Autoblog http://www.autoblog.com Autoblog http://www.blogsmithmedia.com/www.autoblog.com/media/feedlogo.gif Autoblog http://www.autoblog.com en-us Copyright 2009 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/<![CDATA[REPORT: Unsigned waivers to blame for Chrysler Financial rejection of gov't cash]]>http://www.autoblog.com/2009/04/21/report-unsigned-waivers-to-blame-for-chrysler-financial-rejecti/http://www.autoblog.com/2009/04/21/report-unsigned-waivers-to-blame-for-chrysler-financial-rejecti/http://www.autoblog.com/2009/04/21/report-unsigned-waivers-to-blame-for-chrysler-financial-rejecti/#commentsFiled under: , ,



Over the past two days, we've told you what we've heard about the latest short-term federal aid coming to Chrysler and GM. According to the latest reports, it will be $5B to the latter and $500M to the former. We also mentioned it had been reported that Chrysler Financial had inexplicably turned down an additional $750M in government aid during this most recent round of handouts. It had been speculated that it was because of a refusal by CF execs to sign off on executive compensation limits in the terms of the government agreement.

Although CF denied it, the fact that they appeared to be going elsewhere for additional loan money seemed to confirm that they might not have been entirely happy with the terms of the government handout. Well, The Detroit Free Press is now reporting that a recently released report by the special inspector general's office confirms that unsigned waivers were the real reason behind the rejection. The Freep is reporting that at least some of the top 25 executives at CF "refused to sign waivers releasing the Treasury Department and the company from legal responsibility for placing strict limits on executive compensation."

Even without the three-quarter-billion-dollar handout to CF, a total of $13.4B has been given to GM and Chrysler out off the $17.4B in loans President George W. Bush authorized back in December. Meanwhile, President Obama has continued to add restrictions to these handouts, rejecting the initial restructuring plans from both companies, essentially firing Rick Wagoner and telling Chrysler to make a deal with Fiat. While Chrysler has until next Wednesday to finish that deal, CF has apparently turned down the funding over the waiver issue, which had been added early this month.

[Source: Detroit Free Press]

REPORT: Unsigned waivers to blame for Chrysler Financial rejection of gov't cash originally appeared on Autoblog on Tue, 21 Apr 2009 11:40:00 EST. Please see our terms for use of feeds.

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Is General Motors about to get an additional $5 billlion from the Feds? Will Chrysler be getting another $500 million? The Detroit News seems to think so. Citing Obama Administration sources and a leaked 250-page government report, they say that those figures are accurate. The money will reportedly come in the form of short-term aid via the $700B Troubled Asset Relief Program (TARP). One group we know won't be taking any additional TARP money is Chrysler Financial, allegedly refusing an additional $750M over restrictions on executive compensation included in the agreement.

Reading through the report a bit, The Detroit News also discovered some additional figures. The report says that the Treasury Department has already spent $24.8B on the automotive portion of their program (out of $25B allotted). Of that amount, $13.4B has gone to GM, $4B to Chrysler, almost $6B to GMAC and $1.5B to Chrysler Financial. An additional $1.25B will be used to pay for that warranty guarantee program designed to back the warranties of GM and Chrysler vehicles should either company go under.

There has been no confirmation from Washington yet, but you can bet we'll report it when it becomes official.

[Source: The Detroit News]

REPORT: GM to get $5B, Chrysler $500M from gov't originally appeared on Autoblog on Tue, 21 Apr 2009 09:59:00 EST. Please see our terms for use of feeds.

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GM dealership handshake

Show me the money. With apologies to Cuba Gooding Jr., that is exactly what many General Motors dealers are saying to GMAC Financial Services.

Despite being given $5 billion from the U.S. Government last month, GMAC apparently hasn't loosened its purse strings enough for dealers' likings. Some, in fact, are reporting that GMAC keeps rejecting their credit applications. This is somewhat surprising because GMAC previously agreed to lower the necessary minimum credit score ratings from 700 to 621 for new vehicle loans, so presumably more requests should be going through. Dealers are frustrated and although some preferred dealers have seen loan rate reductions, others are saying that GMAC is still as much as 1.5 percent higher than the competition.

In response to this problem, dealers have come up with a wish list of sorts. They are asking that GMAC return to leasing, approve some sub-prime loans and cut interest rates for loans to dealers to help finance their inventory. Also of concern is the fact that customers are increasingly upside down on their trade-ins. As a direct result, these consumers are having trouble getting approved because GMAC requires bigger down payments than it once did.

[Source: Automotive News, sub. req.]

REPORT: Dealers say bailout hasn't made for more GMAC loans originally appeared on Autoblog on Tue, 20 Jan 2009 07:28:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>bailoutdealer relationsDealerRelationsdealershipdealershipsdetroit 3detroit 3 bailoutdetroit threeDetroit3Detroit3BailoutDetroitThreefinancinggeneral motorsGeneralMotorsGMgm bailoutgmacGmBailoutTue, 20 Jan 2009 07:28:00 EST<![CDATA[Oil may hit $35/barrel in wake of auto bailout bust]]>http://www.autoblog.com/2008/12/12/oil-may-hit-35-barrel-in-wake-of-auto-bailout-bust/http://www.autoblog.com/2008/12/12/oil-may-hit-35-barrel-in-wake-of-auto-bailout-bust/http://www.autoblog.com/2008/12/12/oil-may-hit-35-barrel-in-wake-of-auto-bailout-bust/#commentsFiled under: , ,

With the U.S. Senate denying the Detroit 3 relief plan, it looks like oil prices might continue to tumble. Our sibling site BloggingStocks is predicting barrel prices might drop as low as $35 as a result. This comes on the heels of predictions of higher prices in the near future.

It had been thought that OPEC and possibly Russia would be curtailing production, which might have led to higher prices, but if the U.S. auto industry collapses, demand for oil could plummet. That would result in even lower oil and gas prices.

In fact, oil prices started dropping Thursday night as soon as traders heard that Senate Republicans had blocked the bill, with barrel prices checking in at $44.76 as of Friday morning. We just saw regular unleaded for $1.59/gal at a station down the street this morning and thought we had woken up in 2000. Can sub-$1 gas be far away?

[Source: BloggingStocks]

Oil may hit $35/barrel in wake of auto bailout bust originally appeared on Autoblog on Fri, 12 Dec 2008 18:58:00 EST. Please see our terms for use of feeds.

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Click above for high-res gallery of the 2010 Chevy Volt

Although they're a big part of the Congressional pitch to get some federal funds, green cars aren't going to make the Detroit 3 profitable on their own any time soon. Take the Chevrolet Volt for example. When GM CEO Rick Wagoner testified that the Volt is being pushed into production for 2011, he added that, "It will not be at that point fully cost competitive." That statement might seem like the understatement of the century to some.

According to this CNN Money piece, GM has actually spent about $750 million to develop the Volt, much of that in battery research. Apparently GM recognizes the need to stay ahead of (or at least alongside) the competition in developing new technology and is willing to take the risk of spending that kind of money even in desperate times. Of course, some of that money will eventually be spread across the range when the Volt's powertrain and battery advances get shared with other GM models. Still, it's unlikely the Volt will add to rather than bring down the bottom line until a second generation model is introduced, which may not be until 2014-2016.

Gallery: 2011 Chevy Volt - Live Reveal


[Source: CNN Money]

GM has spent $750 million developing the Volt originally appeared on Autoblog on Wed, 10 Dec 2008 17:58:00 EST. Please see our terms for use of feeds.

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What to do when you wanted $34 billion and Congress only gave you $15 billion? Try again, but this time go North young man. The Detroit 3 are now making a pitch to the Canadian legislature seeking an additional $6.8 billion from Canada where nearly 100,000 workers are employed in factories and dealerships bearing the Chrysler, General Motors or Ford name.

General Motors of Canada has asked for $2.4 billion in loans, Chrysler Canada Inc. is looking for $1.6 billion and Ford wants a $2 billion line of credit on "stand-by" to be used "only if the current economic crisis worsens." GM is also seeking an immediate $800 million to make it through the end of the year. The Detroit automakers are quick to point out that these amounts are proportional to the U.S. bailout requests and that they are asking for loans, not handouts.

Federal Industry Minister Tony Clement was in Washington during the recent hearings and says the Canadian government will have to review the requests before pledging any funds. He had previously confirmed that funds were set aside to help automakers in the most recent budget. Premier Dalton McGuinty also pointed out the need to balance the public's needs with the carmakers' requests: "We want to move as quickly as we can, but we don't want to move so quickly that we end up with a response that is irresponsible given the legitimate demands of taxpayers." Thanks for the tip, Xeyad!

[Source: The Hamilton Spectator via MotorGears.com}

Detroit 3 seeking $6.8 billion from Canadian government originally appeared on Autoblog on Mon, 08 Dec 2008 12:59:00 EST. Please see our terms for use of feeds.

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It's the battle of the big chins! (Who are we kidding, Leno would win that fight against anyone.) Two gentlemen who stand as giants in automotive culture have finally weighed in with their opinions on whether or not the Detroit 3 should be rescued by the U.S. government. Jay Leno is all for it, citing the loss of this country's manufacturing infrastructure as the most compelling reason to save the automakers. He also cites a number of points that have been mentioned here and elsewhere, including the disparity between helping white collar workers on Wall St. while hanging blue collar workers on auto assembly production lines out to dry, the huge number of suppliers and businesses that depend on U.S. automakers, and the fact that domestic products have become competitive with the world's best in the last few years and it would be a shame to "get so close to the finish line and not win the race."

Jeremy Clarkson, on the other hand, disagrees. Though the top host of Top Gear says that we may be encountering the "end of days" for the auto industry, he fears the repercussions of letting another industry off the hook. Clarkson claims that he's against state intervention while at the same time acknowledges the immensity of Ford and GM (he calls Chrysler "two bit") and the number of people who depend on them for employment. Despite the ramifications of letting the Detroit 3 slip into oblivion, he leaves us with, "Where does it end?" We'll find out soon enough. Thanks for the tip, James (May?)!

[Source: Popular Mechanics, BBC]

Jay Leno for, Jeremy Clarkson against Detroit 3 bailout originally appeared on Autoblog on Fri, 05 Dec 2008 15:06:00 EST. Please see our terms for use of feeds.

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It seems the entire world is still debating whether or not Rick Wagoner, Alan Mulally and Bob Nardelli should have carpooled, walked or taken the bus for their last trip to the Capitol, but that's all behind us now. The good news for those who like to play expert on the internet is that Detroit's got another date with Congress this week. Ford CEO Alan Mulally is the first of the three CEOs to announce that he'll be driving, though we expect the others to follow suit shortly.

There's no doubt that Mulally will be driving a car from Ford's latest crop of vehicles (rather than his own Lexus), but which one would make the best impression? No matter which he chooses to drive, you can count on the fact that the choice will be dissected, so this seemingly insignificant decision could have major future ramifications. So, we ask you, dear Autoblog readers: What should Mulally drive to Washington... Mustang? Hybrid? Voting polls are now open.

View Poll


[Source: Detroit News, Photo by Mark Wilson/Getty]

Mulally driving to Washington, but what car should he drive? originally appeared on Autoblog on Mon, 01 Dec 2008 19:27:00 EST. Please see our terms for use of feeds.

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Remember the growing movement to caravan a few hundred of Detroit's most fuel efficient vehicles to the automaker's next meeting with Congress? Not happening. Interestingly, it wasn't for lack of support. In fact, it was just the opposite. So many people had voiced their support and announced their intentions to join in that the event's organizers just weren't able to keep up. Talk about a logistical nightmare.

Organizers have not given up on the idea completely, launching a new website called TheEngineofDemocracy.com that's supposed to drum up support for Detroit and fuel efficient cars in general. Along with an outpouring of support via the interwebs, a list of 51 people from various suppliers, dealership workers and Union officials will accompany the CEOs of General Motors, Ford and Chrysler to Washington - one from each state plus one from the capital itself - to prove that the loss of the American auto industry would affect everyone. At this point, we think it's safe to say that Wagoner, Mulally and Nardelli will be, ya know, driving to the proceedings.

[Source: The Detroit News Photo by Mark Wilson/Getty]

Detroit to DC caravan cancelled originally appeared on Autoblog on Sat, 29 Nov 2008 13:22:00 EST. Please see our terms for use of feeds.

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Some U.S. policymakers believe that the domestic auto industry needs a multi-billion $hot in the arm, but the sticking point seems to be where to find the funds. Rep. Barney Frank (D-Mass.) is calling for a portion of the financial sector's $700 billion TARP buyout to be apportioned to Detroit, but Treasury Secretary Henry Paulson doesn't like the sound of that at all. Instead, Paulson would like to see the automakers get the $25 billion they've already been promised, and suggests that it be made available as soon as possible. Of course, that money was supposed to go towards retooling the industry to make more fuel efficient cars, not necessarily as a cash-infusion to keep the Detroit 2.8 running. In any case, Frank has called for a meeting with the heads of each automaker in Washington next Wednesday to discuss whether a new loan for Detroit should be sectioned off from the TARP fund. This could get interesting.

[Source: Detroit Free Press, Photo by Alex Wong/Getty]

Paulson: Automaker aid won't come from financial bailout money originally appeared on Autoblog on Wed, 12 Nov 2008 17:58:00 EST. Please see our terms for use of feeds.

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Last week, the House of Representatives passed a bill approving a $25 billion loan for the Detroit 3. Now the Senate, by a similar margin, has passed the bill, which means it needs George W. Bush's John Hancock in order for the automakers to see their funds.

The process actually began last year when Congress put the language for the loan into an energy bill, but didn't allocate the money for it. Now that the actual sum has been "found" and approved, the details of the loan and repayment need to be sorted out. The energy department has 60 days to do the math once the loan becomes law, but the Energy Secretary said it could still take 18 months or more for GM, Ford, and Chrysler to get the money.

Michigan Congressional reps have cried foul, especially because the bill also included $10 million for the Energy Department to hire outside consultants to speed things up. The department probably won't want to waste time, because Michigan Senator Carl Levine has already pledged to begin work on another round of $25 billion loans for 2009 and 2010. But when the checks finally do come, you can probably expect to see automaker reps waiting outside E-Z Check Cashing.

[Source: Detroit News]

Two down, one to go: Senate approves $25 billion for Big 3 originally appeared on Autoblog on Mon, 29 Sep 2008 10:29:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>25 billion25 billion dollar bailout25Billion25BillionDollarBailoutautomaker bailoutsAutomakerBailoutscongressdetroitdetroit 3detroit 3 bailoutDetroit3Detroit3BailoutsenateMon, 29 Sep 2008 10:29:00 EST<![CDATA[Germans none to happy about U.S. aid to automakers]]>http://www.autoblog.com/2008/09/25/germans-none-to-happy-about-u-s-aid-to-automakers/http://www.autoblog.com/2008/09/25/germans-none-to-happy-about-u-s-aid-to-automakers/http://www.autoblog.com/2008/09/25/germans-none-to-happy-about-u-s-aid-to-automakers/#commentsFiled under: ,

Matthias Wissmann, current head of the Verband Deutscher Automobilhersteller (VDA, or Association of the German Automotive Industry for us non-German speaking folks), is none too pleased with the passing of a $25 billion financing package for the Detroit automakers. Under the terms of the legislation, which has been approved by the House and is expected to pass through the Senate as well, the Detroit 3 will receive low-interest loans in order to finance the cost of bringing more fuel-efficient cars to America.

Of course, it's not entirely unexpected that Detroit's competitors aren't happy about the federal loans, but at least one piece of Wissmann's argument certainly makes a lot of sense. "If the U.S. car industry does not resolve its structural problems, then all the subsidies in the world won't help." Ain't that the truth. The hope, of course, is that this financial aid is just what the automakers need to fix said problems. Looks like we'll find out soon enough.

[Source: Automotive News - sub. req'd]

Germans none to happy about U.S. aid to automakers originally appeared on Autoblog on Thu, 25 Sep 2008 19:28:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>Association of the German Automotive IndustryAssociationOfTheGermanAutomotiveIndustrybig 3big 3 bailoutBig3Big3Bailoutdetroit 3detroit 3 bailoutdetroit bailoutdetroit loanDetroit3Detroit3BailoutDetroitBailoutDetroitLoanMatthias WissmannMatthiasWissmannvdaVerband Deutscher AutomobilherstellerVerbandDeutscherAutomobilherstellerThu, 25 Sep 2008 19:28:00 EST