Autoblog

REPORT: Visteon seeking to end pensions of 21,000 workers, retirees

Jonathon Ramsey — Tue, 22 Dec 2009 08:34:00 EST

Filed under: Government/Legal, Earnings/Financials

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.

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REPORT: GM offering special discounts to rejected franchise customers, move angers dealer group

Michael Harley — Tue, 24 Nov 2009 13:30:00 EST

Filed under: Car Buying, Buick, Cadillac, Chevrolet, GM, Earnings/Financials

Realizing that one of its keys to survival is retaining existing owners, General Motors is proactively enticing nearly one million customers - those loyal to now-closed dealerships - with significant financial incentives. According to Automotive News, GM started sending 950,000 letters out last week to customers of stores which have shut down or lost a brand franchise. Included in the correspondence are $1,000 to $2,000 discounts towards purchasing vehicles from one of GM's four surviving U.S. brands (the incentive amount is based on the customer's "likelihood to purchase a GM vehicle and the relative distance to the next closest dealer," according to a letter GM sent to dealers outlining the program).

General Motors has about 5,860 dealerships right now. A total of 1,839 have agreed to shut down by October of 2010, helping the company downsize to between 3,600 and 4,000 retailers over the long term. While this incentive is scheduled to end January 4, a second wave of incentives (including one targeting Saturn customers) is expected to begin early next year. In addition, GM has also issued a service offer which runs through May that includes free vehicle inspections and tire rotations to displaced customers.

The retention programs - obviously meant to move customers between stores - have dealer advocate groups up in arms. Some dealers are still actively trying to get their franchises off the "kill list," and GM has said recently that some may in fact be welcomed back into the fold. As such, Automotive News quotes Tamara Darvish, a leader of the Committee to Restore Dealer Rights as saying "This is an inappropriate time to take such an aggressive measure... If in fact dealer rights are to be restored, why would GM go in and move all those customers?"

[Source: Automotive News, subs. req'd | Image: Mark Ralston/Getty]

REPORT: GM offering special discounts to rejected franchise customers, move angers dealer group originally appeared on Autoblog on Tue, 24 Nov 2009 13:30:00 EST. Please see our terms for use of feeds.

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REPORT: German union leader calls on Porsche CEO to end ego trip, merge with VW

Jonathon Ramsey — Fri, 10 Jul 2009 18:29:00 EST

Filed under: Europe, Porsche, Volkswagen, Earnings/Financials

Volkswagen labor union chief Bernd Osterloh has called out Porsche's CEO for holding up a merger between the two German automakers: "Together, one could do a whole lot of more things if [Wendelin] Wiedeking would end his ego trip." Osterloh believes Wiedeking is standing in the way of a tie-up with VW, and his repeated thrusts and parries are only making things difficult for both companies.

Osterloh further accused the Porsche head of being "part of the problem and not part of the solution," claiming that he has "absolutely no more trust in the current board of Porsche." Although Porsche and VW may benefit from coming closer together, it is also clear that Porsche needs VW more than the other way around. Should the two bickering automakers eventually manage to come to terms, however, the powerful union leader has one last barb to throw: "Wiedeking isn't running our company, and he never will."

[Source: Bloomberg | Image: David Hecker/Getty]

REPORT: German union leader calls on Porsche CEO to end ego trip, merge with VW originally appeared on Autoblog on Fri, 10 Jul 2009 18:29:00 EST. Please see our terms for use of feeds.

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GM Canada workers approve contract concessions

Jonathon Ramsey — Thu, 12 Mar 2009 12:59:00 EST

Filed under: GM, Earnings/Financials, UAW/Unions, Canada

The Canadian Auto Workers union has ratified a new contract with General Motors that should help substantially reduce the automaker's operating costs in Canada. The template of the agreement is very similar to the one reached here in the U.S. between Ford and the UAW recently.

CAW said 87% of its GM workers voted to accept frozen wages, paying more for health care and losing some paid time off, among other rollbacks. However, the cuts won't take effect until Canada's government finalizes and distributes aid money to General Motors. The U.S. automaker has asked the Canadian government and province of Ontario for up to C$7 billion ($5.4 billion) in loans.

UPDATE: GM's official statement included after the jump.

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

Continue reading GM Canada workers approve contract concessions

GM Canada workers approve contract concessions originally appeared on Autoblog on Thu, 12 Mar 2009 12:59:00 EST. Please see our terms for use of feeds.

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Does Washington's GMAC bailout hurt Ford?

Jonathon Ramsey — Sun, 04 Jan 2009 19:32:00 EST

Filed under: Car Buying, Government/Legal, Earnings/Financials

The Wall Street Journal puts forth the case that the government's $5 billion lifeline to GMAC has given GMAC a competitive advantage compared to its rivals. After the taxpayer cash was received, GMAC dropped the required credit score to get a loan and began offering 0% financing on several models, and rates from about 1% to 6% on a host of others. While doing so, it admitted that "without this [loan] . . . we would not be able to do this today."

The Journal cries foul, saying that because GMAC is essentially doing this with -- or at least, because of -- government money, "the feds have now put the muscle of the state behind one company's products." The Journal also considers that the government might do what it can to make sure the horses it bet on win the race, saying "the Washington temptation will be to take other steps to help the two companies gain market share at the expense of their private competitors."

As to the issue of granting the loan to GMAC at all, the government didn't have much choice unless it wanted its previous investment in GM to potentially get flushed by a GMAC bankruptcy. As to 0% fiancing, it's being offered on SUVs and Saabs, none of which are making the cash register overheat. A quick comparison between financing in Southern California through GMAC or Ford Credit found similar rates on other cars: the 2009 Malibu gets 4.9% APR, the same as the 2009 Ford Taurus SEL AWD.

Will the government try to otherwise help GM and Chrysler (beyond pushing more money their way)? The airlines got $15 billion after 9/11, yet would anyone accuse the government of otherwise aiding the industry? As to intervention in the free market... well, when was the last time the market was truly free? And Does GMAC's ability to offer the new incentives give it a competitive advantage over the other companies? It only lasted until January 5th, and some GM dealers did say they were moving metal -- but if the benefit really was that lopsided, we're sure those competitors will let us know about it soon enough.

[Source: Wall Street Journal]

Continue reading Does Washington's GMAC bailout hurt Ford?

Does Washington's GMAC bailout hurt Ford? originally appeared on Autoblog on Sun, 04 Jan 2009 19:32:00 EST. Please see our terms for use of feeds.

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Deadline passes without word on critical GMAC bond-exchange vote

Jonathon Ramsey — Mon, 29 Dec 2008 13:28:00 EST

Filed under: Government/Legal, GM, Earnings/Financials

GMAC, General Motors' finance arm, was granted bank holding status, but there is still no word on whether the bond buyback was successful. The deadline for GMAC to have converted enough of its bonds - said to be 75 percent - into $28 billion in liquidity was on Friday, December 26, at 11:59 p.m. In return for bondholders converting their bonds to those of lesser value, they would receive a higher dividend.

Two weeks ago, GMAC said it found a slew of new bondholders, but didn't say whether the new participants would put it above the threshold. Now more than two days past the deadline, GMAC has only said "We have not yet issued final results but intend to in the near term." This kind of silence usually means that things didn't go as planned, but other plans are afoot. While it's not impossible, we'd be shocked if GM had fulfilled The Fed's requirements by the deadline and chose to remain quiet about it.

After all, success for GMAC means success for GM. But bankruptcy for GMAC - which could happen without access to TARP funds - could mean something very close to doom for a lot of dealers and for GM. Our guess is that GMAC and The Fed are trying to figure out the best way forward, because it is certain that the government doesn't want to see its $17.4 billion dollar investment go bust because GM lost on a side bet less than a month later.

[Source: New York Times]

Deadline passes without word on critical GMAC bond-exchange vote originally appeared on Autoblog on Mon, 29 Dec 2008 13:28:00 EST. Please see our terms for use of feeds.

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Chrysler Financial turns the screws on dealers

Michael Harley — Mon, 08 Sep 2008 18:32:00 EST

Filed under: Car Buying, Chrysler, Dodge, Jeep

It's not getting any easier to be a Chrysler-Dodge-Jeep dealer. Last month, when Chrysler Financial asked banks and investors to renew their $30 billion line of credit, they came up about $6 billion short. To make matters worse, the investors forced the automaker to follow much tighter financial guidelines (including a requirement to get out of leasing). Now, the cash shortfall is forcing the financial division to significantly turn up the heat on their retailers. Over the next few months, the financial arm will jack up dealer floorplan interest rates, and levy hefty fees for vehicles that sit unsold on dealer lots. With sales way down (in August, Chrysler's sales fell a sickening 34.5 percent -- the steepest decline of any major manufacturer), cash-strapped dealers are obviously unhappy with the news. Many fear this may signal the start of a new retailer initiative to limit vehicle inventory, hurting sales even further. As expected in this industry, bad news for retailers often means good news for consumers. With the new fees on the horizon, dealers will be offering significant incentives to dump inventory over the next few months.

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

Chrysler Financial turns the screws on dealers originally appeared on Autoblog on Mon, 08 Sep 2008 18:32:00 EST. Please see our terms for use of feeds.

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Spyker courts European investors

Noah Joseph — Thu, 13 Dec 2007 08:03:00 EST

Filed under: Europe, Earnings/Financials, Spyker

If you're a regular reader here on Autoblog, it should come as no surprise that Spyker is in deep financial trouble. The exotic Dutch carmaker was forced to sell off its F1 team, cancel the production of the C12 Zagato supercar and even mortgage its own name.

Never content to go quietly into the night, however, Spyker is on a campaign to raise funds. The latest endeavor has been to court European investors, but negotiations with Lichtenstein-based ACI recently fell through after an initial agreement was signed.

According to reports, Spyker is now in negotiations with Snoras Group, a Lithuanian bank, to fund and potentially acquire stake in the Dutch automaker. Spyker says it has a few other possibilities on tap, and hopefully one of them will come through to rescue the company and its beautifully quirky automobiles.

[Source: Motor Authority]

Spyker courts European investors originally appeared on Autoblog on Thu, 13 Dec 2007 08:03:00 EST. Please see our terms for use of feeds.

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Cerberus could align GMAC and Chrysler Financial

Jonathon Ramsey — Fri, 18 May 2007 17:17:00 EST

Filed under: Etc., Chrysler, GM

No one knows yet what Cerberus is going to do with Chrysler. However, the possibilities probably include quite a few things that wouldn't be normally expected in the car business -- such as GMAC and Chrysler Financial working closely together.

Cerberus hasn't made any mention of such, yet -- that comes from GM CEO Rick Wagoner in his first public comments since Cerberus was announced as the winning Chrysler bidder. Cerberus bought 51% of GMAC last year, and now runs Chrysler Financial. Wagoner's comments, however, were very open and non-committal -- specifically, he said "I think it's possible you could see opportunities for Cerberus-owned Chrysler Financial and Cerberus-owned GMAC to seek out opportunities to work together." GM isn't looking for such a tie-up, it is simply open to "potential synergies" should such cooperation be shown to be in everyone's interests. He did appear sure that such a proposal -- for working together -- would be coming in time. If Cerberus did combine the two, it would rule the auto loan market, taking the number one spot from Ford Motor Credit.

[Source: Automotive News, sub req'd]

Cerberus could align GMAC and Chrysler Financial originally appeared on Autoblog on Fri, 18 May 2007 17:17:00 EST. Please see our terms for use of feeds.

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GM makes a buck in Q4 2006

John Neff — Wed, 14 Mar 2007 12:58:00 EST

Filed under: GM, Earnings/Financials

General Motors reported its delayed fourth quarter earnings today and, lo and behold, managed to earn a net income of $950 million in the waning months of 2006. Compare that with last year's Q4 loss of $6.6 billion, and today's news is all the more incredible.

Again, those tricky one-time items skewed the results somewhat, since $770 million was earned in Q4 for the sale of GMAC, the automaker's financing unit. Still, without the one-time bump, GM managed to earn $180 million.

Cost cutting played a major role in GM's positive Q4 performance, as its vehicle lineup, at least in the U.S., is still a transitional mix of "old" and "new" GM product. Many highly anticipated new vehicles, like the Chevy Maliby, Camaro, and Cadillac CTS, have yet to go on sale. We expect the automaker's revenue from retail sales in the U.S. to keep climbing once the majority of its product portfolio has been turned over. GM also did well outside of the U.S., posting $228 million in earnings abroad compared with a $1.2 billion loss last year.

It seems clear, at least to us, that even if the GM turnaround hasn't officially turned the corner, it's got its blinker on and is just waiting for the light to turn green.

[Source: Automotive News]

GM makes a buck in Q4 2006 originally appeared on Autoblog on Wed, 14 Mar 2007 12:58:00 EST. Please see our terms for use of feeds.

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Magna confirms interest in Chrysler, visits Auburn Hills

Dan Roth — Sat, 10 Mar 2007 11:24:00 EST

Filed under: Etc., Chrysler, Daimler

The ups and downs of the rumored Chrysler sale are a better soap opera than NASCAR.

Now, Magna International, one of the reported suitors, has confirmed that the supplier is interested in exploring the purchase of the Chrysler group and has recently met with officials at the automaker. The main reason for the small fish eating the big fish would be mutual preservation. By propping up Chrysler, Magna keeps one of their large customers humming, and the continuation of contracts will keep Magna employees busy.

Other companies are exploring the option of acquiring Chrysler, as well. Private capital firms the Blackstone Group and Cerberus Capital Management have paid visits to Auburn Hills recently, and General Motors has reportedly been examining the possibility of a lash-up, as well. We hope that GM has decided not to move forward, as there are seemingly more overlaps than synergies between the two automakers, and we worry for the future of jobs, platforms, plants and workers should the very strange marriage between two of the Big Three goes forward.

[Source: Detroit News]

Magna confirms interest in Chrysler, visits Auburn Hills originally appeared on Autoblog on Sat, 10 Mar 2007 11:24:00 EST. Please see our terms for use of feeds.

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Homewreckin' Shareholders want to split DaimlerChrysler

Noah Joseph — Sun, 03 Dec 2006 10:27:00 EST

Filed under: Chrysler, Daimler, Earnings/Financials

The "merger" at DaimlerChrysler never really came off as a good idea. We put "merger" in quotation marks because no one ever really bought it as a marriage of equals, but saw it for what it always was: Daimler-Benz taking over Chrysler. Whatever way you spin it, though, it was never a match made in heaven. Lagging sales from Chrysler Group brands are a drain on the parent company's bottom line, and the US lost one of its Big 3 independent domestic carmakers.

Now the company's biggest stockholders are asking that the American half be spun-off as a separate company. Why not sell it off? Apparently, according leading investment experts at least, Chrysler wouldn't find a buyer. In fact, they say, with billions in unfunded pensions and other workers' benefits, DaimlerChyrsler would have to pay someone to take it. Ouch.

The bottom line is that none of the DaimlerChrysler brands have much expertise in the growing small-car market. Nissan/Renault does, though, and after failed talks with GM and Ford, some financial experts have suggested that DCX should ink the deal. That'd make for one very large auto conglomerate, based in the US, Japan, France and Germany. Think they might need a shorter name, though.

[Source: Reuters via Motor Authority]

Homewreckin' Shareholders want to split DaimlerChrysler originally appeared on Autoblog on Sun, 03 Dec 2006 10:27:00 EST. Please see our terms for use of feeds.

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By The Numbers: June 2006 - UPDATE 2

John Neff — Thu, 06 Jul 2006 02:38:00 EST

Filed under: Earnings/Financials

Most of the numbers for the month of June are in, and as you can see the red arrows outnumber the green ones yet again. Eighteen out of the 39 automakers below are reporting a rise in June sales over the same period last year. The 25.9% drop in sales by General Motors has attracted the most attention so far, but the General's performance, along with FoMoCo falling 6.9% and the Chrysler Group dropping 15%, can largely be attributed to the successful summer sales drive of 2005 that artificially inflated sales during that period. We should expect all three domestic producers to show a drop in sales throughout the summer because of this anomaly.

Toyota, meanwhile, keeps on chugging with a 14.41% increase in sales last month compared to the year prior. Honda was also up, but only negligibly, and Nissan has yet to report.

Mad props go to Suzuki for picking up the pace with a 28% rise in sales last month. Credit for the big jump goes to the new Grand Vitara, the sales of which jumped 606% since last year to 2,514 units thanks to the all-new model. At the other end of the spectrum, Saab sales have been reduced to a trickle, falling 50.2% to just 3,295 units during the month of June. Another note of interest, all of the Germans saw a rise in sales, with Mercedes-Benz gaining the most ground on itself by posting a 14% rise in sales.

Big Winner:
Suzuki28%

Big Loser:
Saab50.2%

BRANDS
Acura-19.4% at 15,107 (June 2005: 18,744)
Audi11.3% at 8,039 (June 2005: 7,209)
BMW3.4% at 24,179 (June 2005: 23,392)
Buick-36.6% at 23,738 (June 2005: 37,446)
Cadillac-21% at 23,265 (June 2005: 29,444)
Chevrolet-25.5% at 243,353 (June 2005: 326,632)
Chrysler-21% at 51,986 (June 2005: 65,594)
Dodge-11% at 96,485 (June 2005: 107,997)
Ford-7.2% at 226,250 (June 2005: 243,678)
GMC-46.5% at 47,604 (June 2005: 88,971)
Honda3.4% at 111,342 (June 2005: 107,672)
HUMMER-16.2% at 5,661 (June 2005: 6,754)
Hyundai4.3% at 44,508 (June 2005: 43,051)
Infiniti20% at 9,300 (June 2005: 11,623)
Isuzu-8.4% at 1,652 (June 2005: 1,803)
Jaguar-25.2% at 2,160 (June 2005: 2,888)
Jeep-19% at 37,475 (June 2005: 46,441)
Kia1.3% at 27,443 (June 2005: 27,095)
Land Rover12.7% at 3,847 (June 2005: 3,414)
Lexus6.3% at 27,686 (June 2005: 26,043)
Lincoln-11.1% at 9,610 (June 2005: 10,808)
Mazda8% at 23,727 (June 2005: 22,063)
Mercedes-Benz14% at 20,802 (June 2005: ~18,247)
Mercury1.7% at 16,670 (June 2005: 16,395)
MINI-1.4% at 3,556 (June 2005: 3,607)
Mitsubishi-.04% at 10,004 (June 2005: 10,621)
Nissan18.9% at 65,854 (June 2005: 81,158)
Pontiac12.1 at 41,115 (June 2005: 36,665)
Porsche10.4% at 3,058 (June 2005: 2,770)
Saab-50.2% at 3,295 (June 2005: 6,614)
Saturn.70% at 23,790 (June 2005: 23,618)
Subaru3% at 18,476 (June 2005: 17,946)
Suzuki28% at 9,516 (June 2005: 7,449)
Toyota15.71% at 195,332 (June 2005: 168,832)
Volkswagen5.5% at 20,121 (June 2005: 19,071)
Volvo-11.4% at 10,867 (June 2005: 12,266)

COMPANIES
Chrysler Group-15% at 185,946 (June 2005: 220,032)
Ford Motor Co -6.9% at 269,404 (June 2005: 289,449)
General Motors-25.9% at 413,473 (June 2005: 558,092)
Honda America 0% at 126,449 (June 2005: 126,416)
Toyota Motor Co.14.41% at 223,018 (June 2005: 194,875)

UPDATE - Added Nissan, Infiniti, Porsche, Kia and corrected error in Audi's numbers.
UPDATE 2 - Finally found Hyundai's Junes sales and reorganized listing for simplification.

By The Numbers: June 2006 - UPDATE 2 originally appeared on Autoblog on Thu, 06 Jul 2006 02:38:00 EST. Please see our terms for use of feeds.

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Mitsubishi Motor's May finances

Joel Arellano — Tue, 27 Jun 2006 08:21:00 EST

Filed under: Mitsubishi, Earnings/Financials

Mitsubishi Motors Corp. has posted its sales, unit production, and exports across various markets for the month of May. Worldwide production went up 4.2 percent compared to May 2005, buttressed by the European and North American (NA) segments. The latter, especially, experienced strong growth due to continued sales of the Eclipse coupe and the Eclipse Spyder convertible. Exports to NA rose 65.8 percent compared to last year. It was the European segment, though, with a 246-percent rise in sales compared to 2005, that probably brought a smile to the troubled automaker.

Press release after the jump.

Continue reading Mitsubishi Motor's May finances

Mitsubishi Motor's May finances originally appeared on Autoblog on Tue, 27 Jun 2006 08:21:00 EST. Please see our terms for use of feeds.

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General Motors and Suzuki officially loosen ties

Erin Mays — Mon, 12 Jun 2006 12:58:00 EST

Filed under: GM, Suzuki, Earnings/Financials

Confirming rumors that we reported first late last month, General Motors and Suzuki will not be working together to sell cars in Japan anymore, nor will the two automakers follow through with the partnership undertaken in 2001 on development of some new vehicles. A Suzuki spokesperson says that the move stems from a meeting between GM chief Richard Wagoner and Suzuki chairman Osamu Suzuki. The two companies are scaling back their relationship in response to the reduction of GM's stake in Suzuki from 20 percent to three percent. As a result, Suzuki will discontinue the sale of two GM models, one of them being the Chevy TrailBlazer, and the two companies won't be working on the next Chevrolet Cruze compact car (pictured).

[Source: The Daily Yomiuri]

General Motors and Suzuki officially loosen ties originally appeared on Autoblog on Mon, 12 Jun 2006 12:58:00 EST. Please see our terms for use of feeds.

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