To date, the U.S. government has reportedly given General Motors, Chrysler, their financial institutions and various industry suppliers about $80 billion in taxpayer money, and Congress wants to know when we're going to get that money back. The Senate Banking, Housing and Urban Affairs Committee held a hearing with the Auto Task Force for the first time to discuss the state of the government loans, as well as whether or not taxpayers will ever be paid back.

According to task force senior adviser Ron Bloom, there is "a reasonable probability" that some or all of the money will be paid back, but he was by no means "highly confident" that the money would be returned to taxpayers. He does, though, see "reasonable scenarios where taxpayers get their money back."

Bloom was a bit more certain, however, about the prospects of the auto industry receiving still more money from the government. Bloom said that it was the Obama administration's "absolute intent" not to provide future funding to the bailed out automakers, but he followed that with "never say never." That's far from a guarantee, but it would appear that more money doesn't seem to be in the plans.

During his testimony, Bloom also reiterated that the administration was a "reluctant shareholder" in the automakers, and that the government intends to get out the car business as soon as possible. When Alabama senator Richard Shelby (R) pressed for a timeline for the government to exit GM ownership, Bloom admitted that there was "no specific target" set.

[Source: The Associated Press via MSNBC | Image: Chip Somodevilla/Getty]

When it comes to dealership closings, there is a big divide between what General Motors, Chrysler and President Obama's auto task force want and what dealers and Congress want. The bankrupt Detroit automakers say that closing dealerships will save money, streamline vehicle delivery, improve brand image, and improve the health of remaining retail stores.

Some members of Congress aren't so sure that dealer closings will cure much for GM and Chrysler, and the legislative branch brought Chrysler's Jim Press and GM's Fritz Henderson before the Senate Commerce Committee on Wednesday for yet another grilling. Broadly speaking, Congress tends to side with dealers because of the political influence of the dealer body, and because of the impact of dealership job losses in the districts/states that Congressmen and women serve.

According to The Wall Street Journal, committee chairman John D. Rockefeller (D-W. Va.) says that he doesn't "believe that companies should be allowed to take taxpayer funds for a bailout and then leave it to local dealers and their customers to fend for themselves with no real plan, with no real notice, with no real help." Mike Johanns (R-Neb.) added that he is introducing legislation that will force the Obama administration to require congressional approval to use TARP funds to obtain an equity stake in any company.

Press and Henderson told the dealers that they would need to ultimately close 3,400 dealerships. GM has so far announced 1,324 closings by the end of 2010, while Chrysler will shutter 789 retail stores by June 9. Over the course of the congressional proceedings, Automotive News notes that Henderson bowed to pressure to disclose the list of dealers GM is eliminating, although that list has not been made public yet.

Henderson calls bankruptcy "our last chance to get it right, to fix permanently those parts of the business that have diverted us from consistently building winning cars and trucks and the consumer experience to match." Dealers called the closings "hasty," and contend that the actions taken against them won't be nearly as effective as GM and Chrysler expect. Hat tip to Dave!

[Sources: Wall Street Journal; Automotive News - subs. req | Source Photo by Mark Wilson/Getty]

The die is cast: General Motors has filed for bankruptcy. As expected, the automotive giant filed for Chapter 11 bankruptcy protection this morning in a New York court, listing $82 billion in assets and $172 billion in debts.

As we told you earlier, the century-old company will gain extensive assistance from the U.S. government, the former chipping in $30 billion in financing (GM has already received over $19 billion), that latter of which is expected to work extensively with the automaker as it goes through bankruptcy proceedings that will see the company's assets split into "Good GM" and "Bad GM," the latter of which will be liquidated.

According to the Detroit Free Press, the Obama administration has said that it will manage its holdings in GM (the government gets a 60% stake) in a "hands-off" non-interference fashion, with no White House employees serving on the board or being employed by the automaker. However, Capitol Hill will get the chance to influence company proceedings, as it will vote on core issues of governance that include "selecting the company's board of directors and major corporate transactions." While that may not equate to day-to-day management decisions, the government will certainly have the ability to influence company plans through appointments and such decision-making processes.

You can read more about the filing and the ramifications at the link below.

[Source: Detroit Free Press | Image: Michael Heiman/Getty]

In a brief article on its website, the UK's Channel4 says that a Swedish newspaper, Dagens Industri, is reporting that supercar maker Koenigsegg is in the running to purchase either a stake in Saab, or the whole kit and caboodle.

According to the report, Koenigsegg is reportedly a front-runner to rescue the fellow Swedish automaker, with the other suitors being the Renco Group, a U.S. investment company, and the Italian automaker Fiat – the latter of which is being denied by both Fiat and Saab.

Automotive News has asked Saab to comment on the report, but spokeswoman Gunilla Gustavs declined, although she did say that the likely bankruptcy of parent company General Motors will not derail Saab's plans. Gustavs apparently did impart that GM plans to disclose a "preferred candidate" in the next few weeks.

If Christian von Koenigsegg and his band of merry men manage to get their hands on Saab, we can't help ourselves from wondering that with their expertise in supercars, perhaps they could bring the Aero X (above) to market. We can dream, can't we?

[Source: Channel4; Automotive News - subs. req.]

Despite today's word of coming to terms with its major shareholders on a debt-for-equity swap, Bloomberg is reporting that General Motors will join Chrysler in filing for Chapter 11 bankruptcy on Monday. The move is widely expected, but the news agency is adding a bit of flesh to the story, suggesting that what promises to be the third-largest bankruptcy in U.S. history (after Lehman Bros. and Worldcom) will indeed result in the sale of most of the automaker's assets to a new company (likely the oft-discussed "Good GM"). GM's worldwide assets have been reported to be $91 billion against a total liability of $176.4 billion as of December 31.

A suggested location of the possible bankruptcy filing has not been disclosed. More details in the link below.

[Source: Bloomberg News | Image: Bill Pugliano/Getty]

General Motors is teetering ever closer to the brink of bankruptcy today, as the automaker's exchange offer for its outstanding debt fell "substantially" short of the necessary take-rate. GM had offered some $27.2 billion of its unsecured public notes to its bondholders, but the offer expired at noon yesterday without having the minimum tender amount met. The U.S. Treasury Department had mandated that at least 90 percent of bondholders would have to agree to swap their shares for a 10 percent stake in the GM, but far too few failed to take GM up on its offer, effectively negating any swap at all under the conditions of the tender offer.

A number of major bondholders had originally countered with an offer to give up their stocks in exchange for a markedly larger stake in the company – 58 percent – but with the lion's share of the company already promised to the United Auto Workers' VEBA fund and to the U.S. government, the bondholder issue was widely expected to fail.

As a result, many are expecting GM to file for Chapter 11 bankruptcy by Monday, with The Detroit News reporting that GM's board of directors scheduled to meet earlier than that to discuss whatever options they may have left. Official GM press release after the jump.

[Sources: General Motors; The Detroit News | Image: Bill Pugliano/Getty]

According to The Washington Post, the White House is readying General Motors for a bankruptcy filing that could come as early as the end of next week. According to the paper, the proceedings would likely grant GM nearly $30 billion in additional federal loans, bringing taxpayer investments into the company to almost $45 billion.

As reported earlier, the plan appears to be to give the government a 50%+ stake in The General, with the White House gaining the ability to name new board members, as it has with Chrysler, which is already in Chapter 11 status. The United Auto Workers VEBA health care fund is tipped to own nearly 40% of GM itself, a stake it would receive in exchange for giving up the $10+ billion it is already owed. That would only leave around 10% for the bondholders, who remain none too happy about the situation.

Full details available at the link below.

[Source: The Washington Post | Image: Bill Pugliano/Getty]

Yesterday's media question-and-answer session with General Motors' CEO Fritz Henderson didn't reveal much in the way of actual news, but at least one question raised a few eyebrows: "Is GM considering moving its corporate headquarters?"

While that's an unlikely scenario, Henderson stopped short of denying the possibility, saying: We're looking at, frankly, everything within our business, but it's not like we have that queued up at the top of our list." Henderson also admitted: "We don't have any such plan... but if we did it would be motivated by business rationale, which would be cost, efficiency and speed."

So, where might GM defect to? Detroit Free Press scribe Tom Walsh suggests that Wilmington, Delaware (the city where GM is incorporated) could be a possibility, or even just down the road to Warren, MI near GM's Tech Center complex is located.

Admittedly, a move by GM out of its Renaissance Center headquarters remains unlikely, but Detroit's already skittish residents and politicians are already bristling on the city's airwaves at Henderson's less-than-firm response to the question. What do you think? Answer our poll below.



[Source: The Detroit News | Image: Bill Pugliano/Getty]

Chrysler sales have been abysmal throughout 2009, and with the uncertainty of bankruptcy, the short-term sales outlook is decidedly bad. To get the word out to its customers that the Pentastar is alive and well (except for its idled plants), Chrysler is launching a new campaign beginning May 11 that includes five different commercials. Two focus on Chrysler as a whole and mentions restructuring and the merger with Fiat. The other 30 second spots are product commercials for the Jeep Grand Cherokee, Dodge Grand Caravan and Chrysler Town & Country.

Marketing Vice President Steven Landry wants the the new campaign to "reinforce that it's business as usual and demonstrate a bright future ahead for Chrysler." The public has let it be known, however, that it isn't all that happy with business as usual, so the campaign, while solid, faces a decidedly uphill battle. At least the campaign's tagline,"We're building a new car company. Come see what we're building for you" is catchy. Hit the jump to watch the five Chrysler commercials and check out the photos from "We Build" in the gallery below.



[Source: Chrysler]

In what has to be one of the least surprising developments related to the auto industry, a newly-released survey finds that Americans' favorable view of Ford Motor Company has increased substantially since it became the sole member of the Detroit Three to abstain from taking federal funds.

Before the Capitol Hill Bailout Bonanza got going in earnest late last year, just 41% of Americans held the Blue Oval in a positive light. Now, after billions of taxpayer dollars have been spent keeping now-bankrupt Chrysler and soon-to-be (in all likelihood) bankrupt General Motors in business, FoMoCo's positive number has jumped up to 63%, according to a survey conducted by the Aloft Group last week.

However, that's not to say that those surveyed believe Ford's out of the woods: a mere 24 percent of the respondents think Ford doesn't need Uncle Sam to come to the rescue. Still, Ford's decision to mortgage everything on its own in a bid to stay alive has been a big PR success, and you can bet that Alan Mulally will instruct staffers to burn all the office furniture in Dearborn this winter before he looks to Capitol Hill for a penny in bailout dollars. In Detroit right now, the Scarlet Letter is "B."

[Source: The Detroit News]