under Business , Companies , Featured , GM , Personalities | Comments (2) | digg this | del.icio.us
Mercedes Joins Engine Downsizing, Electric Trends
In the U.S., it's a looming 35-miles-per-gallon fuel-economy mandate. In Europe, it's 
continually tightening restrictions on carbon-dioxide emissions.
Whatever the case, even luxury manufacturers - who, at least in the U.S., used to simply pay the fines for non-compliance - have their backs against the wall when it comes to environmental correctness. Power and heavyweight prestige are what they sell, but soon, there will be no choice but to improve fuel economy and reduce the emissions.
(Read more...)
Posted by Michelle Krebs at 5:53 AM under Business , Companies , Featured , Technology | Comments (0) | digg this | del.icio.us
Mercedes Adjusting to U.S. Market
Although sales have rebounded with the flattening of the recession, premium-brand automakers continue to struggle in the U.S. and almost all are scrambling to adjust their priorities and business models.
Mercedes-Benz USA is coming up with some new ideas and so are its dealers, said Ernst Lieb, CEO of Mercedes-Benz USA, in a meeting with media in Detroit this week.
Think Mercedes only is giving lip service to thinking outside the box? Consider these moves:
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New GM North America Boss Tightening Up the Team
In webchat with a "consumer" audience that seemingly was populated by plenty of industry-savvy questioners, new General Motors Co. North America president Mark Reuss said Friday one of his first initiatives since assuming his new role early this month will be to streamline some of the corporate structure.
Reuss said his planned new system comprises just five direct reports that are "laser focused" on sales, marketing, manufacturing, Canada/Mexico and GM's OnStar telematics-service unit. He said recently-resigned CEO Fritz Henderson "had a lot more to do," inferring that the reporting to Reuss can be simplified because of the different duties of CEO and North American president positions.
Reuss also insinuated he will be working to solidify the ties between GM's North American engineering activities and its Adam Opel AG European Operations. After a lengthy period in which GM made preparations to sell off Opel, the company's board decided to retain the division. Now, Reuss said, he plans to leverage the engineering and product-development experience at Opel to the benefit of all GM vehicles.
(Read more...)
Posted by Bill Visnic at 2:30 PM under Business , Featured , GM , News | Comments (0) | digg this | del.icio.us
GM Broke It Off With Tiger Woods Even Before it Became Fashionable
The personal and business fallout for his "indiscretions" continues for professional golfer Tiger Woods, as a variety of companies and organizations do the damage-control two-step to the certain detriment of "Woods Inc.'s" bottom line.
But at least one former corporate sponsor managed to avoid having to be in the position of judging Woods as his personal life becomes a tabloid bonanza: General Motors Co. Owing to its shaky finances, GM had to cut loose Woods and his big-bucks contract nearly a year ago.
For the nine years prior to parting ways with Woods at the end of 2008, GM reportedly had paid the golfing phenom a heady $8 million per year to be a spokesman for the Buick brand. That had to stop -- leading up to its federal bailout and eventual bankruptcy, GM jettisoned everything with the appearance of extravagance, from corporate jets to corporate golf spokesmen.
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Posted by Bill Visnic at 8:10 AM under Business , GM , In the Media , Personalities | Comments (2) | digg this | del.icio.us
Chevy Boss, Another GM "Lifer," To Retire
General Motors Co.'s crucial Chevrolet division has a new general manager as yet another long-serving executive is leaving GM.
The company announced late Wednesday that Brent Dewar, 31-year GM veteran and vice president, global Chevrolet, will retire effective April 1, 2010. Taking over immediately as Chevrolet general manager is 45-year-old James M. Campbell, who had been in charge of GM's Fleet and Commercial Operations.
Since GM emerged from bankruptcy in mid-July, chairman Ed Whitacre has emphasized GM is striving for younger faces and fresher thinking -- not to mention fresh blood from outside -- to reinvigorate GM's hidebound executive culture.
Chevrolet's new general manager is appropriately young, perhaps, but is no newbie at GM, having been with the company since 1988.
(Read more...)
Posted by Bill Visnic at 7:19 PM under Analysis , Business , Featured , GM , News , Personalities | Comments (4) | digg this | del.icio.us
Time Running Out for Saab
Reports from Europe late on Monday indicate General Motors Co. and China's Beijing 
Automotive Industry Corp. (BAIC) may be edging closer to a deal that will transfer some of Saab's hard assets to BAIC -- but also appears to set the stage for GM to liquidate the Saab brand.
Reuters reported GM was talking with BAIC about a deal to sell existing tooling for the Saab 9-3 and 9-5, both of which were due to be replaced by new-generation models based on GM architectures. Saab had already unveiled the 9-5 at this year's Frankfurt motor show and its launch was ready.
(Read more...)
Posted by Michelle Krebs at 5:29 AM under Business , Companies , GM | Comments (2) | digg this | del.icio.us
GM Details Management Shuffle
General Motors made official a number of key leadership changes, including the elevation of 
Mark Reuss, a 46-year-old engineer and "car guy," to president of GM North America, Nick Reilly to president of GM Europe and Vice Chairman Bob Lutz becomes an advisor on design and product development.
"I want to give people more responsibility and authority deeper in the organization and then hold them accountable," said GM chairman and interim CEO Ed Whitacre, in a statement. "We've realigned our leadership duties and responsibilities to help us meet our mission to design, build and sell the world's best vehicles."
Reuss served ever so briefly as vice president of global engineering after being brought back early as head of Holden in Australia.
(Read more...)
Posted by Michelle Krebs at 6:56 AM under Business , Featured , News , Personalities | Comments (0) | digg this | del.icio.us
Mercedes-Benz Confirms C-Class Production in U.S.
In a significant signal of the cost pressures on global manufacturers, Daimler AG announced Wednesday that its Mercedes-Benz premium-vehicle division will transfer some production of its entry-level C-Class sedan to the U.S.
The company said "additional production" of the C-Class will be added at the Mercedes-Benz U.S. International assembly plant in Tuscaloosa, Alabama, when the next-generation C-Class is launched in 2014.
The MBUSI Tuscaloosa plant, which began production in 1997, currently builds Mercedes' M-Class, R-Class and GL-Class crossover vehicles and has been expanded twice.
(Read more...)
Posted by Michelle Krebs at 8:03 AM under Business , Companies | Comments (1) | digg this | del.icio.us
Geely Seeks $1 Billion from China Banks to Buy Volvo
Ford's sale of Volvo to Chinese automaker Geely appears to be edging toward completion, as major hurdles are cleared.
Geely, the preferred bidder for Ford's Volvo unit, reportedly is seeking at least $1 billion in loans from Chinese banks to finance its bid for the Swedish auto company.
(Read more...)
Posted by Michelle Krebs at 6:17 AM under Business , Companies , Ford , Technology | Comments (1) | digg this | del.icio.us
Back to the Future: Companies Go Vertical -- Again
Forward-thinking Larry Ellison, CEO of Oracle Corp., recently told financial analysts he is taking a page from history past in creating a new business model for the high-tech company. Oracle is going vertical.
And Ellison is not alone in turning back to the century-old vertical integration strategy whereby a company controls materials, manufacturing and distribution, according to a story on the trend in Monday's Wall Street Journal.
Other companies, including General Motors and Boeing from which Ford CEO Alan Mulally came, are as well.
(Read more...)
Posted by Michelle Krebs at 10:22 AM under Analysis , Business , Companies | Comments (0) | digg this | del.icio.us
Lending Drops Most Since 1984
Lending by U.S. banks - the lifeblood of the auto industry -- fell 2.8 percent in the third quarter, the largest drop since at least 1984 and the fifth consecutive quarter in which banks have reduced lending, according to a Federal Deposit Insurance Corp. issued Tuesday and reported on by the Washington Post.
The paper said the decline in lending is emerging as a serious impediment to economic recovery.
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Posted by Michelle Krebs at 9:46 AM under Analysis , Business | Comments (0) | digg this | del.icio.us
Get Ready for Leasing's Revival
Leasing may have been down, but it isn't out.
After all but abandoning leasing for the past year, Ford Motor Co., General Motors Co. and Chrysler Group LLC each have reported either a re-entry or expansion in the leasing business. And other manufacturers who never got out of the game are in a position to increase their lease penetration.
Through the remainder of the year, Edmunds.com expects a modest increase in non-luxury leasing commensurate with the announcements by the domestics, as well as a slight increase with at least one import brand: Toyota Motor Corp. has room to grow its lease portfolio.
(Read more...)
Posted by Michelle Krebs at 6:10 AM under Analysis , Business , Companies , Featured | Comments (2) | digg this | del.icio.us
GM Engineers Call Customers Who Returned Cars
At the request of General Motors' new chairman, Ed Whitacre, the automaker's top engineers are calling the couple hundred customers who are returning or exchanging their GM cars under the 60-day money-back guarantee policy to find out why.
Mark Reuss, GM's recently appointed vice president of global engineering, told reporters Thursday that he personally is calling customers.
This evening, Reuss will call a customer who was dissatisfied with and returned a Chevrolet Malibu under the program. And he will call the buyer of a Chevrolet Silverado who reported the interior room wasn't roomy enough and the exterior paint and finish were unsatisfactory.
(Read more...)
Posted by Michelle Krebs at 11:13 AM under Business , GM , Personalities | Comments (10) | digg this | del.icio.us
Latest Hybrids Probably Won't Help Build the Market
In order to prod soccer moms across the nation to plug a visit to the BMW dealership into their Blackberrys, BMW North America Inc. this week nonchalantly announced the price for its first "full" hybrid-electric vehicle, the ActiveHybrid X6: $89,725.
Welcome to hybridization as seen by German luxury marques, who, given their choices for showcasing hybrid technology, seem to be more intent on using their new hybrids to prove why their diesel-powered models make much more sense in terms of actually appealing to consumers.
At nearly $90,000, the ActiveHybrid X6 has a total of 485 horsepower, weighs more than 5,600 pounds, delivers a 2-mpg improvement over than the 6-cylinder X6 (4 mpg better in the city and 1 mpg worse on the highway than the V8 X6) - and still has plenty of extra-price options.
In the spring, BMW will follow up with the ActiveHybrid 7, the hybridized version of its 7-Series flagship. The car is certain to crack the 6-figure price barrier.
(Read more...)
Posted by Bill Visnic at 9:30 AM under Business , Chrysler , Companies , GM , In the Media , Technology | Comments (1) | digg this | del.icio.us
Tough New Roof Test Whittles Down Field of IIHS 'Top Safety Pick' Winners
A rigorous new roof-strength standard means a lot fewer new models earned the Insurance Institute for Highway Safety's "Top Safety Pick" award for 2010.
This year, just 27 individual models were named Top Safety Pick by the IIHS, compared with last year's record 94 models that earned the award. Most of the reason so many new vehicles couldn't grab the brass ring comes down to a newly instituted roof-safety test presumed to indicate superior protection in rollovers, which are involved in about one-third of all fatal accidents.
"With the addition of our new roof strength evaluation, our crash test results now cover all 4 of the most common kinds of crashes," said IIHS president Adrian Lund in a release. "Consumers can use this list to zero in on the vehicles that are on the top rung for safety."
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Posted by Bill Visnic at 10:00 AM under Business , Chrysler , Companies , Ford , In the Media , News , Technology , Volkswagen, Audi | Comments (0) | digg this | del.icio.us
Ghosn Confirms Nissan to Persevere with Titan, Other Trucks in U.S.
In a recent meeting with automotive media, Nissan-Renault chairman and CEO Carlos Ghosn said Nissan intends to stick with fullsize pickups in the U.S. and also said there is a future for other trucks and SUVs in Nissan's model range, including the Quest minivan.
The fullsize pickup market has been battered by the U.S. economic upheaval and the auto industry's resulting plunge, and import-brand fullsizers have had the worst of it. Sales for Nissan's Titan were down a striking 50.2 percent through October, to a meager 15,393 sold.
After a deal in which Nissan arranged to have the next-generation Titan based on the Dodge Ram pickup and manufactured by Chrysler Group LLC evaporated earlier this year, questions began to circulate about whether Nissan would remain in the domestic-nameplate-dominated segment that has proven difficult for import brands to invade.
But Ghosn said despite the setback from losing the Chrysler connection, Nissan is hanging in the fullsize-pickup game.
(Read more...)
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Job Seekers Flood VW's Tennessee Plant with Applications
More than 65,000 job seekers submitted applications to work at Volkswagen's new plant in 
Chattanooga, Tenn., the local newspaper there reported. The plant intends to hire 2,000 workers total; the first will be come onboard in the spring with hiring extending into 2011.
Volkswagen is investing about $1 billion in the new plant, which starts production in 2011 building a midsize sedan, including a diesel-powered version.
(Read more...)
Posted by Michelle Krebs at 7:03 AM under Business , Companies | Comments (0) | digg this | del.icio.us
Daimler Doesn't Expect Quick U.S. Recovery
Dieter Zetsche, Daimler AG chairman and head of the German automaker's Mercedes-Benz passenger-car division, said yesterday in a media conference in New York that it "remains to be seen" if the U.S. economy really is improving, adding that "there is some (economic) data causing concern."
He said Daimler instead is banking on growth in China and some Latin America markets.
"I do believe the U.S. market will come back to former volumes," Zetsche said, adding, however, the company does not think it will happen until 2012 or 2013.
"There is one country where we haven't seen any retraction," he said. "This country is China." Zetsche said China soon will be the third-largest market for Mercedes-Benz - and already is the world's largest market for the company's S-Class flagship.
(Read more...)
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TARP Watchdog Reiterates: Billions Loaned to Automakers Likely Lost
Top executives at General Motors Co. and Chrysler LLC have both gone out of their way in the past week to say their once-bankrupt companies are positioning themselves to pay back the tens of billions of dollars loaned to them by the federal government.
The man charged with overseeing the U.S. Dept. of Treasury program through which the money was loaned doesn't share their confidence.
Neil Barofsky, the special investigator assigned by Congress as the watchdog for the $700-billion Troubled Asset Relief Program, said at a conference in Washington D.C. that while GM and Chrysler may pay back some of the approximately $65 billion extended to them, the U.S. probably won't ever see full payback.
"Tens of billions of dollars are likely to be lost on the automotive bailout," Barofsky said flatly.
(Read more...)
Posted by Bill Visnic at 8:10 AM under Business , Chrysler , Companies , GM , News | Comments (2) | digg this | del.icio.us
New-Gen Buick Midsizer Flaunts German DNA
General Motors Co.'s Buick division today released images and information for the 2011 Buick Regal and is openly billing the new-age Buick as a sport sedan.
Given the new Regal's origins with GM's second-generation global midsize chassis that was engineered by Adam Opel AG - the Germany-based European division GM just retrieved from the clutches of mega-supplier Magna and Russia's Sberbank - there might be reasonable credibility for the sport-sedan claim.
In addition to being based on the German-engineered Epsilon II architecture also used by the well-regarded new Opel Insignia (not to mention Buick's new LaCrosse sedan), the 2011 Regal also will be built in Germany at Opel's Russelsheim assembly plant.
The Regal's lines may be some of the crispest ever to be seen in a Buick showroom and GM is calling out the Acura TSX, Volkswagen Passat, Mazda6 and even the Volvo S60 as competitors. The Regal goes on sale in the second quarter next year - and in a significant sign of the times, only 4-cylinder power will be on offer.
(Read more...)
Posted by Bill Visnic at 8:55 PM under Business , Companies , GM , News , Technology | Comments (3) | digg this | del.icio.us
VW Pushes Past Toyota as Global Production Leader
The distractions for much of the year surrounding the Volkswagen Group's ownership tussle with Porsche AG didn't stop VW from achieving a significant global milestone: VW this month surpassed Toyota Motor Corp. as the world's largest vehicle manufacturer.
The United Kingdom's Guardian newspaper reports IHS Global Insight figures as indicating Volkswagen (now with Porsche included) production hit 4.4 million units for the year, easily shouldering by Toyota and its production of about 4 million units year-to-date.
Analysts have noted this event was not unpredictable; in the face of a global dropoff in demand, Toyota had made the decision to drastically curtail production in the early part of the year, a move that removed as much as 1 million units or more from Toyota production schedules.
Volkswagen, meanwhile, has been the beneficiary of large-scale stimulus efforts in China and many European countries trying to prop up flagging new-vehicle sales.
(Read more...)
Posted by Bill Visnic at 12:54 PM under Business , Companies , News , Toyota | Comments (2) | digg this | del.icio.us
BMW: Consumer Values Evolving - But Luxury Brands Will Survive
With luxury automakers taking a beating from the global recession and the geared-down "new" economy left in its wake, some are writing the epitaph for premium cars.
But in a meeting with the media this week, BMW North America LLC officials said that although the economic meltdown indeed has caused shifts in consumer thinking and "America has been changed by this recession," premium brands will continue to be a force in the U.S. market.
BMWNA president Jim O'Donnell said yesterday at the company's headquarters that "premium automakers will help shape the future of mobility" because high-end brands historically have been the first to develop and introduce new innovations.
And given the pressure for new solutions to the automobile's environmental impact, O'Donnell said, "It is our belief that the premium market - and the BMW Group as the leader of this segment - will continue to fill an important and necessary role of bringing innovation and technology to market to meet customer, social and regulatory needs and providing direction for the entire industry."
(Read more...)
Posted by Bill Visnic at 3:00 AM under Business , Companies , News , Technology | Comments (1) | digg this | del.icio.us
Renault Takes on Tata Nano, Competing on Price
French automaker Renault will take on Tata Motors' Nano, currently billed as the world's cheapest car, with "an ultra low-cost" car designed by Renault and built by its partner in India, Bajaj Auto beginning in 2012, a year later than originally planned.
"The cost of this car will be lower than any other car made today in India," said Renault/Nissan CEO Carlos Ghosn at the World Economic Forum meeting in New Delhi, India, Tuesday.
(Read more...)
Posted by Michelle Krebs at 11:32 AM under Business , Companies | Comments (2) | digg this | del.icio.us
GM Invests to Boost Equinox, Terrain Production
General Motors will invest nearly $100 million in a Canadian plant and call back all laid-off 
workers to boost production of its Chevrolet Equinox and GMC Terrain, Toronto's Globe and Mail reports.
The investment will be made in CAMI Automotive Inc., a joint venture between GM and Suzuki Motor Corp. in Ingersoll, Ontario, near Toronto. The plant will call back 150 laid off workers, which means the plant will have no employees on layoff.
Photo by GM
2010 Chevrolet Equinox
Posted by Michelle Krebs at 8:47 AM under Business , GM | Comments (0) | digg this | del.icio.us
GM-Europe Chief Reportedly Quits; Opel Restructuring Begins
The chief of General Motors European operations, Carl-Peter Forster, plans to leave the company after this week's u-turn that calls for the automaker keeping rather than selling Opel. European media reports claim. GM's head of all international operations Nick Reilly is said to be stepping in for the time being.
GM is not commenting on the personnel changes. However, on Thursday - the day after GM's announced it would keep Opel -- GM CEO Fritz Henderson told reporters in Detroit that a transition team is being quickly gathered to oversee the restructuring of GM's German subsidiary. GM also will keep its British subsidiary, Vauxhall
(Read more...)
Posted by Michelle Krebs at 7:20 AM under Business , GM , Personalities | Comments (0) | digg this | del.icio.us
Marchionne Disarms Alfa-In-U.S. Speculation, Calls Cost of Coming 300 Platform 'Shocking'
At Chrysler Group LLC's unveiling of its 5-year business plan at its headquarters in Auburn Hills, MI, today, CEO Sergio Marchionne laid to rest a few rumors about the new joining of Chrysler and Fiat S.p.A. One of them was the long-rumored ambition for Fiat to use the alliance to distribute its Alfa Romeo brand in Chrysler's U.S. dealerships.
There is no current plan to sell Alfas in Chrysler dealerships, said Marchionne. In wearing his Chrysler hat (he also is Fiat's CEO) Marchionne insisted that Alfa Romeo would have to "make a convincing case" about which Alfa Romeo models could be profitably exported to the U.S. and sold in Chrysler showrooms.
(Read more...)
Posted by Michelle Krebs at 3:39 PM under Business , Chrysler , News , Personalities | Comments (1) | digg this | del.icio.us
Chrysler and Fiat's Lancia Brands to be Teamed
Outlining a 5-year plan to move Chrysler forward, managing partner Fiat S.p.A. will couple the 
Chrysler brand with Fiat's premium Lancia cars in some international markets.
"Lancia and Chrysler have many things in common," said Michael Manley, Chrysler's president and CEO, Jeep brand and lead executive for international organization, said at Chrysler's presentation of its 5-year business plan Wednesday.
Lancia, he said, has little exposure outside Italy. And most of Chrysler's brands have marginal impact in international markets. But Lancias definitely are Fiat's largest models and also most luxury-oriented, so are most closely aligned with Chrysler.
(Read more...)
Posted by Michelle Krebs at 1:59 PM under Business , Chrysler | Comments (2) | digg this | del.icio.us
Confirmed: Fiat 500 in Some Chrysler Dealers This Time Next Year
At a giant confab Wednesday to unveil its 5-year business plan, Chrysler Group LLC ended months of speculation by detailing how the Fiat 500 subcompact will be initially sold in the U.S.
The 500 - a runaway hit in Europe for Fiat S.p.A., Chrysler's new managing partner and 20-percent owner - will be sold, as a Fiat, in Chrysler dealerships starting late next year. Fiat will sell a North American version of the Fiat 500 Cabrio beginning in 2011 and the Fiat 500 Abarth in 2012.
But perhaps not all Chrysler dealerships. Sales of the 2-door 500 will be sold "mainly" at dealers in metro markets and who carry all Chrysler brands, said Peter Grady, Chrysler's vice president, network development and fleet.
(Read more...)
Posted by Michelle Krebs at 1:08 PM under Business , Chrysler , News | Comments (1) | digg this | del.icio.us
Fiat's Marchionne: Chrysler Is Better Off Than Most Think
Fiat CEO Sergio Marchionne, in kicking off a six-hour business meeting outlining Chrysler's 
five-year plan, said Chrysler is in better financial shape than the media and outsiders suggest.
He said Chrysler has boosted its cash reserves by $1.7 billion from the $5.7 billion it had on June 10 when it emerged from Chapter 11 bankruptcy. He said at the end of September the automaker was profitable on an operating basis.
Massive cost reductions have been underestimated, he said, adding the company is downright "cheap" in its spending.
Posted by Michelle Krebs at 9:09 AM under Business , Chrysler , News , Personalities | Comments (0) | digg this | del.icio.us
Ford Picks China's Geely as Preferred Volvo Bidder
Ford Motor Co.'s confirmation that it has chosen a group led by Chinese automaker Zhejiang Geely Group Holding as its preferred bidder for Volvo came as no surprise. Geely has long been mentioned as a potential buyer for the Swedish marque, which Ford put up for sale a year ago.
"Ford's objective in our discussions with Geely is to secure an agreement that is in the best interests of all the parties," Ford's CFO Lewis Booth, said in a statement.
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Posted by Michelle Krebs at 7:34 AM under Business , Ford | Comments (1) | digg this | del.icio.us
Former Chrysler Sells Delaware Durango Plant; GM Sells Its Delaware Plant
The state of Delaware was the scene of some historic and trend-setting events this week, as the "old" business entities of General Motors Co. and Chrysler Group LLC both sold cast-off assembly plants as the companies as part of the companies' rapid downsizing.
The site of Chrysler's assembly plant in Newark will be sold to the University of Delaware for a new research center. The plant, which most recently built the Dodge Durango and Chrysler Aspen SUVs, was sold to the university for $24.25 million, according to the Delaware News Journal.
(Read more...)
Posted by Michelle Krebs at 5:43 AM under Business , Chrysler , GM | Comments (0) | digg this | del.icio.us
Fisker Automotive Buys Plant from 'Old' GM
Fisker Automotive, the new-age startup company aiming to sell an expensive and high-tech extended-range electric vehicle next year, confirmed it has purchased an assembly plant in Wilmington, DE, from Motors Liquidation Co., the entity holding the assets of the former General Motors Co.
Fisker said in a media release the company paid $18 million for the plant, which most recently build the Pontiac Solstice and Saturn Sky 2-seat sportscars.
That's a great price to acquire what is essentially a fully functional auto assembly plant with a relatively new paint shop, one of the costliest areas of investment in any auto-assembly operation.
Fisker said it will invest another $175 million to retool the plant to produce a still-under-development plug-in hybrid sedan targeted to sell for considerably less than the $87,000 Karma extended-range electric sport sedan Fisker plans to begin selling next year.
(Read more...)
Posted by Bill Visnic at 8:10 AM under Business , Companies , GM , News | Comments (1) | digg this | del.icio.us
More Delay for Sale of GM's Opel
Anyone - or is it everyone at this point - hoping for an October finish for the saga of General Motors Co.'s sale of its Adam Opel AG European operations will have to wait at least a while longer.
In a blog at GM's website, John Smith, GM's group vice president of business development and the company's lead negotiator, said GM's deal to sell Opel to a consortium headed by Canada's Magna International Inc. and Russia's Sberbank will be on hold until at least early November.
The deal has won approval from the Opel Trust Board, but the European Union expressed concern about several details and their potential transnational effect on labor in various nations in which Opel operates.
The EU also "has been reviewing the Opel investor process and the circumstances surrounding the selection of Magna/Sberbank," Smith said in the blog. Some EU member nations have expressed skepticism that GM's decision to sell to the Magna/Sberbank group was based solely on business metrics.
(Read more...)
Posted by Bill Visnic at 11:23 AM under Business , Companies , GM , News | Comments (0) | digg this | del.icio.us
Ford to Build European Kuga in Kentucky, Report Says
Ford Motor Co. is moving production of its small Kuga crossover from Europe to the U.S. to 
take advantage of lower labor costs and the weaker dollar, Bloomberg News reports.
Ford will shift Kuga production from Germany to Louisville, where Ford makes trucks, in October 2011, says Bloomberg, quoting three unnamed sources apparently familiar with the plans. As many as 80,000 a year will be exported to Europe.
The automaker is not confirming the report.
(Read more...)
Posted by Michelle Krebs at 10:44 AM under Business , Commentary , Featured , Ford | Comments (1) | digg this | del.icio.us
Chinese Automaker Investment Pays Off for Buffett
A stake purchased in Chinese automaker/batterymaker BYD is paying off for billionaire 
investor Warren Buffett.
Buffett's Berkshire Hathaway Inc. last September paid $230 million for a 10-percent stake in BYD. Since then, the stock has risen from the $1.21 a share that Buffett paid to $10.55 a share, the Detroit News reports.
The stock-run up has made company founder Wang Chuanfu the richest man in China, according to the Hurun Report, a list of the wealthiest Chinese.
(Read more...)
Posted by Michelle Krebs at 9:21 AM under Business , Companies , Personalities , Technology | Comments (1) | digg this | del.icio.us
Mercedes-Benz E-Class Buoys Daimler Earnings
Daimler AG beat analysts third-quarter earnings estimates and improved its cash flow, 
largely on the success of the new E-Class.
Daimler made about $700 million before interest and taxes, the automaker reported. That was nearly a $2.2 billion swing from a loss to a profit.
In the U.S., Mercedes-Benz's September sales were off nearly 10 percent from a year earlier, but sales of the just-launched E-Class soared 28 percent.
Posted by Michelle Krebs at 10:05 AM under Business , Companies | Comments (0) | digg this | del.icio.us
Ford 3Q Profit Possible, JP Morgan Says
Ford may report an unexpected third-quarter profit next week, for the first time in a long time, analysts for JP Morgan predicts. However, The Wall Street consensus is that Ford will post a loss.
Posted by Michelle Krebs at 9:50 AM under Business , Ford | Comments (1) | digg this | del.icio.us
Fiat Expected to Report 3Q Profit
Italian automaker Fiat, which now runs Chrysler, is expected to report an operating profit 
Wednesday for the third quarter.
Little information is expected to be provided regarding Chrysler's financial situation in Wednesday's Webcast, however. Instead, Fiat will roll out its five-year plan for Chrysler on Nov. 4.
(Read more...)
Posted by Michelle Krebs at 9:49 AM under Business , Chrysler , Companies | Comments (0) | digg this | del.icio.us
Coskata Fires Up First 'Flex' Ethanol Plant, in Pennsylvania
Coskata Inc. has pushed toward the front of the pack of second-generation ethanol producers 
by firing up its new "semi-commercial" facility for manufacturing cellulosic ethanol in Madison, Pa., near Pittsburgh. The $50-million result of research and construction is 65 feet tall and includes an 8,000-degree torch that processes the pine chips which serve as a raw material.
The opening of the facility last week moves the Warrendale, Ill.-based company closer to building a full-scale commercial plant, which Coskata anticipates opening by late 2012.
(Read more...)
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GM Regaining Lost Market Share Ground in October, Edmunds.com Reports
General Motors is regaining some ground it lost in terms of market share this month, 
according to Edmunds.com.
If the early October trend continues, GM's market share should rise to 22.4 percent this month, a boost from the third-quarter average of 19.1 percent. Based on early October numbers, the Seasonally Adjusted Annual Rate (SAAR) of industry sales will come in at just above 10 million vehicles.
Launches of new models combined with a substantial hike in ad spending this month are helping.
Indeed, GM needs good news on the market-share front since its business plan is based on maintaining a market share of at least 19 percent with half the brands and fewer models, one of its board directors said Thursday.
(Read more...)
Posted by Michelle Krebs at 5:35 AM under Analysis , Business , Featured , GM | Comments (2) | digg this | del.icio.us
Ford's Better Idea: Keep An Eye on the Italians
Caught recently at Ford Motor Co. headquarters in Dearborn, Mich.: a Fiat Bravo 5-door in 
the employee parking area.
But not just any employee - the small sign at the right reads "Vice President."
If Ford's crosstown rival Chrysler Group LLC - now managed by partial owner Fiat S.p.A. - gets its way, there are going to be Chrysler -- and probably Fiat-badged subcompacts sold in the U.S. within two years that could rely on some variant of the Bravo underpinnings.
(Read more...)
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Aftermarket Maker, Apple Aim to Put Keyless Remote Suppliers Out of Business
Despair surely reigns in the electronics divisions of several major automotive suppliers with this week's unveiling of an Apple iPhone-based aftermarket system to remotely start your vehicle as well as perform all the functions of a traditional keyless remote.
After all, the electronics boffins have themselves already nonsensically eliminated the need for actual keys, so now Apple and the aftermarket are taking the exercise one step further, eliminating the need for OEM remote key fobs.
Directed Electronics said this week it has an iPhone app that will allow a vehicle properly wired with its Viper SmartStart hardware to be started remotely. The app also enables conventional door and trunk lock/unlock features and "panic" alarm operation.
And unlike current OEM and aftermarket remote starters, the company says the Viper SmartStart system allows the vehicle to be remotely started from almost any distance, provided both iPhone and vehicle have access to cellular signal.
(Read more...)
Posted by Bill Visnic at 9:17 AM under Business , In the Media , News , Technology | Comments (4) | digg this | del.icio.us
Bad Switch Prompts Another Large Ford Recall
A faulty switch to disengage cruise control will cost Ford Motor Co. yet again in what has been a wide-ranging safety problem.
In the latest recall that encompasses some 4.5 million vehicles - mostly trucks - Ford will repair the switch that can overheat and cause underhood fires. This round brings the number of vehicles recalled to fix the switch to 16 million. It is the largest recall ever in the U.S.
The vehicle lines affected by the latest recall - the Detroit Free Press said it now is the eighth recall for the switch - are:
1992-2003 Ford Ranger
1992-2003 Econoline vans
1995-2003 Ford Windstar
2000-2003 Ford Excursion
1993, 1997 and 1999-2003 F-Series Super Duty with diesel engines
1994 F53 motorhomes
The National Highway Transportation Safety Admin. opened an investigation for the latest recall in June 2008 after reports of engine fires in Windstar minivans.
Windstar photo courtesy Ford Motor Co.
Posted by Bill Visnic at 6:29 AM under Business , Companies , Ford , News | Comments (0) | digg this | del.icio.us
Ford's Europe Share Hits 10 Percent
Ford achieved a 10.1-percent market share in September in its primary 19 European markets - the best share for any month since September 2001 - and a 0.8 percentage point increase on September 2008.
Ford sold 51,400 new Ford Fiesta cars in September - the best September for Fiesta since 1994. The Fiesta goes on sale in the U.S. in 2010.
(Read more...)
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GM Buyers Pick Cash Over Guarantee
General Motors CEO Fritz Henderson told reporters the "vast majority" of GM buyers are taking the $500 rebate instead of the automaker's 60-day money-back guarantee.
His admission suggests GM is attracting buyers already committed to the brands rather than convincing fence-sitters or converting intenders of competitive makes.
GM's money-back guarantee promotion, which runs through Nov. 30, allows customers to return their vehicles between day 31 and 60 of ownership nearly free of charge. However, after the program started, GM added a $500 rebate if they waive the policy.
(Read more...)
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GM May Conclude Opel Sale with Magna This Week
General Motors CEO Fritz Henderson told reporters during his visit to China Tuesday that the 
automaker may sign its deal to sell a majority stake in Opel to Magna International and its Russian partner later this week.
Under the agreement, GM will sell a 55 percent stake in Opel to a consortium including Canada's Magna and Russia's Sberbank. The deal has created furor with Opel and Vauxhall unions because of the massive job losses anticipated and the ire of European governments, which are being asked to subsidize the deal.
(Read more...)
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Done Deal. GM Sells Hummer to Chinese Company
General Motors, as expected, announced Friday it had signed an agreement with China's 
Sichuan Tengzhong Heavy Industrial Machinery Co., Ltd. Friday to sell Hummer.
The deal is subject to approvals by U.S. regulatory agencies and Chinese authorities. Tengzhong acquires ownership of the Hummer brand, trademark and trade names, as well as specific intellectual property license rights necessary to manufacturer vehicles. Tengzhong also assumes the existing dealer agreements.
(Read more...)
Posted by Michelle Krebs at 10:36 AM under Business , Companies , GM , News | Comments (0) | digg this | del.icio.us
Huge U.S.-Market Backdoor Ready To Open for Chinese Automakers
A few years back, it was the first appearance of a Chinese automaker at the Detroit auto 
show that seemed to start the serious speculation about when the Chinese would crack into the U.S. market. Assessing the functional but rudimentary models on display, some predicted 2015 or 2020.
Instead, how about next year?
OK, it won't be with their own China-built models. But there are three pending brand-takeover deals -- General Motors Co.'s Saab and Hummer and Ford's Volvo Cars -- in which a Chinese automaker has a leading or secondary role. If any of the three purchases make it to completion -- and it's probable at least two will -- Chinese automakers will in effect be selling vehicles in the U.S.
(Read more...)
Posted by Michelle Krebs at 6:29 AM under Analysis , Business , Companies , Featured , Ford , GM | Comments (1) | digg this | del.icio.us
Brent Dewar: Chevrolet Is General Motors
The future success of the new General Motors Company rests largely on the bowtie of 
Chevrolet. With the automaker winnowing its brands from eight to only four, Chevrolet carries the load for sales and market share around the world.
And the weight of Chevrolet rests on the shoulders of Brent Dewar, who was named the vice president of Chevrolet Global after the automaker emerged from bankruptcy in July. He headed Chevrolet in the early part of the decade as the automaker made plans to take the brand global.
"Chevrolet needs to be the General Motors Company," Dewar told AutoObserver.com in an exclusive interview recently.
(Read more...)
Posted by Michelle Krebs at 11:49 AM under Business , Featured , GM , Personalities | Comments (0) | digg this | del.icio.us
GM Satisfied with Early Post-Bankruptcy Progress
Saying the "new" General Motors Co. that emerged from Chapter 11 bankruptcy on July 10 
is mostly achieving its goals for cost and debt reductions and is exceeding its projections in some key business metrics, CEO Fritz Henderson said in a media conference call Wednesday that GM is making progress in its three-pronged future strategy to focus on customers, cars and changing its corporate culture.
Just 90 days into its new status as a private company, GM was long on generalities and brief of specifics, however.
(Read more...)
Posted by Michelle Krebs at 11:10 AM under Business , Featured , GM | Comments (0) | digg this | del.icio.us
Aftermarket Performance Icon Holley Goes Chapter 11 -- Again
In a tale that chronicles the dwindling generation of do-it-yourself auto modifiers, storied 
aftermarket performance-parts company Holley Performance, which made its name manufacturing carburetors bearing its name, last week filed for Chapter 11 bankruptcy protection for the second time in two years.
Holley, whose name became synonymous with carburetors for all manner of high-performance engines and later branched out to own a handful of brands well known for bolt-on performance parts, first entered Chapter 11 bankruptcy in early 2008 and emerged later that year, transferring the company's equity to holders of its second-lien debt.
(Read more...)
Posted by Michelle Krebs at 6:22 AM under Business , Companies , Technology | Comments (0) | digg this | del.icio.us
Consortium Led by Former Ford Execs Makes Play for Volvo
Although Ford Motor Co. has been trying to offload its money-losing Volvo Cars unit for some time, it appeared there had been only one entity serious about buying Volvo: China's Geely Automotive Holdings.
But the Financial Times reports today that a consortium headed by former Ford executive Michael Dingman and that also includes Shamel Rushwin, another executive for both Ford and Chrysler, has emerged as a bidder for Volvo.
There are few reported details about a proposal from Dingman's Crown consortium to acquire Volvo, but the deal likely may vary significantly from that proposed by Geely, which, among other facets, is said to include a provision that Ford retain responsibility for certain pension liabilities and that Ford retain a share of Volvo.
(Read more...)
Posted by Bill Visnic at 12:34 PM under Business , Companies , Ford , News | Comments (0) | digg this | del.icio.us
Two More Chrysler Big Shots Out in Fiat-Led Management, Brand Reorg
Chrysler Group LLC is losing two more high-level executives after a board meeting last week conducted by 20-percent owner and managing partner Fiat S.p.A. The company is casting the moves as part of its ongoing efforts to reorganize Chrysler management in an orientation more focused on the company's individual Chrysler, Dodge and Jeep brands.
Leaving the company are Gary Fong, president and CEO of the Chrysler brand who also was Chrysler's chief sales executive, and Michael Accavitti, a longtime product-oriented Chrysler executive who most recently had been appointed by Fiat as president and CEO of the Dodge brand.
In a statement, Chrysler also said it is reorganizing the Dodge brand, creating separate groups for Dodge cars and trucks.
The move is just the latest in a series of executive shuffles that has left many long-serving Chrysler executives on the outside looking in, as Fiat often harvests its own ranks for replacements.
(Read more...)
Posted by Bill Visnic at 9:04 AM under Business , Companies , Featured , News | Comments (0) | digg this | del.icio.us
Strong Yen Could be Next Problem For Japan Automakers
Tough selling to still-wary American consumers might be a problem at the lower end of Japanese automakers' list if currency exchange rates continue their current trend. A soaring yen and a drooping dollar are raising red flags for the bottom line in corporate Japan.
Late last week -- after the yen hit a near high for the year at just more than 88 yen to the dollar -- Honda Motor Co. Ltd. president and CEO Takanobu Ito expressed concern about the yen's ongoing strengthening. Although Honda and many other Japanese automakers, such as chief rival Toyota Motor Corp., produce the preponderance of their vehicles sold in the U.S. inside North America, revenue earned in dollars still must be erodingly converted to yen.
With the global automotive sales environment tenuous and the economies of most large auto-buying nations still sputtering, Takanobu said in an Associated Press report that the currency exchange situation is helping push Honda to a "danger zone" that is hampering fragile recovery efforts.
(Read more...)
Posted by Bill Visnic at 12:25 AM under Business , Commentary , Featured , News | Comments (1) | digg this | del.icio.us
Big Bucks on the Hood of Pricey Hybrids
Low gas prices and even lower demand in the luxury market have conspired to short-circuit sales of premium hybrid-electric vehicles. Now, as the fourth quarter begins to wind down a fairly lousy year for auto sales - and new 2010 models are shouldering their way onto dealer lots - automakers are piling on some fantastic incentives in the hope of clearing out leftover big-money hybrids.
Toyota Motor Corp.'s Lexus premium division, owner of the market's most-expensive hybrid in its LS 600h L, rang in October with a bulging $10,000 dealer-cash incentive on the '09 model of the flagship hybrid. The company also is offered a bounty of $1,000 to any sales associate selling an '09 LS 600h L, which starts at $106,035.
Toyota doesn't break out sales of the hybrid LS in its monthly sales reports, but sales of the entire LS line are down 53.7 percent through September as sales in almost all luxury segments continue to fade.
(Read more...)
Posted by Bill Visnic at 12:17 AM under Analysis , Business , Companies , GM , Toyota | Comments (0) | digg this | del.icio.us
GM Says Bye, Bye eBay
General Motors will end its listing of cars online through eBay this week because it didn't 
generate sales, a newspaper report says.
The program had been set to end September 8 but was extended through the end of the month. GM had been optimistic that it would be successful and would be rolled out nationwide. But it has not generated sales, the Wall Street Journal reported, citing sales figures and dealer comments.
As a result, GM will not extend the eBay venture beyond September, the newspaper reported. A GM spokesman did not confirm the report.
(Read more...)
Posted by Michelle Krebs at 10:07 AM under Analysis , Business , GM | Comments (2) | digg this | del.icio.us
Fiat-Chrysler's Marchionne Steps Down from Bank Board
Fiat CEO Sergio Marchionne apparently has figured out his plate is full running both Fiat and Chrysler as he has decided not to run for re-election to the board of directors of UBS AG, Switzerland's largest bank.
Marchionne was elected to the bank board in 2007 and appointed independent vice chairman in 2008. The credit crisis prompted UBS to write down or write off in loss $53 billion, the most of any European financial institution.
Marchionne is spending half of his time in Chrysler in Detroit and half at Fiat's Turin, Italy, headquarters. He has promised a five-year plan for Chrysler by November. It apparently includes refreshing much of Chrysler's current line in the next 18 months and extending the life of at least one plant previously scheduled for closure.
Posted by Michelle Krebs at 6:12 AM under Business , In the Media | Comments (1) | digg this | del.icio.us
Fiat's Guy To Run Chrysler Powertrain; Hemi Future Cloudy
Chrysler Group LLC 20 percent owner and managing partner Fiat S.p.A. continues to import 
its home-grown management to run Chrysler's U.S. operations, Tuesday naming another Fiat executive to a key Chrysler management position.
The company said a "realignment" of Chrysler's powertrain department brings Paolo E. Ferrero as senior vice president of Chrysler Powertrain. Ferrero apparently replaces Bob Lee, a popular Chrysler executive who has spent his entire career at Chrysler and most recently was head of powertrain engineering. Chrysler told Automotive News late Tuesday that Lee remains employed by Chrysler.
Lee, who holds mechanical engineering and MBA degrees, is widely recognized as the "father" of the new-age Hemi V8, which was launched for the 2003 model year and went on to become an icon for the company and a performance benchmark for the industry.
(Read more...)
Posted by Michelle Krebs at 5:38 AM under Business , Chrysler , Commentary , Companies , Featured , Personalities | Comments (2) | digg this | del.icio.us
VW Phaeton May Rise from the Dead
Volkswagen reportedly is considering bringing its Phaeton luxury car back to the U.S., but 
this time with a diesel engine, a top executive told reporters at the Frankfurt auto show.
Volkswagen Group CEO Stefan Jacoby said VW wants to bring back the Phaeton, which launched in the U.S. 2003, reached its peak of 1,939 sales the next year and was pulled out of the market in 2007 due to slow sales.
"I have to admit that it was a mistake to take this car out of the market," Jacoby said in a media briefing at the Frankfurt auto show as reported by the trade publication Automotive News. "We think that the Volkswagen brand is a good place for this. We are looking at various alternatives for the re-launch of Phaeton."
(Read more...)
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Remaining GM Dealers To Get a Pay Cut
"Don't worry about the profit margin -- you'll make it up on volume."
Anyone familiar with any kind of retailing has heard that platitude, but General Motors Co. dealers will be the latest to find out if it works.
GM reportedly plans to chop a half-percent from dealer margins as the company -- goaded by new chairman Ed Whitacre -- scrambles to regain slipping share and revenue.
(Read more...)
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Ford Poised To Grab Medium-Truck Share With New Power Stroke Diesel
Medium-duty truck buyers are due for a potential treat when Ford Motor Co. launches 2011 
models of its Super Duty F-Series next spring powered by the company's all-new Power Stroke 6.7-liter V8 turbodiesel.
The new, in-house-developed engine ends Ford's decades-long supply arrangement with Navistar International Corp., a relationship that ends this year after a long and publicly nasty dispute.
The engine, which Chief Engineer Adam Gryglak said is a total clean-sheet design, is something of a technical tour de force: It has an innovative twin-turbocharger setup packaged as a single unit, a reversed exhaust-port design in which exhaust exits on the inner portion of the engine's vee and Ford's first medium-truck use of weight-saving compacted graphite iron for the engine block.
(Read more...)
Posted by Michelle Krebs at 4:26 AM under Business , Featured , Ford , Technology | Comments (0) | digg this | del.icio.us
Porsche's Off-Message Models Axed in VW Takeover
Get a good look at the Porsche Cayenne SUV. In the wake of the bizarre German corporate 
soap opera whose end will soon see the absorption of Porsche AG into the mighty Volkswagen Group, the controversial Cayenne -- and even more astoundingly, the just-released Panamera four-door sport sedan -- has no future after VW takes over.
Such is the report from Britain's Car magazine, which says a "massive U-turn in Porsche's product plan" resulting from the bitter VW boardroom triumph means Porsche will be forced to discontinue the Cayenne and Panamera after their product cycles are complete around seven years from now.
(Read more...)
Posted by Michelle Krebs at 6:10 AM under Business , Companies , News , Personalities | Comments (1) | digg this | del.icio.us
Saab Unveils New Flagship
It's leaving the General Motors Co. empire by the end of this year, but GM nonetheless issued the press material detailing Saab's next-generation 9-5 flagship, a car that goes on sale next year after Saab effectively is no longer under GM management. The car will be unveiled at the Frankfurt motor show next month.
Although there are well-executed Saab-esque design details, including a feint at the Saab-signature wraparound windshield and an angular sideglass/C-pillar junction reminiscent of the 900 Series, the bodysides betray a hint of Buickness that shouldn't surprise: the all-new 9-5 is built around the GM global midsize architecture on which rides the new Buick LaCrosse, not to mention Europe's well-received Opel/Vauxhall Insignia.
Leveraging the global midsize underpinnings means the new 9-5 is markedly larger than the current flagship, some five inches longer in wheelbase and nearly seven inches longer overall.
(Read more...)
Posted by Bill Visnic at 1:24 PM under Business , Companies , GM , News | Comments (3) | digg this | del.icio.us
Toyota Closing Nummi In March; Tacoma to Texas
Toyota Motor Corp. announced late Thursday it will end its production contract at the New United Motor Manufacturing Inc. assembly plant in Fremont, CA, next March, shifting assembly of NUMMI-manufactured Tacoma midsize pickups to Toyota's recently built plant in San Antonio, TX.
The NUMMI facility was a joint-venture operation between Toyota and the General Motors Co., but in June, just prior to its Chapter 11 bankruptcy reorganization, GM said it was vacating the NUMMI operation and leaving its ownership in the venture with the "old" GM.
GM did not see a future for NUMMI and shortly thereafter Toyota also began to send signals it, too, might abandon the venture that began in 1984. GM ended production of the Pontiac Vibe (a badged variant of the Toyota Matrix) on Aug. 17.
(Read more...)
Posted by Bill Visnic at 5:36 PM under Business , GM , News , Toyota | Comments (0) | digg this | del.icio.us
Shutdown of Cash for Clunkers To Smack Down Industry Sales
Watch out for a world of sales pain now that the federal Cash for Clunkers rebate program is over, as data from Edmunds.com projects a serious decline in industry sales for the coming weeks.
Edmunds.com's proprietary tracking of purchase intent from visitors to its Web site -- which has proven to be a reliable leading indicator of actual near-term industry sales -- has plunged some 50 percent from its peak during the Cash for Clunkers program.
It is an effect analysts had warned was likely.
"Cash for Clunkers distorted the market in a way that benefited the industry for four weeks -- now the payback begins," said Edmunds.com CEO Jeremy Anwyl.
(Read more...)
Posted by Bill Visnic at 9:21 AM under Analysis , Business , Featured , News | Comments (3) | digg this | del.icio.us
GM Accelerating Decision on Opel?
Just days after the General Motors Co. board of directors countered the company's management and ordered a reexamination of the favored bid to take majority ownership of GM's Adam Opel AG and most of the company's associated European operations, reports from Europe say GM may announce within a matter of days -- or even hours -- the course it will take with Opel.
GM's abrupt reversal in the months-long process that seemed to be proceeding toward selling Opel to a consortium led by Canadian auto supplier Magna International Inc. riled sensitive German politicians and the country's powerful labor unions, all of whom had made it clear they preferred the Magna bid -- which seeks to minimize German job losses -- to the rival offer from Belgium's RHJ International.
GM's about-face last week, in which it announced the board effectively told company leaders to reconsider GM's options, seemingly signaled to the German interests that GM now might be trying to hedge in light of improving auto-industry and economic conditions on both sides of the Atlantic.
(Read more...)
Posted by Bill Visnic at 1:38 PM under Business , GM , News | Comments (0) | digg this | del.icio.us
Honda Increasing Production but Won't Attach Number
Reports from Japan earlier this month indicated Honda Motor Co. Ltd. -- like other automakers with models that proved popular in the just-ended Cash for Clunkers new-vehicle rebate program -- is planning to increase production to replenish starved U.S. inventories.
But a Honda spokesman told AutoObserver today the company won't detail the amount of its production increase.
"We're not attaching figures yet to our production," said the Honda spokesman, adding that the company doesn't expect to forecast production for the remainder of the year.
(Read more...)
Posted by Bill Visnic at 3:00 AM under Business , Companies , Ford , GM | Comments (0) | digg this | del.icio.us
GM Readies Break With Four Divisions, but Opel Intrigue Continues
With the news-dominating Cash for Clunkers program now officially finished, the auto industry can get back to normal: battling U.S. and global recessions and trying to figure out who's going to own half of the former divisions of General Motors Co.
The last month's news was devoted almost exclusively to Cash for Clunkers, so anybody could be forgiven for not being caught up on what's been happening with the sales of GM's Hummer, Saturn, Saab Automobiles and Adam Opel AG divisions. Here's the updated scorecard:
Opel
Suddenly, Opel is GM's problem child.
The company's board last week slapped down the bid from a consortium led by Canadian mega-supplier Magna International Inc., a deal that was favored by GM's management and had the vital blessing of the German government, which was to provide billions in assistance in exchange for Magna's vow to minimize job losses.
(Read more...)
Posted by Bill Visnic at 3:00 AM under Analysis , Business , Featured , GM , News | Comments (0) | digg this | del.icio.us
"Clunkers" Not Dead Yet
No, they can't sell any more new vehicles under the month-long Cash for Clunkers federal rebate program, but dealers swamped by last-minute customers -- and stymied by government computer systems unable to keep up with the deluge -- now have until noon on Tuesday morning to submit their claims for reimbursement.
It is an extension that was widely expected after a weekend of frenzied Clunkers-driven new vehicle sales -- at least for dealers and dealer groups that still were participating.
Many dealers had shut down Cash for Clunkers deals for fear the overloaded government application pipeline would make it impossible to determine if there was funding still available, leaving dealers on the hook for possibly paying the consumer rebates out of their own pockets.
(Read more...)
Posted by Bill Visnic at 3:28 PM under Business , Companies , News | Comments (0) | digg this | del.icio.us
GM Board Brushes Off Magna Bid for Opel
The newly reconstituted board of directors for General Motors Co. might turn out to be a little more "activist" than originally presumed.
The Wall Street Journal reported late last week the new GM board has rejected the bid of management's favored suitor for the company's Adam Opel AG automaking unit.
A consortium headed by Canadian auto supplier Magna International Inc. has been vying with RHJ International, a Belgian investment firm, for control of Opel, but GM leaders and much of the German government have long been reported to favor Magna, which for one thing resolved to minimize job losses in Germany, the main base of operations for Opel and the other portions of GM's European operations up for sale.
Over the weekend, Reuters reported German Chancellor Angela Merkel as expressing a need for urgency in the situation.
(Read more...)
Posted by Bill Visnic at 3:05 AM under Business , Companies , GM , News | Comments (0) | digg this | del.icio.us
Cash-For-Clunkers Expected to Go Out With a Bang: Edmunds Projects 15-Million Weekend SAAR
The federal Cash-For-Clunkers incentive program ends today, and despite frustrating administrative snarls, the program's close was expected to have prompted a rush of last-minute new-vehicle purchases over the weekend leading up to the program's shutdown at 8:00 p.m.
Whatever its problems, Cash-For-Clunkers certainly will be credited for injecting life into auto showrooms that had been moribund until the program began in late July. The industry's Seasonally Adjusted Annualized Rate of sales had struggled all year to broach the 10-million mark, but before the actual transaction details for the program's last weekend can be assessed, Edmunds.com is projecting the SAAR for the final weekend of the Cash-For-Clunkers program to be 15 million.
The final burst of sales should in turn generate an August SAAR of 13 to 13.5 million, said Edmunds forecasters.
(Read more...)
Posted by Bill Visnic at 3:00 AM under Business , Featured , In the Media | Comments (1) | digg this | del.icio.us
Despite Payback Fiasco, Dealers Will Regret End of Cash for Clunkers
The much-examined Cash for Clunkers new-vehicle rebate program ends August 24 and the armchair quarterbacking has already started. Most evaluations of the program will focus on the government's inability to quickly process applications and reimburse dealers for the $3,500 or $4,500 rebates given to buyers.
The backlog of payments certainly affected dealer cashflow, particularly for smaller operations.
But according to new data from Edmunds.com, dealers (and automakers, ultimately) did enjoy more than a few offsetting perks: Besides hiking sales volumes, the Cash for Clunkers program, along with the resulting accelerated reduction of new-vehicle inventories, was responsible for immediately jacking up average transaction prices, margins -- and dealer profit.
(Read more...)
Posted by Bill Visnic at 2:00 AM under Analysis , Business , Companies , Ford , GM , News | Comments (0) | digg this | del.icio.us
Cash for Clunkers Ends August 24
The story of the summer in the auto industry has been the federal government's Cash for Clunkers rebate program. And it's set to close next Monday.
Even two automaker bankruptcies to start the summer seem to have taken a back seat to the furiously popular and always controversial Car Allowance Rebate System (CARS), the official name of the Cash for Clunker program devised by the Obama administration to simultaneously stimulate the auto industry and its dealers and better the environment by removing gas-guzzling and emissions-belching old vehicles (as old as 1984, anyway) from the road.
The program has proven immensely popular with consumers and dealers at first were enraptured, too. But the Cash for Clunkers story quickly evolved into one of bureaucratic snafus and dealer acrimony as the Department of Transportation, administrator of the CARS program, proved unable to quickly and efficiently process the tidal wave of applications in order to promptly reimburse dealers for the $3,500 or $4,500 rebates extended to new-vehicle-buying consumers.
(Read more...)
Posted by Bill Visnic at 10:17 PM under Business , Companies , News | Comments (0) | digg this | del.icio.us
It's Dealers Versus DOT as "Clunkers" Program Set to Close
No auto dealer is complaining about the extra customer traffic the Cash for Clunkers program has generated in the past weeks. But although the federal program has been a solid lifeline in what surely would have been a dead summer for sales, the Car Allowance Rebate System (CARS) is amounting to the ultimate in profitless prosperity for too many dealers.
Complicating the situation, data from Edmunds.com indicates that with the program nearing its conclusion - just announced to be Monday, Aug. 24 - Cash for Clunkers transactions are slowing markedly from highs of 40 percent or more of all new-vehicle sales to less than one in five new-car deals.
Despite the CARS program's undeniable invigoration of previously tomblike showrooms, angry and dispirited dealers across the nation said they had no choice but to give up on Cash for Clunkers participation. The government was so slow in repaying the $3,500 or $4,500 rebates they literally couldn't afford to keep selling new vehicles.
The government foot-dragging was so endangering the final days of the CARS program that General Motors Co., Toyota Motor Corp., Honda Motor Co. Ltd. and others stepped in today to say they will provide cash advances on Cash for Clunkers transactions so dealers don't have to wait for the feds to pay up.
(Read more...)
Posted by Bill Visnic at 9:18 AM under Analysis , Business , Featured , GM , In the Media , News | Comments (7) | digg this | del.icio.us
GM To Add 60K Units Through End of the Year
General Motors Co. confirmed it is boosting production of several models to restock depleted inventories of vehicles popular in the ongoing Cash for Clunkers rebate program and to address "consumer reaction" to new 2010 models such as the Chevrolet Camaro, Cadillac SRX and CTS Sport Wagon and the Buick LaCrosse.
GM says it will add production shifts at the Lordstown, Ohio, plant that produces the Chevrolet Cobalt, a popular choice for buyers replacing a "clunker," and at its CAMI facility in Ingersoll, Ontario, Canada, that assembles the new 2010 versions of the Chevrolet Equinox and GMC Terrain compact crossovers. The company also will add overtime and reinstate previously scheduled downtime at other plants.
In all, GM said it expects to add about 60,000 units of increased production -- the bulk coming in the fourth quarter, when many of the new models will be well along in their launch cycles.
(Read more...)
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"Clunkers" Interest Dwindling
The buying furor instigated by the federal Cash for Clunkers program has peaked and is slipping quickly, according to a new analysis from Edmunds.com, whose data researchers also say it could be mere weeks before auto-industry sales are back to pre-Clunkers levels.
Studying new-vehicle purchase intent, Edmunds.com analysts say figures are down 31 percent from the peak roughly one week after the Car Allowance Rebate System (CARS), the official name of Cash for Clunkers, began on July 24. Edmunds analysts have determined purchase intent is a reliable indicator of actual sales that can be expected to come in the following 90 days.
It appears that like many other wide-scope auto-industry incentive programs of the past, the steam may be running out of Cash for Clunkers after several weeks of furious buying by consumers initially unsure of whether the federal funding would run dry.
(Read more...)
Posted by Bill Visnic at 3:09 PM under Business , In the Media , News | Comments (0) | digg this | del.icio.us
New Cadillac GM Pondering the Diesel Equation
WARREN, MI - Bryan Nesbitt has been on the job as Cadillac's new general manager less than a month, and at a recent media event here, the former vice president of General Motors Co.'s North American design isn't afraid to admit he's still getting up to speed on direct product issues for the company's premium-vehicle division.
One, he told AutoObserver, is diesel engines.
GM product-development higher-ups are adamant that diesels are too costly for the U.S. market. They require complex and expensive exhaust aftertreatment ("onboard chemical factories" is one term repeatedly employed) to comply with the world's toughest diesel-emissions standards - and U.S. diesel fuel is not taxed advantageously, as it is in Europe, where diesels have captured more than half of the region's light-vehicle market.
That includes an outsized presence in Europe's premium sector, where diesel has made distinct inroads because of its combination of efficiency and primary technical advantage: huge torque output, the perfect attribute for engines used in heavy and large luxury models.
(Read more...)
Posted by Bill Visnic at 12:13 AM under Business , GM , News , Technology | Comments (2) | digg this | del.icio.us
VW Merger With Porsche All But Final
The final leg in the convoluted journey Volkswagen AG and Porsche AG have undertaken in the past several years is nearing as VW, once the takeover target of miniscule Porsche, prepares to instead take a controlling interest in Porsche and merge the two companies.
VW reportedly plans to drum up nearly $6 billion to obtain a 42-percent portion of Porsche AG and all of the company's holding company, Porsche Automobil Holding SE. Meanwhile, there's an estimated $1 billion coming from Qatar Holding LLC that will give it 10 percent of Porsche and most of the options Porsche holds in VW stock. The deal is expected to be complete by the end of the year.
The complex arrangement would make the Qatar Emirate the third-largest VW shareholder, behind the Porsche and Piech families probable eventual stake of a reported 35 to 39 percent and the German state of Lower Saxony's approximate 21 percent. The companies had not elaborated, however, on exactly what Qatar Holding's VW stake might be.
(Read more...)
Posted by Bill Visnic at 12:06 AM under Business , Companies , News | Comments (4) | digg this | del.icio.us
GM Says Mercury Cleanup Lies with 'Old' Company
General Motors Co. probably won't win many friends who are concerned about pollution from mercury with its position the "new" GM won't continue participating in an auto-industry coalition to recycle the mercury used in many auto components.
Tens of millions of mercury switches were used for lights and braking systems in the 1980s and 1990s and excesses of the toxic metal have been linked to neurological problems in fetuses and children. A large proportion of the switches were in GM-made vehicles.
The auto industry formed the End of Life Vehicle Solutions Corp. (ELVS) in 2005 to stop escape of mercury from vehicles sent to salvage-yard crushers. The ELVS program is slated to run through 2017 and reportedly has recycled 5,600 pounds of mercury from some 2.5 million automotive switches.
(Read more...)
Posted by Bill Visnic at 11:58 PM under Business , Companies , GM | Comments (0) | digg this | del.icio.us
GM's Henderson: No "Definition" Yet on Exec Pay
Although General Motors Co. has submitted compensation proposals for its 100 executives to 
U.S. Department of Treasury "pay czar" Kenneth Feinberg, CEO Fritz Henderson said Tuesday the GM executives who fall under the still-pending government compensation guidelines effectively are working without knowing exactly how much they're being paid.
"We need to get some definition" about what type of executive compensation may be considered acceptable, said Henderson, who admitted government oversight of pay structure is limiting GM's ability to attract outside talent.
(Read more...)
Posted by Michelle Krebs at 5:54 AM under Business , GM | Comments (3) | digg this | del.icio.us
Magna Takes Loss, Other Suppliers Soaring
Magna International Inc. is embroiled in a bidding war with Belgium's RHJ International SA to take over General Motors Co.'s European operations, but Aurora, Ontario, Canada's Magna has another hassle in the form of its balance sheet: the company lost $205 million in the second quarter.
Magna's sales for the quarter slumped to $3.71 billion, a 45 percent drop, the company said.
(Read more...)
Posted by Michelle Krebs at 4:09 AM under Business , Companies , GM , News | Comments (0) | digg this | del.icio.us
Toyota: No Plan To Undercut U.S. Ad Agencies
An Internet blog was entirely off-base when it suggested this week Toyota Motor Corp.'s
restructuring of its marketing organization in Japan will adversely impact the company's relationship with its U.S. advertising agencies, a senior Toyota source tells AutoObserver
.
Toyota announced it was forming two new internal marketing units, one in Japan to "primarily handle marketing within Japan," and an internationally focused unit "to carry out and assist global marketing as well as coordinate and assist the marketing activities of TMC affiliates."
(Read more...)
Posted by Michelle Krebs at 4:52 AM under Business , Rumors , Toyota | Comments (0) | digg this | del.icio.us
GM-Opel: No Done Deal Yet, GM Exec Says
Press reports that a deal is done between General Motors and Canadian auto supplier
Magna International for Opel are greatly exaggerated, the GM executive in charge of the Opel talks wrote Thursday on the company's blog.
"We have had constructive meetings with both Magna and [Belgian private equity firm] RHJ International this week," wrote GM Group Vice President John Smith, who is chief negotiator for the sale of a stake in Opel and Vauxhall in Europe.
(Read more...)
Posted by Michelle Krebs at 5:40 AM under Business , Companies , GM | Comments (0) | digg this | del.icio.us
GM: Leases To Be Competitive
Barely noticed in the clamor over the Cash for Clunkers effect was that General Motors Co.
announced this week it is reviving its leasing business with a pilot program rolling out for vehicles in each of its four marketing divisions.
The revived leasing program is earmarked to last for just a month.
GM said that just a year ago, leasing accounted for about 17 percent of sales; the ratio has plummeted to around 1 percent thanks to a variety of industry and credit-market travails.
(Read more...)
Posted by Michelle Krebs at 5:52 AM under Business , GM , News | Comments (0) | digg this | del.icio.us
Toyota Loses $819 Million in Quarter; Better Than Analysts' Estimates
Toyota reported Tuesday it lost 77.8 billion yen -- the equivalent of $819 million (U.S.) in the
most recent quarter. The loss was smaller than analysts had forecasted, suggesting the worst is over and that Toyota's full-year losses will be less than previously expected.
Toyota said it now expects to lose 450 billion yen ($4.7 billion) for the fiscal year that ends March 31, 2010. Previously, Toyota expected to lose 550 billion yen ($5.8 billion) for the year.
In a conference call with media and analysts Wednesday morning, Toyota Managing Officer Takuo Sasaki noted a dramatic drop in vehicle sales volume. "However, the introduction of demand stimulating measures by various governments, including Japan, has begun to trigger a revival in some regions," he said.
(Read more...)
Posted by Michelle Krebs at 5:01 AM under Business , News , Toyota | Comments (1) | digg this | del.icio.us
Summer Non-Driving Means Oil Prices Take Big Dip
The price of crude oil dropped six percent Wednesday to around $66.50 per barrel, oil's biggest
slide in almost three months -- a decline that flies in the face of historic trends that typically see oil prices jump in the summer travel months.
But drivers clearly are curtailing travel as the economies in most developed nations continue to drag, and their reduced gasoline and diesel use is driving down the price of oil and ballooning crude oil inventories.
The U.S. Energy Information Agency said the nation's crude-oil stock is 18 percent higher than at the same time last year, a summer that will be long remembered for volatile spikes in gasoline and diesel-fuel prices. Even inventories of gasoline are bloated, despite uncharacteristically low prices.
(Read more...)
Posted by Michelle Krebs at 7:58 AM under Business , News | Comments (0) | digg this | del.icio.us
Honda Ends U.S. Motorcycle Production
In a strange juxtapositioning of the auto and motorcycle industries -- and a business decision
that marks the end to an era -- Honda Motor Co. Ltd. this week said that after three decades, it ended production of motorcycles made in the U.S.
The Honda of America Manufacturing Marysville, Ohio, motorcycle assembly plant was in 1979 the start of the company's manufacturing footprint in the U.S. The HAM site eventually expanded to auto and engine production as well as major stamping and casting activities.
(Read more...)
Posted by Michelle Krebs at 7:47 AM under Business , Companies | Comments (1) | digg this | del.icio.us
Daimler Loses 1 Billion Euros; Honda and Nissan Hang On
A recovery for the global automotive sector may be coming, but it's coming slowly. Japan's second- and third-largest automakers managed to stay in the black in the second quarter, but large European makers still bled.
Daimler AG lost about 1 billion euros in the second quarter, the company reported, although the decline beat analyst expectations. The maker of Mercedes-Benz passenger vehicles said total sales, which included commercial vehicles, plunged 31 percent in Q2 to 391,500 units and revenue was off by 25 percent.
(Read more...)
Posted by Michelle Krebs at 8:49 AM under Business , Companies | Comments (0) | digg this | del.icio.us
Magna Submits Improved Bid to GM for Opel
Canadian auto-parts supplier Magna International reportedly has increased the amount of
upfront capital it will inject into its offer for General Motors' Opel. No word on whether its competitor RHJ International has countered.
Unnamed government sources have told various news outlets that Magna is now offering 350 million euros ($700 million U.S.) of its own capital immediately and 150 million euros in a convertible bond.
(Read more...)
Posted by Michelle Krebs at 8:02 AM under Business , GM , News | Comments (0) | digg this | del.icio.us
GM, Private Equity Firm Rebuffed in Delphi Bid
Something strange happened on the way to bankruptcy court Monday morning: General
Motors Co. and private equity firm Platinum Equity LLC lost out on a seemingly done deal to acquire the assets of long-bankrupt auto-industry mega-supplier Delphi Corp.
The Wall Street Journal reported that several investment funds that owned some $3.4 billion in Delphi debt chose to forgive that debt in a bid to retain Delphi's assets rather than see them auctioned to GM in a procedure that largely would have resembled the recent Chapter 11 bankruptcy restructuring GM itself undertook.
(Read more...)
Posted by Michelle Krebs at 5:24 AM under Business , Companies , GM | Comments (2) | digg this | del.icio.us
Ford Reports $2.3 Billion Net Profit, $424-Million Operating Loss
Ford Motor Co. reported a net profit of $2.3 billion in the second quarter, thanks to a one-time
special gain. However, the automaker continues to lose money in its operations.
Ford said Thursday its net profit was the result of a $2.8-billion net gain due to debt-reduction actions the automaker took. Its pre-tax operating loss came to $424 million in the second quarter, excluding those special items. Its after-tax loss totaled $638 million.
Still, Ford's second-quarter results show the automaker is improving its financial position and narrowing losses. Further, Ford's results beat analysts' forecasts, although the company's automotive operations still "burned" slightly more than $1 billion for the quarter.
(Read more...)
Posted by Michelle Krebs at 4:54 AM under Business , Featured , Ford | Comments (2) | digg this | del.icio.us
"New" GM Has Busy First Week
By Michelle Krebs
DETROIT - The "new" General Motors, which emerged from bankruptcy just last Friday, had a busy first week
The automaker announced a series of executive retirements, departures and re-assignments, likely the first of many as it sheds about a third of its executive ranks. The top three executives, it was revealed in government filings, will retain their previous pay. Unretired executive Bob Lutz had his first misstep in the communications role he now heads. And the automaker got back to the business of building, promoting and selling vehicles
(Read more...)
Posted by Michelle Krebs at 8:55 AM under Business , Featured , In the Media , News , Personalities , Technology | Comments (0) | digg this | del.icio.us
Payday For Old GM Liquidators
Old General Motors, now known as Motors Liquidation Co., has appointed another outside restructuring expert to its board and revealed compensation for its execs in filings with the Securities and Exchange Commission.
The new-old company is headed by Al Koch, as president and CEO, who will be paid $835 an hour. Koch, is vice chairman and managing director of Detroit restructuring firm AlixPartners. He has been joined by James Selzer as vice president and treasurer; he is also a director of AlixPartners. He will receive $555 an hour.
They will be in charge of the sale and liquidation of the old GM's assets, including Pontiac, Hummer, Saab and Saturn.
Posted by Michelle Krebs at 10:13 AM under Business , GM , Personalities | Comments (2) | digg this | del.icio.us
Mission Accomplished: Auto Task Force Could Be History
This week's departure of Steven Rattner from President Obama's automotive task force suggests the panel soon could be dissolved now that General Motors and Chrysler have emerged from bankruptcy.
The possibly imminent dissolution of the task force suggests what its members and President Obama have insisted all along - but have not been believed - that they do not want to run the day-to-day business of GM and Chrysler
(Read more...)
Posted by Michelle Krebs at 9:59 AM under Business , Chrysler , GM , Personalities | Comments (0) | digg this | del.icio.us
Ex-GM CEO Wagoner Retires With $8.6 million
Former General Motors Chairman and CEO Rick Wagoner, who got the boot from the Obama 
Administration in March, will officially retire in August with a compensation package worth more than $8 million in the first five years, the company said in a report filed with the U.S. Securities and Exchange Commission.
That's substantially less than the $20 million he was entitled to at the end of last year.
Wagoner, who is 56 and spent 32 years at GM, officially retires Aug. 1.
Posted by Michelle Krebs at 9:45 AM under Business , GM , Personalities | Comments (0) | digg this | del.icio.us
GM Once Again Owns Delphi
By Bill Visnic
The seesaw saga of auto industry mega-supplier Delphi Corp. is over after coming full circle: General Motors Co. is buying most of the assets of the supplier formed in 1999, ironically, as a way for GM to offload from its balance sheet many very same operations it will once again purchase.
Barely a month ago it was reported GM and a division of the private investment firm Platinum Equity Group would purchase Delphi's assets after Delphi has stumbled in bankruptcy for nearly four years - with Platinum Equity paying more than $3.5 billion to assume much of Delphi's operations and GM taking only strategically vital portions of Delphi.
But it appears the roles have been reversed: GM, just days removed from its own Chapter 11 "quick rinse" bankruptcy and the recipient of an eventual $50 billion or more in government loans, is instead acquiring the lion's share of Delphi - and investing vastly more than Platinum Equity.
(Read more...)
Posted by Bill Visnic at 1:35 PM under Business , Companies , GM | Comments (1) | digg this | del.icio.us
Daimler Shares Stake in Tesla with Abu Dhabi
Daimler AG appears to be pulling along its largest single investor for a ride with the company's recent investment into industry-disruptive electric-car maker Tesla Motors Inc. Daimler reportedly is selling a portion of its 10-percent holding in Tesla to Abu Dhabi's Aabar Investments PJSC.
The deal will give Aabar about 4 percent of Tesla, Bloomberg
reports.
Daimler said it will use Tesla-developed lithium-ion battery packs in a trial fleet of 1,000 of Daimler's smart cars converted to run entirely on electricity.
(Read more...)
Posted by Bill Visnic at 7:23 AM under Business , Companies , News | Comments (0) | digg this | del.icio.us
Ford Stock Slips as GM Exits Bankruptcy
By Bill Visnic
Shares at Ford Motor Co., which had buoyed in recent weeks but began sliding with news of a still-sputtering U.S. economic recovery, slid further on Friday after rival General Motors Co. slipped the shackles of Chapter 11 bankruptcy off after just six weeks.
Ford's share-price slide -- by midday on Friday after GM's emergence from bankruptcy, shares had dropped just a few cents but were off meaningfully from morning gains -- could be coincidental with a continuing downward move in the broad market, but some analysts and investors remain concerned that Ford may be at a competitive disadvantage because of the enormous support the federal government is throwing at GM to assure its recovery.
By the end of the year, the U.S. Department of Treasury will have invested upward of $50 billion in GM, plus at least $5 billion more to lending unit GMAC Financial Services, which also now handles vehicle financing for Chrysler Group LLC.
(Read more...)
Posted by Bill Visnic at 9:58 AM under Business , Companies , Ford | Comments (4) | digg this | del.icio.us
GM Plants To Start Moving Again
By Bill Visnic
Assembly plants for the new General Motors Co. will start to fire up again next week after the newly reconstituted GM left Chapter 11 bankruptcy today and the company completes its traditional two-week shutdown, said president and CEO Fritz Henderson.
The new GM, after leaving many of its plants and other operations with the cast-off assets of the "old" company, should begin to "run our plants on a stable basis going into the second half of the year," Henderson said in a press conference today to announce GM's emergence from bankruptcy and to detail other organizational changes for the new company.
How the company will be organized is important, but the immediate concern is to sell new vehicles in a U.S. auto market that stubbornly refuses to break a Seasonally Adjusted Annual Rate of sales in excess of 10 million units -- the industry sales volume GM continues to say it needs to at least break even selling vehicles in the U.S.
(Read more...)
Posted by Bill Visnic at 8:03 AM under Business , Companies , GM , News | Comments (0) | digg this | del.icio.us
Deadline Set for Delphi Bidders; Auction Scheduled
The four-year bankruptcy saga of auto parts supplier Delphi Corp. has taken lots of twists
and turns, and now the bankruptcy court has set a Friday deadline for the various interested parties to bid on the company that nobody was interested in earlier.
Carl Icahn's Federal-Mogul Corp. and billionaire investor Wilbur Ross, who has pumped significant funds into auto supply companies, are among those interested.
(Read more...)
Posted by Michelle Krebs at 9:49 AM under Business , Companies | Comments (0) | digg this | del.icio.us
House Committee Votes To Restore Terminated Dealer Franchises
WASHINGTON -- A bill approved by the Appropriations Committee of the U.S. House of Representatives requires General Motors and Chrysler to restore franchise agreements with auto dealerships they terminated as part of their bankruptcy proceedings.
U.S. Rep Steve LaTourette, R-Ohio, who sponsored the bill, said the automakers failed to show cost savings associated with having fewer dealers and called the White House backing the elimination of dealers as "un-American."
(Read more...)
Posted by Michelle Krebs at 9:32 AM under Business , Chrysler , GM | Comments (0) | digg this | del.icio.us
Best Buy Gearing Up Electric Vehicle Sales
Best Buy, the nation's largest consumer-electronics retailer, has quietly begun offering
electric-powered scooters, bicycles and Segway Inc. transporters in 19 locations in California, Oregon and Washington, the Wall Street Journal
reports.
Best Buy told the newspaper that its electric vehicles push is part of a re-imagining of the company's product mix involving a corporate division known as Best Buy Labs, which is looking to make better use of the company's Geek Squad electronics technicians.
Industry experts told the Journal that electric vehicles won't be a cash cow for Best Buy anytime soon. But many concur that the investment could prove wise over time, noting that Best Buy has a history of sharp turns that have kept it ahead of competitors.
(Read more...)
Posted by Michelle Krebs at 11:10 AM under Business , Companies , Technology | Comments (2) | digg this | del.icio.us
Chrysler Completes Board of Directors
Chrysler Group LLC announced it has finished naming the last of its nine-member board of directors, with the new (and still private, despite billions of dollars in government loans) company's first board meeting scheduled for July 29.
(Read more...)
Posted by Michelle Krebs at 3:35 AM under Business , Chrysler , News , Personalities | Comments (2) | digg this | del.icio.us
Magna Deal for GM's Euro Operations Souring?
Although it has for some time enjoyed a preferred-bidder status to buy Adam Opel AG and the European operations of General Motors Corp., the grip of Canada's Magna International may be slipping.
The Financial Times
reports GM is weighing a restructured offer from Belgian holding company RHJ International after detailed negotiations with Magna and its consortium partners became snarled by new conditions.
The Magna-led consortium includes Russia's second-largest automaker, GAZ, and the FT reports the group's offer to GM includes conditions that allow access to certain GM technologies, some of which GAZ seemingly intends to wield for Opel-based vehicles built in Russia.
(Read more...)
Posted by Bill Visnic at 1:01 PM under Business , Companies , GM , News | Comments (3) | digg this | del.icio.us
Automakers Hopeful for Some Sales Rebound in June
The industry remains cautiously optimistic June vehicle sales in the U.S. will hit a seasonally adjusted annualized rate (SAAR) of 10 million units for the first time in 2009, a milestone analysts think may indicate the deep freeze in auto sales is at least beginning to thaw.
Automakers will report June sales on Wednesday, and Ford Motor Co. chief sales analyst George Pipas told reporters the company believes total industry sales will see less than a 30 percent decline (compared with the same period last year) for the first time since early last fall.
Ford is confident enough in an improving outlook that it will slightly increase its production for the third quarter -- the first time it's hiked scheduled production since 2007.
(Read more...)
Posted by Bill Visnic at 7:24 AM under Business , Companies , Ford , GM | Comments (0) | digg this | del.icio.us
GM Out in Joint-Venture Plant With Toyota
By Bill Visnic
The status of the New United Motor Manufacturing Inc. General Motors Corp.-Toyota Motor Corp. manufacturing joint-venture assembly plant in Fremont, California, is decided:
GM is out.
Speculation about GM's involvement in the NUMMI facility -- opened in 1984 -- began immediately after GM's filing for Chapter 11 bankruptcy reorganization on June 1. The two companies currently make individually badged versions of the Toyota Matrix/Pontiac Vibe at the NUMMI site; Toyota also makes versions of the Tacoma pickup.
GM announced today its ownership in NUMMI will go along with the company's discarded liabilities in the "old" GM it seeks to form as part of its Chapter 11 restructuring.
(Read more...)
Posted by Bill Visnic at 11:28 AM under Business , Companies , GM , Toyota | Comments (2) | digg this | del.icio.us
"Window Closing" on VW-Porsche Tie-Up
First, tiny sports-carmaker Porsche SE ran a gambit to gain control of the world's second-largest automaker, Volkswagen Group.
Various industry and political pressures and the global economic crisis got in the way, though, and VW now is turning the tables as Porsche bows under the towering debt it ran up during nearly four years of acquiring VW stock.
Reuters reported from Europe today that Porsche rejected VW's latest offer to buy the sports-carmaker and continues to resist pressure from Germany's state of Lower Saxony -- formerly VW's largest stakeholder -- for the two companies to combine.
(Read more...)
Posted by Bill Visnic at 9:42 AM under Business , Companies , News | Comments (0) | digg this | del.icio.us
Geely Closing in on Volvo?
By Bill Visnic
Yet another news report says, through a Chinese news agency citing anonymous government sources, that Chinese automaker Geely has signed a deal to purchase Volvo Cars from current owner Ford Motor Co.
Volvo and Geely are silent on the latest report, but neither company issued a denial. Volvo's official response, which could be interpreted either as dismissive or a Nordically stoic quasi-confirmation, was to call the report "speculative."
The report says the two companies continue to hammer out details, with the most intriguing aspect being that Volvo reputedly will add more Chinese production in a yet-to-be-built plant in the city of Dongguan in China's Guandong Province. Volvo Cars China already produces the S40 domestically and in March added a version of the S80 flagship at a factory in Chongging.
(Read more...)
Posted by Bill Visnic at 2:23 PM under Business , Companies , Ford , In the Media | Comments (0) | digg this | del.icio.us
Half-Hearted Cash for Clunkers Bill Awaits President's Pen
By Bill Visnic
Finally agreeing on legislation hoped to spur the nation's beaten-down auto sales and get some gas-guzzlers off the road, the Senate last night passed a version of the long-debated Cash for Clunkers bill that only needs President Obama's signature -- which he said will happen -- to become law.
Too long in coming and too limited in reach, the final bill, part of larger war-spending legislation, earmarks a $1 billion fund for owners of older, less-efficient models to trade in for new vehicles that use less fuel and emit less pollution. The program's official name is Consumer Assistance to Recycle and Save (CARS).
Owners of 1984 or newer vehicles with a combined fuel-economy rating of 18 mpg or less will get a voucher for $3,500 if the car they trade for gets at least 4 miles per gallon better than their clunker. The payday improves to $4,500 if the purchased vehicle delivers a combined rating of 10 mpg better than the traded vehicle.
Jeremy Anwyl, CEO of Edmunds.com, parent of AutoObserver, reckons the measure, expected to take about 30 days to implement and set to expire in November, might generate only about 250,000 new sales for struggling automakers and dealers -- a fraction of what originally was hoped and with a stimulus impact much less than seen in other nations that have adopted similar programs.
(Read more...)
Posted by Bill Visnic at 8:23 AM under Business , Featured , In the Media , News | Comments (6) | digg this | del.icio.us
New Incoming Rounds in Hybrid War
By Bill Visnic
When gasoline prices plunged early this year, sales of hybrid-electric vehicles went South, too.
Quickly.
The timing may be unfortunate, but major hybrid players Toyota Motor Corp. and Honda Motor Co. Ltd. launched new hybrids this spring -- and both seem determined to grub out a larger portion of the yo-yoing hybrid market. That battle, the latest summertime jump for gasoline prices and the U.S. auto market's continuing gyrations are once again cranking up the attention on hybrids.
(Read more...)
Posted by Bill Visnic at 8:51 AM under Analysis , Business , Companies , GM , Technology , Toyota | Comments (2) | digg this | del.icio.us
Miata Designer Matano, T. Boone Pickens Part of Start-Up Car Company
MONROE, La. -- Mystery solved. Or at least the players behind it.
Mazda Miata designer Tom Matano and Texas billionaire investor T. Boone Pickens are key figures behind a car plant being established in Louisiana to build environmentally friendly vehicles by a start-up company that has never before built cars.
V-Vehicle Co., of San Diego, is a start-up company being financed by California venture capitalists. Its CEO is Frank Varasano, a former executive vice president of Oracle Corp. who is described as the project's visionary.
Company chairman is Ray Lane of the California venture capital firm Kleiner, Perkins, Caufield & Byers, which has been extensively involved in environmentally friendly projects and companies, including Fisker Automotive. John Doerr, a managing partner with the California venture capital company, is a V-Vehicle board member. Former Vice President Al Gore recently joined the firm. Matano will direct design.
(Read more...)
Posted by Michelle Krebs at 12:23 PM under Business , Companies , Featured , GM , News , Personalities , Technology | Comments (0) | digg this | del.icio.us
Washington to Auto Suppliers: No More Money
WASHINGTON -- The U.S. Department of Treasury turned down a request by auto suppliers for additional financial aid, saying it believes the supply chain is stable enough without immediate assistance -- and besides it isn't the government's role to interfere in the contraction of the supplier market.
Two trade associations representing suppliers had asked for the government to guarantee between $8 billion to $10 billion in loans so banks will lend to the suppliers. That's in addition to the $5 billion the government provided to suppliers earlier this year. Those funds are administered through automakers.
President Obama's auto task force, however, did say it would step in if the supply chain unravels and vehicle assembly plants are forced to close due to parts shortages.
(Read more...)
Posted by Michelle Krebs at 9:23 AM under Business , Chrysler , Companies , GM | Comments (0) | digg this | del.icio.us
Bill Ford Calls for National Industrial Policy, Gas Price Stabilization
DETROIT - Ford Motor Co. Chairman Bill Ford Jr., kicking off a National Summit in Detroit this week, called for the U.S. government to establish a national industrial policy aimed at bolstering the nation's competitiveness and to institute a policy that would stabilize "gyrating" gasoline prices.
"The industrial base is eroding and prosperous nations don't let their industries erode," Ford said. "Government, industry and academia all have to be on the same page. Too many times they throw bombs at each other rather than working together."
(Read more...)
Posted by Michelle Krebs at 6:30 AM under Business , Chrysler , Ford , GM | Comments (1) | digg this | del.icio.us
Chrysler Plants To Resume Production; Viper Is First
DETROIT -- After shutting down all of its plants after filing for Chapter 11 bankruptcy April 30,
Chrysler is slowly resuming production, starting Monday with the Detroit Conner Avenue plant that makes the Dodge Viper sports car.
Chrysler should have a schedule for plant re-starts by the end of this week. Plants likely to resume production first will be those building vehicles for which demand is strong and inventories low.
(Read more...)
Posted by Michelle Krebs at 6:21 AM under Business , Chrysler | Comments (0) | digg this | del.icio.us
Mystery Company To Assemble Cars in Louisiana
Baton Rouge, La. -- A company described as a well-financed start-up reportedly is close to
choosing a shuttered north Louisiana site to start a new automobile manufacturing facility -- its first, creating up to 1,500 jobs, two elected officials from the region told the Associated Press.
A formal announcement on the mystery company could come Wednesday from Gov. Bobby Jindal, Rep. Jim Fannin told the wire service.
Fannin said the vehicles would be the company's first, they would be fuel-efficient ones and they will be built at a former Guide Corp. plant.
(Read more...)
Posted by Michelle Krebs at 6:08 AM under Business , Companies , GM , Rumors , Technology , Toyota | Comments (0) | digg this | del.icio.us
Fat Paydays for GM Law Firms
You knew the lawyers would make out on the General Motors' bankruptcy, and they are.
GM's primary law firm, Weil, Gotshal & Manges LLP, earned $54 million in fees and expenses in the six months leading up to GM's June 1 bankruptcy filing, according to a recent court filing by the law firm and reported on by the Wall Street Journal
. The firm's lawyers are billing GM at a rate of $355 to $950 per hour, the Journal
reported.
And there's more. The paper said much of the $54 million didn't relate strictly to GM's Chapter 11 so more big paydays could be in store for the firm.
(Read more...)
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GM Purchasing Czar Headed for Russia
Bo Andersson, who resigned last week as General Motors Corp.'s group vice president-global purchasing and supply chain, is taking a position with Russia's second-largest automaker, GAZ.
The company said Andersson, who served as GM's top procurement executive since 2001, will be the chief consultant to the Russain automaker's board of directors. GAZ is one partner in a group led by Canada's Magna International Inc. to take over GM's Adam Opel AG and most of the company's European operations, including the United Kingdom's Vauxhall.
The announcement of Andersson's departure came abruptly last week and it was speculated he could be leaving GM to be part of a new management team for GM's Saab unit, which GM also is in the process of selling and currently is under bankruptcy protection in Sweden. Andersson began his GM career as a Saab executive.
The Detroit News reported GAZ as saying there is the likelihood Andersson also will be elected to the GAZ board of directors when the company meets to elect a new board on June 29.
(Read more...)
Posted by Bill Visnic at 11:32 AM under Business , Companies , GM , News | Comments (0) | digg this | del.icio.us
GM Playing Own Plants Against One Another?
By Bill Visnic
The political and financial jockeying has started among three General Motors Corp. assembly plants in competition to win the job of building a new generation of compact cars sometime around 2011.
And there is criticism GM -- currently in bankruptcy and earmarked to be more than 60 percent owned by the U.S. government -- is using the promise of the new work to coerce additional tax dollars from the three states hoping to prevail.
The company reportedly has been offered $44 million in long-term tax abatements from the township of Orion, Michigan, site of one of the three competing plants. Countering that are reports GM suggested to Tennessee governor Phil Bredesen the company might choose to build the small cars in the GM plant in Spring Hill -- if the state coughs up $200 million.
(Read more...)
Posted by Bill Visnic at 10:49 AM under Business , Companies , GM , News | Comments (0) | digg this | del.icio.us
Chevrolet Ready To Be Lead Horse in GM Revival
By Bill Visnic
PLYMOUTH, Mich. -- Through the months of the unfolding General Motors Corp.'s bankruptcy story, one plotline has been clear and unwavering: the Chevrolet brand will be the backbone -- and linchpin -- of GM's attempt to restructure and revitalize with a lot fewer brands and a lot smaller operational footprint.
At an event this week to launch the new 2010 Equinox compact crossover, Chevrolet North America Vice President Ed Peper reiterated GM isn't planning to wear the bankruptcy label for long, and added that Chevrolet is ready to drive GM's recovery. He said Chevrolet is loaded with coming products that should resonate in the new patterns of the U.S. auto market.
(Read more...)
Posted by Michelle Krebs at 3:47 AM under Business , Featured , GM , Technology | Comments (3) | digg this | del.icio.us
GM Picks Koenigsegg as Front-Runner for Saab
General Motors has chosen Swedish luxury sports-carmaker Koenigsegg Automotive AB as the
front-runner to buy its Swedish auto company, Saab, sources have told Bloomberg News
.
Bloomberg's source said Koenigsegg was chosen because it committed to invest in restructuring Saab and because it's a carmaker.
Other bidders included U.S. billionaire Ira Rennert's Renco Group Inc. and Merbanco Inc., a group of investors from Wyoming.
(Read more...)
Posted by Michelle Krebs at 10:17 AM under Business , Companies , GM | Comments (0) | digg this | del.icio.us
GM Pulls Plug on 2010 Chevrolet Malibu Hybrid
DETROIT - General Motors has pulled the plug on the 2010 version of the Chevrolet Malibu hybrid
due to slow sales and high inventory levels, the Wall Street Journal
reports.
A GM spokesman told the paper the automaker has a "sufficient stock of 2009s" and starting up production in the near future is "possible, but not likely."
(Read more...)
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Kia Plans to Sell 20,000 Forte Koup Cars This Year
SEOUL - Kia plans to sell 20,000 units of its new Forte Koup vehicle this year and 35,000 in
2010 globally, the company revealed in regulatory documents.
The automaker also said it is considering building a midsize sedan at its soon-to-open U.S. plant in Georgia. The vehicle under consideration for the plant is codenamed VG, currently sold as the Kia Amanti.
(Read more...)
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Zipcar Expects Profit, To Go Public
Car-sharing service Zipcar Inc
. said it will post its first profit in the third quarter and go public in early 2010.
The company, with a fleet of 6,500 vehicles and car-sharing services in the U.S. and the U.K., expects revenues to reach $120 million this year and to hit $1 billion within a decade.
Posted by Michelle Krebs at 6:20 AM under Business , Companies | Comments (0) | digg this | del.icio.us
Right-Wingers Push Obama Protest Through GM Boycott
WASHINGTON -- Right-wing radio hosts says there's only one choice for conservatives angry
about government involvement in the auto industry: Boycott GM.
"Nobody wants to support an Obama company," Rush Limbaugh told his audience, citing a poll showing that 17 percent of Americans backed a boycott of GM, the Detroit News reported.
Limbaugh didn't outright call for a boycott, but said he understood why people would want to avoid GM vehicles. "They don't want to patronize Obama. They don't want to do anything to make Obama's policies work."
Added conservative host Hugh Hewitt online: "Every dollar spent with GM is a dollar spent against free enterprise."
Posted by Michelle Krebs at 10:46 AM under Business , GM , Personalities | Comments (6) | digg this | del.icio.us
Penske: Envisioning Saturn as a Global Motors
By Michelle Krebs
DETROIT -- Roger Penske's dealership group doesn't hold a single Saturn franchise, but now he's offered to buy from General Motors the whole kit and caboodle.
Penske's vision, as he laid it out in an exclusive interview with Edmunds' AutoObserver.com Friday shortly after GM and the Penske Group announced they had made a deal for Saturn, is twofold: to sell GM-made models in Saturn showrooms while shopping the globe for other vehicles to sell, eventually convincing the offshore manufacturers of those vehicles to make them in the United States.
(Penske announced on Sept. 30 it terminated discussions with GM for the purchase of Saturn.)
(Read more...)
Posted by Michelle Krebs at 11:49 AM under Business , Companies , Featured , GM , News , Personalities , Technology | Comments (5) | digg this | del.icio.us
GM, Germany Edge Toward Magna as Opel Buyer
By Bill Visnic
Various press reports on Friday indicate Canada's Magna International had reached a tentative agreement for ownership of General Motors Corp.'s Adam Opel AG automaking unit and most of GM's European operations, including Britain's Vauxhall.
The move would fulfill a long-held ambition for Magna, known mostly as an auto-industry supplier, to evolve into an automaker, although the company's European unit, Magna Steyr, has a strong background of low-volume and niche-volume vehicle production for a variety of automakers, including Mercedes-Benz, BMW and Chrysler.
(Read more...)
Posted by Bill Visnic at 1:03 PM under Business , Companies , GM , In the Media , News | Comments (2) | digg this | del.icio.us
Specialist Supplier Metaldyne Goes for Chapter 11
By Bill Visnic
In a signal the widening distress in the U.S. auto industry's supplier sector is certain to spill outside the nation's borders, Metaldyne Corp., a Plymouth, Michigan-based developer and supplier of specialty metal components mainly for powertrain and chassis applications, filed for Chapter 11 bankruptcy protection.
The company is owned by Japan's Asahi Tec Corp., a former competitor.
(Read more...)
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Auto Supplier Visteon Files for Bankruptcy
By Michelle Krebs
DETROIT -- Auto parts supplier Visteon Corp., as long anticipated it would, filed for Chapter 11 bankruptcy protection Thursday.
Visteon, one of the world's largest auto-parts suppliers, was created from Ford Motor Co. parts operations and employs 31,000 people in 27 countries.
Visteon follows in the footsteps of Delphi Corp., formed from General Motors' parts operations. Delphi has been in Chapter 11 bankruptcy for three and a half years.
Like all automotive suppliers, Visteon has struggled with the dramatic fall-off in vehicle sales, which have prompted its automaker customers to slash production.
(Read more...)
Posted by Michelle Krebs at 5:07 AM under Business , Featured , Ford , News | Comments (0) | digg this | del.icio.us
Small Cars Benefit in U.K.'s Bangers for Cash Scheme
A week after it was put into effect, the United Kingdom's scrappage program is benefiting the sales of small cars and squeezing dealer margins.
The cost program, which offers consumers a 2,000-pound incentive to turn in their old car for a new one, is supposed to be shared equally between the British government and automakers.
However, dealers complain the car companies have cut sales commissions, leaving dealerships funding most of the industry's portion. In addition, most of the new vehicles being purchased are small entry-level ones with already tight profit margins.
Nevertheless, after a shaky start to the program, dealers and automakers say the so-called Bangers for Cash (bangers being slang for old car) is generating increased showroom traffic and sales.
Posted by Michelle Krebs at 10:05 AM under Business , Companies | Comments (2) | digg this | del.icio.us
End in Sight for U.S. Recession; Recovery Modest
The end is in sight for the recession, the worst in U.S. history since World War II that is now in its 17th month, but the recovery will be modest, a new poll indicates.
The survey of 45 professional forecasters released by the National Association of Business Economists (NABE) Wednesday showed about three-quarters expected the economic downturn to end by the third quarter of this year. The other quarter said the upturn would be in the fourth quarter this year or early 2010. None believed it would go beyond the first quarter of 2010.
However, of those who saw an upcoming recovery, they predicted a more moderate one compared with those after previous downturns because of continued job losses and plummeting home prices.
The survey comes on the heels of U.S. consumer confidence, still at historically depressed levels, surged to its highest level this month since last September.
Posted by Michelle Krebs at 10:03 AM under Analysis , Business | Comments (0) | digg this | del.icio.us
Sonic Expects Record Used-Car Sales in May
Sonic Automotive, the third- largest U.S. auto retailer, said it expects to report record used-car sales for May, spurred by demand for Mercedes-Benz, Lexus and other luxury models by cost-conscious consumers, Bloomberg News reported.
May sales will exceed 7,000, the most per month since the company went public in 1997, Chief Financial Officer David Cosper told Bloomberg in an interview. However, new-car sales are down by about 30 percent, he added.
(Read more...)
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AutoZone Benefits from DIYers
AutoZone, the largest U.S. auto-parts retailer, is one of the beneficiaries of the recession as consumer opt to repair their current vehicles rather than buying new ones.
The company reported a third-quarter profit of $174 million, up 9.5 percent and higher than analysts had forecasted. Sales rose 9.3 percent to $1.66 billion. In addition to do-it-yourselfers, the company said the increasing average age of the cars is boosting its sales of oil filters and windshield wipers.
Posted by Michelle Krebs at 9:56 AM under Business , Companies | Comments (0) | digg this | del.icio.us
Beijing Auto Bids on Opel; Other Chinese Auto Companies Make News
Beijing Automotive Industry Corp. has submitted an offer to buy Germany's Opel, on the eve
of the German government announcing which bid it prefers for the General Motors subsidiary, Reuters
reported.
Meantime, German officials are pressing the three other Opel suitors to improve their current offers. The three are Italy's Fiat, Canadian auto supplier Magna International with its backing of Russian investors, and Belgium-based RHJ International.
(Read more...)
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U.S. Taxpayers: GM's Accidental Majority Shareholder
The U.S. government -- or rather U.S. taxpayers -- will hold a majority share in the new General Motors after it emerges from Chapter 11 bankruptcy, which it is expected to file at any moment.
The U.S. Treasury Department will receive about 70 percent of the new GM in exchange for $50 billion in financing for its restructuring, unnamed sources told The New York Times.
(Read more...)
Posted by Michelle Krebs at 12:25 PM under Business , GM | Comments (0) | digg this | del.icio.us
Porsche's Billions in VW Options Gain at Risk
Porsche is in danger of losing about $25 billion in profits recorded from holding Volkswagen
options because it may not have the money to exercise them, Bloomberg News
reports.
Porsche purchased options and Volkswagen stock for more than three years. It now controls more than 70 percent of Volkswagen. However, Porsche may be unable to raise the money needed to cash in the options, reported Bloomberg, citing research by Sanford C. Bernstein & Co., Sal. Oppenheim jr. & Cie. and FAIResearch GmbH & Co.
(Read more...)
Posted by Michelle Krebs at 10:18 AM under Business , Companies | Comments (1) | digg this | del.icio.us
Bankruptcy Judge May Bless Chrysler-Fiat Union This Week
NEW YORK -- The Chrysler-Fiat union could become official as early as Wednesday.
Judge Arthur Gonzalez of the Southern District of New York's bankruptcy court in Manhattan could rule on Wednesday morning to allow Chrysler to sell its select assets to a new company under control of Italy's Fiat. If that approval is granted, a deal to create a merged Chrysler-Fiat with the backing of the U.S. government could be closed by the middle of next month.
(Read more...)
Posted by Michelle Krebs at 6:57 AM under Business , Chrysler | Comments (0) | digg this | del.icio.us
Fiat Dangles Opel Carrot: Fewer German Job Losses
By Bill Visnic
Evidently seeking to up the ante in its gambit to take over General Motors Corp.'s Adam Opel AG, Fiat S.p.A. Chief Executive Sergio Marchionne said over the weekend that job losses from the takeover would be far fewer than press accounts have speculated, reported the Associated Press.
Marchionne told the AP that Fiat's plan for restructuring Opel and integrating it and most of GM's European operations into a mega-automaker consisting of Fiat, Opel and Chrysler (the assets of which Fiat expects to acquire through Chrysler's Chapter 11 bankruptcy) would mean less than 10,000 job losses in Europe - not the 18,000 some reports have suggested.
(Read more...)
Posted by Michelle Krebs at 3:57 AM under Business , GM , News , Personalities | Comments (0) | digg this | del.icio.us
VW, Porsche Talking Again; Looking for Investor
After feuding over the weekend, executives of Volkswagen and Porsche are talking merger once again.
"The chairmen of the supervisory boards of VW and Porsche confirm that the goal of an integrated automobile concern will be pursued further," Ferdinand K. Piech, chairman of Volkswagen, and Wolfgang Porsche of Porsche said in a joint statement. "Both companies will push ahead with the work to achieve this goal constructively and in consensus."
(Read more...)
Posted by Michelle Krebs at 10:16 AM under Business , Companies | Comments (0) | digg this | del.icio.us
Fiat: We Just Want the Money, Not the Rules
By Bill Visnic
Let the "loopholing" begin.
Fiat S.p.A. made it clear it wouldn't go through with its no-investment alliance with now-bankrupt Chrysler unless the American automaker was guaranteed to be the recipient of $6 billion (and probably more) in federal loan guarantees.
Now that Fiat is all but assured of favored-bidder status in the Chapter 11 bankruptcy auctioning of Chrysler's assets and the subsequent Fiat-Chrysler alliance is on track -- as are the federal billions earmarked for the "new" Chrysler -- Fiat's revealed some intriguing new financial sleight-of-hand: an end-run around executive-compensation limits imposed on companies that accept government handouts.
(Read more...)
Posted by Bill Visnic at 8:24 PM under Business , Chrysler , Companies , News | Comments (3) | digg this | del.icio.us
Cash for Clunkers Legislation Eyed for Tuneup
By Bill Visnic
The U.S.'s "cash for clunkers" legislation earmarked to both prop up the auto industry and improve the environment is sputtering along without resolution, hampered by compromises forced by trying to attain two worthy but dissimilar goals.
The proposed used-vehicle scrappage legislation, it is hoped, will incentivize Americans to trade in older, less-efficient (and higher-polluting) models for a new vehicle, both stimulating the auto industry and the economy and also helping air quality. But muddy details, dual policy goals and squabbling constituencies have turned what seems like a good idea into a political quagmire.
"Because this program aims to achieve both environmental and industry goals, it falls short in both directions," said Jeremy Anwyl, CEO of Edmunds.com, parent of AutoObserver.
(Read more...)
Posted by Bill Visnic at 1:52 PM under Business , Featured , In the Media , News | Comments (6) | digg this | del.icio.us
GM Stock at Value-Menu Price; Ford Offering Lukewarm
By Bill Visnic
With investors nervously interpreting the General Motors Corp. tea leaves, GM's stock price plunged to $1 on Wednesday - leaving for Americans the choice between a value-menu order of French fries or a share of GM stock.
After the dip, GM's share price bounced back some 25 percent or better by midday, but the price range nonetheless reflected levels GM common shares hadn't visited since the 1930s.
GM's stock price has been steadily declining in the past months - and since the bankruptcy of Chrysler LLC on May 1 - as media reports and industry-analyst talk underscore an increasing certainty that GM, too, will have to make a trip to bankruptcy court when the company's June 1 restructuring deadline given by the Obama Administration arrives.
(Read more...)
Posted by Bill Visnic at 11:59 AM under Business , Companies , Ford , GM | Comments (1) | digg this | del.icio.us
GM To Burn Rubber on Detroit?
By Bill Visnic
The rumors started not long after General Motors Corp. accepted its first loan under the U.S. Treasury Dept.'s Troubled Asset Relief Program late last year: GM was looking to leave its global headquarters in what is downtown Detroit's most prestigious and recognizable building, the Renaissance Center.
This week, the Detroit News
reports the nearby suburb of Warren, Michigan -- longtime home to GM's rambling Technical Center -- is actively encouraging GM to cut loose of the expensive "RenCen" HQ and relocate to Warren. One major carrot: Warren has no city income tax; workers currently located at GM's RenCen headquarters pay a 1 percent tax to the city of Detroit.
And Warren Mayor Jim Fouts reportedly is dangling tax abatements if GM relocates its HQ to his city. The paper said Warren already has delivered $100 million in tax cuts to GM in recent years.
Fouts was quoted as saying the city's offer could "save" GM.
(Read more...)
Posted by Bill Visnic at 1:32 PM under Business , Companies , GM | Comments (1) | digg this | del.icio.us
Ford Readies New Stock Offering
By Bill Visnic
In a move signaling Ford Motor Co. is seeking new liquidity -- and further positioning itself apart from its Detroit competitors -- the company announced late Monday a new public offering of 300 million shares of common stock.
Ford made a point to say it will use some of the proceeds to pay cash into the United Auto Workers union retiree health-benefits fund, rather than the stock General Motors Corp. and Chrysler hope to use as the lion's share of their payments to the fund.
"Net proceeds to Ford from the offering are expected to be used for general corporate purposes, including to fund with cash, instead of stock, a portion of the payments the company is required to make to the Voluntary Employee Beneficiary Association (VEBA) retiree health care trust with the United Auto Workers," Ford said in a statement.
(Read more...)
Posted by Bill Visnic at 6:15 AM under Business , Ford , News | Comments (3) | digg this | del.icio.us
Pickups Sales Plunging But Ford Buyers Spending More - What Gives?
By Bill Visnic
DETROIT -- By now, everyone knows the raw sales numbers are bloody red: the full-size pickup market was one of the first to be savaged by last summer's high gasoline prices and by the end of 2008, pffft -- five points of market share and some three-quarters of a million units were gone.
Maybe never to return. At least to the segment's former glories.
But there may be a sliver of a silver lining in the pickup sales plunge. At least one automaker -- Ford Motor Co. -- says those still buying pickups are splurging. Since its launch late last year, the "mix" of Ford's new '09 F-Series has been unexpectedly rich, slanted toward more expensive and heavily optioned models and trim levels.
The best example: the F-Series' ultra-plush Platinum -- the new top-of-the-line trim level -- has run at 8 percent of the total F-Series mix. Ford predicted a 3 percent take rate.
(Read more...)
Posted by Bill Visnic at 6:00 AM under Analysis , Business , Companies , Featured , Ford | Comments (1) | digg this | del.icio.us
Corvette Safe in GM Restructuring
By Bill Visnic
Anything and everything in General Motors Corp.'s multinational manufacturing empire is under scrutiny as the company approaches a June 1 deadline to present the U.S. Treasury Dept. with a new restructuring plan, but GM CEO Fritz Henderson today issued reassurance the high-performance (but not entirely politically correct) Corvette is going to be a part of the "new" GM's future.
Rumors and speculation about the Corvette's future in a drastically downsized -- and presumably more environmentally progressive -- GM have circulated for some time, but in a public webchat at GM's FastLane
blog Monday, Henderson said the Corvette is "one of our strongest (if not our strongest
) nameplates in the entire GM lineup. We intend to keep this car fresh and in a segment-leading position."
(Read more...)
Posted by Bill Visnic at 10:46 AM under Business , Companies , GM | Comments (6) | digg this | del.icio.us
Tata Comes Up With Another Big Idea For Its Little Nano
By Bill Visnic
Tata Motors already wins the auto-sector's buzz-of-the-year award for the $2,000 Nano basicar. But the company's onto another good idea: variable delivery charges for its every-penny-counts personal-mobility revolution.
Automotive Business Review says Tata will charge a variable delivery charge based on where the vehicle is ordered in relation to the Nano's assembly plant in the northern-India town of Pantnagar. The report says a Nano delivered to Mumbai has a delivery charge 11 percent higher than a Nano delivered to New Delhi.
(Read more...)
Posted by Michelle Krebs at 5:42 AM under Business , Companies , News | Comments (2) | digg this | del.icio.us
Toyota Posts First Loss in Decades; Red Ink To Continue
By Michelle Krebs
Toyota, still the world's largest automaker and once the world's most profitable one, posted a quarterly loss heftier than what analysts had forecasted and even bigger than the one beleaguered General Motors reported Thursday. The fourth-quarter red ink pulled Toyota's full-year results into negative territory.
For the fourth quarter ended March 31, Toyota lost the equivalent of about $7 billion, one of the biggest quarterly losses recorded by a Japanese manufacturer and more than the $6 billion GM lost in the same quarter.
The fourth quarter pushed Toyota's full-year results to a loss of about $8.6 billion, its first loss in about six decades.
And Toyota, scrambling to cut costs and boost revenue, revealed Friday it expects an even larger loss in the current fiscal year because of another 1 million drop in sales for the year. Toyota's anticipated loss is bigger than analysts predicted.
Posted by Michelle Krebs at 3:49 AM under Business , Featured , News , Toyota | Comments (2) | digg this | del.icio.us
GM: Still Trying To Avoid Bankruptcy, but Preparing Anyway
By Michelle Krebs
DETROIT -- General Motors still hopes to accomplish its restructuring outside of bankruptcy court, but is preparing for bankruptcy nonetheless, most notably by monitoring Chrysler's Chapter 11.
GM's chief financial officer, Ray Young, normally cool, calm and collected, expressed in passionate terms, during his conference call with media and analysts on financial results Thursday, that GM wants to avoid bankruptcy.
"If we go into bankruptcy, it is imperative that we get in and out quickly," Young said, adding the automaker is watching and learning from Chrysler's current Chapter 11 proceedings.
(Read more...)
Posted by Michelle Krebs at 7:16 AM under Business , GM , Personalities | Comments (0) | digg this | del.icio.us
GM Loses $6 Billion in First Quarter
By Michelle Krebs
DETROIT -- With a June 1 deadline for a finalized restructuring plan or bankruptcy filing looming, General Motors posted a $6-billion loss in the first quarter of 2009, about double what it lost in the same quarter a year ago but smaller than what analysts had forecasted.
Revenues this year were about half of last year's, reflecting the global economic downturn. GM spent $10.2 billion more than it earned.
"Our first-quarter results underscore the importance of executing GM's revised viability plan, which goes further and faster to lower our breakeven point," GM CEO and President Fritz Henderson said in the company's press statement issued Thursday morning.
(Read more...)
Posted by Michelle Krebs at 4:08 AM under Business , Featured , GM , News | Comments (1) | digg this | del.icio.us
Not So Fast, Fiat: Russians Interested in Opel, Too
Fiat CEO Sergio Marchionne's plan to create a mega-automaker by
combining Fiat's auto operations with Chrysler and General Motors Corp.'s Opel and other European operations may yet face competition from a previously named interested party: Canada's Magna International.
Just-auto.com reported a Russian news source as saying Magna is allying with Russia's Sberbank and GAZ Group to make a controlling-stake bid for Opel, which GM is anxious to offload and Marchionne covets in order to create a new automaker from Fiat, Opel and Chrysler.
(Read more...)
Posted by Michelle Krebs at 3:56 AM under Business , Chrysler , Companies , GM | Comments (1) | digg this | del.icio.us
Chrysler's Challenge: Finding Customers During Bankruptcy
By Michelle Krebs
DETROIT -- Chrysler has launched a major advertising campaign, to be coupled with a cash and dealer incentives, in its effort to convince new buyers to purchase Chrysler, Dodge and Jeep vehicles and keep current owners in the fold.
But even before it officially filed for Chapter 11 bankruptcy last Thursday, Chrysler was struggling to maintain its once-loyal buyers. In the months leading up to Chrysler's bankruptcy filing -- and despite some of the highest incentives ever in the U.S. auto industry doled out by Chrysler -- the automaker's customer loyalty has dropped on the news of its financial duress. Customer loyalty fell below 50 percent in April, according to Edmunds.com's data. That is, less than half of Chrysler owners who traded in their vehicle did so for another Chrysler, Dodge or Jeep vehicle.
(Read more...)
Posted by Michelle Krebs at 9:43 AM under Analysis , Business , Chrysler , Featured | Comments (0) | digg this | del.icio.us
Chrysler Bankruptcy: It's Official as Case No. 09-50002
By Michelle Krebs
It's official: Chrysler has now filed for bankruptcy. Case No. 09-50002.
The bankruptcy pleadings were officially filed Thursday afternoon, shortly after President Obama announced Chrysler was going into bankruptcy despite its signed alliance with Italy's Fiat.
(Read more...)
Posted by Michelle Krebs at 1:44 PM under Business , Chrysler | Comments (0) | digg this | del.icio.us
Chrysler Plants Shut Down Until Bankruptcy Over; CEO Nardelli Out
By Bill Visnic
Less than an hour after confirming it filed a petition for Chapter 11 bankruptcy, Chrysler LLC issued a press release with initial details of its proposed alliance with Italy's Fiat S.p.A.
Most intriguing is a statement (near the bottom of the release) saying most Chrysler manufacturing operations will shut down starting Monday -- and, although the language is vague, presumably not restart until the restructured company emerges from bankruptcy.
Also, Chief Executive Office Robert Nardelli will leave the company "following the emergence of the new [Chrysler] company from Chapter 11 and the completion of the alliance with Fiat."
(Read more...)
Posted by Bill Visnic at 11:05 AM under Business , Chrysler , Companies , In the Media , News | Comments (0) | digg this | del.icio.us
Edmunds: GM To Hit the Kill Switch on Pontiac
Pressured on all fronts to right-size its business in order to stave off a bankruptcy that's likely to happen anyway, General Motors Corp. next week is likely to announce the latest casualty in its crash-dive restructuring: its lost-in-yesteryear Pontiac division.
Edmunds.com's Inside Line
, like AutoObserver
a part of the Edmunds.com organization, reported yesterday that a source at GM indicated the company is likely to announce on Monday that it will fold Pontiac, a name that has been part of the GM empire since 1926.
Citing unnamed sources, Bloomberg today also reported GM will shelve Pontiac, which achieved its true prominence in the 1960s when it introduced the GTO in 1964, a car widely credited with beginning one of Detroit's most beloved marketing and engineering phases -- its muscle-car era.
(Read more...)
Posted by Bill Visnic at 10:51 AM under Business , GM , News | Comments (7) | digg this | del.icio.us
One Million Plug-In Hybrids by 2015? Maybe. Profitable? Probably Not
By Bill Visnic
DETROIT -- Most members of a panel of electric vehicle and battery experts at the Society of Automotive Engineers World Congress here say President Obama's goal of having 1 million plug-in hybrid-electric vehicles on the road by 2015 is possible -- but will be difficult.
But when asked if automakers or battery suppliers will be able to make a profit on the coming generation of electrified vehicles -- hybrids, plug-in hybrids and extended-range electric vehicles such as General Motors Corp.'s Chevrolet Volt and others -- that need advanced (but more expensive) lithium-ion batteries, the chances are even slimmer.
(Read more...)
Posted by Michelle Krebs at 3:54 AM under Business , Companies , Featured , GM , Technology | Comments (1) | digg this | del.icio.us
GM May Unload Opel for a Song
By Bill Visnic
Hustling to clean up its balance sheet and deal with some atrophied tentacles of its overseas operations prior to a June 1 deadline from the Obama administration, General Motors Corp. could be preparing a deal to offload -- for a paltry sum -- its cash-poor Adam Opel AG European operations, the Financial Times reported today.
The paper says GM wants an investor to pay the equivalent of about $650 million for Opel/Vauxhall. But GM would then invest the money in the new company formed by its European operations, becoming one of, if not the largest, of the new company's shareholders.
Moreover, given the complexity of GM's current financial situation and the compressed time frame for GM to right its ship lest the Obama administration's Automotive Task Force decree GM should be taken through bankruptcy, GM wants this Opel proposal to proceed in a matter of weeks, the Financial Times story said.
(Read more...)
Posted by Bill Visnic at 11:49 AM under Business , Companies , GM , News | Comments (4) | digg this | del.icio.us
Famed German Coachbuilder Karmann Files for Bankruptcy
Legendary coachbuilder Wilhelm Karmann GmbH, which makes convertibles for
Audi and Daimler, has filed for bankruptcy protection from creditors in Germany. The company said "crashing" car markets and contract cancellations have left it unable to pay its bills and its workers.
Karmann said on its Web site that it plans to continue production and maintain as many jobs as possible, while keeping creditors at bay through the courts.
(Read more...)
Posted by Michelle Krebs at 9:19 AM under Business , Companies , News | Comments (0) | digg this | del.icio.us
"Fast & Furious" Shows That Consumers Are Watching Cars, Though Not Buying Them
Consumers aren't buying cars, especially sports cars, but they're watching them on the silver
screen -- in droves.
The newly released movie Fast & Furious took in an April record of $71 million in ticket sales at U.S. and Canadian box offices.
The movie had the biggest April opening ever by a wide margin as cash-strapped consumers seek to escape the reality of the dreary economy to the fantasy within the movie theater. Anger Management, starring Jack Nicholson and Adam Sandler, set the previous record of $42 million in 2003.
(Read more...)
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Honda Will Be No-Show at Frankfurt Auto Show
TOKYO -- Honda announced Tuesday that it has canceled plans to participate in this fall's
Frankfurt auto show due to the "unprecedented market turndown."
"As seen in the withdrawal from Formula One, Honda is trying to reduce every possible cost in various areas including manufacturing, sales and marketing activities to strengthen its business constitution to overcome the tough climate of today," according to the company's press release. Honda earlier closed its assembly plant in the U.K. for a lengthy four months to reduce inventories due to slow sales.
(Read more...)
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Cadillac Put Out of Some European Markets by Distributor's Woes
The future of General Motors' Cadillac division in Europe is becoming increasingly cloudy,
with the automaker reportedly withdrawing its luxury brand from half of Europe's 25 markets due to the financial struggles of its distributor, the Netherlands-based Kroymans Corp.
In another blow to its European aspirations, Cadillac confirmed to AutoObserver earlier this week that it has shelved plans for a new long-needed diesel engine for its rear-drive cars, like the CTS and STS, sold in Europe, where diesels are a must-have for luxury cars.
(Read more...)
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Cadillac Kills Crucial Diesel Engine for Europe
By Bill Visnic
General Motors Corp.'s Cadillac division, long ambitious to expand its brand in Europe, has canceled a long-needed diesel engine that was earmarked to power Cadillacs sold in that market.
The loss of the diesel engine -- currently a virtual requirement to successfully compete in Europe, particularly in premium-vehicle segments -- is another blow to Cadillac's European aspirations and is certain to cause a serious setback and realignment of Cadillac's strategy. Or even an outright surrender in Europe.
GM and Cadillac sources confirm the diesel for Europe has been canceled, but division spokesperson Joann Krell said the engine's official status, as with many diesel engine programs recently shelved, is "indefinitely delayed."
(Read more...)
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March Industry Car Sales Looking Bad, but Less so for Hyundai, CEO Says
By Michelle Krebs
With the month drawing to a close, March is looking a lot like February when
usually March is better than February, Hyundai CEO John Krafcik said.
"March is looking kind of bad," Krafcik said in a press conference and Webcast Wednesday morning from Las Vegas, where the automaker was introducing its 2010 Hyundai Genesis Coupe. Krafcik forecasts 600,000 to 650,000 retail sales in March, about the same for February when March usually has higher sales, kicking off the big spring selling season.
"It's another indication that we're still in the midst of a pretty deep recession and car buyers staying on the sidelines," said Krafcik.
(Read more...)
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GM Bondholders Tell Regulators Debt-Swap Plan Is Risky, Unfair
By Michelle Krebs
Representatives of General Motors' bondholders, facing a March 31 deadline to negotiate concessions with the automaker, charge in a letter to federal regulators that GM's proposed restructuring will not necessarily keep GM out of bankruptcy, and if GM does file bankruptcy, their investments would be worthless.
GM's restructuring plan submitted to the U.S. Treasury Department on February 17 may not keep GM out of bankruptcy as it appears "the company is putting too much faith in a near-term turnaround in the economy that would enable annual car and truck sales to reach previous levels," said the letter sent Sunday to Treasury Secretary Timothy
Geithner as well as Lawrence Summers, Steven Rattner and Ron Bloom, who serve on President Barack Obama's automotive task force.
(Read more...)
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Obama Recognizes Unpopularity of Auto Bailout
President Barack Obama didn't give any hints about which way his administration was
leaning in terms of more loans to domestic automakers, General Motors and Chrysler. But he did acknowledge the unpopularity of such loans by the American public, during his interview with CBS' 60 Minutes
, which aired Sunday night.
The President said he is still committed to helping GM and Chrysler avert bankruptcy, but he says they have yet to demonstrate they can remain economically viable. And there are major political obstacles.
(Read more...)
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Global News: Mitsubishi Restructures in Europe; China's Chery Launches New Brands; China's Dongfeng Cuts Spending
In Europe, Japanese automaker Mitsubishi announced plans to restructure that including moving its corporate headquarters and eliminating jobs while in China, Chery launched two new brands as Dongfeng announced capital spending cuts.
(Read more...)
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Global News: Ford Supports GM in Europe; British Motor Show Cancelled; Brazilian Auto Sales Surge; Seat Workers Vote for Pay Freeze
In news from around the world Thursday, Ford of Europe offered support for General Motors Europe's request for government aid, the 2010 British International Motor Show was canceled, Brazil car sales this month are rising and union workers for Volkswagen's Seat subsidiary approved a two-year pay freeze to prevent layoffs.
(Read more...)
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Some New Cars Now Less Expensive than Used Cars, Edmunds.com Reports
SANTA MONICA, Calif. - The deals on some new cars are so generous that they actually
make the new car less expensive than the one-year old used version of the same model, according to a pricing analysis by Edmunds.com
, parent of AutoObserver.com
.
"Compared with new vehicles sales - which are at lows unseen in decades - the used car market is doing well," observed Edmunds.com CEO Jeremy Anwyl. "Desirable used vehicles are becoming harder to find, pushing up their prices, while today's new cars are heavily discounted. This is creating an unusual economic event: It can actually be less expensive to purchase a new car than a used car."
(Read more...)
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Auto Suppliers Get $5 Billion From Treasury
By Bill Visnic
The U.S. Treasury Department Thursday extended support to the auto industry's financially teetering supplier base, saying it will extend $5 billion in loan support that will be channeled through major automakers.
The Treasury Department will guarantee payment of receivables for components supplied to automakers.
(Read more...)
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Following Hyundai Lead, AutoNation Offers Payment Guarantee
By Michelle Krebs
Taking a cue from Hyundai's highly successful Hyundai Assurance program, AutoNation, the nation's largest dealership chain, will be offering its customers a guarantee to cover payments on the new or used vehicle they purchase for six months if they become unemployed.
Programs like Hyundai's and AutoNation's are an attempt to tackle the No. 1 reason consumers aren't buying cars: lack of confidence.
(Read more...)
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German Aid To Opel Is On Hold
BERLIN - Aid from the German government for General Motors' Opel subsidiary is
stalled until GM submits its final restructuring plan and obtains U.S. government approvalfor that plan at the end of the month.
"Contracts between GM and the U.S. Treasury have to be put on the table and then we can get the clarity we need," said Dagmar Woehrl, Germany's Deputy Economy Minister, following a closed hearing in Berlin with Carl-Peter Forster, GM's top European executive.
(Read more...)
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Global News: Toyota Prius Plug-In Trials in France; Chinese Cars in Israel; Canadian Economy to Shrink
In news from around the world Wednesday, Toyota has partnered with French utility company EDF to road test the plug-in Prius, a Chinese vehicle brand is set to launch in Israel, and Merrill Lynch forecasts dramatic retraction of Canada's economy in the first quarter of 2009.
(Read more...)
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BMW in 2009: A Year of Transition, CEO Says
MUNICH -- This year will be "a transitional year" for BMW as it closely manages its finances on lower sales, the German automaker's chief executive told reporters at the company's annual earnings news conference Wednesday.
After reporting a stunning profit drop in 2008, CEO Norbert Reithofer said he could not offer a "reliable" profit forecast for 2009.
However, he and other top company executives, said the automaker will focus in 2009 continued cost cutting, maintenance of vehicle production in line with sales demand, expansion its cost-saving parts-buying effort with Daimler, exploration of other partnerships and better management its lease business.
(Read more...)
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Global News: Mazda Seeks Government Help; Toyota To Slash Prius Price; China Incentivizes Rural Car Sales; Kia Cuts Russia Sales Targets
In global news Tuesday, Mazda said it was seeking financial help from the Japanese government, China is giving incentives to rural dwellers to buy cars, and Kia slashed its forecast for Russia.
(Read more...)
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Japan's Big Three Reject Higher Pay for Workers
Toyota, Nissan and Honda rejected their unions' requests for higher wages and heftier bonuses for workers.
In Japan, salaries and bonuses are usually negotiated in the winter, in advance of the start of the new fiscal year on April 1. Typically, the companies grant whatever is requested for base pay and bonuses, but this year is different.
(Read more...)
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Moody's Downgrades Honda's Credit Rating
Moody's Investors Services has downgraded Honda's credit rating on $26 billion in debt.
Honda's unsecured long-term debt rating was cut one level to A1, the fifth-highest rating, from Aa3. The rating cut, which makes borrowing money more expensive, is due to plummeting car demand, particularly in Honda's largest market, the U.S., Honda's forecast of an 87 percent drop in profits and its vulnerability to the yen.
"The downgrade has been driven by the severe and rapid downturn in demand for Honda's products in developed markets," Moody's report said.
Both Toyota and Nissan already have had their credit ratings cut.
Posted by Michelle Krebs at 8:05 AM under Business , Companies | Comments (0) | digg this | del.icio.us
Daimler Shops for Michigan Property, Tax Incentives
DETROIT -- German automaker Daimler AG plans to locate an engineering center near Ann Arbor, Michigan, home of the University of Michigan, to develop hybrid technology, if it receives tax incentives and finds suitable property, state and local officials say.
The subsidiary, to be called Mercedes-Benz Hybrid LLC, would employ about 223 engineers and technicians and would receive tax credits valued at $7.5 million over 10 years.
(Read more...)
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Global News: Toyota Cuts Bonuses, Ford Cuts Europe Production, China Caps Fuel Prices, Russia Cuts Out Foreign Competition
In news from around the globe Monday, Toyota announced 50 percent bonus cuts for Japanese management, Ford is reducing output at several European plants, consumer gas prices in Shanghai rose to the government-limited maximum, and Chinese automaker Geely has halted production in Russia.
(Read more...)
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Obama to Korea: Free Trade Agreement Isn't That Free
The Obama administration is reviewing a Bush-negotiated trade agreement with South Korea, objecting to provisions that too heavily favor Korean automakers. Additional concessions from Korea may be required for Congress to approve the 2007 proposal.
This agreement "just simply isn't fair," said Ron Kirk, designee for U.S. Trade Representative, last week at his confirmation hearing before the Senate Finance Committee. Expanding trade in South Korea is "one of the biggest opportunities we have," he added, also cautioning that the administration "will step away from that if we don't get it right."
(Read more...)
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Global News: Daimler Layoffs, GM Aid From Spain, Fiat Leadership in Brazil
In news from around the globe Thursday, Germany's Daimler AG announced layoffs at its truck plants, General Motors won financial aid from the Spanish government, and Fiat's long reign as sales leader in Brazil is under threat from Volkswagen.
(Read more...)
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BMW Still Likes Hydrogen - Sans Fuel Cell
By Bill Visnic
BMW AG, long a promoter of hydrogen fuel for fairly conventional internal-combustion engines, said this week its engineers, with the help of other technical partners, have developed a hydrogen-fueled IC engine with diesel-like thermodynamic efficiency.
BMW said the engine, which uses high-pressure injection of gaseous hydrogen directly into the specifically designed combustion chamber, is up to 42 percent efficient, which rivals contemporary diesels, which represent the current top of the combustion-engine food chain -- not to mention most other propulsion alternatives.
(Read more...)
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Saab, Volvo Digging Deeper
By Bill Visnic
The cuts just keep coming for Swedish automakers Saab Cars and Volvo Cars; in response to weak demand, Saab announced significant job cuts this week; Volvo reportedly will idle plants in Sweden and Belgium for months and cut pay.
Saab recently sought bankruptcy protection in Sweden and is scheduled to sever business ties with current owner General Motors Corp. on January 1 next year; Volvo
owner Ford Motor Co., meanwhile, is laboring to rid itself of the unit for which it paid nearly $6.5 billion in 1999.
(Read more...)
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GM Backs Off on March Billions
General Motors Corp. said today the company won't be needing $2 billion in loans it previously requested for March.
GM said in a statement issued primarily to announce new labor-agreement modifications with the Canadian Auto Workers union that the company "advised the Presidential Task Force on the Auto Industry that the $2 billion of funding previously requested for March would not be needed at this time.
"This development reflects the acceleration of GM's company-wide cost reduction efforts as well as proactive deferrals of spending previously anticipated in January and February," GM added.
(Read more...)
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Ford Builds 100,000th Hybrid; Honda Prices Insight Below Prius
KANSAS CITY, Missouri -- Ford produced its 100,000th hybrid vehicle Tuesday. The silver Escape
Hybrid rolled off the assembly line at the carmaker's Kansas City Assembly Plant.
At the same time, Honda announced that its 2010 Honda Insight will cost more than $2,000 less than the least expensive 2009 Toyota Prius.
Ford has built the most hybrids of any of the Big Three, but still trails Toyota and Honda. In 2008, Ford sold 19,524 Ford Escape and Mercury Mariner hybrids. Toyota sold almost 159,000 Prius hybrids. Still, as Edmunds' Green Car Advisor reports, Escape hybrid sales bucked the industry's downward sales trend in February with a 55-percent sales increase.
(Read more...)
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Visteon Makes Payment, Avoiding Bankruptcy -- for Now
DETROIT -- Automotive supplier Visteon Corp. made a $16 million interest payment on
Tuesday, avoiding what may be the inevitable for now, that of filing for Chapter 11 bankruptcy.
Visteon, a major supplier to Ford, is widely expected to eventually file for Chapter 11 but postponed the filing for now by making the interest payment on the $450 million it has in bonds maturing in 2014.
On Friday, Visteon was delisted from the New York Stock Exchange; its stock price on its final day of NYSE trading closed at 2 cents per share. Fitch Ratings and Moody's say Visteon is among the companies very likely to default on debt payments.
Posted by Michelle Krebs at 5:49 AM under Business , Companies , Ford | Comments (0) | digg this | del.icio.us
Obama Auto Task Force: What Did They Think About Their Detroit Visit?
By Michelle Krebs
DETROIT -- You could imagine a collective sigh of relief as General Motors and Chrysler executives closed their doors late Monday behind the most important guests they've ever had visit.
And you could imagine them wondering what kind of impression they had made on the representatives of President Obama's automotive task force that will decide their fate. "So what did they think?" they must have been asking.
Yet those task force members, none of whom have automotive experience, remain as poker faced as any card player, not providing even the slightest hint about their impressions of their Detroit visit, their thoughts on the precarious situations of GM and Chrysler and their plans for what they will do when the March 31 deadline arrives.
(Read more...)
Posted by Michelle Krebs at 8:06 AM under Business , Chrysler , Companies , Featured , GM , Personalities , Toyota | Comments (1) | digg this | del.icio.us
Subaru and Mitsubishi Among Japanese Makers Seeking Government Loans
By Bill Visnic
Fuji Heavy Industries Ltd. Inc.'s Subaru automaking unit is one of the handful of makers seemingly keeping ahead of withering U.S. auto demand. Yet it was reported this week that even Fuji is seeking a government-backed low-interest loan reported to be approximately $102 million as security against a continuing sales slump.
Auto-industry sales in Japan have been tanking in concert with the U.S. market (Japan auto sales were down 32.4 percent last month), yet in the U.S., Subaru managed a 4-percent hike in sales compared with February 2008.
(Read more...)
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President Obama's Auto Advisors Visit Detroit
DETROIT -- Representatives of President Barack Obama's automotive task force are visiting
Detroit Monday. Their trip includes a tour of a Chrysler assembly plant and General Motor's Technical Center and a test-drive of the Chevrolet Volt.
All the while, auto company executives will try to convince them further federal assistance is a worthwhile investment for taxpayers.
Their visit comes as Republicans cranked up the volume on their opposition to support Detroit automakers and yet another survey showed the American public generally is opposed as well.
(Read more...)
Posted by Michelle Krebs at 7:59 AM under Business , Commentary , Companies , Ford , GM , Personalities , Technology , Toyota | Comments (0) | digg this | del.icio.us
GM Share Price Hits 75-Year Low
DETROIT -- General Motors made history again Friday as its stock price plummeted to a 75-year low, dropping for the first time below Ford's share price.
GM's stock closed at $1.45 a share on Friday, but during the day dropped to $1.27 a share, a price not seen since May 4, 1933. That put GM's market capitalization at about $885 million.
Ford lost 6 percent to close Friday at $1.70.
(Read more...)
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Stock Exchange Delists Supplier Visteon; May Drop American Axle
By Michelle Krebs
The New York Stock Exchange plans to delist the stock of ailing auto supplier Visteon Corp. on Friday and has warned another supplier, American Axle, that it could be delisted if certain criteria aren't met.
Visteon's stock has been at "abnormally low trading levels," the stock exchange said in a statement. It was trading at 7 cents a share Thursday morning, putting its market capitalization at about $7.8 million. A year ago, Visteon traded at about $3.70 a share.
(Read more...)
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Chrysler Cuts Canadian Minivan Production
By Bill Visnic
In its recent restructuring plan submitted to the U.S. Department of Treasury, Chrysler LLC promised to eliminate a shift of production at a North American assembly plant this year, and now it's known where the cut will come: the company announced it will eliminate the third shift at its minivan assembly plant in Windsor, Ontario, Canada.
The move is not unexpected - although minivans still account for a significant portion of Chrysler's total sales, minivan sales have long been trending downward. Sales for Chrysler's Dodge Caravan are off 36 percent so far this year, with Chrysler Town & Country sales slumping 41 percent.
(Read more...)
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Toyota Seeks Loans From Japan
You know the economic environment is tough all over when formidable Toyota goes hat-in-
hand to the Japanese government for a handout.
In fact, public broadcasting station NHK in Japan, reported that Toyota, which expected to report its first loss in history for the fiscal year that ends March 31, has asked the Japanese governments to loan about $2 billion to Toyota Financial Services because private investors are demanding up to 50 percent or more in interest for the company's debt.
(Read more...)
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Consumer Confidence Drops as Do February Car Sales
Americans' confidence in the U.S. economy fell in February, and it showed with a lack of activity in dealer showrooms last month. Automakers report February sales Tuesday, and the annualized rate is likely to be the lowest since the early 1980s.
A key indicator that drives car sales is consumer confidence, which had been edging up since last fall but fell back in February.
(Read more...)
Posted by Michelle Krebs at 7:45 AM under Business , Chrysler , Companies , Ford , GM | Comments (0) | digg this | del.icio.us
Toyota Says Market Has Room for 2010 Prius and New Honda Insight
By John O'Dell
Gas is down around $2 a gallon again. Honda is about to introduce a $19,000 (give or take) hybrid. The economy's in the tank. People are pinching pennies like crazy. And new-car sales are at their lowest levels in decades.
Sounds like a great time for Toyota to hit the market with its third-generation Prius, a car likely to be priced thousands of dollars above its prime competitor, the new Honda Insight hybrid.
But that's exactly what Toyota's doing. Toyota expects the 2010 Prius, which arrives in showrooms in June, will reverse the model's sliding sales and bring 100,000 buyers into the market in the last seven months of this year.
(Read more...)
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Mega-Supplier Visteon Fading
With February auto sales expected to once again be precipitously low and the nation's
economy still roiling, automotive supplier giant Visteon Corp. appears to be sliding toward bankruptcy.
The fall could cause more turmoil for the fragile Detroit automakers, all of which depend on Visteon and a number of similar mega-suppliers for a heavy proportion of their auto parts and major sub-assemblies.
(Read more...)
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Tata Sets Nano Launch Date for March 23
After continuous postponements, India's Tata Motors finally has set a launch date for the
Tata Nano. The roughly $2,500 minicar will go on sale March 23, about three months after initially planned with the automaker being forced to relocate the factory to make the car.
Tata, which is billing the Nano as the world's cheapest passenger car, said Thursday in a statement that it will begin displaying the car in dealerships the first week of April and will begin taking customer orders the following week.
At the March launch, which will include media test-drives, Tata will provide details about the car and the order process will be revealed.
(Read more...)
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GM Posts $30.9-Billion Loss for 2008, Second Biggest Ever
By Michelle Krebs
DETROIT -- As expected, General Motors announced Thursday morning a loss of $30.9 billion
for 2008, the second largest loss in the company's 100-year history -- second only to the $38.7 billion the automaker lost in 2007.
The worst came in the final quarter of 2008 when GM lost $9.6 billion, even more than analysts had predicted. During the fourth quarter, GM burned through $6.2 billion of cash.
GM is staying afloat only with the help of government loans, of which it is seeking more.
"2008 was an extremely difficult year for the U.S. and global auto markets, especially the second half," said GM CEO Rick Wagoner, who is in Washington, D.C., pleading the automaker's case this week for additional federal loans to President Obama's newly formed auto task force.
(Read more...)
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Nissan Will Try To Hold Line on Cube Pricing
By Bill Visnic
CHICAGO -- Even before it launches the funko-box Cube, the cult car that's been on grunge-watch for years to come to the U.S., Nissan North America Inc.'s $13,990 base price already looks like a stretch to maintain.
Although examples on display at the recent Chicago auto show underscore the Cube is no luxury ride, the car nonetheless looks -- and feels -- like it should cost more.
While there are vast areas of uncompromisingly cheap plastic inside, the upholstery is dismal and there's a rudimentary torsion-beam design for the rear suspension, there are components that demonstrate deeper investment.
(Read more...)
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GM Shares Drop to Lowest Price Since 1934
General Motors' shares sunk to their lowest price in 74 years on Friday, as the stock market
in general fell and nagging questions about GM's future arose.
At one point on Friday, GM shares fell to $1.52, the lowest level since July 26, 1934. The price rebounded some, to close at $1.77, a nearly 12 percent drop.
Friday's drop briefly sent GM's market capitalization below $1 billion; in other worse news, GM was worth less than $1 billion based on the value of outstanding shares.
(Read more...)
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Beijing Auto Denies Interest in Chrysler
Chinese automaker Beijing Automotive Industry Co. denied Monday that it was in talks with 
Chrysler about buying assets or technology from the Detroit automaker, Reuters
reported.
The denial came in response to a Chinese Business News report, citing an unnamed executive at Beijing Auto, that the companies had initial talks.
Though Chrysler no longer has a car-making venture with Beijing Auto, the Chinese company still produces Chrysler 300 models for the local market.
(Read more...)
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Saab Says It's Once Again Swedish
By Bill Visnic
Although the press release comes on the letterhead of "former" owner General Motors Corp., Saab Automobile issued a statement Friday saying, "After 20 years of foreign ownership, the future of Saab Automobile is once again in Swedish hands."
Saab made official what had been speculated for weeks, that it's separating from GM after nearly 20 years of at least partial GM ownership. GM acquired full ownership of Saab in 2000.
(Read more...)
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President Obama's Auto Task Force Meets
WASHINGTON -- President Barack Obama's newly established automotive task force met for the first time Friday morning to consider the latest requests for as much as $21.6 billion for new government loans by General Motors and Chrysler and review the companies' viability plans submitted to the U.S. Treasury Tuesday.
The panel, still reviewing the hundreds of pages of documents submitted by GM and Chrysler, was not expected to make any decisions at its first session. Still, the panel does have substantial power to make critical decisions, including if GM and Chrysler should receive more loans, if they should file for bankruptcy or if they should merge. They can approve or reject any major transaction of the companies of $100 million or more. And they can recall the loans.
(Read more...)
Posted by Michelle Krebs at 10:39 AM under Business , Chrysler , GM | Comments (0) | digg this | del.icio.us
GM's Saturn Spin-Off Could Be Opening for Chinese, Indian Automakers
By Michelle Krebs
DETROIT -- General Motors is moving toward a spin-off of its Saturn brand and is open to
selling vehicles from other automakers through the Saturn dealer network, according to a letter sent to Saturn owners.
Such a move would be a perfect door into the U.S. market for Chinese and Indian automakers.
If an alliance with Chrysler fails to materialize, Fiat -- long chomping at the bit to return to the U.S. with its Alfa Romeo models and launch its popular Fiat 500 here -- would be another possibility.
(Read more...)
Posted by Michelle Krebs at 11:11 AM under Business , Commentary , Featured , GM | Comments (0) | digg this | del.icio.us
Saab To File for Reconstruction, Swedish Report Says
By Michelle Krebs
DETROIT -- Saab Automobile AB will file for
reconstruction -- the U.S. equivalent of Chapter 11 reorganization -- at a board meeting at 11 a.m. local time in Sweden, a newspaper there is reporting.
Spokesmen from General Motors, Saab's parent, and Saab declined to comment to AutoObserver Thursday morning, saying they had nothing more to say about Saab than what was in GM's viability plan submitted to the U.S. government on Tuesday.
Saab's plan to file for reconstruction as well as end payments to suppliers was first reported by the highly respected Dagens Industri, Sweden's equivalent of the Wall Street Journal. The paper, citing unnamed sources, said GM's request for a capital injection into Saab by the Swedish government was unsuccessful.
(Read more...)
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Chrysler Needs Extra Billions To Continue; 3,000 More Jobs Cut
AUBURN HILLS, Mich. -- Chrysler's viability plan submitted late Tuesday to the U.S. Treasury
Department asks for another $2 billion in federal loans, bringing its total request to $9 billion.
The additional $2 billion request means Chrysler is seeking $5 billion by March 31 -- rather than $3 billion -- that it says is required to continue operations.
Chrysler's preliminary "viability plan" said it will eliminate more jobs -- another 3,000. It also will rid itself of three more models -- Dodge Durango and Chrysler Aspen and PT Cruiser -- and another production shift. In addition, Chrysler said it has a framework for an agreement of cost-saving concessions from the United Auto Workers (UAW) union, its dealers, its suppliers and second-lien lenders.
(Read more...)
Posted by Michelle Krebs at 2:15 PM under Business , Chrysler , Featured , News | Comments (0) | digg this | del.icio.us
GM, Chrysler Bankruptcy Not Impossible, Obama Aide Says
DENVER -- President Barack Obama's chief spokesman said the administration can't rule out a restructuring through bankruptcy for struggling automakers, while adding the industry is "tremendously important" to the economy, Bloomberg News reported Tuesday afternoon.
Traveling to Colorado on Tuesday with the president, who signed the economic stimulus package, White House press secretary Robert Gibbs told reporters the administration won't "prejudge" the next steps for General Motors and Chrysler until the automakers present their own plans under terms of a government aid package. Those plans are to be filed after the stock market closes today.
The auto companies "represent a huge part of our manufacturing base, and to have a strong and viable auto industry is tremendously important for the future."
(Read more...)
Posted by Michelle Krebs at 12:28 PM under Business , Chrysler , GM , Personalities | Comments (0) | digg this | del.icio.us
Fiat Seeking Cash, Reports Say
Fiat, which has an alliance agreement with Chrysler, reportedly is seeking about $2.5 billion
from investment banks to pay off debt owed this year and to avoid having its credit rating lowered to junk status. The Italian automaker officially denies the reports that came from unnamed sources.
The media reports say Fiat hasn't decided to proceed with a funding plan while the company said it isn't studying a capital increase. Still, Fiat has said it won't pay a dividend for 2008 after its debt climb at year-end and is likely to rise in the first half.
(Read more...)
Posted by Michelle Krebs at 12:26 PM under Business , Chrysler , Companies | Comments (0) | digg this | del.icio.us
BMW Scales Back Mini Production
BMW will scale back production of its popular Mini at its plant in the United Kingdom.
Beginning March 2, the plant, which is BMW's only plant for the Mini Cooper and Mini Clubman, will go from three shifts to two shifts and produce cars five days a week instead of seven.
"While Mini has been weathering the economic downturn, it is not immune from the challenges of the current situation," the automaker said in a statement.
(Read more...)
Posted by Michelle Krebs at 12:01 PM under Business , Companies | Comments (0) | digg this | del.icio.us
Chrysler, Global Sales Slump Prompt Daimler Loss
Daimler AG reported a $1.9-billion loss in the fourth quarter of 2008, its first quarterly loss since 2007.
The German automaker blamed declining global sales and costs related to its 19.9-percent stake in Chrysler for its loss. Further, the company warned that the continued worldwide recession would hurt Daimler's 2009 earnings as well.
Daimler's fourth-quarter loss, its first quarterly loss since the third quarter of 2007, was steeper than analysts had predicted, prompting its stock price to fall by more than 7 percent in early trading Tuesday.
(Read more...)
Posted by Michelle Krebs at 11:25 AM under Business , Chrysler , Companies | Comments (1) | digg this | del.icio.us
GM: Looking for Cash on All Fronts
By Michelle Krebs
DETROIT -- General Motors is denying it has held talks with its Chinese partner, SAIC Motor Corp., about selling part of its stake in their joint venture or other assets as the automaker tries to raise.
Reuters news service quoted sources saying the two had been in such talks. GM issued a statement saying: "There is no truth to the story that we are planning to sell Shanghai GM shares to our partner SAIC."
Meantime, GM has attracted interest in Hummer from an unnamed Chinese company and a private-equity firm, sources told Bloomberg News. In Sweden, GM is seeking $600 million in loan guarantees from the government to keep Saab afloat until a buyer can be found or the brand can be restructured, Bloomberg News also reported.
(Read more...)
Posted by Michelle Krebs at 6:25 AM under Business , Companies | Comments (2) | digg this | del.icio.us
Despite U.S.'s Gloomy Market, Kia Projects Further Gains
By Bill Visnic
CHICAGO -- In the disastrous sales year that 2008 turned out to be, gains of any kind were few and far between. Almost no automakers had volume gains in a market that lost some 2.8 million units. Kia Motors America was one of a handful of companies to post a market-share gain -- and just may improve on that performance this year.
Last year marked Kia's 14th consecutive year of market-share gain in the U.S. And Thomas Loveless, vice president-sales, Kia Motors America, said Kia actually is accelerating despite what turned out to be a dreadful January for the industry: Kia last month won 3.4 percent of the market -- the first time in the company's history, said Loveless, that Kia has ever exceeded 3 percent market share in the U.S.
(Read more...)
Posted by Michelle Krebs at 4:13 PM under Business , Companies | Comments (0) | digg this | del.icio.us
Will Car Loan Tax Deduction Be In or Out of Final Stimulus Package?
The proposed tax deduction for interest on a new-vehicle loan could wind up on the cutting room floor once the U.S. Senate and U.S. House of Representatives come up with a compromise economic stimulus package.
At the moment, the tax credit is in the just-approved Senate bill but not in the House package. Experts are divided on whether it will make it into the final stimulus package agreed upon by both the Senate and House.
(Read more...)
Posted by Michelle Krebs at 9:10 AM under Business , Companies | Comments (0) | digg this | del.icio.us
Sirius XM May Face Possible Bankruptcy
Sirius XM, the company created out of combining the nation's only two satellite radio companies, Sirius and XM, has hired advisers to prepare for a possible bankruptcy filing, The New York Times
reported.
A bankruptcy would make Sirius XM one of the largest casualties of the credit squeeze. With over $5 billion in assets, it would be the second-largest Chapter 11 filing so far this year, the newspaper noted, quoting Capital IQ.
(Read more...)
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Ferrari Enjoys Record 2008
MARNELLO, Italy -- Ferrari bucked the trend of the global auto industry and reported higher
vehicle sales and higher revenues in 2008, according to a statement released by its board of directors Tuesday.
"Ending 2008 with results unprecedented in the entire history of the company is the best endorsement we could have of our strategy of exclusivity, innovation and focus on people," Ferrari Chairman Luca di Montezemolo said in a statement.
"These results beautifully cap a truly exceptional year that saw us once again at the top in Formula 1, winning our 16th Constructors' title, our eighth in the last 10 years," he added.
(Read more...)
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GM, Sweden Hastening to Close Saab Deal
By Bill Visnic
A report from Europe late last week says General Motors Corp. and the government of
Sweden could be hurrying to broker an arrangement for GM's wholly-owned Saab Automobile AB that would effectively re-establish Saab as an independent automaker.
GM's Karl-Peter Forster was reported as saying GM and the Swedish government are working quickly to refine the details of a deal - authorized and financed by Sweden - that would establish independent, Sweden-based management for Saab and re-establish most, if not all, of the company's auto manufacturing once again in the Scandinavian nation, said a story by Britain's AutoCar
magazine.
GM is rushing to tie-up the plan so that Saab might at least technically no longer be a part of GM when the company presents its next restructuring blueprint to Congress and other federal entities on Feb. 17 in order to be considered "viable" and worthy of receiving continued government funding.
(Read more...)
Posted by Michelle Krebs at 4:22 AM under Business , Companies , GM | Comments (0) | digg this | del.icio.us
Magna Shutting Down NY Facility
Magna International recently joined Ford Motor Co. in a high-profile announcement that it will build fully electric cars designed by Ford. But for now, Magna is giving up a core manufacturing component from the old-school business model: the company reportedly is shuttering a plant in New York state that makes transfer cases for SUVs and pickups.
Negotiations with the United Auto Workers union representing workers at the Magna site in Syracuse, NY, reportedly broke down, and the Canadian mega-supplier said it would close the plant because workers would not agree to a contract that would keep the plant competitive.
(Read more...)
Posted by Bill Visnic at 3:15 AM under Business , Companies , News | Comments (0) | digg this | del.icio.us
Supplier Group Asks for $25B in Bailout Help
The Motor & Equipment Manufacturers Association (MEMA) this week submitted a request to the U.S. Dept. of Treasury for $25.5 billion in federal aid to help its auto-industry supplier members weather the deepening financial crisis that has gripped the domestic auto industry.
The Wall Street Journal
reports MEMA's request came to light this week as U.S. House members met with representatives from the state of Michigan to discuss the auto industry's troubles. MEMA represents some 400 auto-industry suppliers, a significant portion of which are believed to be mirroring the financial distress of their primary customers, the Detroit Three automakers, and, to a lesser extent, transplant manufacturers who also are battling a prolonged downturn in U.S. auto sales.
(Read more...)
Posted by Bill Visnic at 8:52 AM under Business , Chrysler , Companies , GM , News | Comments (0) | digg this | del.icio.us
China's Geely Mentioned as Volvo Suitor
By Bill Visnic
Joining the list of auto companies denying they are interested in purchases of or alliances with other auto companies is China's Geely Automobile Holdings Ltd. -- one of the more prominent of the nation's numerous automakers -- which is denying talks with Ford Motor Co. about acquiring its Volvo Cars operation.
The Wall Street Journal
reported this week that Geely president Li Shufu said, "there are no such talks," and Ford, which has said it is shopping Volvo, would not comment.
(Read more...)
Posted by Bill Visnic at 7:02 AM under Analysis , Business , Ford , News | Comments (0) | digg this | del.icio.us
Senate Approves Auto-Loan Interest and Sales-Tax Writeoff
By Bill Visnic
WASHINGTON, D.C. -- Perfectly timed after auto makers reported dismal U.S. sales in January, legislation introduced by U.S. Senator Barbara A. Mikulski's (D-Md.) to allow buyers to deduct from their income taxes the interest payments on auto loans - as well as state sales and excise taxes -- was passed in the Senate late yesterday.
The Auto Assistance Ownership Amendment is an amendment to the American Recovery and Reinvestment Act, which is awaiting Congressional approval.
Many analysts and auto-industry executives have called for auto-loan interest tax writeoffs to be a part of the broad federal stimulus being considered in Washington as an effective way to help reignite auto sales this year.
(Read more...)
Posted by Bill Visnic at 9:12 AM under Business , In the Media , News | Comments (0) | digg this | del.icio.us
Fleet Cutbacks Help Shrink January Sales to Early-1980s Levels
By Dale Buss and Bill Visnic
Two huge drags on the U.S. auto market - an utter lack of consumer confidence, and a paucity of credit -- persisted in January and were joined by a new one: at least a temporary evaporation of the fleet market.
Industry-wide sales in January cratered from a year earlier, falling by 36.9 percent, to about 677,000 units from 1.06 million vehicles sold in January 2008. The seasonally adjusted annual sales rate fell to fewer than 10 million units for the first time in more than 26 years. And the American auto business sold fewer cars than for any month since the depths of a recession in December 1981.
(Read more...)
Posted by Bill Visnic at 5:14 PM under Analysis , Business , Chrysler , Featured , Ford , GM , News , Toyota | Comments (2) | digg this | del.icio.us
Scion Not Scorched by 2008, but Wants Fourth Model
By Bill Visnic
DETROIT -- Sales analysts for Toyota Motor Corp.'s Scion brand are still looking at the numbers from the last half of 2008 -- a disastrous six months for U.S. auto sales -- but the brand's vice president says the economy's credit meltdown probably did not hurt Scion as much as it might be assumed for a brand that broadly target's young and first-time buyers.
And despite the rapid and debilitating contraction of the U.S. market, Scion wants another model to sell.
(Read more...)
Posted by Michelle Krebs at 7:41 AM under Business , Toyota | Comments (0) | digg this | del.icio.us
Fiat Is Chrysler's Only Dance Partner Now, Press Says
By Kevin Smith
LOS ANGELES -- Chrysler President Jim Press told a roundtable of media in Los Angeles that the only party the automaker is in discussions for an alliance with at the moment is Italy's Fiat.
"We're in conversation with Fiat only," Press said. "It's a potential alliance that makes a lot of sense. It brings fuel-efficient technology here quickly. It preserves jobs because dealers can expand their market coverage, and we use excess North American manufacturing capacity. We get a platform for export back into Fiat's worldwide distribution."
(Read more...)
Posted by Michelle Krebs at 6:25 AM under Business , Chrysler | Comments (0) | digg this | del.icio.us
Few Auto Ads Air on Super Bowl
By Michelle Krebs
Super Bowl audiences will see a dearth of car ads during Sunday's big game, and they will see none from Detroit's ailing automakers. Only Audi and Hyundai, back for the second year as they seek to increase market share in the game, and Toyota will advertise during the game.
The cost of the ads, which hit the $3-million mark for a 30-second spot (of which there will be nearly 50) this year, is significant barriers to entry for automakers with auto sales slumping to their lowest levels since the early 1980s and most companies struggling to turn a profit. And the payoff is mixed for advertisers, even though the Super Bowl attracts millions of eyeballs.
(Read more...)
Posted by Michelle Krebs at 5:46 AM under Business , Chrysler , Companies , Ford , GM , In the Media , Toyota | Comments (1) | digg this | del.icio.us
Volvo Loses $1.5 Billion in 2008; $736 Million Fourth Quarter
DEARBORN, Mich. -- Ford's Swedish brand, Volvo, posted a $1.5 billion loss in 2008, with
$736 million of that loss coming in the fourth quarter.
That compares with a loss of $164 million in 2007 and breaking even in the fourth quarter of 2007.
Ford CEO Alan Mulally, in a conference call, blamed Volvo's significant loss largely on lower sales and exchange rates. He said Volvo remains under strategic review, which includes its possible sale, but said no further details would be provided at this time.
(Read more...)
Posted by Michelle Krebs at 6:11 AM under Business , Ford | Comments (0) | digg this | del.icio.us
UAW Jobs Banks Gone From Big Three
DEARBORN, Mich. -- Ford said Thursday the United Auto Workers (UAW) union agreed to end its Jobs Bank for laid-off employees as the union had done with General Motors and Chrysler.
Elimination of the controversial Jobs Bank, which gives laid-off workers nearly full pay though they aren't working, was a requirement for GM and Chrysler to keep their loans from the U.S. government. Though Ford has not taken federal money, the automaker insisted it would not be disadvantaged and expected the same concessions the union granted to GM and Chrysler.
(Read more...)
Posted by Michelle Krebs at 4:56 AM under Business , Chrysler , Ford , GM | Comments (0) | digg this | del.icio.us
Chrysler's Press: On Sales, Incentives, Cash and Alliances
LINTHICUM HEIGHTS, Md. -- Chrysler President Jim Press told reporters here that it has other possible partners it can tap in case the Fiat alliance
doesn't work out, that the automaker's new incentives are helping its market share this month and that it needs the additional $3 billion in federal loans to survive the first quarter.
Press held a roundtable with reporters as he tours the country visiting dealers, urging them to push out the old 2008 inventory and order more 2009 models so Chrysler can keep its factories running and badly needed cash coming in.
(Read more...)
Posted by Michelle Krebs at 9:32 AM under Business , Chrysler , Personalities | Comments (0) | digg this | del.icio.us
GM Plant for Cruze, Volt Engines Delayed Again
General Motors confirmed Wednesday it extending the delay in construction of its four-
cylinder engine plant in Flint, Michigan. The plant is to build the 1.4-liter engines for the Chevrolet Cruze and Volt.
Last month, work was suspended pending a review in the first quarter, GM said at the time. No specifics about the most recent delay were provided.
GM insists the engine plant should be done in time for the start-up of production of the Cruze at the Lordstown, Ohio, plant and the Volt at the Hamtramck plant in Detroit.
(Read more...)
Posted by Michelle Krebs at 9:13 AM under Business , GM , Technology | Comments (0) | digg this | del.icio.us
Volkswagen Orders Routan Production Halted
Volkswagen AG confirmed reports that it asked Chrysler to suspend production of its new Routan minivan during the month of February due to weak demand, the Windsor Star
in Ontario, Canada, reported.
VW contracts Chrysler to build the minivan, based on the Chrysler Town & Country and Dodge Grand Caravan, at its plant in Windsor.
A VW spokesman told the Windsor Star Routan production would resume in March.
(Read more...)
Posted by Michelle Krebs at 7:32 AM under Business , Chrysler , Companies | Comments (0) | digg this | del.icio.us
Mitsubishi Idles U.S. Plant for 12 Weeks
Mitsubishi Motors North America says its assembly plant in Normal, Illinois, will remain closed an additional five weeks as the Japanese automaker tries to reduce inventories, rising due to sluggish sales.
The plant, which employs 1,400 people and assembles the Eclipse, Eclipse Spyder, Galant and Endeavor, will be closed a total of 12 weeks, from February 16 through May 8.
(Read more...)
Posted by Michelle Krebs at 7:25 AM under Business , Companies | Comments (0) | digg this | del.icio.us
Honda Cuts Production in North America, Japan; Ends S2000
By Michelle Krebs
DETROIT -- Honda announced further production cuts in North America and Japan as the global recession deepens and vehicle sales continue to decline.
The additional cuts are across the board at Honda's North American plants and models, with its slow-selling Honda Odyssey and Pilot taking a big hit.
In addition to production cuts, Honda announced this will be the last model year for its Honda S2000 sports car.
(Read more...)
Posted by Michelle Krebs at 6:53 AM under Business , Companies , Featured | Comments (0) | digg this | del.icio.us
Toyota Denies Plans To Cut Output Further
Despite published reports in Japan to the contrary, Toyota is denying that it will cut worldwide vehicle production by at least 20 percent this year.
The Japanese newspaper Tokyo Shimbun reported Monday that Toyota planned to produce about 6.5 million vehicles this year, down from the 8.21 million it assembled in 2008.
Posted by Michelle Krebs at 6:50 AM under Business , Toyota | Comments (0) | digg this | del.icio.us
Chrysler Greets Fiat Visitors
By Michelle Krebs
AUBURN HILLS, Mich. -- Chrysler had a visit from executives of Italy's Fiat this weekend, including its high-profile CEO, Sergio Marchionne
.
Chrysler CEO Bob Nardelli told employees in a memo Monday that the executives from Fiat held meetings at the company's headquarters over the weekend. He characterized the meeting as positive and said the "alliance is very promising."
Fiat has offered to take a 35 percent stake in the Detroit automaker in a deal that could be completed by the end of April. It could eventually raise that stake to 55 percent.
(Read more...)
Posted by Michelle Krebs at 6:09 AM under Business , Chrysler , Companies , Personalities | Comments (0) | digg this | del.icio.us
GM Slashes Production, 2,000 More Jobs
General Motors will eliminate shifts at plants in Ohio and Michigan, eliminating 2,000 jobs.
Those plants make its Lambda-based SUVs, including the Buick Enclave and GMC Acadia, as well as the Chevrolet Cobalt compact. GM will cut production at 13 other North American plants in the second quarter.
In Lansing, Michigan, GM will begin alternating between morning and afternoon shifts at the plant that builds the Enclave and Acadia sport-utility models from February 2 until it eliminates the afternoon shift March 30. That will eliminate 1,200 jobs.
(Read more...)
Posted by Michelle Krebs at 9:25 AM under Business , GM | Comments (0) | digg this | del.icio.us
Chrysler-Badged Fiats Two Years Away
Chrysler Vice Chairman Jim Press announced at the National Automobile Dealers Association gathering in New Orleans this weekend that a Chrysler-badged Fiat could be introduced in less than two years. The company is reportedly looking at the Fiat 500, Panda and Punto models, but has not decided on a platform.
At the same time, Chrysler CEO Bob Nardelli sent a letter to company employees Friday confirming the development of a new Dodge Durango SUV as well as a Dodge Charger and Chrysler 300 sedan.
(Read more...)
Posted by Michelle Krebs at 7:45 AM under Business , Chrysler , Technology | Comments (0) | digg this | del.icio.us
Gasoline Prices Rose 15% So Far This Year
Gasoline prices at pumps across the U.S. have risen 15 percent since the beginning of the year, a delayed reaction to refiners cutting back production late in 2008, the Wall Street Journal reported Monday.
U.S. gasoline prices rose 6.3 cents to $1.847 a gallon in the week ended January 19, according to government data. Data from AAA, the largest automobile club in the country, indicate that this number will be slightly higher in the next release of weekly figures, scheduled for Monday.
(Read more...)
Posted by Michelle Krebs at 7:37 AM under Business | Comments (0) | digg this | del.icio.us
Chinese Automakers Report Mixed Results
Two of China's biggest carmakers have issued profit warnings for 2008 and a third reported strong profit growth last year.
(Read more...)
Posted by Michelle Krebs at 7:30 AM under Business , Companies | Comments (0) | digg this | del.icio.us
Auto Industry Slump To Continue a Couple Years, Ghosn Says
RIYADH, Saudi Arabia -- Renault-Nissan CEO Carlos Ghosn predicts the current slump for
automakers will continue for the next couple of years.
Ghosn forecasts global vehicles sales will fall 14 percent this year to 55 million units from 63 million in 2008. Further, he expects it will take at least seven years to return to the peak level of 69 million units in 2007.
"It's not a short-term kind of correction. It's a real slump," Ghosn told reporters at an economic gathering here.
(Read more...)
Posted by Michelle Krebs at 7:22 AM under Business , Companies , Personalities | Comments (0) | digg this | del.icio.us
UAW Ends Chrysler Jobs Bank
The United Auto Workers (UAW) union has agreed to end its controversial Jobs Bank at Chrysler that pays workers on layoff, effective Monday.
The Jobs Bank became a lightening rod during last fall's Congressional hearings on government aid to U.S. automakers and its elimination was part of the agreement to obtain the federal loans.
(Read more...)
Posted by Michelle Krebs at 6:47 AM under Business , Chrysler , Ford , GM | Comments (0) | digg this | del.icio.us
AutoTrader.com, Edmunds.com, Car Dealers Join To Reach More Car Buyers
NEW ORLEANS, La. -- AutoTrader.com and Edmunds.com, the two most prominent independent automotive Web sites announced Sunday at the National Automobile Dealers Association convention here that they are collaborating to connect more new car buyers to dealers through a nationwide partnership that will put new car listings from AutoTrader.com dealers in front of the millions of new car shoppers on Edmunds.com.
AutoTrader.com is powering new car inventory listings on Edmunds.com so that the millions of car buyers who visit the Edmunds site can choose a new path to research and compare franchise auto dealers' new car inventory as they make their new car purchase decisions.
(Read more...)
Posted by Michelle Krebs at 6:03 AM under Business , News | Comments (0) | digg this | del.icio.us
Kia Profits Climbs; Forges Ahead With U.S. Plant
Kia Motors, which is 39 percent owned by Hyundai, reported this week that its fourth-quarter profit nearly doubled due to the weak Korean won and the success of new models, especially in its home market.
Kia said it would proceed with its plan to start production of two to three models at its U.S. plant in Georgia in December, as planned. The automaker said it would launch four new models, increase small-car production and keep inventories in check this year.
Posted by Michelle Krebs at 11:02 AM under Business , Companies | Comments (0) | digg this | del.icio.us
Fiat-Chrysler Marriage Is Troubled Even Before Consummation
By Michelle Krebs
The proposed marriage between Chrysler and Italy's Fiat is showing signs of strain even before it is consummated.
Some Congressmen already are expressing concern about Chrysler's planned alliance with a foreigner and using federal funds to do so. Fiat has made obtaining additional federal funds a condition of the wedding to occur.
At the same time, Fiat's turnaround showed its fragility as the automaker reported fourth-quarter earnings that plummeted and a cash burn that is raging.
(Read more...)
Posted by Michelle Krebs at 7:53 AM under Business , Chrysler , Companies | Comments (0) | digg this | del.icio.us
AutoNation CEO Promotes Higher Gas Tax
Mike Jackson, CEO AutoNation, the country's largest dealer group, said the federal government needs to gradually increase gasoline taxes if it wants to decrease dependence on foreign oil and promote cleaner vehicles.
Speaking to the Automotive News World Congress in Detroit, Jackson said cheap gas will keep consumers from buying automakers' vehicles equipped with technology for fuel-efficiency.
"Cheap gasoline combined with fuel-efficiency mandated by the government is an economic disaster for America," Jackson told the industry gathering.
Earlier this month, Edmunds.com, parent of AutoObserver, took and promoted the same position.
(Read more...)
Posted by Michelle Krebs at 10:25 AM under Business | Comments (0) | digg this | del.icio.us
Chrysler-Fiat Could Find Welcoming Marketplace, Experts Say
By Dale Buss
If the Chrysler-Fiat alliance makes it out of the crib, the
combination could provide each company with some potent new assets in the U.S. and global marketplace.
Chrysler could badge fuel-efficient, Fiat-based or -built small cars under its Chrysler brand and fill out the American industry's weakest car lineup as well as gain access to Fiat's
global retail network. Broader distribution of Chrysler's iconic Jeep brand -- into Asia, for instance -- would be one possibility.
(Read more...)
Posted by Michelle Krebs at 7:24 AM under Analysis , Business , Chrysler , Companies | Comments (0) | digg this | del.icio.us
COMMENTARY: Fiat-Chrysler Link Is Nice Idea, but Futile Without Money
By Bill Visnic
Fiat S.p.A.'s acquisition of 35 percent of Chrysler has all the good-sounding trappings of an auto-industry alliance that, under normal circumstances, would indicate another industry tie-up that might bear fruit.
But in the supercharged atmosphere currently surrounding the auto sector -- and particularly the at-risk U.S. domestic automakers -- the deal is being considered by some as the salvation of Chrysler.
The prolongation of Chrysler's likely dissolution is the more viable assessment of Tuesday's announced Fiat-Chrysler deal because it includes no cash infusion to Chrysler.
(Read more...)
Posted by Michelle Krebs at 4:31 AM under Analysis , Business , Chrysler , Commentary , Featured | Comments (0) | digg this | del.icio.us
Honda Sets New Record for Plant Shutdown
Honda plans to halt production at its U.K. plant that employs 4,200 people for four months. That is believed to be the longest shutdown by any carmaker worldwide -- so far.
Honda said on Friday it would extend a shutdown planned for February and March into April and May. Honda's move puts more pressure on the U.K. government to bail out ailing automakers who are struck by the general decline in the economy and car sales, which are worse in the U.K. than in Europe generally.
(Read more...)
Posted by Michelle Krebs at 1:02 PM under Business , Companies | Comments (0) | digg this | del.icio.us
Checker Files for Bankruptcy
Checker Motors Corp., the auto-parts maker that used to produce Checker taxi cabs, has filed for Chapter 11 bankruptcy.
Checker sought court protection last Friday in U.S. Bankruptcy Court in Michigan, citing problems such as rising raw material prices and the falling market share of its automaker customers, which include General Motors, Ford and Chrysler, for its situation.
(Read more...)
Posted by Michelle Krebs at 12:20 PM under Business , Companies | Comments (0) | digg this | del.icio.us
French Government's Automaker Bailout Offer Has Strings Attached
The French government is working on an aid package for domestic automakers Renault and PSA Peugeot Citroen. However, the automakers don't agree on one of the major strings attached -- no closure of French factories.
(Read more...)
Posted by Michelle Krebs at 12:13 PM under Business , Companies | Comments (0) | digg this | del.icio.us
BMW Cuts Production, Seeks German Loan Backing
BMW is looking into applying for state guarantees to back up its borrowings, a German
newspaper reported Tuesday. At the same time, BMW announced it will cut production, including that of its 3-Series and 7-Series, by reducing hours of 26,000 workers.
BMW said shorter hours would allow the German automaker to reduce labor costs and production without mass firings. "The highly qualified employees we are able to retain today will give us a decisive competitive edge in the future," BMW said in a statement.
(Read more...)
Posted by Michelle Krebs at 12:00 PM under Business , Companies | Comments (0) | digg this | del.icio.us
Chrysler, Fiat Sign Global Strategic Alliance Deal
By Michelle Krebs
Auburn Hills, Mich. -- Chrysler confirmed early Tuesday morning that it, along with its majority owner Cerberus Capital Management, had signed a deal with Italy's Fiat to establish what it called a global strategic alliance.
Chrysler said the alliance is a key element of its viability plan that must be submitted to Congress by the end of this quarter. The automaker said in a statement posted on its Web site that the alliance would allow Fiat and Chrysler to take advantage of each other's distribution networks and "optimize fully their respective manufacturing footprint and global supplier base."
(Read more...)
Posted by Michelle Krebs at 4:27 AM under Business , Chrysler , Companies , Featured , News | Comments (1) | digg this | del.icio.us
Chrysler Launches 0% Financing With Government Help
By Michelle Krebs
DETROIT -- Within hours of its credit arm obtaining $1.5 billion in federal loans, Chrysler LLC announced incentives of zero-percent financing for up to 60 months on select 2008 and 2009 model year Chrysler, Jeep and Dodge vehicles through Chrysler Financial, effectively immediately.
In addition to the incentives, Chrysler Financial will loosen its previously tightened credit requirement to now include customers with scores in the 620 range.
(Read more...)
Posted by Michelle Krebs at 12:13 PM under Business , Chrysler , Featured , News | Comments (0) | digg this | del.icio.us
Tokyo Show Could Be No Show; Big Three Bow Out
The Japan Automobile Manufacturers' Association reportedly plans to meet later this month
about whether or not to hold the 2009 Tokyo Motor Show. A decision likely will be announced shortly thereafter.
An official of the organization was quoted as saying the show, held every other year, may be canceled due to the global economic crisis.
The Tokyo show has struggled in recent years to maintain its status as an international show because of Japan's largely closed market. Automakers have opted instead to shift their auto show dollars to China.
(Read more...)
Posted by Michelle Krebs at 8:19 AM under Business , Ford , GM , News , Toyota | Comments (1) | digg this | del.icio.us
Edmunds.com Gives Away $10 Million of Ads Urging Americans To Buy Cars
Online car-buying site Edmunds.com, parent of AutoObserver, is giving away $10 million
worth of advertising in an effort to spur Americans to start buying new cars and trucks again and is asking other media companies to follow suit.
"While we all can feel optimistic about a new year, a new presidential administration and other elements of our future, we can't ignore the fact that this is an incredibly difficult economic time," said Edmunds.com CEO Jeremy Anwyl in his letter to media publishers. "In better years, we've all built businesses that rely heavily on the car business. Now, the car business needs our help. Can we publishers do something to recharge the car business, and, in turn, our economy? We think so."
(Read more...)
Posted by Michelle Krebs at 8:09 AM under Business , Commentary | Comments (0) | digg this | del.icio.us
With Workable Stimulus, Toyota Forecasts Better Second Half
By Bill Visnic
DETROIT - Saying at the Detroit auto show here that the U.S. auto market is entering a period of transition that is almost certain to be difficult for both automakers and consumers, a senior Toyota U.S. executive is forecasting a rebound in the second half of 2009.
Acknowledging drastically reduced vehicle sales in the second half of last year reached levels as painful for Toyota as most other automakers, Bob Daly, Senior Vice President, Toyota Motor Sales USA, says a number of factors make Toyota confident a "recovery" is coming in the second half.
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Hyundai Buyback Program and Award Win Attract Shoppers, Edmunds.com Reports
By Michelle Krebs
While many incentive programs seem to be falling on deaf ears with consumers, Hyundai's Assurance Program that allows buyers to return the vehicle if their circumstances change is resonating, according to an Edmunds.com
analysis.
The Hyundai Assurance program launched earlier this month has caused purchase intent for Hyundai vehicles to soar 15 percent during initial reaction to the program and has remained at least 7 percent above its seasonal norm ever since, according to Edmunds.com's analysis.
A second shot in the arm for Hyundai purchase intent came Sunday when its flagship Genesis luxury car was named the 2009 North American Car of the Year at the Detroit auto show. The award caused the brand's purchase intent to soar 31 percent above normal levels.
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Mini Expects To Make the Most of Fractured U.S. Market
By Bill Visnic
DETROIT -- At the Detroit auto show this week, nobody's kidding themselves: 2009 will be a rough year for auto sales. The only question is how rough.
There are oases of hope; one of them can be found at the Mini display here. Mini is the still-hot property of much larger BMW AG, which had its hands full fighting the market to a draw last year. Thanks to ballooning unemployment and deflating consumer confidence, BMW and most volume manufacturers are not particularly optimistic about sales in the U.S. this year -- but don't suggest such to Mini.
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GM, Chrysler Expand Partnerships With Credit Unions
By Dale Buss
Encouraged by their initial exposure to an uncommonly creditworthy bunch of customers, General Motors and Chrysler have expanded regional test programs of discounts for credit union members into nationwide campaigns.
Both of the troubled automakers have announced their participation in a program they're calling Invest in America, encompassing nearly 8,000 credit unions nationwide who have nearly 90 million members.
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In Tomorrow's Market, Confidence Will Be Only a Starting Point
By Dale Buss
Americans will reenter the car market in significantly higher numbers if and when a certain measure of confidence has returned to their financial outlook.
But that will create only the potential for a revitalization in auto sales. It will be up to carmakers to figure out how to tap effectively into a consumer psyche that likely will emerge as one very different from how Americans have operated in the marketplace for the last several years.
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Federal Help Allows GM To Offer 0% and Low-Interest Car Loans to Consumers
By Michelle Krebs
DETROIT -- In stark contrast to banks who still largely refused to give consumers loans despite receiving billions from the government to do so, General Motors wasted no time in pumping federal cash into car loans for consumers.
GM announced Tuesday morning it was offering no-interest financing for up to 60 months and low-interest loans on select 2008 and 2009 model-year cars and trucks through January 5, 2009. The loans will be provided through GMAC and be more widely available to consumers as GMAC has lowered its credit criteria.
The zero-interest and low-interest loans were made possible by GM and its financing company, GMAC, because the Bush administration Monday expanded its bailout of the U.S. auto industry by buying $5 billion in equity in auto and mortgage finance company GMAC and increasing a loan to GM by $1 billion.
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Billionaire Kerkorian Sells Last of Ford Stock
By Michelle Krebs
Perhaps now, at age 91, Las Vegas billionaire Kirk Kerkorian has finally given up on the auto industry that has not been particularly good to him.
On Tuesday -- just in time to take year-end losses -- Kerkorian sold the last of his investment in Ford. The move came just six months after Kerkorian's Tracinda Corp. bought a 6.49 stake in Ford and carries with it deep losses. Kerkorian's purchase was seen as a vote of confidence in Ford's turnaround strategy and its management led by former Boeing exec Alan Mulally.
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Buffett Invests in RV Business
By Michelle Krebs
As investor Kirk Kerkorian was selling off the last of his shares in the U.S. auto industry, another elder American investor was easing into the business.
Warren Buffett's Berkshire Hathaway, Inc. reported to government regulators Monday that it had purchased $40 million in recreational vehicle maker, Coachmen Industries Inc., which assembles Viking travel trailers in Middlebury, Ind.
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GMAC Wins Bid To Become Holding Company
GMAC LLC, the finance arm of General Motors Corp. that also lends money for home mortgages and lines of credit, on Decemcber 24 was granted status as a bank holding company by the U.S. Federal Reserve.
The move was vital for GMAC in order for it to qualify for relief loans from the storied Troubled Assets Relief Program (TARP), passed in October to provide emergency loans to distressed banks and other financial institutions.
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Cerberus Gives Auto Equity to Labor, Creditors
Private-equity firm Cerberus Capital Management that owns Chrysler plans to hand over equity in the company's automotive operations to labor and creditors as part of its loan agreement with the U.S. government, Bloomberg News reports.
"Cerberus believes that concessions by all relevant constituencies will be required to facilitate a full restructuring and recapitalization of Chrysler," the New York-based firm said in an e-mailed statement Friday. The Chrysler investment is the largest in the firm's history.
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GM To Provide Update on Hummer's Future in First Quarter
By Michelle Krebs
DETROIT -- General Motors will provide an update on the future of Hummer sometime in the first quarter, a company executive said Friday.
"We've been in discussions [regarding Hummer] with interested parties. Those talks are moving along quickly and we'll have something to say about Hummer in the first quarter of next year," said GM President Fritz Henderson in a conference call with media regarding the government's rescue package for GM and Chrysler.
Henderson said that announcement would be either "a deal to be had or a different path" that Hummer would take.
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Toyota Tracking To Post First-Ever Annual Loss
By Bill Visnic
Japan's financial sector is buzzing with the prospect Toyota Motor Corp., one of the nation's most successful and powerful corporate entities, is likely to record it's first-ever full-year operating loss, reports Japan's Nikkei English-language business newspaper.
Toyota has not recorded an annual operating loss since it began publicly reporting its earnings in 1940, and the Nikkei says fallout from World War II led to Toyota's only pre-tax loss -- in 1949.
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Chrysler Announces Executive Departures
By Michelle Krebs
Two of the highest profile hires made by Chrysler following its purchase by private equity firm Cerberus Capital Management are leaving the company.
Philip F. Murtaugh, who headed Chrysler's Asia-Pacific operations, and Deborah Meyer, Chrysler's chief marketing officer, are gone, Chrysler announced just moments after President George W. Bush said Chrysler and General Motors would receive $17.4 billion in government loans.
The hiring of Murtaugh and Meyer, along with Vice Chairman Jim Press, were hailed as coups by Chrysler when they occurred just 18 months ago.
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GM Denies Chrysler Linkup Talks, Auto Stocks Tumble
By Bill Visnic
A day after Chrysler LLC announced it is suspending operations for at least a month at all of its North American assembly plants, General Motors Corp. is denying a Wall Street Journal report saying the two companies resumed merger talks.
Chrysler and GM are awaiting word from the Bush Administration regarding promised emergency funding to carry the automakers into early 2009. Without a loan of billions, both companies have said they may not have sufficient liquidity to continue funding daily operations.
Separate from Chrysler's drastic move to curtail all manufacturing, GM already had announced a major production cutback for the first quarter of 2009 and is delaying other manufacturing spending, including the construction of a plant to build the engine for the high-profile Volt extended-range electric vehicle.
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Chrysler Shuttters Manufacturing Plants for at Least a Month
Chrysler will close all 30 of its plants for at least a month beginning at the end of the work
day Friday, in an effort to keep inventories of unsold vehicles from building due to slumping sales and to conserve cash. The automaker said workers will be called back January 19 at the earliest.
The company said it is closing plants for an extended holiday to keep inventories from building due to poor sales. "The continued lack of consumer credit for the American car buyer and the resulting dramatic impact it has had on overall industry sales" forced the action, Chrysler said in a statement.
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GM's Vauxhall Offers Workers Innovative Furlough Plan
General Motors' Vauxhall division in the U.K. is offering a temporary furlough plan to its 2,200 workers at its Ellesmere Port plant that builds the Astra model sold under the Vauxhall and Opel brands in Europe and Saturn in North America.
All but key employees are being offered a furlough of between two and nine months between January 1 and September 1, 2009. They will receive 30 percent of their normal pay but retain holiday pay and pension benefits.
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We've Not Hit Bottom, Ghosn Says
Nissan-Renault CEO Carlos Ghosn said the global auto industry has not hit bottom yet.
French president Nicolas Sarkozy invited Ghosn and Christian Streiff of PSA Peugeot Citroen to discuss the crisis in the global industry Monday, after promising to help the carmakers if they promised not to move jobs abroad. Renault, PSA and others are shedding thousands of jobs in France and elsewhere in Europe as they cut output.
"I do not see a rapid issue to the crisis in the automobile industry," said Ghosn. "We have not touched the bottom yet."
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VW Reports Possible Sales Fall
Volkswagen CEO Martin Winterkorn told the Sueddeutsche Zeitung newspaper in Monday's edition that its sales could fall about 10 percent next year in a global market expected to fall around 20 percent.
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Auto Bailout Not Ready, President Bush Says
President George W. Bush said Monday an announcement on an auto industry rescue was not imminent, leaving the Detroit Three's fate clouded in uncertainty for a little longer, Reuters news service reports.
"We're not quite ready to announce that yet," Bush told reporters on Air Force One during a flight from Baghdad on an unannounced visit to Afghanistan.
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GM Makes Major Slash in 1Q Production
By Bill Visnic
How bad is it? General Motors Corp., currently hoping for "bridge" funding extended by the Bush administration to keep the company from imminent bankruptcy, isn't buying into any optimism about the potential for an economic turnaround -- the company announced today it is slashing a quarter-million units from its first-quarter 2009 production schedules.
It's an outsized reaction that projects a downbeat outlook for the U.S. auto market's prospects in early 2009.
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GM, Credit Unions Already Planning To Expand Partnership
By Dale Buss
Both General Motors and the Credit Union National Association would like to expand a just-announced pilot partnership that provides a 4 to 5 percent purchase-price discount to members of nearly 1,300 credit unions who buy GM vehicles in four Midwestern states.
After the June 30 wrap-up of the program launch, GM would like to roll it out to other regions or nationwide, Mark LaNeve, the company's North American vice president of sales, said today. And a credit-union executive invited Ford and Chrysler to consider their own versions of a test program that aims to bring some of America's most creditworthy middle-income consumers into GM dealer showrooms.
With the deal that began this week, GM is seeking broader access for its customers to one of the few reliable pools of auto-financing funds, especially because the company's finance arm, GMAC, is making practically no new loans these days.
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GMAC's Survival in Question
GMAC, the auto loan and mortgage lender owned by General Motors and Cerberus Capital Management, said Wednesday too few of its bondholders have agreed to swap their debt, raising doubts that it can become a bank holding company and putting its very survival in question.
It also exacerbates GM's precarious situation as GM relies in large part on GMAC to finance its dealers and its car buyers. Already, GMAC has substantially tightened credit standards making it extremely difficult for dealers and their customers to receive loans.
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