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[Former President Bush asks Obama to exit the car business]]>http://www.autoblog.com/2009/10/26/former-president-bush-asks-obama-to-exit-the-car-business/http://www.autoblog.com/2009/10/26/former-president-bush-asks-obama-to-exit-the-car-business/http://www.autoblog.com/2009/10/26/former-president-bush-asks-obama-to-exit-the-car-business/#commentsFiled under:



When Former President George W. Bush spoke to the Montreal Board of Trade recently, he made a public appeal to the Obama administration to "get out of the private sector," adding "I hope our government gets out of the autos and the financials in which they have a stake." His premise is that it takes private companies to turn an economy around, not government-run ones.

As we have found out during America's recent economic troubles, a lot of people find it easy to say a lot of things when they're not on the hook. And the former Commander-in-Chief isn't the first (nor the only) ex-President to offer such advice; they've all done it - he's only the most recent. But this is coming from the man whose VP sold him out as giving TARP money to prevent General Motors and Chrysler bankruptcies on his watch. Lest we forget, Bush is also the man who said:
"Well, I have obviously made a decision to make sure the economy doesn't collapse. I've abandoned free market principles to save the free market system. I think when people review what's taken place in the last six months, uh, and put it all in one, in one, (sigh), you know, in one package, they're realize how significantly we have moved."
Forget about politics, it isn't even that what Bush has said is wrong, per se - by most accounts, the American government shouldn't be in the car business nor the retail banking business, and the current administration agrees with that, having said repeatedly it wants to get out of both. But they inherited the issue, and now it's up to them to figure out the best way out of it. Hat tip to Avinash!

[Source: Bloomberg | Image: Getty]

Former President Bush asks Obama to exit the car business originally appeared on Autoblog on Mon, 26 Oct 2009 12:58:00 EST. Please see our terms for use of feeds.

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The short version: old General Motors is worthless, new General Motors is... well, less worthless. The Securities and Exchange Commission has already warned us that Motors Liquidation Company, the new name for the leftover scraps of GM, is not expected to return any value to stockholders. Despite this, the stock still has a fractional dollar value assigned to it, and some investors are still trading it. Yesterday, shares dipped 52%, closing at 55 cents.

The newly created "good" GM emerged from bankruptcy less than a week ago, and what's left at Motors Liquidation, still publicly traded, is highly unlikely to return any value, as Motors Liquidation will still be underwater after Chapter 11 fire sales are over. Bloomberg reports that this shell of the former company has 16 shuttered plants to sell off, as well as a nine hole golf course in New Jersey (we're as confused as you are), and of course, it is still beholden to unsecured creditors and also still holds the bag for lawsuit liabilities, too. Warnings are being clearly stated and more and more investors appear to be cottoning on to the reality that MLC stock doesn't hold much water, which explains the stock's precipitous decline.

[Source: Bloomberg via STLtoday]

Paging Captain Obvious: Liquidation Motors reportedly tanks in trading originally appeared on Autoblog on Thu, 16 Jul 2009 09:57:00 EST. Please see our terms for use of feeds.

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The far right wing of the American political spectrum has begun channeling its displeasure over the federal government's involvement in the restructuring of General Motors into calls for a boycott of the company's products. Reportedly spearheaded by right wing pundits and radio show hosts, the boycott would be a response to the U.S. government taking a 60% stake in GM in exchange for forgiving most of the tens of billions of dollars loaned to the company over the last six months.

The original premise of loaning money to GM (and Chrysler) was certainly open to plenty of healthy debate. But the money was given and now the task has turned to how to best proceed in order for the automaker to recover and the U.S. Treasury to get the best return on its investment. In order for that treasury-held stock to ever regain its value, GM needs to sell vehicles and lots of them.

Therefore, a successful boycott of GM products could have the adverse effect of driving the company into liquidation. This would eliminate any hope of getting reimbursed for the tens of billions in loans that the government has given GM. All that taxpayer money may never be recovered anyway, but it makes sense to at least walk the path that has a chance of success. Fortunately for GM, such boycotts are rarely successful, as Ford learned when it easily weathered a boycott by the American Family Association over its marketing in gay-centric media outlets.

[Source: The Detroit Bureau]

Far right wing reportedly ready to boycott a newly federalized GM originally appeared on Autoblog on Mon, 08 Jun 2009 10:29:00 EST. Please see our terms for use of feeds.

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General Motors makes more than a few world-class automobiles. As true as that statement may be, that alone wasn't enough to stall the automaker's steady decline - fueled as it may have been by the global economic downturn - into Chapter 11 bankruptcy. To expedite GM's return to viability, the Obama Administration plans to split the giant automaker into two parts, a so-called "Good GM" made up of GM's best assets and "Bad GM," which is what we're examining in today's Top Ten list.

In case you're not aware, Bad GM happens to include the entire lines from HUMMER, Pontiac, Saab and Saturn. Instead of dwelling on the oft ignored, underdeveloped and stagnant vehicles in Bad GM's lineup, we're taking a look at the best that Bad GM has to offer. Try as we might to make this into a true Top Ten list, we were only able to come up with seven suitable vehicles to lament - which admittedly does tell us something. Some were obvious, a few not so much. That said, follow along as we pick the Top 7 Good Cars from Bad GM.

Top 7 Good Cars From "Bad GM" originally appeared on Autoblog on Wed, 03 Jun 2009 12:30:00 EST. Please see our terms for use of feeds.

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Not that it should come as a major shock to anyone paying attention over the last few weeks, but in a regulatory filing submitted by General Motors on Tuesday, the beleaguered automaker has admitted that it's unlikely to have acceptable deals negotiated with the either the United Auto Workers or Canadian Auto Workers unions before the previously announced deadline of May 27.

Equally as unsurprising are rumors that GM's plan to begin importing 50,000+ cars from China by 2014 is one of the major stumbling blocks in UAW negotiations. Other sticking points surely include how best to slash the desired $1 billion in annual labor costs that the two parties reportedly targeted and how to fund the Voluntary Employees Beneficiary Association (VEBA) health care trust.

Furthermore, the Detroit Free Press is reporting that CAW union leaders are upset at the way they are being treated in negotiations. A flier passed out to Canadian union workers had this to say:
"Because the Canadian and U.S. governments are planning a joint effort to support GM's restructuring, we now face a dangerous attempt to enforce a 'cookie-cutter' approach on our bargaining. This philosophy is absolutely offensive to us as Canadians."
More than ever before, it seems almost a foregone conclusion that GM will file for bankruptcy on June 1st. Hold on tight, this promises to be a wild ride.

[Source: Detroit Free Press | Image: Bill Pugliano/Getty]

GM warns UAW and Treasury deals won't be done in time originally appeared on Autoblog on Thu, 21 May 2009 08:33:00 EST. Please see our terms for use of feeds.

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According to a lengthy report by the New York Times, the Treasury Department is directing General Motors to begin work on a bankruptcy filing by June 1. Based on sources close to the talks who were unable to officially discuss the process, the report outlines the "fast 'surgical' bankruptcy" of the automaker if GM is unable to reach an agreement with the UAW and bondholders to exchange some $28 billion in debt into equity in the automaker.

The plan, which needs to address every aspect of the company, aims to make the bankruptcy filing as quick and painless as possible so the General can avoid tarnishing its already damaged image and stem the sales slide experienced over the last six months. One consideration is to break up GM into two separate entities after the filing, which would bundle and separate the automaker's good and bad assets. The positive portions of the automaker would "enter and exit bankruptcy protection in as little as two weeks, using $5 billion to $7 billion in federal financing." The bad bits, including lackluster brands (Hummer, Pontiac, Saab and Saturn), bloated dealer networks, extra manufacturing capacity and health care obligations would be left in the "old" GM and liquidated over the course of several years.

President Obama's automotive task force has been in close contact with GM officials over the last week and those talks will continue into this week. And in an about-face from the Wagoner administration, GM's new CEO, Fritz Henderson, has begun to indicate that bankruptcy is a strong possibility, going so far as saying during a Canadian Broadcasting Corporation interview, "If we need to resort to bankruptcy, we have to do it quickly."

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

GM, Task Force preparing for "surgical" bankruptcy originally appeared on Autoblog on Mon, 13 Apr 2009 00:41:00 EST. Please see our terms for use of feeds.

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Despite recent rumblings to the contrary, both General Motors and Chrysler claim that they will not be going bankrupt any time soon. Still, as much as the two American automakers would love to quell fears of unsustainable liquidity, questions remain, especially as the pickup market in the United States continues to dwindle. In a note sent out to dealers, Chrysler's Jim Press and Steven Landry say that the automaker will focus its efforts on small cars for the rest of this year, though the current pickings from the automaker's stable seem a bit slim. Chrysler is surely banking on its alliances to bolster its line of small car offerings, which could help to dampen the blow of lost truck profits -- somewhat. General Motors, for its part, has invested heavily into its upcoming Delta platform vehicles, which will include a compact Chevrolet-branded car known as the Cruze as well as the Chevy Volt electric vehicle.

[Source: Automotive News (Chrysler and GM) - Sub. Req.]

GM and Chrysler say bankruptcy not in the cards originally appeared on Autoblog on Fri, 11 Jul 2008 10:35:00 EST. Please see our terms for use of feeds.

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