Autoblog

GM passes Ford in government sales, first time since bailout

Jeffrey N. Ross — Fri, 11 Jan 2013 17:44:00 EST

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

Opponents of the US auto bailout - specifically that of "Government Motors" - should have a field day with this information. According to data compiled by Automotive News from the Government Services Administration, General Motors became the largest supplier of new cars to the US Government; overtaking Ford for the first time since 2009. Before the bailout, GM had held this lead dating back to at least 2005.

For fiscal year 2012, GM sold 19,404 units worth $409.2 million to the government, while Ford's sales to the feds dropped by 43 percent to 10,734 units worth $241.3 million. While some might want to attribute this finding to favoritism toward GM, GSA says that the majority of vehicle purchases, with "only a few exceptions," are driven solely by price. The report says that GM's vehicle prices climbed just 1.9 percent, and Ford's prices have risen by 12 percent. The overall top-selling car purchased by GSA? The Chevrolet Malibu. Although it has a retail price of $21,995, GSA acquired the cars for an average price of just $15,778. Other vehicles among the top 10 to be purchased by the government include the Grand Caravan, Ram 1500, Tahoe, F-150. And as we previously reported, the Hyundai Sonata Hybrid was the top hybrid model purchased by GSA.

GSA spending has also dropped in recent years with last year's $1.3 billion down from $1.36 billion in 2011 and $1.55 billion in 2010. Vehicle purchases were also down 8.6 percent from the previous year with overall purchases totaling 50,114 units.

GM had previously stated that it was going to buy back 200 million shares of its own stock by the end of the year, but we have yet to hear any confirmation on such a deal, which would be worth an estimated $5.5 billion.

GM passes Ford in government sales, first time since bailout originally appeared on Autoblog on Fri, 11 Jan 2013 17:44:00 EST. Please see our terms for use of feeds.

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Romney vows to dump federal stake in GM quickly

Jonathon Ramsey — Tue, 05 Jun 2012 11:32:00 EST

Filed under: Government/Legal

With a multi-volume list of issues that a presidential hopeful could discuss, we aren't sure why Mitt Romney keeps circling back to the auto industry bailouts, but here we are again. He's lately swinging his stick at the U.S. Treasury Department for not having sold its 26.5-percent stake in General Motors, accusing it of holding back on the stock sale to avoid having to report a multi-billion dollar loss before the election.

At GM's current stock price, the government would lose about $16 billion by sellings its 500 million shares, a number that hasn't much changed from several months ago. Romney said the government has "no reason" for not selling, and a report of his interview with The Detroit News says that "he'd sell the stock quickly if he wins the White House." A Treasury spokesman responded with "We have to balance maximizing recovery for the taxpayers with the speed of exit."

On top of that, Romney said that if he becomes POTUS, he would take another look at Corporate Average Fuel Economy standards, believing that "The best approach is to try and build vehicles that people want, rather than having the government telling the companies what they must make." It's a line we've heard (and even uttered) often, but the nexus of government regulations, consumer desires, viable business models and long-term industry concerns is a moving target shifty enough to confuse quantum physicists.

Either way, it's clearly fair to expect more jabs from Romney at President Obama and the auto bailout as the campaign season grinds toward election day.

Romney vows to dump federal stake in GM quickly originally appeared on Autoblog on Tue, 05 Jun 2012 11:32:00 EST. Please see our terms for use of feeds.

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GM stock price leads to greater estimate of losses on bailouts

Jeff Sabatini — Wed, 01 Feb 2012 09:59:00 EST

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

The "Government Motors" crowd isn't going to be happy about this: The Detroit News is reporting that the U.S. Treasury now says it has lost an extra $170 million in the auto industry bailout. The culprit? The declining price of General Motors stock.

According to the report, GM's stock crested at $37.23, but is down 35 percent from that level today. The Treasury Department based its calculations on a $21.29 value from November 30, 2011. The government's share of GM was initially 61 percent, but has been reduced to 26.5 percent. The News says that the lower stock price has kept the government from selling its remaining 500 million shares.

While political opponents of the Obama administration will no doubt jump all over this report, the final cost of the bailout is still looking like it will be far less than originally thought. According to the report, the $44 billion estimate was reduced to $30 billion in December 2009, and this most recent estimate puts the total sum at $23.77 billion.

Matthew Anderson, a Treasury spokesman, was quoted as saying: "The auto industry rescue helped save one million jobs and is still projected to cost dramatically less than many had expected during the crisis."

GM stock price leads to greater estimate of losses on bailouts originally appeared on Autoblog on Wed, 01 Feb 2012 09:59:00 EST. Please see our terms for use of feeds.

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Far right wing reportedly ready to boycott a newly federalized GM

Sam Abuelsamid — Mon, 08 Jun 2009 10:29:00 EST

Filed under: Government/Legal, GM

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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Officially, Official: GM files for Chapter 11 bankruptcy

Chris Paukert — Mon, 01 Jun 2009 09:26:00 EST

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

The die is cast: General Motors has filed for bankruptcy. As expected, the automotive giant filed for Chapter 11 bankruptcy protection this morning in a New York court, listing $82 billion in assets and $172 billion in debts.

As we told you earlier, the century-old company will gain extensive assistance from the U.S. government, the former chipping in $30 billion in financing (GM has already received over $19 billion), that latter of which is expected to work extensively with the automaker as it goes through bankruptcy proceedings that will see the company's assets split into "Good GM" and "Bad GM," the latter of which will be liquidated.

According to the Detroit Free Press, the Obama administration has said that it will manage its holdings in GM (the government gets a 60% stake) in a "hands-off" non-interference fashion, with no White House employees serving on the board or being employed by the automaker. However, Capitol Hill will get the chance to influence company proceedings, as it will vote on core issues of governance that include "selecting the company's board of directors and major corporate transactions." While that may not equate to day-to-day management decisions, the government will certainly have the ability to influence company plans through appointments and such decision-making processes.

You can read more about the filing and the ramifications at the link below.

[Source: Detroit Free Press | Image: Michael Heiman/Getty]

Officially, Official: GM files for Chapter 11 bankruptcy originally appeared on Autoblog on Mon, 01 Jun 2009 09:26:00 EST. Please see our terms for use of feeds.

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