Autoblog

"Old GM" quietly dead and buried

Chris Paukert — Mon, 19 Dec 2011 17:30:00 EST

Filed under: Government/Legal, Earnings/Financials

After 103 years of stratospheric heights and immeasurable lows, General Motors Corp. has died. Motors Liquidation Co., or "Old GM," as it became known during the 2009 bankruptcy reorganization, was quietly dissolved on Thursday, Dec. 15, taking the company's bad debts and liabilities along with it.

The dissolution leaves the newly formed General Motors. Co. to live on as the company's fitter and better-financed replacement. The latter, as you'll recall, benefited from a massive government bailout of nearly $50 billion and the ability to restructure contracts with its suppliers, dealership bodies and unions. The surprisingly expeditious reorganization saw GM shed its Hummer, Pontiac and Saturn nameplates, along with Swedish automaker Saab (whose own efforts to find footing as an independent automaker sputtered into bankruptcy earlier today). A far healthier company today, "New GM" is turning a profit with just four U.S. nameplates - Buick, Cadillac, Chevrolet and GMC... and it's enjoying a newfound run of competitiveness.

For a quick refresher on the history of Old GM, check out a eulogy of sorts by The Detroit News.

"Old GM" quietly dead and buried originally appeared on Autoblog on Mon, 19 Dec 2011 17:30:00 EST. Please see our terms for use of feeds.

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Cheney admits he disagreed with Bush on GM bailout in new memoir

Zach Bowman — Mon, 05 Sep 2011 10:01:00 EST

Filed under: Etc., Government/Legal, GM, Celebrities

Former United States Vice President Dick Cheney didn't hold back when it came time to write his memoir of his time in office. Cheney has taken shots at everyone from Colin Powell to Condoleezza Rice, and according to The Detroit News, the VP wasn't thrilled about the idea of pulling General Motors out of financial dire straits. The memoir reveals that Cheney would have preferred that the Bush Administration hadn't bailed out General Motors with a $13.4 million rescue package and that he was disappointed, "but not surprised" that the Obama Administration took further steps to keep the world's largest automaker afloat.

Cheney said that he felt that bankruptcy was the right option.

Even so, the former vice president defended the $700 billion Troubled Asset Relief Program designed to pull U.S. banks out of hot water, saying that the U.S. government was the only body able to protect the banking system from collapse. Private companies, Cheney said, should be judged by the marketplace.

Cheney admits he disagreed with Bush on GM bailout in new memoir originally appeared on Autoblog on Mon, 05 Sep 2011 10:01:00 EST. Please see our terms for use of feeds.

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WSJ looks at who the auto bailouts really left behind

Aaron Richardson — Fri, 27 May 2011 15:31:00 EST

Filed under: Government/Legal, Recalls, Safety, Chrysler, GM

According to The Wall Street Journal, Chrysler's post-bailout restructuring allowed it to effectively erase any responsibility for car accident victims. Two years after the $12.5-billion auto industry bailouts, families like the one Vicki Denton left behind are stuck between a rock and a hard place.

The WSJ reports that Ms. Denton was killed in a head-on collision in which the airbag in her 1998 Dodge Caravan failed to deploy. A court ordered Chrysler to pay Denton's son and surviving relatives $2.2 million in damages, but that was just before the bailout hit. Since Chrysler is no longer under any obligation to the family because the bailout measures absolved Chrysler from its liabilities, the Dentons will almost certainly never see their money and have no legal recourse to get it.

The Chrysler case isn't unique. The same rings true at General Motors, where a $50-billion bailout and restructuring left asbestos victims, laid off dealers and accident victims without any way to secure their damages. Beyond the unfairness of the deal, some experts suggest paying accident victims wouldn't have been out of the question.

Those who coordinated the bailouts maintain that in situations like the ones at GM and Chrysler, full recompense simply isn't possible for everyone. As far as the courts are concerned, there is standing legal precedent to allow for such omissions during a bankruptcy restructuring.

WSJ looks at who the auto bailouts really left behind originally appeared on Autoblog on Fri, 27 May 2011 15:31:00 EST. Please see our terms for use of feeds.

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Report: Fund oversight panel says jury still out on auto bailouts

Aaron Richardson — Thu, 17 Mar 2011 10:40:00 EST

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

The Congressional Oversight Panel charged with overseeing America's $700 billion federal bailout fund admits that it still isn't sure if the measure will save the auto industry in the long run, The Detroit News is reporting. As you'll recall, the $700 billion was divvied up between banks, insurers and General Motors and Chrysler, among others.

According to the panel, the Treasury had no specific goals for the $85 billion it gave automakers, so it will be hard to gauge the success of the loan in the long term. For now, it would seem that the bailout worked, with GM and Chrysler both posting their first profits in years in 2010.

Last year, GM cleared a $6.2 billion profit - its first year in the black since 2004. Chrysler also managed a profit, and Ford, who didn't take any money from the government, ratcheted a $6.6 billion profit.

As part of its final 236-page report, the oversight panel also reduced its estimate of how much money the bailout would cost taxpayers, from $40 billion to $17 billion.

[Source: The Detroit News | Image: Mark Wilson/Getty]

Report: Fund oversight panel says jury still out on auto bailouts originally appeared on Autoblog on Thu, 17 Mar 2011 10:40:00 EST. Please see our terms for use of feeds.

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Treasury aims to sell GM shares early

Zach Bowman — Fri, 25 Feb 2011 14:02:00 EST

Filed under: Etc., Government/Legal, GM

According to The Detroit News, the United States Treasury Department is planning on quickly eliminating its shares of General Motors stock rather than trying to maximize the government's return on its investment. The news comes from Austan Goolsbee, chairman of the Council of Economic Advisors, who said that the government is interested in quickly shedding its 33 percent stake in the automaker due to the fact that it never wanted to be a shareholder in the automaker to begin with. The Detroit News reports that if the Treasury Department decided to sell its stake in GM at its current trading price, the government would lose something on the order of $10 billion.

That's out of the $49.5 billion bailout that GM received from the government.

GM shares are currently trading at their lowest levels since the company went public, thanks largely to an overall market dip. The drop came even with GM reporting its first profit since 2004.

The Detroit News reports that so far, the federal government has reclaimed $23.1 billion of its investment in GM, and that in order to recuperate the $26.4 billion, GM stock would need to trade at $53 per share. The company is trading at $33.02 at the time of this writing.

[Source: The Detroit News]

Treasury aims to sell GM shares early originally appeared on Autoblog on Fri, 25 Feb 2011 14:02:00 EST. Please see our terms for use of feeds.

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Video: GM commercial thanks taxpayers for the bailout

Jeff Glucker — Mon, 29 Nov 2010 14:59:00 EST

Filed under: Government/Legal, Marketing/Advertising, Videos, GM, Earnings/Financials

General Motors takes one on the chin but gets back up, thanks to us - Click above to watch video after the jump

General Motors is trying hard to move forward after everything that has happened in the last few years. The auto giant would not be here without the help of the government and the hard-working taxpayer. In a brand-new 60-second holiday ad spot, The General shows us that people and things can fall down or fail, but they get back back up... even if they need help doing so.

A boxer gets knocked down, a rocket falls back to its launch platform, Popeye almost drowns and Evel Knievel lands on his back instead of his bike. Each situation looks rocky but turns out okay in the end. GM shows these clips and then acknowledges its own fall while also thanking us (i.e. taxpayers) for picking it back up.

The clip is heavy on the schmaltzy side, but it's nice to think General Motors realizes who kept it in business. While we'd prefer some stock, a simple "thank you" message will have to do for now. You can see the ad for yourself by clicking past the jump and giving it a look.

[Sources: USA Today, General Motors]

Continue reading Video: GM commercial thanks taxpayers for the bailout

Video: GM commercial thanks taxpayers for the bailout originally appeared on Autoblog on Mon, 29 Nov 2010 14:59:00 EST. Please see our terms for use of feeds.

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Report: Fed reduces auto bailout loss forecast to $17B

Chris Shunk — Wed, 06 Oct 2010 14:01:00 EST

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

The federal government spent roughly $86 billion in taxpayer money to bail out the auto industry. That's a lot of Monopoly money, folks, and when the industry we know and love was at its weakest point, early projections suggested that that the U.S. government and American taxpayers would never see $30 billion of that money. But as the economy slowly crawls back to life and cars and trucks are beginning to move with greater regularity, those forecasts are being adjusted downward.

A few months ago the Treasury Department proclaimed that the industry could, if everything fell just so, lose only $8 billion by the time the dust settles. We're now in October, and according to The Detroit News, the DoT is settling on a loss that looks a lot like $17 billion. That figure was revised downward from $24.3 billion due to increased optimism that the bailout of Ally Bank, the Cerberus-owned finance arm for both General Motors and Chrysler, wasn't going to be as big of a cash drain as was originally expected.

The revised auto industry loss comes out of a 200-page report that details the overall plight of the $700 billion ($475 billion has been spent to date) Troubled Asset Relief Program. The report states that the U.S. government stands to lose a grand total of $29 billion of the $475 billion spent. That $29 billion number is definitely tentative, though, because a lot of the numbers are heavily dependent on the price of stocks at the time the federal government decides to sell.

For example, at the current price of AIG shares, the government would actually book a profit of $21.9 billion. The bank bailouts are said to have produced another $16 billion in profits, while the mortgage securities buys are currently underwater to the tune of $46 billion. The $29 billion figure could go further up or down based upon the price of the initial public offerings at General Motors and Chrysler. The government put $43 billion into The General in exchange for 60.8 percent of the company's stock, and another $12 billion for a 10 percent stake in Chrysler. GM's IPO is expected to open next month, though the feds aren't expected to sell off all of its shares in the first offering. Industry watchers suggest that Chrysler's IPO could happen in 2011.

[Source: The Detroit News | Image: Mario Tama/Getty]

Report: Fed reduces auto bailout loss forecast to $17B originally appeared on Autoblog on Wed, 06 Oct 2010 14:01:00 EST. Please see our terms for use of feeds.

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GM will increase Volt production by 50% - to 45,000 units - in 2012

Autoblog Staff — Fri, 30 Jul 2010 14:29:00 EST

President Obama toured the General Motors' Detroit-Hamtramck facility where the automaker will build (can we say "is building" yet?) the Chevrolet Volt today, and as any good PR person will surely agree, you can't let an opportunity like that go by without making an announcement of some sort. So, GM has something to say and it's big news, too: GM will increase Volt production capacity by 50 percent in 2012.

Details are as follows: Instead of making 30,000 Volts in the U.S. in 2012, GM will now make 45,000. These numbers are lower than production numbers we heard rumors of in years past, but they're good news for fans of plug-in vehicles. Is the increase a response to positive reaction to the Volt's $33,500 after-tax-rebate price tag? Maybe, GM said in a statement that, "In the past few weeks, more than 25,000 people have joined the Chevrolet Volt enthusiast list."

The news is good for the President, too, since the White House is pushing The American Auto Industry: A Comeback Story message this week. Part of that is an interactive version of the White House map showing places where the government has supported automakers, which you can find here.

Gallery: 2011 Chevrolet Volt

[Sources: General Motors, WhiteHouse.gov]

Continue reading GM will increase Volt production by 50% - to 45,000 units - in 2012

GM will increase Volt production by 50% - to 45,000 units - in 2012 originally appeared on Autoblog on Fri, 30 Jul 2010 14:29:00 EST. Please see our terms for use of feeds.

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Report: GM's planned purchase of AmeriCredit questioned by senator

Jonathon Ramsey — Mon, 26 Jul 2010 09:31:00 EST

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

We've decided to stop trying to guess what General Motors will do before its IPO - which might come next month or later this year or early next year. What we do know is that GM has wanted to secure a captive finance arm before an IPO, a process that looked unlikely, then fell off the radar entirely, and then, BAM!, GM whips out $3.5 billion to buy AmeriCredit. That has made at least one senator do a double-take, asking whether spending that much money and loaning to the subprime market is the best thing for the Detroit automaker to do.

Republican Charles Grassley is quoted by Bloomberg as saying, "If GM has $3.5 billion in cash to buy a financial institution, it seems like it should have paid back taxpayers first," adding that The General should remain "clear of repeating its effort to make high-risk car loans." He has written a letter to the inspector general of the TARP program seeking an inquiry into the purchase.

Grassley has little hope of scuttling the purchase, however. As long as GM stands by the terms of the bailout, it can do just about anything it wants, which includes buying a bank. The move is also explained, of course, as a way to bolster GM's bottom line, something everyone wants. Company CFO Chris Lidell notes that if GM can add just one more percent to the number of buyers - people with credit scores between 500 and 650 - that's a "significant" benefit, as well as the additional leasing it can offer. And that one additional percent of subprime purchasers would still leave it in-line with the industry average.

[Source: Bloomberg]

Report: GM's planned purchase of AmeriCredit questioned by senator originally appeared on Autoblog on Mon, 26 Jul 2010 09:31:00 EST. Please see our terms for use of feeds.

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GM eliminates 2,000 dealers, will end year with 4,500 showrooms

Jonathon Ramsey — Wed, 07 Jul 2010 07:27:00 EST

Filed under: Government/Legal, GM

A little more than a year ago, General Motors had in excess of 6,000 dealerships across the country. In the viability plan GM submitted to Congress the automaker stated it would shut down 400 dealerships every year, shedding 1,600 of them by 2012. The General said it eventually wanted to get down to 4,000 showrooms at some point in the future. According the the latest reports, GM is well ahead of its own schedule: it will have just 4,500 dealership by the end of this year, a 1,650-site drop from last year.

Those are the most recent words of Mark Reuss, GM's head of North America. And while his assessment includes the latest round of arbitration hearings with dealers who didn't want their agreements terminated, there are still pending arbitration cases. Reuss' estimate is meant to take those into account, but since the original spread was anywhere from 4,100 to 5,300 dealers, his number could go up or down.

Even if GM ended up with 5,300 dealers at year's end it would be an 850-dealer drop from last year, more than doubling GM's original goal. Yes, it remains far more than the number of storefronts run by mass-market Toyota, which only has about 1,500. But it's a start.

[Source: Detroit News | Image: Mark Wilson/Getty]

GM eliminates 2,000 dealers, will end year with 4,500 showrooms originally appeared on Autoblog on Wed, 07 Jul 2010 07:27:00 EST. Please see our terms for use of feeds.

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White House: Auto bailout worked, but we'll still lose money

Chris Shunk — Fri, 23 Apr 2010 19:22:00 EST

Filed under: Government/Legal, Chrysler, GM

One year ago, the U.S. auto industry was at the weakest point in its history. To make matters worse for the both the industry and the Obama Administration, the majority of Americans wanted nothing to do with a bailout, having just undertaken an even pricier propping up of the country's lending institutions. But President Obama and the Auto Task Force made the difficult decision to push General Motors and Chrysler through bankruptcy while providing $50 billion in loans to keep the doors open at the two companies. The administration estimates that the move staved off an estimated 1.1 million lost jobs, but the political and fiscal cost was high.

Last year, the Congressional Budget Office and the Treasury Department estimated that the U.S. government would likely lose $30 billion in the long term. The Detroit News reports that one year later there is a lot more optimism at the White House about the industry and our money. A five-page report released by the Obama Administration points to Chrysler's first quarter operating profit and the fact that GM paid off its government loans early shows that the auto bailout was a success. The report adds that "the contrast between where these companies, and the American auto industry, are today and the situation President Obama faced when he took office is stark." And that projected $30 billion loss? The latest projections by the Treasury Department and the DOT are for a much smaller loss of $8 billion.

The next step towards the U.S. government getting our money back comes when GM executes its initial public offering, which is rumored to be happening as soon as this June. Uncle Sam currently owns 60.8 percent of The General.

[Source: The Detroit News | Image: Jeff Swensen/Getty Images]

White House: Auto bailout worked, but we'll still lose money originally appeared on Autoblog on Fri, 23 Apr 2010 19:22:00 EST. Please see our terms for use of feeds.

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Report: GM to announce repayment of federal loans in full on Wednesday

Jeremy Korzeniewski — Mon, 19 Apr 2010 18:00:00 EST

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

According to The Detroit News, General Motors will announce that it is fully repaying the federal loans it received last summer from both the United States and Canadian governments. In total, General Motors will have paid back about $6.7 billion ($2 billion of which has already been returned) of the $50 billion it received from the U.S., the majority of which was recovered by acquiring a 61-percent share of the automaker.

For those keeping track of such things and assuming this report is accurate, GM will have paid the entire amount agreed upon with the U.S. Treasury a full two months earlier than anticipated. This accelerated schedule is said to be seen as good news by both the automaker and the federal government. We'd guess that this is also a sign that GM is likely still on track for an initial public offering sometime this year.

GM CEO Ed Whitacre is expected to make the announcement on Wednesday when he makes a speech at a GM plant in Kansas. Later that day, Whitacre will make his first appearance at Capitol Hill since taking over at the head of the company in January. For what it's worth, the automaker has also called a press conference on Wednesday that we'll be attending. Stay tuned.

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

Report: GM to announce repayment of federal loans in full on Wednesday originally appeared on Autoblog on Mon, 19 Apr 2010 18:00:00 EST. Please see our terms for use of feeds.

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Christmas List 2010: Rattner's book to debut in time for next Christmas

Dan Roth — Fri, 18 Dec 2009 10:03:00 EST

Filed under: Etc., Government/Legal, Chrysler, GM, Earnings/Financials

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.

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Meet Brian Deese, the 31-year-old in charge of breaking up GM

Dan Roth — Fri, 05 Jun 2009 10:31:00 EST

Filed under: Government/Legal, GM

Many of us ABers being in our early- to mid-30s, we're less amazed that another of our ilk has risen to a decisive government position. We are, after all, a generation on the rise. The surprising part about Brian Deese's story is that he's been instrumental in shaping the Obama administration's moves to save General Motors, and this is his first official tour of duty in Washington. What qualifies a guy who hasn't even finished his Yale Law degree to steer President's automotive task force around? From what's been said about Mr. Deese, his quick ability to boil down the often competing economic and political aspects of any given issue.

Deese piped up in favor of Fiat's rescue of Chrysler, pointing out with a memo that a fire sale of the ailing automaker would send unforseen ripples out into the economy as a whole. Speaking out in such an influential manner is definitely unusual considering Deese doesn't appear to be an auto enthusiast or business propeller-head with his nose buried in studies and reports about the car industry. A childhood spent in the Boston suburb of Belmont, Massachusetts under the parentage of a college professor an an engineer, Deese did his undergraduate time at Middlebury College in Vermont before heading to Washington to work for Nancy Birdsall on international aid. A turn with former Clinton policy wonk Gene Sperling before the move to Yale, Hillary Clinton's bid for nomination brought Deese back to DC. With friends in Washington, Deese found himself hooked into the Obama team, and from there he's been running busily around our nation's capital.

If General Motors can successfully navigate Chapter 11, we'll all get to see just how well Brian Deese has done digesting the thorny chestnut that is saving our domestic auto industry.

[Source: The New York Times, Image: Maxhawkins - CC2.0]

Meet Brian Deese, the 31-year-old in charge of breaking up GM originally appeared on Autoblog on Fri, 05 Jun 2009 10:31:00 EST. Please see our terms for use of feeds.

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REPORT: GM reaches deal with Canadian Auto Workers union

Frank Filipponio — Fri, 22 May 2009 15:58:00 EST

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

After two weeks of intense negotiations, General Motors Canada and the Canadian Auto Workers (CAW) union have reached a deal that will help the automaker cut costs, allowing it to meet the terms for additional government loans. Ken Lewenza, head of the CAW, said it was "a struggle" to reach a deal with GM, but he added that the union had done the best it could under the circumstances, saying: "we have protected most of our core benefits."

Wages, pensions and most benefits were preserved, although restructured in some instances. The union's pension rates will be frozen until 2015, for instance. The deal also keeps GM's plants in Oshawa, St. Catharines and Woodstock open for the foreseeable future. In total, it is believed that the new deal will result in $15 to $16 hourly wage savings on average. The announcement comes a day after the UAW reached a deal of its own with GM.

Although a different agreement was signed with the CAW in March, it had been rejected by the provincial and federal governments who wanted more cost-cutting to avoid bankruptcy. Although GM now appears to be heading in the same direction as Chrysler, hopefully there will be enough progress before the June 1 deadline to keep Chapter 11 a viable option. All told, the recent deals mean that 16 GM factories will close and an additional 21,000 hourly workers will be out of a job.

[Source: CTV]

REPORT: GM reaches deal with Canadian Auto Workers union originally appeared on Autoblog on Fri, 22 May 2009 15:58:00 EST. Please see our terms for use of feeds.

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REPORT: GM hedges bets, plans to miss $1B debt payment deadline

Jonathon Ramsey — Wed, 22 Apr 2009 15:57:00 EST

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

The familiar expression goes "Better the devil you know," meaning it's preferable to deal with the nasty things you don't like but are at least familiar with. General Motors, however, doesn't seem to think so. The troubled automaker appears more ready to take its chances with bankruptcy than continue to fight the weight of monumental debt and the demands of restructuring it.

GM has a $1 billion payment due on June 1, the same day as the government-imposed deadline for having its financial house cleaned up. The company's chief financial officer has just gone on record as saying that GM does not intend to make that payment. The General will attempt another round of debt-for-equity swaps (DFE) with its bondholders, and if it succeeds - and also succeeds in restructuring $20 billion in UAW healthcare obligations - it will get money from the government to continue without bankruptcy. If the DFE doesn't meets its goals, then GM is set to go into government-backed Chapter 11, court protection and what will likely be a nearly clean slate to restart its debt negotiations.

Last week, bondholders said they were preparing a response to GM's most recent offer. The automaker says that it will do what needs to be done "in court or out of court," which means that unless the bondholders' response is "Yes," bankruptcy is a fait accompli.

[Source: Wall Street Journal | Image: Bill Pugliano/Getty]

REPORT: GM hedges bets, plans to miss $1B debt payment deadline originally appeared on Autoblog on Wed, 22 Apr 2009 15:57:00 EST. Please see our terms for use of feeds.

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Ford counting on the "B" word to score conquest sales

Jeremy Korzeniewski — Fri, 17 Apr 2009 10:57:00 EST

Filed under: Car Buying, SUV, Truck, Government/Legal, Crossover, Chrysler, Ford, GM, Earnings/Financials

Is that 'B' as in bankruptcy or 'B' as in bailout? Probably 'B' as in both. Regardless of the buzzword you choose to slap on the respective situations General Motors and Chrysler find themselves in, it's not good, and Ford realizes this fact just as clearly as the rest of us. In response, the Blue Oval has embarked on a new plan to pick up as much market share as possible.

In an internal memo sent to Ford dealers in New York, the automaker laid out a new incentive that would pay current owners of Dodge, Chrysler or Jeep vehicles an extra $1,000 - in addition to whatever Customer Cash, Bonus Cash and 0% APR is already available - to trade in their current rides for a new SUV, pickup or crossover from Ford.

As pointed out by Detroit News columnist Daniel Howes, this tactic is a bit of a slippery slope for Ford. Although the Dearborn-based automaker has yet to seek out or accept any financial assistance from the government, a bankruptcy at either General Motors or Chrysler could put a major dent in Ford's own perilous financial footing. Still, Ford will take all the sales it can get.

[Source: Detroit News]

Ford counting on the "B" word to score conquest sales originally appeared on Autoblog on Fri, 17 Apr 2009 10:57:00 EST. Please see our terms for use of feeds.

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REPORT: Pontiac and GMC may get axe... you knew this was coming

Dan Roth — Thu, 16 Apr 2009 09:27:00 EST

Filed under: Etc., Government/Legal, GM, GMC, Pontiac, Rumormill

When the president tells you to sharpen your pencil and improve your last-ditch survival effort, it's time to grab the big eraser. According to reports, General Motors may ditch its GMC and Pontiac brands to demonstrate just how serious it is. If the auto lines go, GM would be pared back to Chevrolet, Buick and Cadillac, a mere shadow of its former self, but the nameplates might become more clearly defined with the added breathing room. Ford's got its trifecta of Ford, Mercury and Lincoln, so GM would match that setup should it unload Pontiac and GMC in some way, as well as carry through with its ongoing process of shedding Saturn, Saab and Hummer.

While Pontiac actually has some unique offerings, GMC is rumored to stand a better chance of sticking around. It still wouldn't be cheap to do away with the brands. There are dealers who will not go quietly into the night, meaning GM will be looking at the possibility of finding a buyer for yet another piece of its puzzle. Of course, everyone's keeping mum about the possibility of life without Pontiac or GMC.

UPDATE: According to General Motors' sales chief Mark LaNeve, the automaker has no intentions of killing off Pontiac or GMC. LaNeve admits that GM is continuing to tweak its strategy, but reports that "GMC is going away are just unfounded, unsubstantiated and untrue."

[Source: Bloomberg]

REPORT: Pontiac and GMC may get axe... you knew this was coming originally appeared on Autoblog on Thu, 16 Apr 2009 09:27:00 EST. Please see our terms for use of feeds.

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GM and AIG: Why bondholders might want bankruptcy

Jonathon Ramsey — Fri, 03 Apr 2009 11:29:00 EST

Filed under: Etc., GM, Earnings/Financials

Before we begin, let us state clearly that this is speculation by Karl Denninger at The Market Ticker. Examining the various stakeholders' interests in General Motors, Denninger has come up with a scenario that supposes GM's bondholders might actually want the automaker to file for bankruptcy.

The bondholders appear to be the biggest obstacle to restructuring. They're not allowing GM to reach its government-mandated target for debt reduction because they would lose much of their investment in the process. According to Denninger, however, the biggest and most savvy of those bondholders could get 100% of their investment back if GM files for bankruptcy. Those bondholders would have had their bonds backed by credit default swaps (CDS), which Denninger supposes would have been written in large part by insurance giant AIG. If that's the case, then we the taxpayers are on the hook to repay 100% of those bonds because the government has agreed to fulfill AIG's CDS collateral obligations.

Follow the jump for more.

Continue reading GM and AIG: Why bondholders might want bankruptcy

GM and AIG: Why bondholders might want bankruptcy originally appeared on Autoblog on Fri, 03 Apr 2009 11:29:00 EST. Please see our terms for use of feeds.

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GM asking Department of Energy for $2.6 billion to build hybrids?

Jeremy Korzeniewski — Thu, 02 Apr 2009 15:20:00 EST

Filed under: Hybrid, Government/Legal, Green, Chevrolet, GM

Click above for high-res image gallery of the 2011 Chevy Volt

General Motors released an updated business plan to Congress on Wednesday, and one of the main points of interest surrounds the automaker's request of an additional $2.6 billion for the production of the Chevrolet Volt and two additional variants based on the same Voltec powertrain architecture.

The report doesn't spell out what the two new Volt-like models would be, but there's speculation a production model based on the Cadillac Converj concept (possibly as a 4-door sedan) might be in the works. Offering the Volt's high-tech and expensive powertrain at a Caddy-level price point makes plenty of sense as it would allow GM to subsidize the cost of its development and lower the price of production.

These funds would reportedly come from the Department of Energy's $25 billion Advanced Technology Vehicle Manufacturing Program and is separate from - and in addition to - the ongoing negotiations for bailout funds between General Motors, Chrysler and the U.S. government. The total amount GM has requested under the D.O.E. program now stands at $10.3 billion.

Gallery: 2011 Chevrolet Volt

[Source: Reuters]

GM asking Department of Energy for $2.6 billion to build hybrids? originally appeared on Autoblog on Thu, 02 Apr 2009 15:20:00 EST. Please see our terms for use of feeds.

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