Autoblog

Treasury poised to sell off 30 million more GM shares

Chris Paukert — Thu, 06 Jun 2013 10:13:00 EST

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

The next step in the US Treasury's efforts to eliminate its financial interests in General Motors will involve the sale of 30 million shares of the automaker's stock. The government's move to divest itself of GM is all part of a larger plan to sell the remaining 300 million shares of stock it received in compensation for the 2009 bailout of the then-failing automaker. The US Treasury plans to sell off all remaining stock - around 18-percent of GM - by early next year, yet this 30 million share sell-off, which may happen today, is a much smaller divestment than the 200-million shares it sold back to GM in December for $5.5 billion. The United Auto Workers, whose retiree medical trust also owns a large chunk of The General, will also sell off 20 million shares in this latest offering.

According to The New York Times, the sale is timed in tandem with GM's return to Standard & Poor's 500-stock index, a mental milestone of sorts that many investors believe will help improve the company's under-performing stock. GM is taking the spot on the S&P 500 formerly occupied by H.J. Heinz, the Pittsburg-based food conglomerate that has gone private thanks to investment by Berkshire Hathaway and investment firm 3G Capital.

At the time of this writing, GM stock is trading at $34.04 a share, a little above its initial public offering price of $33 back in November 2010.

Treasury poised to sell off 30 million more GM shares originally appeared on Autoblog on Thu, 06 Jun 2013 10:13:00 EST. Please see our terms for use of feeds.

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Treasury to begin selling off more GM stock

Jonathon Ramsey — Thu, 09 May 2013 09:29:00 EST

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

Reuters reports that earlier this week the US Treasury announced the sale of another tranche of General Motors stock. It didn't say how many of the 241.7 million shares it holds in the automaker it would sell, nor exactly when - the discretion apparently intended to keep hedge funds from profiting from the situation. The government's ownership is broken down into common and diluted shares, representing close to 18 percent of the company at the moment, down from the 60.8 percent it owned in 2009 after GM's bankruptcy. This follows a share sale in February, when Treasury sold 17.2 million shares for $489 million.

Although GM's share price is nowhere near the $70-per-share or so that Treasury would need to break even, the department has reiterated that the point of the Troubled Asset Relief Program (TARP) wasn't to make money but to save jobs. GM's share price has, however, almost edged back to its November 2012 IPO price of $33. At the time of writing, shares were trading for $32.10. Based on the timetable Treasury gave in December, it should be fully divested of its GM ownership within a year from now.

Treasury to begin selling off more GM stock originally appeared on Autoblog on Thu, 09 May 2013 09:29:00 EST. Please see our terms for use of feeds.

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US Treasury denies pay hikes for GM, Ally execs

Jonathon Ramsey — Mon, 29 Apr 2013 11:30:00 EST

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

In December, the US Treasury granted General Motors the rights for the company to once again buy corporate jets and for its executives to fly on them, but neither those execs nor the ones at Ally Financial will get any raises this year. The automaker, worried that top talent might leave for higher-paying pastures, reportedly sought a more "market-based approach to executive compensation" for 12 of its top 25 execs. Because the federal government still has stakes in both GM and Ally, though, the companies need approval for pay raises, and they were declined. Neither company sought raises for their CEOs, and Ally's request didn't involve any additional cash compensation for the executives in question.

While the Treasury says that cash salaries for the 25 top executives at GM and Ally combined are just four percent below the median compared to similar positions, total cash compensation is 56 percent below the median. That would include GM CEO Dan Akerson (shown), who got a little more cash last year because of a compensation rearrangement speculated to potentially involve his retirement, but the overall annual pay package of $9 million hasn't changed for him since 2010 according to the Treasury.

What's more, it's said the overall compensation at both firms dropped by double-digit percentages compared to last year due to an influx of new appointments among the top 25 executives. The Treasury has said it will divest itself of all GM shares it owns by March 2014, but hasn't given a any guidance on divestiture of its Ally stock, the financial firm dealing with a much more complicated situation.

US Treasury denies pay hikes for GM, Ally execs originally appeared on Autoblog on Mon, 29 Apr 2013 11:30:00 EST. Please see our terms for use of feeds.

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Treasury says auto bailout tally drops to $20.3 billion

Jonathon Ramsey — Tue, 12 Feb 2013 18:00:00 EST

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

In December, the US Treasury announced that it was going to sell all of its shares in General Motors within 12 to 15 months. The first tranche of the 500-million total shares was purchased by GM, which took 200 million of them at $27.50 per share. That price represents an eight-percent premium over the market price at the time. The remaining 300 million shares will be sold "through various means in an orderly fashion."

Of the $418 billion disbursed through the Troubled Asset Relief Program (TARP), a report in Automotive News indicates that "about 93 percent" has been paid back, and the latest figures put Treasury's loss from the program overall at $55.58 billion. That's a $4.1 billion improvement on the last figure, when the expected red ink added up to $59.68 billion. The auto industry's portion of that loss is estimated to be $20.3 billion, a 16-percent drop from the earlier estimate of $24.3 billion.

The Treasury now owns 19 percent of GM, but if all goes well, there will be no more cause for anyone to utter "Government Motors" by the end of Q1 next year. A loss of some kind is still expected, however. Although GM's stock price is close to $29 at the time of this writing, that's still $4 below its IPO price and well below the $72 share price necessary for the government to come out even on its GM investment. On second thought, maybe the ribbing will continue.

Treasury says auto bailout tally drops to $20.3 billion originally appeared on Autoblog on Tue, 12 Feb 2013 18:00:00 EST. Please see our terms for use of feeds.

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Read an excerpt from Whitacre's book about how he fired Henderson and why Akerson got the job

Jonathon Ramsey — Thu, 24 Jan 2013 15:45:00 EST

Filed under: Etc., GM

It is probably best just to play this down the middle and let you read the excerpt from American Turnaround: Reinventing AT&T and GM and the Way We Do Business in the USA by Ed Whitacre. The author, you'll remember, was the former AT&T CEO who came out of retirement to take the position of chairman at General Motors in June of 2009. Six months later, he took the role of CEO, and on September 1, 2010 he was replaced by current CEO Dan Akerson and gave up the chairmanship at the end of that year.

To read the excerpt, you're going to have to get past the Fortune headline "How Ed Whitacre brought GM back from the brink." Now, Whitacre didn't choose that headline, and since we're playing this down the middle, we can't say that the headline isn't the only eyebrow-raising line in the piece - but we won't charge it to Whitacre's account. However, when it takes five years to develop a single car, and redesigning a taillight for a midcycle refresh might take a year, we're not sure how anyone can reinvent a global automaker in just nine-months as CEO. Perhaps we should ask Ford boss Alan Mullaly about that timeframe.

To the point, the book will be out on February 12 - you can pre-order it on Amazon now - and Whitacre's explanation of how Fritz Henderson was let go, how he got the CEO position and how Akerson came to follow will be sure to get enthusiasts intrigued in what else the complete tome might say. All you've got to do is follow the link to read it.

Read an excerpt from Whitacre's book about how he fired Henderson and why Akerson got the job originally appeared on Autoblog on Thu, 24 Jan 2013 15:45:00 EST. Please see our terms for use of feeds.

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Feds expect greater loss on auto bailout

Jonathon Ramsey — Mon, 20 Aug 2012 08:56:00 EST

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

The saga of the U.S. Treasury's involvement with General Motors has become the theater of call and response: the call is Treasury announcing how much it stands to lose on its bailout of GM, the response is a turgid chorus of "Government Motors!" and "They should have died!" peppered with a few defenders trying to make themselves heard. Well, here we go again, since the latest Treasury report filed states that it stands to lose $25.1 billion on the 500 million shares of GM stock it still owns.

There are two qualifiers with this, the first being that the estimate is low; it was made when GM's stock price was $22.20, but at the close of trading on of August 17 the stock price was $22.01. The second and much more important qualifier is that Treasury only loses $26 billion, give or take, if it actually sells the stock. Treasury's report to Congress on the state of its investment doesn't mean a sale is imminent, it's just an update. The only thing we've heard about the date of a sale is that Treasury has no immediate plans on such, preferring to wait until the market catches up to the progress it feels GM has made.

At one time the government expected to lose $44 billion on the auto bailout. Even if it takes a $26 billion bath on GM and adds the $1.3 billion loss on Chrysler, that's still a 33-percent improvement on what could have been. And that's called "looking at the bright side."

Feds expect greater loss on auto bailout originally appeared on Autoblog on Mon, 20 Aug 2012 08:56:00 EST. Please see our terms for use of feeds.

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GM suing to shut down eight dealers that missed targets

Jeff Sabatini — Mon, 23 Jul 2012 14:02:00 EST

Filed under: Car Buying, Government/Legal, GM

Eight General Motors dealers are being sued by the automaker, which is seeking to revoke their franchises and purchase the dealerships assets in the wake of poor 2011 sales. According to Automotive News, the dealers are among the 700 who filed for arbitration when GM targeted them for closure during its 2009 bankruptcy.

Other GM dealers who were initially among the 2,064 the company sought to eliminate have met sales targets and their franchises are no longer at risk, according to the report. GM had directed troubled franchises to create new business plans for 2011.

GM suing to shut down eight dealers that missed targets originally appeared on Autoblog on Mon, 23 Jul 2012 14:02:00 EST. Please see our terms for use of feeds.

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Watchdog says White House needs exit strategy for GM, Ally

Jonathon Ramsey — Thu, 12 Jul 2012 11:30:00 EST

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

Christy Romero, a special inspector general examining the corporate bailouts that came in the wake of 2008's financial crisis, has some advice for the U.S. government: "Treasury should develop a concrete exit plan for GM and Ally." She is referring, of course, to the 30-percent stake that the government still holds in General Motors and the 74-percent stake it holds in Ally Financial, formerly known as GMAC when the Treasury pumped $17 billion into it.

For its part, the government says it already has an exit plan and Romero doesn't offer any further advice to guide that plan in some other direction. With the calls for Treasury to divest coming even more frequently during the U.S. Presidential race, Treasury has repeatedly stated the same thing: it is waiting for the right time to maximize its return, thereby minimizing the loss to the U.S. taxpayer.

With 500 million GM shares in its portfolio, the government needs those shares at $52-per in order to recoup the remainder of its initial $50 billion investment. Shares are right around $20, which would mean a highly unpalatable Greek haircut if the government gave up its position. Recent GM moves have also led the Treasury to believe that there is unlocked value in the company that the market simply hasn't reacted to yet; however, that sentiment was voiced two months ago and the stock price still hasn't budged.

Ally Financial is a different conundrum, one that the Treasury seems to be much more eager to divest itself of. The financial firm has paid back $5.4 billion of its TARP loan and filed IPO paperwork a year ago, but there's still not even a potential date for an offering, and no one seems to have any idea when it will pay off the rest of the funds. While plans are debated for an offering or a breakup of the company, Treasury has suggested that GM buy back Ally, but GM hasn't indicated any desire to do so.

So in effect, nothing has really changed, but at least now we have more figures in the government suggesting that the government get out of GM.

Watchdog says White House needs exit strategy for GM, Ally originally appeared on Autoblog on Thu, 12 Jul 2012 11:30:00 EST. Please see our terms for use of feeds.

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Memo says Bush administration almost pushed GM and Chrysler into earlier bankruptcy

Chris Shunk — Tue, 24 Jan 2012 10:28:00 EST

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

2008 was one crazy, almost surreal year. It was the year when the economy took a nosedive, and the U.S. auto industry nearly ceased to exist. One of the last major decisions former President Bush made before he left office was to give Chrysler and General Motors a combined $17.4 billion to keep their doors open.

That money held over the two automakers for a few months, but The Detroit News reports that the Bush administration almost took a different tack. The New Yorker published a 57-page economic memo that was written by economist Larry Summers to President Elect Obama. The memo claims that President Bush was noodling an earlier bankruptcy for the automakers, backed by up to $100 billion in government financing.

By instead forwarding GM and Chrysler a bridge loan, Bush (pictured here with former Chrysler CEO Bob Nardelli) effectively prolonged the inevitable and pushed the tough decision on to the next administration. But that could have been the best possible action to take - Summers was reportedly of the opinion that pushing the automakers through bankruptcy too early could have severely damaged the entire U.S. auto industry - not just at Chrysler and GM.

In the end, Chrysler entered bankruptcy in April, followed by GM in June. Chrysler no longer owes the federal government any money, though Uncle Sam still owns 26.5 percent of The General. As a result of the Bush administration's choices, the Obama administration is the one that gets the blame and credit (depending on your political viewpoint) for shepherding the two automakers through bankruptcy.

Memo says Bush administration almost pushed GM and Chrysler into earlier bankruptcy originally appeared on Autoblog on Tue, 24 Jan 2012 10:28:00 EST. Please see our terms for use of feeds.

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Romney blames Obama for GM layoffs

Jeremy Korzeniewski — Tue, 20 Dec 2011 15:29:00 EST

Filed under: Government/Legal, Hirings/Firings/Layoffs, Plants/Manufacturing, Chrysler, GM, Earnings/Financials

"The president is going to go after me. I'll go after him." That pretty much sums up every presidential race in recent memory, where it seems attacking the opposing side is just as important as proving your own personal worth. And the 2012 U.S. presidential election, unsurprisingly, is shaping up much the same.

The words above came from former Massachusetts Gov. Mitt Romney, who is in the running for the Republican nomination. According to a Romney interview conducted by Fox News, President Obama is responsible for closing factories and laying off workers during the government-backed bankruptcies of Chrysler and General Motors. Detractors would argue that factory closings and a shrinking workforce were unavoidable at the automakers and that the plans were effectively put in motion on former President George Bush's watch.

This new line of reasoning from Romney comes as he himself is under attack for his role in Bain Capital, a highly profitable Boston-based private equity firm. Depending on who you're asking, Bain was either a creator of jobs and a savior of broken companies or a group of rich investors whose sole goal was to make money at the expense of everything else. Either way, there's no denying that many facilities were closed and many jobs were lost under the ownership of Bain Capital.

As for President Obama's reaction, The Detroit News quotes Michigan spokesman for the Obama campaign, Clark Pettig, as saying:

"We know what Mitt Romney did when 1.4 million jobs were on the line - he opposed the rescue loan the president extended to avoid liquidation, and made clear he would let Detroit go bankrupt. It's no wonder he did that, because when he was a corporate buyout specialist, he laid off thousands of workers, closed factories and outsourced jobs solely in order to create profits for himself and his partners."

Welcome to election season, folks.

Romney blames Obama for GM layoffs originally appeared on Autoblog on Tue, 20 Dec 2011 15:29:00 EST. Please see our terms for use of feeds.

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"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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Trust says Old GM shorted property cleanup funds by $13.5M

Jonathon Ramsey — Tue, 29 Nov 2011 08:58:00 EST

Filed under: Government/Legal, Safety, GM

A special trust called RACER was created last year to clean up 89 contaminated sites left behind by the old General Motors in 14 states. According to a report in the Detroit Free Press, GM was meant to provide $625.2 million (an earlier report in the Detroit News indicated $773 million) to pay for cleaning, and did so with with $49.9 million in cash and the balance in Treasury Bonds.

Those Treasury Bonds should have been worth $575.3 million, but a lawyer for the RACER trust says they were only worth $561.8 million when they were remitted to the trust. That's a $13.5 million gap that the trust would like filled, and it is asking the judge to compel Motors Liquidation (old GM) to hand over the money, or to take that money from remaining Motors Liquidation assets and place it in escrow by December 11.

The bonds have become more valuable since they were given to the trust, but the trust's lawyers maintain that current value has no bearing on the amount they were due as stated in the judge's ruling. Motors Liquidation is trying to dissolve by December 15, and at this point it isn't clear if it even has the $13.5 million, or the inclination to pay.

Trust says Old GM shorted property cleanup funds by $13.5M originally appeared on Autoblog on Tue, 29 Nov 2011 08:58:00 EST. Please see our terms for use of feeds.

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Report: Judge approves plan to clean up "Old GM" sites

Zach Bowman — Sat, 05 Mar 2011 12:33:00 EST

Filed under: Government/Legal, GM

General Motors has been given the go-ahead to begin selling off the remaining old GM assets as part of the automaker's restructuring plan. According to The Detroit News, a federal bankruptcy judge approved the plan after a day-long hearing. Judge Robert E. Gerber is expected to issue a written opinion on the matter within the next few days, and the sale's confirmation date is set to be announced on March 31.

As part of the move, 610 million shares of old GM stock will be cancelled. Creditors have submitted verified claims of around $29.5 billion, and as part of the plan, those entities will receive $5 billion in new GM stock and warrants. That figure equates to around 15 percent of all new-GM stock.

In addition, Gerber moved to approve a $773 million environmental trust designed to help fund and oversee the cleanup of 89 former General Motors plants in 14 states. An additional plan is in the works to address additional environmental issues.

Those include an extra $536 million to cover cleanup costs and $300 million for demolition costs and property taxes.

Gerber's decision means that the last remaining embers of the old GM are officially dying out. The Detroit News reports that the company should cease doing business by no later than December 15.

[Source: The Detroit News]

Report: Judge approves plan to clean up "Old GM" sites originally appeared on Autoblog on Sat, 05 Mar 2011 12:33:00 EST. Please see our terms for use of feeds.

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"Car Czar" Rattner settles with Cuomo over pension fund kickbacks

David Kiley — Fri, 31 Dec 2010 08:57:00 EST

Filed under: Etc., Government/Legal

New York Attorney General Andrew Cuomo has announced that his office settled with former White House Task Force "Car Czar" Stephen L. Rattner for $10 million. The agreement comes following charges that Rattner engaged in a kickback scheme involving New York's pension funds while he was an executive with Quadrangle Group.

Rattner, who oversaw the U.S. government rescue of General Motors and Chrysler in 2009 and shepherded the companies into bankruptcy, will also be barred from doing business with the State's pension fund for a period of five years as part of the agreement with Cuomo. The deal will settle two lawsuits filed in November against Rattner.

"I am gratified that we have been able to reach an agreement in this case, as it resolves the last major action of our multi-year investigation," Cuomo said in a statement. "The state pension fund is a valuable asset held in trust for retirees and supported by taxpayers. Through the many cases, pleas and settlements in this investigation, I believe we have been able to help restore and protect the integrity of the state pension fund."

Mr. Cuomo will be sworn in as New York's governor on Jan. 1.

Rattner said in a statement: "I am pleased to have reached a settlement with the New York attorney general's office, which allows me to put this matter behind me. I apologize if during the course of this process there is anything I did that may have made reaching this agreement more difficult. I respect the work of the attorney general and his staff to ensure that the New York State Common Retirement Fund operates properly and in the best interests of New Yorkers."

[Image: Neilson Barnard/Getty]

Continue reading "Car Czar" Rattner settles with Cuomo over pension fund kickbacks

"Car Czar" Rattner settles with Cuomo over pension fund kickbacks originally appeared on Autoblog on Fri, 31 Dec 2010 08:57:00 EST. Please see our terms for use of feeds.

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'Old GM' asset sell-off includes... an abandoned Indiana church and a golf course?!

Jonathon Ramsey — Thu, 21 Oct 2010 08:28:00 EST

Filed under: Auctions, Government/Legal, Plants/Manufacturing, GM

Attention is focused on the new General Motors, but behind the scenes the dismantling of the old GM, now known as Motors Liquidation Co., continues. Last week another auction was held in a series of highest-bidder events going back to September of 2009. The Livonia engine plant, home of Northstar V8 assembly among other things, had its old machinery and mementos sold to buyers around the world. The property itself, however, wasn't sold.

And as with any garage sale, even one spread among 14 states, there are things you wouldn't expect to find among the booty, like an abandoned Indiana church and a New Jersey golf course. The golf course we can understand. The church has our curiosity turning over all kinds of scenarios. The next auction will be November 4 at the Pontiac Assembly plant, each one doing its small part to address Motors Liquidation Co's $275 billion in debts in addition to funds needed for toxic site cleanups

[Source: Detroit News | Image: Stan Honda/AFP/Getty Images]

'Old GM' asset sell-off includes... an abandoned Indiana church and a golf course?! originally appeared on Autoblog on Thu, 21 Oct 2010 08:28:00 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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Report: GM's Akerson says taxpayer payback will take years

Jonathon Ramsey — Thu, 16 Sep 2010 13:31:00 EST

Filed under: Government/Legal, GM

New General Motors CEO Dan Akerson's first bit of big news isn't exactly good news: paying back the taxpayer for loans during GM's dark days is going to take years. How many years remains uncertain, with Akerson saying the company's performance will be the test, since repaying the government in a lump sum would be "unrealistic." It helps that this news isn't exactly unexpected, and if we can take anything from Akerson's 15 days on the job, well, at least he's honest.

[Source: Automotive News - Sub. Req.]

Report: GM's Akerson says taxpayer payback will take years originally appeared on Autoblog on Thu, 16 Sep 2010 13:31:00 EST. Please see our terms for use of feeds.

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California Chevrolet dealer unhappy with arbitration, sues for franchise

Sam Abuelsamid — Tue, 17 Aug 2010 09:30:00 EST

Filed under: Government/Legal, Chevrolet, GM

When General Motors announced a couple of weeks ago that it had completed the arbitration process with all of its discontinued dealers, the automaker no doubt hoped that its painful retail shrinkage process was over. But sadly, it was not to be - Rally Auto Group of Palmdale, CA, is apparently not quite ready to call it quits.

The arbiter in Rally's case removed the dealer's Chevrolet franchise and awarded it to a Saturn dealer that was located nearby; but allowed Rally to keep its Cadillac, Buick and GMC dealerships. Rally claims that, under the law passed by congress last year that created the dealer arbitration process, the arbiter should not have split the franchises but rather kept the whole dealership together or ordered it closed in its entirety.

So far, Rally is the only GM dealer to sue in the wake of the arbitration process, though three Chrysler dealers have also reportedly sued.

[Source: Automotive News - Sub. Req'd]

California Chevrolet dealer unhappy with arbitration, sues for franchise originally appeared on Autoblog on Tue, 17 Aug 2010 09:30:00 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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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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