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[Lilli Bertone takes the reigns of family design house]]>http://www.autoblog.com/2009/12/22/lilli-bertone-takes-the-reigns-of-family-design-house/http://www.autoblog.com/2009/12/22/lilli-bertone-takes-the-reigns-of-family-design-house/http://www.autoblog.com/2009/12/22/lilli-bertone-takes-the-reigns-of-family-design-house/#commentsFiled under:

Bertone Mantide - Click above for high-res image gallery

The design arm of Bertone, which is now known as Bertone Centro Srl, is finally and completely back in family hands. Last year the entire company, its design and production divisions, went into bankruptcy. Fiat bought the production side, while control of the design side was held jointly by the court and the Bertone family. Lilli Bertone, the widow of Nuccio, the last scion to run the company, closed the deal on the remaining stake that was held by the courts.

Last year it was reported that the courts would maintain their share of control for at least three years, but it appears Lilli found a way to end that stewardship early. Bertone Centro, lately famous for the Bertone Mantide, will begin offering design and engineering contract work to the automotive and rail industries.


Gallery: Bertone Mantide


[Source: Automotive News - Sub. Req.]

Lilli Bertone takes the reigns of family design house originally appeared on Autoblog on Tue, 22 Dec 2009 17:30:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>bankruptcybertonebertone centroBertoneCentrolilli bertoneLilliBertoneTue, 22 Dec 2009 17:30:00 EST<![CDATA[REPORT: Visteon seeking to end pensions of 21,000 workers, retirees]]>http://www.autoblog.com/2009/12/22/report-visteon-seeking-to-end-pensions-of-21-000-workers-retir/http://www.autoblog.com/2009/12/22/report-visteon-seeking-to-end-pensions-of-21-000-workers-retir/http://www.autoblog.com/2009/12/22/report-visteon-seeking-to-end-pensions-of-21-000-workers-retir/#commentsFiled under: ,



Visteon, the automotive supplier currently going through bankruptcy proceedings, is seeking to rid itself of pension obligations for 21,000 current workers and retirees. It wouldn't mean the end of pensions for the workers, but the payments would be taken over by the Pension Benefit Guaranty Corporation (PBGC), and that would mean diminished benefits.

Visteon contributes to four pension plans, three of which is it attempting to drop. The company owes $544 million to those three plans, and although it will make $260 million in payments over the next five years its obligations will grow if it cannot free itself. If it does get clear, pensioners will collectively lose $100 million in benefits because of caps on what the federal body can guarantee.

The PBGC wants Visteon to keep making pension payments, but its now in the hands of the Delaware judge handling the bankruptcy. Visteon has presented a few different options for reorganization, but each has met with resistance from one or more involved parties, including the plan to pay $8.1 million in bonuses to executives and the structure of it's post-bankruptcy stock allocation. The company hopes to emerge from Chapter 11 by the middle of next year. Pension recipients will hope they do it with their funds intact, but that isn't looking likely.

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

REPORT: Visteon seeking to end pensions of 21,000 workers, retirees originally appeared on Autoblog on Tue, 22 Dec 2009 08:34:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>bankruptcyfinancialgovernmentpensionPension Benefit Guaranty Corp.PensionBenefitGuarantyCorp.Visteonvisteon bankruptcyVisteonBankruptcyTue, 22 Dec 2009 08:34:00 EST<![CDATA[Christmas List 2010: Rattner's book to debut in time for next Christmas]]>http://www.autoblog.com/2009/12/18/christmas-list-2010-rattners-book-to-debut-in-time-for-next-ch/http://www.autoblog.com/2009/12/18/christmas-list-2010-rattners-book-to-debut-in-time-for-next-ch/http://www.autoblog.com/2009/12/18/christmas-list-2010-rattners-book-to-debut-in-time-for-next-ch/#commentsFiled under: , , , ,



Planning for the future is perhaps an alien concept to big business - even automakers, with their protracted product development cycles. Take a cue of what not to do from them, then, and start planning now for next Christmas. May we suggest that your 2010 wishlist starts with what's destined to be a hotly-anticipated tome: Steven Rattner's memoir of his spearheading the bailout of General Motors and Chrysler. Tentatively titled "Overhaul," the cloyingly-named book will tell the story of the quick-rinse bankruptcies Rattner presided over.

A fascinating piece that Rattner wrote for Fortune Magazine back in October gave us a glimpse of how riveting such a seemingly-dry subject can be. The book is on track for a debut in the fall of 2010, and might be even more interesting in a year depending on how Rattner's deals work out. The hardest part is going to be behaving well enough for an entire year so this thing gets stuffed in our stocking.

[Source: The Detroit News | Image: Neilson Barnard/Getty]

Christmas List 2010: Rattner's book to debut in time for next Christmas originally appeared on Autoblog on Fri, 18 Dec 2009 10:03:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>bailoutbailout planBailoutPlanbailoutsbankruptcychryslerchrysler bankruptchrysler bankruptcyChryslerBankruptChryslerBankruptcygmgm bailoutgm bankruptgm bankruptcyGmBailoutGmBankruptGmBankruptcyrattnerSteven RattnerStevenRattnerFri, 18 Dec 2009 10:03:00 EST<![CDATA[REPORT: Old Carco (read: "Bad Chrysler") to not repay $4B in TARP loans]]>http://www.autoblog.com/2009/12/17/report-old-carco-read-bad-chrysler-to-not-repay-4b-in-tar/http://www.autoblog.com/2009/12/17/report-old-carco-read-bad-chrysler-to-not-repay-4b-in-tar/http://www.autoblog.com/2009/12/17/report-old-carco-read-bad-chrysler-to-not-repay-4b-in-tar/#commentsFiled under: , ,



Before Fiat and prior to bankruptcy, the old Chrysler, LLC needed $4 billion just to keep the doors open. The Bush Administration came through with the company-saving cash at the 11th hour, keeping the Pentastar solvent long enough to make it to bankruptcy court. Chrysler was reportedly given $15 billion in total aid, and it appears much of that money will be repaid through future payments and through incentives for Fiat to increase its stake in Chrysler from 20 percent to 35 percent. But that original $4 billion? Don't expect that money to come back any time soon - if ever.

The Detroit News reports that what's left of the old Chrysler LLC (which has been renamed Old Carco), has filed court papers saying that the $4 billion will likely never be repaid. New Chrysler is not legally responsible for that debt and Old Carco doesn't exactly have considerable assets. And the government isn't the only debt-holder that isn't going to get its cash. Many secured and unsecured creditors will be unlikely to see their cash, thought some $21 million in secured debt could be paid. Old Carco contains the bad assets not purchased by the new Chrysler when it exited bankruptcy in the spring. The sale of those bad assets, which includes plants, tooling and miscellaneous items like old company cars, will help pay back some of the money creditors lost.

Lawyers working on the bankruptcy case say it take years before the book is finally closed on Old Carco. One item that could help drag matters out is a $25 billion lawsuit Old Carco filed against former owner, Daimler.

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

REPORT: Old Carco (read: "Bad Chrysler") to not repay $4B in TARP loans originally appeared on Autoblog on Thu, 17 Dec 2009 11:31:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>bailoutbankruptcychryslerchrysler llcChryslerLlcgovernment loansGovernmentLoansold carcoOldCarcoThu, 17 Dec 2009 11:31:00 EST<![CDATA[REPORT: Fitch Ratings says U.S. auto industry headed for airline-style cyclical bankruptcies]]>http://www.autoblog.com/2009/11/30/report-fitch-ratings-says-u-s-auto-industry-headed-for-airline/http://www.autoblog.com/2009/11/30/report-fitch-ratings-says-u-s-auto-industry-headed-for-airline/http://www.autoblog.com/2009/11/30/report-fitch-ratings-says-u-s-auto-industry-headed-for-airline/#commentsFiled under: , ,



Remember this past spring and summer's super speedy General Motors and Chrysler bankruptcies? If the billions in government loans and White House strong-arming is starting to slip into the recesses of your memory, your mind will likely be refreshed sometime in the future, at least according to Fitch Ratings. Fitch says that high fixed costs, perpetual over capacity and weak sales will lead to more bankruptcies that will mirror the misery of the airline industry.

Fitch gives plenty of reasons that the auto industry is far from out of the woods, chief among them is the continuation of weak sales. The ratings agency predicts 2010 car sales will rise by 7.8% to 11.1 million units, an improvement that is still far shy of the industry's peak sales of 17 million units. Another chief concern is GM and Chrysler's inability to access the credit markets for the foreseeable future. Credit markets are tight enough already, and Fitch doesn't see any bank lining up to loan money to any company fresh out of bankruptcy and still in restructuring mode. And if suppliers don't become more healthy or if gas prices spike again, Fitch sees the potential for more stress and ultimately more bankruptcies. And the Detroit 3 still have to contend with a high dollar union workforce and retiree obligations. Of the Detroit automakers, Fitch unsurprisingly sees the most stability at Ford. The Blue Oval still has access to bank loans and Fitch feels it has the strongest product lineup as well.

While we certainly agree that the auto industry is anything but out of the woods, we're also a bit skeptical of Fitch Ratings' foggy crystal ball. After all, Fitch didn't foresee much of the banking collapse that brought this country to its largest recession in decades until the collapse was painfully obvious, giving AA ratings to banks like Lehman Bros. only one year before that financial institution's dive into Chapter 11 protection.

[Source: Reuters | Photo by David Goldman/Getty]

REPORT: Fitch Ratings says U.S. auto industry headed for airline-style cyclical bankruptcies originally appeared on Autoblog on Mon, 30 Nov 2009 08:29:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>bankruptcychryslerfitch ratingsFitchRatingsfordgmMon, 30 Nov 2009 08:29:00 EST<![CDATA[Followup: Auctioneer Kruse ordered to pay bank $1.3M, has jet repo'd]]>http://www.autoblog.com/2009/11/28/followup-auctioneer-kruse-ordered-to-pay-bank-1-3m-has-jet-re/http://www.autoblog.com/2009/11/28/followup-auctioneer-kruse-ordered-to-pay-bank-1-3m-has-jet-re/http://www.autoblog.com/2009/11/28/followup-auctioneer-kruse-ordered-to-pay-bank-1-3m-has-jet-re/#commentsFiled under: ,

The walls are closing in on Dean Kruse, head of the Indiana-based Kruse International auction house. In September, a slew of lawsuits were filed against the company. Further opening the wound, a county court in Indiana has now ordered Kruse to pay more than $1.3 million to a bank in Warsaw -- just one of several debtors seeking money from the company -- for an overdue loan originally in the amount of $4.5 million. Two foreclosure lawsuits in DeKalb County, Indiana, are pending. One is for $6.5 million in unpaid loans. The other is for a loan in default for $7.8 million. Adding to his growing headache, and slowing down his travel, GE's financial arm has asked a federal court to repossess Kruse's million-dollar Cessna corporate jet.

While Kruse isn't talking to the media about his current events, he told The Journal Gazette last month that the recession has been hard on his sales. Compounding his troubles and drying up his cash flow, his longtime business practice of releasing cars to good customers before payment has come back to bite him. Understandably, he told the Gazette that he has since suspended that practice.

[Source: The Journal Gazette]

Followup: Auctioneer Kruse ordered to pay bank $1.3M, has jet repo'd originally appeared on Autoblog on Sat, 28 Nov 2009 14:33:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>auctionauction houseAuctionHouseBankruptbankruptcyCessna JetCessnaJetDean KruseDeanKruseKeKalb CountyKekalbCountykruse internationalKruseInternationallawsuitMillionsSat, 28 Nov 2009 14:33:00 EST<![CDATA[GM loses $1.2B last quarter, ready to start repaying loans]]>http://www.autoblog.com/2009/11/16/gm-loses-1-2b-last-quarter-ready-to-start-repaying-loans/http://www.autoblog.com/2009/11/16/gm-loses-1-2b-last-quarter-ready-to-start-repaying-loans/http://www.autoblog.com/2009/11/16/gm-loses-1-2b-last-quarter-ready-to-start-repaying-loans/#commentsFiled under: ,



This is one of the trickier press releases we've ever had to parse, but here goes. Despite losing $1.15 billion in the third quarter of 2009, General Motors sees this as a "solid foundation." GM President and CEO Fritz Henderson continues, "With a healthier balance sheet and a competitive cost structure, our focus is on driving top line performance. We'll achieve that by winning customers over, one at a time, with vehicles that deliver performance and value."

How can he say any of that? Despite the loss, revenue for the entire quarter is up $4.9 billion from Q2. As are sales, up from 62.8 million global sales in Q2 to 67.7 million in Q3. Cash for Clunkers helped boost sales, resulting in such a healthy quarter. But despite a good three months, GM is still saddled with paying out $2.8 billion for Delphi's bankruptcy, $2 billion of "payment term adjustments," $2.5 billion owed to the US and Canadian Governments and another $1 billion in restructuring costs. Bottom line, says Henderson, is, "I've been asked 100 times, 'When are you going to start paying back the taxpayers?' The answer is now." All the sordid details are in the press release below the fold.

[Source: GM | Image Source: Bill Pugliano/Getty]

Continue reading GM loses $1.2B last quarter, ready to start repaying loans

GM loses $1.2B last quarter, ready to start repaying loans originally appeared on Autoblog on Mon, 16 Nov 2009 12:32:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>bankruptcyFritz HendersonFritzHendersonGeneral MotorsGeneralMotorsGMNew GMNewGmMon, 16 Nov 2009 12:32:00 EST<![CDATA[BREAKING: GM to begin repaying $6.7 billion in U.S. loans next month]]>http://www.autoblog.com/2009/11/16/breaking-gm-to-begin-repaying-6-7-billion-in-us-loans-next-mon/http://www.autoblog.com/2009/11/16/breaking-gm-to-begin-repaying-6-7-billion-in-us-loans-next-mon/http://www.autoblog.com/2009/11/16/breaking-gm-to-begin-repaying-6-7-billion-in-us-loans-next-mon/#commentsFiled under: , ,



General Motors will announce later today plans to repay the U.S. government some $6.7 billion in loans ahead of its initial due date of July 2015. The payments are expected to begin as early as next month, with $1 billion paid each quarter until the full sum is paid - although that doesn't cover the total $50 billion the taxpayers have "invested" in the automaker after it declared bankruptcy earlier this year.

However, as the Washington Post points out, the amount the government will get back from GM depends on the value of the General's stock. With $6.7 billion in debt, $2.1 billion preferred stock and a 61 percent stake in the automaker, the $50 billion total is a long way off from being paid in full. And when GM reports its financial results tomorrow, it's not expected to show a profit, although the overall picture could be slightly better than anticipated.

[Sources: Washington Post, Detroit News | Image: Bill Pugliano/Getty]

BREAKING: GM to begin repaying $6.7 billion in U.S. loans next month originally appeared on Autoblog on Mon, 16 Nov 2009 00:01:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>bankruptcybreakinggeneral motorsGeneralMotorsgmgm repay loansGmRepayLoansrepay loansRepayLoansus governmentUsGovernmentMon, 16 Nov 2009 00:01:00 EST<![CDATA[Koenigsegg reportedly rejects 81 out of 218 U.S. Saab dealers]]>http://www.autoblog.com/2009/11/13/koenigsegg-reportedly-rejects-81-out-of-218-u-s-saab-dealers/http://www.autoblog.com/2009/11/13/koenigsegg-reportedly-rejects-81-out-of-218-u-s-saab-dealers/http://www.autoblog.com/2009/11/13/koenigsegg-reportedly-rejects-81-out-of-218-u-s-saab-dealers/#commentsFiled under: , ,

2010 Saab 9-5 - Click above for high-res image gallery

According to Automotive News, Federal Express letters arrived at 81 of Saab's 218 dealers on Thursday stating that their franchises had not been selected to move forward and become a dealer for the post-sale entity, Saab Cars North America. The package from General Motors said that Swedish supercar maker Koenigsegg, Saab's buyer, had selected only certain stores based on its business plan requiring strong, well-located dealers showing profits and high volume.

All Saab dealers signed termination agreements in June when GM entered bankruptcy. The dealers who received reject letters today will follow the terms of those agreements. Meanwhile, the remaining 137 U.S. Saab dealers will have to wait patiently until the end of November when the sale is scheduled to close (although those close to the deal say it may take longer). Current Saab dealer contracts with GM will not expire until October 2010, at which point the remaining dealers will sign new franchise agreements with Saab Cars North America.


Gallery: 2010 Saab 9-5


[Source: Automotive News, subs. req'd]

Koenigsegg reportedly rejects 81 out of 218 U.S. Saab dealers originally appeared on Autoblog on Fri, 13 Nov 2009 14:28:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>2010 saab 9-3X2010 saab 9-52010 saab 952010Saab9-3x2010Saab9-52010Saab95BankruptcyDealersGeneral MotorsGeneralMotorsgm saleGmSaleKoenigseggRetailersSaabSaleFri, 13 Nov 2009 14:28:00 EST<![CDATA[REPORT: General Motor still on track for 2010 IPO]]>http://www.autoblog.com/2009/09/28/report-general-motor-still-on-track-for-2010-ipo/http://www.autoblog.com/2009/09/28/report-general-motor-still-on-track-for-2010-ipo/http://www.autoblog.com/2009/09/28/report-general-motor-still-on-track-for-2010-ipo/#commentsFiled under: , ,


While defending the government bailout of America's auto industry, Herb Allison (above), the Treasury Department's assistant secretary for financial stability, said that a General Motors initial public offering is still a go for next year. While Allison still believes it was essential to safeguard the security of our financial system, he claims that the deal to bail out the auto industry has always been seen as a temporary situation:
"Our investments in the automobile industry and other companies that have received exceptional assistance are limited and temporary. Chrysler Financial has already repaid its assistance, and an initial public offering for GM is expected next year," Allison said.
According to The Detroit News, the Treasury is getting things in place to begin selling off their 60.8% equity stake in GM. It will take several years to divest themselves of GM stock, but the IPO should happen sometime in 2010. An initial public offering for Chrysler is still a ways off.

[Source: The Detroit News | Image: Mandel Ngan/AFP/Getty Images]

REPORT: General Motor still on track for 2010 IPO originally appeared on Autoblog on Mon, 28 Sep 2009 16:29:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>bailoutbankruptbankruptcygeneral motorsgeneral motors corp.General Motors IPOGeneralMotorsGeneralMotorsCorp.GeneralMotorsIpogmgm bankruptcygm ipoGmBankruptcyGmIpoHerbert AllisonHerbertAllisonIPOreportMon, 28 Sep 2009 16:29:00 EST<![CDATA[Chrysler to expand product liability claims after all]]>http://www.autoblog.com/2009/08/28/chrysler-to-expand-product-liability-claims-after-all/http://www.autoblog.com/2009/08/28/chrysler-to-expand-product-liability-claims-after-all/http://www.autoblog.com/2009/08/28/chrysler-to-expand-product-liability-claims-after-all/#commentsFiled under: ,



When Chrysler sought bankruptcy protection on April 30, the Obama administration insisted that one of the conditions of its Chapter 11 filing were that all product lawsuits against the Pentastar were the responsibility of "Old Carco LLC." In other words, anyone in litigation with Chrysler as a result of injuries that may have been caused as a result of faulty product would never be paid. The move was obviously unpopular with anyone seeking to sue Chrysler, and it wasn't exactly a public relations boon, either. Some groups were even looking to have product liability disclaimers added to all used Chrysler vehicles on dealer lots.

After taking a closer look at the viability of the new Chrysler Group, the reinvigorated automaker has decided to once again accept legal responsibility for vehicles purchased prior to June, 2009. Chrysler states in a press release (available after the jump) that it is taking a similar stance to how General Motors handled their lawsuits. If that is indeed the case, Chrysler would only take responsibility for future liability claims for cars and trucks assembled prior to bankruptcy - all cases that were in the courts prior to bankruptcy would still be the responsibility of Old Carco. The press release is rather vague and a bit confusing, but you can check it out after the jump.

[Source: Chrysler | Image: Bill Pugliano/Getty]

Continue reading Chrysler to expand product liability claims after all

Chrysler to expand product liability claims after all originally appeared on Autoblog on Fri, 28 Aug 2009 10:31:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>bankruptcychryslerlawsuitliabilityobama administrationObamaAdministrationold carcoOldCarcoproduct lawsuitproduct lawsuitsproduct suitsProductLawsuitProductLawsuitsProductSuitsFri, 28 Aug 2009 10:31:00 EST<![CDATA[REPORT: Saab deal between GM and Koenigsegg finalized]]>http://www.autoblog.com/2009/08/18/report-saab-deal-between-gm-and-koenigsegg-finalized/http://www.autoblog.com/2009/08/18/report-saab-deal-between-gm-and-koenigsegg-finalized/http://www.autoblog.com/2009/08/18/report-saab-deal-between-gm-and-koenigsegg-finalized/#commentsFiled under: , , , , ,


2010 Saab 9-5 - Click above for high-res image gallery

The deal has been signed, but the cash still hasn't changed hands. In a nutshell, that's where the share transfer agreement between GM and Swedish manufacturer Koenigsegg sits. Those close to the deal say the two companies have agreed on a very low price for Saab, but the exact figures are still undisclosed.

One towering hurdle in front of the deal is financing - the consortium, led by Koenigsegg Group, has yet to completely lock down funding as it is waiting on a hefty 4.3 billion kronor (about $593 million) loan from the European Investment Bank. The money won't be cleared unless the Swedish government secures it. Needless to say, there are countless other smaller hurdles (including word of investors backing out) that need to be knocked over before the deal is sealed. As of now, GM expects Saab to exit bankruptcy reorganization "shortly" and will share technology and services with Koenigsegg for a "defined time period" that has yet to be disclosed but should last at least a generation cycle as a number of new models that were developed by GM, including a redesigned 9-5 (above), are just about to launch.


Gallery: 2010 Saab 9-5 Leaked Again


[Source: Swedish Wire, General Motors]

Continue reading REPORT: Saab deal between GM and Koenigsegg finalized

REPORT: Saab deal between GM and Koenigsegg finalized originally appeared on Autoblog on Tue, 18 Aug 2009 09:29:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>bankruptcyDealForced saleForcedSaleGeneral MotorsGeneralMotorsKoenigseggSaabSaleSwedenTue, 18 Aug 2009 09:29:00 EST<![CDATA[REPORT: New GM entitled to $16 billion in federal tax breaks courtesy of Old GM]]>http://www.autoblog.com/2009/08/04/report-new-gm-entitled-to-16-billion-in-federal-tax-breaks-cou/http://www.autoblog.com/2009/08/04/report-new-gm-entitled-to-16-billion-in-federal-tax-breaks-cou/http://www.autoblog.com/2009/08/04/report-new-gm-entitled-to-16-billion-in-federal-tax-breaks-cou/#commentsFiled under: , ,



Due to what appears to be a slight (additional) bending of the rules, the "new," post-bankruptcy General Motors has been allowed to carry the $16 billion net operating loss that was created by the "old" GM. That means that New GM will not have to pay taxes on its profits for a while, because the profits can be written off by the losses.

The issue is that the move, called a "tax-loss carry forward," isn't supposed to be available to the automaker. The tax code contains provisions that prohibit a profitable company from buying an unprofitable company for the sole purpose of claiming the unprofitable company's tax losses - and the type of bankruptcy GM went through should have precluded The General's ability to use the tax loss practice.

Except for the fact that GM was bought by the government, and since the government writes the tax code and collects said taxes, it can decide how it wants to handle the companies it owns. General Motors says the move will bolster its "cash position to the benefit of all parties." Critics, on the other hand, say that GM got a $16 billion unfair head start on Ford. Hat tip to Adrian.

[Source: The Wall Street Journal | Image: Jim Watson/AFP/Getty]

REPORT: New GM entitled to $16 billion in federal tax breaks courtesy of Old GM originally appeared on Autoblog on Tue, 04 Aug 2009 08:27:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>bankruptbankruptcychapter 11Chapter11earningsfinancialsgeneral motorsGeneralMotorsgmgm bankruptcyGmBankruptcygovernmentlegaltaxesuawunionsTue, 04 Aug 2009 08:27:00 EST<![CDATA[STUDY: Ford continues to find favor with consumers while GM, Chysler decline]]>http://www.autoblog.com/2009/07/30/study-ford-continues-to-find-favor-with-consumers-while-gm-chy/http://www.autoblog.com/2009/07/30/study-ford-continues-to-find-favor-with-consumers-while-gm-chy/http://www.autoblog.com/2009/07/30/study-ford-continues-to-find-favor-with-consumers-while-gm-chy/#commentsFiled under: , ,



Bankruptcy may have put General Motors and Chrysler in a better financial position, but a report from Rasmussen shows that public opinion may have taken a big hit in the process. The survey, which was completed by 1,000 Americans in late July, shows that only 38% of Americans now have a favorable opinion of GM, down six points from May, and 21% of respondents have a very unfavorable view of the Detroit-based automaker. Chrysler now only has a 34% favorable rating, also down six points, while its very unfavorable rating has dipped to 23%.

The perils of GM and Chrysler are having the opposite affect on Ford, though, as the latest Rasmussen Report shows the public now has a 66% favorable opinion of Ford, with 22% now very favorable. The reason sited in the survey is the fact that the Blue Oval didn't require bailout money, along with avoiding a stint in bankruptcy court. For Ford, 46% of Americans surveyed are more likely to buy a car for avoiding government assistance, while only 17% say they are more likely to go GM now that the company is out of bankruptcy. While the report is good news to Ford, we'd point out that the significant swings in opinion from March to May to July shows that the public mood can shift quickly.

The bankruptcies of GM and Chrysler have certainly weighed down public opinion of the companies, but the attention the industry has received in the past year has helped the surveyed Americans place more value on the auto industry. 88% of those surveyed felt the auto industry is at least somewhat important to the economy, compared to only 49% back in March 2007. Hit the jump to review the complete Rasmussen Report.

[Source: Rasmussen Reports]

Continue reading STUDY: Ford continues to find favor with consumers while GM, Chysler decline

STUDY: Ford continues to find favor with consumers while GM, Chysler decline originally appeared on Autoblog on Thu, 30 Jul 2009 07:58:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>bailoutbankruptcycar buyingCarBuyingchryslerfordgmrasmussen reportsRasmussenReportsThu, 30 Jul 2009 07:58:00 EST<![CDATA[REPORT: Government ends warranty programs for GM, Chrysler]]>http://www.autoblog.com/2009/07/22/government-ends-warranty-programs-for-gm-chrysler/http://www.autoblog.com/2009/07/22/government-ends-warranty-programs-for-gm-chrysler/http://www.autoblog.com/2009/07/22/government-ends-warranty-programs-for-gm-chrysler/#commentsFiled under: ,



On March 30, President Obama announced that the federal government would back the warranties of General Motors and Chrysler in the event of bankruptcy. When the president says the word "backing," he means cold, hard cash, and in this case the total was $641 million. But with both companies out of bankruptcy court and flush with the government cash needed to run their businesses, it is apparently time to pay the money back.

Automotive News is reporting that new Auto Task Force head Ron Bloom informed a House Judiciary subcommittee that the government would no longer be backing the warranties of GM and Chrysler, adding "consumers can now feel assured that the companies have the financial wherewithal to meet their warranty commitments on a continuing basis."

GM and Chrysler have reportedly returned the $641 million, with interest. GM told Automotive News that it didn't use any of the funds, while Chrysler declined to comment on warranty matters as a matter of company policy.

[Source: Automotive News - Sub. Req. | Image: Justin Sullivan/Getty]

REPORT: Government ends warranty programs for GM, Chrysler originally appeared on Autoblog on Wed, 22 Jul 2009 17:58:00 EST. Please see our terms for use of feeds.

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One of the more controversial parts of the Chrysler bankruptcy was the decision to cut 789 dealerships by June 9. The move made for a quick, painful end to dealerships that in some cases spanned several generations of family ownership. When General Motors entered bankruptcy, it said it would cut about 1,300 retail stores, but the automaker planned on waiting until October, 2010 to pull the plug.

The dealership closings hit small and medium-sized towns particularly hard, putting pressure on lawmakers to do something to rectify the problem. The U.S. House took initial steps towards restoring the doomed dealerships by passing a bill to restore dealer rights. The bill, which has just been approved by the House by a 219-208 margin, would restore dealerships back to their previous state, forcing automakers to work through state courts to close down the stores. Since dealerships are such a big part of the employment picture in most states, GM and Chrysler face an expensive uphill battle to close the stores if the bill is also passed by Congress and then signed into law by President Obama.

Automotive News is reporting that Chrysler says the bill would cost the company $2 billion per year over the next four years. Vice President Peder Grady added on the Chrysler blog that if the bill were passed, " it flies in the face of a U.S. vehicle market that has declined 40 percent since 2007." AN also says that GM estimates the bill would cost them $2.5 billion in support, training and IT costs over a period of time.

The Obama administration is reportedly against the measure, saying that the dealership closings were "a critical part of their overall restructuring to achieve long-term viability." Thus, even if the measure passes muster in the Senate, there's a good chance it will face a veto from President Obama.

[Source: Automotive News - subs req'd | Image: Spencer Platt/Getty]

House reportedly approves measure to restore dealerships despite bankruptcy blows originally appeared on Autoblog on Fri, 17 Jul 2009 16:00:00 EST. Please see our terms for use of feeds.

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Back in late 2008, auto executives from General Motors and Chrysler warned of dire consequences in the event that one of their companies was forced into bankruptcy proceedings. With the help of the federal government, little of that doom and gloom materialized, at least when it comes to used car residuals.

Back in May, Automotive Lease Guide used impending bankruptcy as reason to slash the 36 month residuals of all Chrysler-branded products by a substantial 6% off the original retail price. That dropped the residual value of a Chrysler vehicle to an average of 28.8%, while Dodge and Jeep were at 31.3% and 32.5%, respectively.

Just one month later, with Chrysler's bankruptcy in the rearview mirror, and residuals are nearly back at April levels. Chrysler has climbed nearly four points to 32.5%, Dodge is at 34.8%, and Jeep is now at 37.4%. ALM admits that bankruptcy didn't effect residual values like the company thought it would, and as a result, resale values for GM-branded vehicles won't be downwardly adjusted.

Kelly Blue Book reportedly told Automotive News that some of the bounce-back in residuals is due to the fact that relatively low gas prices are making used trucks and SUVs a bit more appealing to customers. With new car sales in the tank, we suspect used vehicles have been in higher demand as well, helping to boost up residuals.

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

Remember that whole 'bankruptcy will kill GM and Chrysler residuals?' Not so much. originally appeared on Autoblog on Tue, 14 Jul 2009 14:30:00 EST. Please see our terms for use of feeds.

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After a scant six weeks in bankruptcy court, General Motors is on its way out of Chapter 11. U.S. Bankruptcy Court Judge Robert Gerber approved the sale of GM's good assets to a new company lead by the U.S. and Canadian governments and the UAW healthcare fund, but gave vested parties four days to file an objection.

After two requests for a stay were denied on Tuesday and an accident victim's request was denied at the last minute on Thursday, all signs point to an exit from bankruptcy within a few days, and this morning, word from the Detroit News is that the company officially emerged from Chapter 11 at 6:30am this morning. CEO Fritz Henderson has called a 9 am press conference this morning, and one can only assume that he will declare the birth of "New GM."

GM has received $50 billion from the US government to keep the mega-corporation out of liquidation. For its troubles, Uncle Sam will receive a 60% stake in the new company. Canada, which pitched in $9 billion, will be 11.7% owners, while the UAW will receive 17.6%. Old GM will receive 10% of the new company to help creditors recoup some money. The "New GM" will be smaller in almost every way, with four fewer brands, a smaller presence in Europe, fewer employees, and a markedly more attractive balance sheet.

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

*UPDATE: Official press verbiage added after the jump, click here to watch GM's live 9am press conference.

Continue reading BREAKING: New GM drives out of bankruptcy this morning [*UPDATED]

BREAKING: New GM drives out of bankruptcy this morning [*UPDATED] originally appeared on Autoblog on Fri, 10 Jul 2009 08:50:00 EST. Please see our terms for use of feeds.

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With sales numbers continually bad and plants just now awakening from long idle periods, suppliers are particularly vulnerable to financial trouble. Seat supplier Lear Corporation failed to pay a $38 million obligation on June 1st, and the grace period has just run out. With General Motors as its largest customer, and a significant amount of Blue-Oval business, as well, Lear's late 2008 gamble of borrowing $1.2 billion as a hedge against Detroit bankruptcy has proven difficult for the company to pay back. The supplier of seats and electronic components filed for Chapter 11 today in U.S. bankruptcy court for the Southern District of New York. The company hopes to operate business-as-usual while it restructures and plans to emerge from bankruptcy within 60 days.

Lear has been trying to find more diverse automakers to do business with besides the Detroit 3, but in the meantime, the seat and electronics manufacturer will reorganize and try to turn its fortunes around quickly. Investor Carl Icahn made a deal to buy out Lear shareholders a couple of years ago that might have prevented all this, but his deal was met with resistance over the price per share he was offering. Instead of the $37.25 per share Ichan was offering, current shares of Lear are likely to be worth a big old goose egg once Lear starts coughing up to it creditors. While some Lear seats may be very good at coddlng keisters, the company now has a lot of work to do to save its own ass.

[Source: Automotive News - sub. req'd | Photo by Bill Pugliano/Getty]

Seat-of-the-Pants: Lear files for Chapter 11 bankruptcy originally appeared on Autoblog on Tue, 07 Jul 2009 11:30:00 EST. Please see our terms for use of feeds.

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General Motors has cleared a major hurdle to get out of bankruptcy quickly, as U.S. Judge Robert Gerbe has finally given the automaker the go-ahead to sell off its best assets to a newly formed company that analysts have been calling "New GM". The new GM will include assets like the Chevrolet and Cadillac brands, plus plants and production facilities that haven't scheduled for closure. The old GM will consist of soon-to-be shuttered plants, the Pontiac brand and mountains of debt and liabilities.

Judge Gerbe gave the go-ahead on Sunday because he felt not doing so would cause "immediate and irreparable harm" to the 100-year-old company. The Detroit Free Press is reporting that the Treasury Department was threatening to cut off funding to GM if the sale didn't go through by July 10. Hundreds of GM's debtors requested that the sale be rejected, but Judge Gerbe's ruling likely means that the affected parties won't see much, if any money owed.

GM entered Chapter 11 bankruptcy protection on June 1, and if New GM actually does emerge from bankruptcy this week, the fourth largest bankruptcy in this country's history will have been completed inside of just six weeks. The timeframe is very similar to that of the much smaller Chrysler, which needed only 42 days to exit bankruptcy.

[Source: Detroit Free Press, Photo by Hiroko Masuike/Getty]

BREAKING: Bankruptcy Judge OKs sale of good assets to New GM originally appeared on Autoblog on Mon, 06 Jul 2009 02:07:00 EST. Please see our terms for use of feeds.

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