Autoblog

From November 28 to December 11, GM is holding back incentive payments to dealers, including dealer cash and customer cash. Why? in the words of Mark LaNeve, GM's VP of North American sales, because "Anytime you can delay any kind of a payment, it helps cash flow" And cash is probably the most important four-letter word in any GM dictionary.

The withheld payments don't cover all the monies that GM sends to dealers, just various incentives. According to Automotive News' numbers, the two weeks of extra cash could let GM hold on to an extra $300 million. If GM needs $14 billion per month to operate, $300 million would extend the lifeline by... almost another day. Payments after December 11 would resume on a weekly basis, but with the new two-week delay, something like an employee paycheck. GM discussed the plan with the National Dealer Council beforehand and, unsurprisingly, the council understood. Follow the jump to read LaNeve's letter to dealers.

[Source: Automotive News - Sub. Req.]

Just four months ago, Kirk Kerkorian had a cup out and was asking passers-by for some spare Ford shares. Although he only wanted 20 million of them, he was offered one billion. Turns out those folks trying to get out of the Ford ownership business might have been a bit more prescient than the Tracinda billionaire. After a couple more weeks of watching Ford's share price begin digging toward the center of the earth, Kerkorian seems to want out of Ford himself.

A week ago Tracinda shed 7.3 million shares, and now it has unloaded another 26.4 million at an average price of $2.01 per share. That's about $6 less than he paid for them. Kerkorian used a $600 million line of credit from Bank of America to finance the original billion dollar investment in Ford, using shares in his MGM casino for collateral. In addition to the loss on the Ford investment, MGM's stock price hasn't held up either, and that means he's had to commit more of the casino to B of A. Kerkorian's latest divestment takes him under 5% ownership of The Blue Oval, which means he doesn't have to divulge any more share sales, but we have a feeling it won't be the last.

[Source: Bloomberg]

The NFL season is clearly out of control, Audi just crossed the country in a bunch of diesels you can't buy here, and GM wants to "merge" with Chrysler. But it's not just America that's home to the madness: Ferrari might leave F1, Mitsuoka is selling this thing for €70,000, and today, for a brief moment, Volkswagen was the most valuable company in the entire world based on market capitalization. The reason: Porsche announced it would up its stake in the company to 75-percent. That blasted VW's €210 euro-per-share price up to €1,000 per share, making it more valuable than ExxonMobil and giving Ferdinand Piech reason to start practicing some lines from Scarface. The shares ended the day at €643, which is still pretty good for paper that could be had for less than €200 just about a month ago... Thanks for the tip, Kris!

[Source: Seeking Alpha]

Big Bob Lutz said that GM declaring bankruptcy is "out of the question." Of course, that was two years ago, when things like a $25 billion government loan would have sounded ludicrous. That was also before the auto industry mess got messier, and in order to stay true to those words today, GM is doing whatever it has to do to find money to stay in business. It heard Chrysler has an $11 billion piggy bank and a couple of jewels (Jeep and minivans) and GM said "Come here, girl! Lemme holla at you for a minute!"

Now GM is looking at its own international stable, and has its eye on China as a source of stopgap revenue for its North American operations. We've posted before on the fact that GM's international operations aren't doing too badly, and GM China sold 11.5 million vehicles last year -- more than any other manufacturer there. This year, it expects China sales volume to grow by 11- to 12-percent, and that means yuan in the bank.

Lutz said of the China move, "We do not rule out such a possibility under current conditions." These are hard times, but -- just like the good ones -- they're temporary, and GM just needs a little help to get to payday. Using money from one of your branches makes perfect sense to us. What doesn't make perfect sense is that China will get the Cruze the same time as Europe, in early '09, while we in the U.S. have to wait years in line for a car that we've been screaming for. Ah, GM, what are we going to do with you?

[Source: Gasgoo]

It's up and down, but nowhere near out for Chrysler, LLC. The Big Three's smallest sibling says that it's ahead of internal estimates and has posted earnings in excess of one billion for the first half of '08. True, the company also posted a $510 million loss in Q1 according to minority shareholder Daimler. And since Chrysler is privately held, it doesn't need to tell anyone whether these earnings put it in the red or black.

But whatever's on the books was good enough to convince lenders to grant Chrysler's financial arm a $24 billion line of credit. Said a Chrysler spokesman, the money will be used to "support our dealers and their retail customers." The pentastar just got out of the leasing business, so the influx of credit will keep the financial arm doing what it needs to do as all those remaining lease vehicles come back with empty tanks and bottomed-out residuals. And believe it or not, those are all good things.

[Source: Detroit News]

Daimler may have divested 80.1% of its ownership in Chrysler, but the German automaker is still feeling pain from the Pentastar. The value of Daimler's portion of Chrysler has dropped from $2.18 billion to $852 million not even a year after the two parted ways. The loss of nearly $1.4 billion in value is a fair chunk of change, even for the mighty Daimler, but the news is not all bad for company shareholders. If Daimler hadn't sold Chrysler to the private equity firm Cerberus as fast as it did, the automaker's stock would likely be in much worse shape.

Since the privately owned Chrysler, LLC doesn't have to report earnings, it claims that its fiscal standing is all peaches and cream. According to Chrysler, the company has had positive earnings since it was bought out by Cerberus last year. The official line that explains the discrepancy with Daimler's reporting is that U.S. accounting rules are much more favorable than those overseas. Damn accountants.

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

Toyota reported its earnings today for the second quarter that ended on June 30th, and not surprisingly, profits are up. Bolstered partly by a weak Yen, Toyota's operating profits rose 31.8% to $5.48 billion USD. Revenue was up 15.7% to $52.92 billion and sales were up 7.1% to 2,365,000 (Side Note: GM sold over 2.4 million globally in Q2). In a coincidental twist of fate, Toyota sales the world over were all up except in its home market of Japan, a situation that mirrors closely what is happening to General Motors, Ford, and the Chrysler Group in the U.S. The difference, however, is that the U.S. is potentially the most profitable market in the world, and a loss in the States equates to a lot more potential sales missed.

Toyota also commented on the Tundra's performance in the market place, saying, "from the beginning, we were ready to offer incentives," and "We had some concerns about the Tundra, but the plans have been achieved." Incentives are certainly a permanent part of the game now for automakers offering full-size pickups, and Toyota is not immune. Nevertheless, as we reported yesterday, sales are doing well, with the Tundra possibly overtaking the GMC Sierra 1500 in units sold year-to-date at the end of Q2. According to Mike Levine from pickuptruck.com, while hitting the 200,000 unit/year mark may be in question, there's still a chance the Tundra could overtake the half-ton Dodge Ram in sales by the end of the year.

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

A little bit ago, Stephan Winkleman was declaring that, as far as Lamborghini goes, "the results will speak for themselves." Now, he is proved right. These are the kinds of black and white numbers -- especially black -- that any business salivates at the chance to tell analysts: in all of 2006 Lamborghini made 18.1 million euros in pre-tax profit; in the first half of 2007, it has already posted a pre-tax profit of 26.4 million euros. That compares to a 6.9 million euro pre-tax profit in the first half of 2006.

Lamborghini sold more than 2,000 cars for the first time in its history in 2006. So far this year it has bested deliveries by 30%, selling 1,239 cars, and raised revenue by 61% to 253 million euros. Increased brand awareness -- via espresso makers and Batman Begins -- and a young model lineup have been attributed as causes. Nevertheless, we're sure that building the fastest, most comfortable, most reliable, and among the most beautiful cars the Sant' Agata maker has ever created could account for the flush results as well.

[Source: Auto News, sub req'd]

This morning, General Motors announced its second quarter earnings, which saw the giant automaker earn $891 million in Q2 compared to a loss of $3.4 billion last year that had analysts wondering whether the automaker would be around for today's announcement.

GM's performance in the second quarter played out largely like it did for cross-town rival Ford, in that the profitable performance of its overseas operations in Europe, Asia and South America outweighed its losses at home. Major cost cutting also helped the bottom line, and CFO Fritz Henderson is quoted as saying the company is going to keep the "pressure" on. He's likely referring to historic talks with the UAW occurring as we speak that GM hopes will result in lower healthcare bills for the automaker.

GM deserves to stop and smell the roses today, however, as its stock price has been surging all morning, being up as much as 6.0% before the opening bell and hitting a high of $34.65. As of this writing, GM stock is at 33.61, up about 1.00 or 3.07%.

[Source: Bloggingstocks, Automotive News]

First half sales reports have been rolling in and it looks like things are just peachy for the crew at Crewe. Bentley is reporting increased sales for the fourth year in a row. Sales were up nearly 19 percent compared to first-half '06, meaning 5,600 individuals called themselves new Bentley owners in the past six months. During that time, the company had its best month ever, delivering 1,200 Bentleys in March alone. Thanks in large part to the GTC and the new Brooklands, things are indeed good at Bentley, and its fortunes don't seem to be slowing down any time soon. Being the ride of choice for jewelry thieves and setting ice speed records didn't seem to hurt either. The brief press release is after the jump. Read on to find out about a turnover that was tagged at 739 million Euro, which seems awfully spendy for a pastry, and an operating profit of 85 million Euro.

[Source: Bentley]