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[Official: GM shrinking to four brands; Pontiac to four models]]>http://www.autoblog.com/2009/01/12/official-gm-shrinking-to-four-brands-pontiac-to-four-models/http://www.autoblog.com/2009/01/12/official-gm-shrinking-to-four-brands-pontiac-to-four-models/http://www.autoblog.com/2009/01/12/official-gm-shrinking-to-four-brands-pontiac-to-four-models/#commentsFiled under: , , , , , , , ,

In an interview Sunday with Automotive News (sub. req'd), Troy Clarke, GM's North American president, said that General Motors will be able to make good on its promise to Congress to drastically cut costs. Clarke said that GM will now focus its "product and marketing resources" on Buick, Chevrolet, Cadillac and GMC. That would leave Pontiac, Saturn, Saab and HUMMER in automotive limbo. As part of that same plan presented to lawmakers, GM said it would sell or close Saturn. And since no one has yet stepped forward with cash, the future is not at all certain for the unique brand despite what GM's marketing VP Mark LaNeve says.

In a separate interview, Bob Lutz told AN that Pontiac will also have to get by with only four models: the G8, G5, Vibe and Solstice. Or five models if you count the Solstice coupe separately as Lutz does. Shrinking the brand would complete yet another promise GM made to Congress to make Pontiac a niche brand.

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

Official: GM shrinking to four brands; Pontiac to four models originally appeared on Autoblog on Mon, 12 Jan 2009 07:58:00 EST. Please see our terms for use of feeds.

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The House of Representatives and the Senate will discuss and likely vote on the Automaker Bailout Bill (we know, it's not technically a bailout, but rather loans that will be paid back) tomorrow, and the first discussion draft of the bill has hit the internet. The discussion bill is 31 pages long, and like you we're not about to spend our Monday evening reading through the whole thing. Thankfully, some real auto journalists over at The Detroit Free Press have done that for us.

They report that the bill contains provisions for a federal official, or "Car Czar" as the position will no doubt be referred to, who would oversee distribution of the funds and have authority to yank them back if an automaker is deemed to be using them ineffectively. The bill also requires automakers to submit another restructuring plan by March 31, 2009, after which the Car Czar could use his or her powers to reopen negotiations with the company, its creditors and the United Auto Workers union.

Part of the bill also stipulates that if the Detroit 3 accepts these loans, they must promise to stop pursuing litigation aimed at striking down California's right to set its own emissions standards and other states' right to adopt them. The California Air Resources Board has created emissions standards the are generally more strict than federal standards, and so far 17 states have chosen to adopt the Golden State's measures.

Detroit is backed into a corner, however, and will likely accept any conditions that Congress attaches to the bailout bill. With that in mind, Democratic leaders in Congress and the White House say that approval for the bill is likely, which would see around $15 billion in federal loans granted to the Detroit 3 as soon as December 15th.

[Source: CNN Money, The Detroit Free Press]

First draft of Automaker Bailout Bill is out originally appeared on Autoblog on Mon, 08 Dec 2008 19:27:00 EST. Please see our terms for use of feeds.

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Ten years before Chrysler introduced the world to minivans, General Motors had already developed its own version. Toyota sold the Prius at a loss for years before it became popular while GM leased a fleet of electric EV1s for three years before deciding it would never turn a profit. Honda and Toyota both sold small, efficient vehicles for decades even though their sales were relatively small and profits less than stellar. Meanwhile, GM spent billions to establish Saturn to compete with small import cars, only to let the brand go five years with no new products.

At least that's the way this New York Times story looks at GM's recent history. Through several interviews, the newspaper paints a picture of a company driven more by short term profits than ingenuity. GM board member George Fisher is quoted in the story saying, "We were late on hybrids. Why were we late? We made a business decision as opposed to a marketing decision. That's probably a mistake, in retrospect."

For GM's sake, hopefully the company's leaders have learned from history and will renew the automaker's innovative spirit with or without its pending government loan.

[Source: The New York Times]

NYT argues GM engineered its own downfall originally appeared on Autoblog on Mon, 08 Dec 2008 18:31:00 EST. Please see our terms for use of feeds.

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When ants need to cross some dangerous span in order to get to the thing they want, certain ants in the colony will sacrifice themselves to build a bridge that other ants can cross. That's how you get the honey. In GM's case, the honey is a $12 billion government lifeline. The dangerous span is, well, extinction. And the sacrificial ants in this case could be Pontiac, Saturn, and Saab.

Before the government would start writing checks (to the automakers, at least), Congress told GM (and Ford and Chrysler) to come back with a plan that gave some indication of long-term viability and a return to financial health. Supposedly, as part of such a plan, GM has looked at "shedding" the three brands in question, which would eliminate the massive costs associated with production, marketing and sales. But that would happen after massive payouts, some serious upheaval and tens of thousands of job losses. It would leave GM with Chevrolet, GMC, Buick, and Cadillac... which, since it's in ruthless survival mode, makes us wonder what kind of crush GM has on GMC. GM will release a 10-to-12 page plan to the public making its case and Congress has scheduled a hearing on the matter for December 5th.

In the article, the word "shedding" is used to describe what GM would do with Saturn, Pontiac, and Saab. But we don't know where and how they would shed them. Saturn is a misfit child (not really Saturn's fault), Pontiac is unsure of itself (except when it comes to the G8 triplets and the Solstice), and Saab sold about 33,000 cars in America last year and 125,000 around the world. With the state of lending and credit markets, it would probably be easier to buy a pterodactyl than get a loan to buy one of GM's brands. HUMMER's already been on the block so long it's about to get arrested for loitering. So is "shedding" a euphemism for "bye-bye..."? We'll know soon enough. Thanks to all who tipped in.

[Source: Bloomberg]

Would GM shed Saab, Saturn and Pontiac to secure gov't aid? originally appeared on Autoblog on Fri, 28 Nov 2008 10:15:00 EST. Please see our terms for use of feeds.

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Wow, what an amazing piece of political theater that just went down. As we reported, four senators from auto producing state (two Democrats and two Republicans) led by Michigan Senator Carl Levin have reached an agreement on a compromise bailout bill for automakers. They were set to announce details of the compromise bill at 2:30PM, but before they could, a team of Congressional Democrats led by House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid walked into the room in which the press conference was to be held and announced that they didn't support the compromise bill and that CEOs of the Big 3 would have to come back after the Thanksgiving holiday and present a plan on how any loans that might be given would be used.

Back to that compromise bill. The big stalemate, other than whether U.S. automakers should get a bailout at all, is where the money would come from. Democrats want to take $25 billion from the $700 billion bailout fund for financial institutions while Republicans and the White House want to re-appropriate $25 billion in loans that have already been approved for investments in green technology. Levin revealed the compromise to be a version of the Republican's plan, with concessions made to Democrats in that certain environmental restrictions would remain in tact and that loan repayments would go directly back to replenish the $25 billion fund for green investments.

What do we take away from all this? The Big 3 will get no assurance of federal aid before Thanksgiving, and there's still no guarantee they'll get help after the break. The ball is again back in the court of the Big 3 CEOs, who need to show up in December with detailed plans of how each would use any federal aid. The Democrats are calling for "accountability" and "viability" in their proposals, which are due to Congress by December 2.

Aw Snap! Congressional Democrats undercut compromise bailout bill originally appeared on Autoblog on Thu, 20 Nov 2008 15:16:00 EST. Please see our terms for use of feeds.

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CNBC is reporting that four U.S. senators have reached a bipartisan agreement on a bill to help the Big 3 automakers in Detroit. Those senators include Michigan Democrats Carl Levin and Debbie Stabenow, Ohio Republican George Voinovich and Missouri Republican Christopher Bond. Details of the bill are not yet available, but a news conference is scheduled for 2:30PM EST, at which time we should learn more. It will likely be some compromise between the Democrats' wish for taking an extra $25 billion out of the $700 billion financial bailout fund and the plan supported by the White House that would allow automakers to use the already approved $25 billion in low interest loans for anything they wanted rather than just investing in green technology.

Still, CNBC says the bill faces some big procedural hurdles, not the least of which is that senators want to go home soon for the Thanksgiving holiday. Trying to squeak in a vote before the break will be tough, and lawmakers may have to reconvene in December to vote on the bill. Plus, there's no guarantee the House of Representatives will pass it even if the Senate would.

Regardless, Wall Street seems pleased with the news as shares of General Motors and Ford have jumped, with the latter hitting as high as $4 after ending the day yesterday at $2.79.

Stay tuned, we'll bring you all the details on the new automaker bailout bill when they become available. Thanks for the tip, everyone!

UPDATE: Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi have held a press conference in which they said that the compromise agreement reached by the above senators would not be approved, and instead that Congress will come back in December and hold more hearings with the CEOs of the Big 3. Each automaker has been charged with the task of showing "accountability and viability" at this second round of hearings, specifically telling Congress exactly how they plan to use any bailout money they might be given.

UPDATE 2: For details on the compromise bill, click here.

[Source: CNBC]

BREAKING: Automaker bailout agreement reached in Senate, still not a sure thing [UPDATE] originally appeared on Autoblog on Thu, 20 Nov 2008 13:33:00 EST. Please see our terms for use of feeds.

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General Motors' CEO, Rick Wagoner, who's been manning the helm for the last eight years and a part of its staff since 1977, has taken some heat for asking the Feds for a bailout. A possible condition for those funds may be the symbolic sacrificial death of its current leader, according to a slew of analysts polled by Bloomberg. Whether true of false, there seems to be a sense that the CEOs of U.S. automakers are some of "the dumbest people in the world," according to ex-Chrysler prez. Thomas Stallkamp. Ouch. Ford has stated that it doesn't need a bailout and Chrysler is actively looking for partners to keep itself alive.

In the last few months, when the government has bailed out institutions such as AIG, Fannie Mae and Freddie Mac, one stipulation was that its top management be replaced, and that sentiment may stick around if the Detroit 3 receive packages of their own. Although Wagoner isn't likely to step down willingly, he may not be given the choice if some legislators get their way. Here's an unanswered question, though... who would be the best man to replace him?

[Source: Bloomberg]

Calling for GM bailout may cost Wagoner his job originally appeared on Autoblog on Fri, 14 Nov 2008 16:42:00 EST. Please see our terms for use of feeds.

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When Congress wants to hand out money, it apparently wants to include everybody. Barney Frank, Chairman of the House Financial Services Committee, is likely to propose a measure that lets automakers tap into the $700 billion vein of rescue dollars that's ostensibly intended for financial institutions, yet is being hungrily eyed by everyone.

CEOs from Ford, General Motors, and Chrysler will make the trek to Washington, DC, as will UAW chief Ron Gettelfinger. All will be pleading their collective case for an estimated $100 billion-plus vitamin pill. Many, not the least of whom is Treasury Secretary Henry Paulson, think that automakers should not be allowed to snag some of the cash that's intended for financial institutions. Things look bleak for all three of the brands, but can Congress be moved to offer up some money and prolong the jobs of so many Americans? Even if the automakers get the $100 billion they're seeking, when nobody's buying, it will merely turn into taxpayers funding an increasing glut of product nobody can afford to buy. Even those consumers with money and good credit are holding back as the economy delves into recession, emotional purchases are way down, and most vehicle purchases are driven by wants versus needs. Things will undoubtedly sort themselves out, but not before more pain for Detroit.

[Source: Automotive News - Sub. Req.]

Detroit CEOs and UAW chief summoned to Washington originally appeared on Autoblog on Thu, 13 Nov 2008 13:32:00 EST. Please see our terms for use of feeds.

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