GM Car Forum (Buick Hummer OPEL Cadillac) http://www.igeneralcar.info Just another WordPress weblog Mon, 15 Sep 2008 21:44:32 +0000 http://wordpress.org/?v=2.5.1 en GM expects to give potential buyers financial information about Hummer http://www.igeneralcar.info/2008/09/15/gm-expects-to-give-potential-buyers-financial-information-about-hummer/ http://www.igeneralcar.info/2008/09/15/gm-expects-to-give-potential-buyers-financial-information-about-hummer/#comments Mon, 15 Sep 2008 21:44:32 +0000 admin http://www.igeneralcar.info/?p=1548 General Motors Corp expects to give potential buyers financial information about Hummer in the next few weeks while also looking at other asset sales, Chief Operating Officer Fritz Henderson said on Monday.

GM, which in June hired Citigroup to consider all strategic options for Hummer, has not yet officially put the iconic gas-guzzling brand on the market.

Even as GM executives have publicly said they have received indications of interest in the brand, likely buyers from India, China, Russia and the Middle East have denied interest.

A credit crunch that began last summer has severely limited access to borrowing money, especially for private equity players, making large deals very difficult.

“Private equity, which was a source of capital, has really curtailed its appetite with concerns about credit,” Henderson said at the Reuters Autos Summit in Detroit. “Ultimately someone has to buy assets in order to sell them, and there has been a dearth of buyers.”

Still, Henderson said GM was not delaying the sale process of Hummer to wait out the downturn. “I would like to reach a conclusion on this relatively promptly because taking a lot of time doesn’t help.”

Henderson said there was no deliberate delay and that the auction had not yet begun because “doing stand-alone financials takes time.”

While he said he would like to see a decision on Hummer by the end of the year, he does not see a sale closing before 2009.

Interest in buying a brand that gets only 9 to 15 miles a gallon has been scant and continues to shrink as gasoline prices squeeze drivers worldwide and environmental concerns increasingly trump any other notion of what’s cool.

Sources familiar with the matter have said GM has had initial exploratory talks about Hummer with Indian automaker Mahindra & Mahindra Ltd and Russian oligarch Oleg Deripaska.

But both parties have publicly denied interest.

Hunan Changfeng Motor Co also said it had held preliminary talks with GM, but the Chinese SUV maker backed off after touring Hummer’s U.S. factory, citing limited potential to market the vehicle.

And after Terry Johnson, GM’s managing director for the Middle East, said two investors in the Gulf Arab region had made overtures, the three most likely candidates — Abu Dhabi’s Mubadala, Kuwait’s Investment Dar and Dubai Investment Capital — denied interest.

“It’s an interesting and iconic brand, and our timing was poor,” Henderson said, referring to GM’s launch of the Hummers in the U.S. market.

The original Humvees were multipurpose, off-road military vehicles, but maker AM General launched Hummer for civilians in 1992. GM bought the brand in 1999, near the peak of truck sales, and went on to sell the H1, H2 and H3 models.

But as oil prices have risen, sales have plunged. U.S. demand — accounting for the bulk of all Hummer sales — was down 44 percent through August.

GM, which lost more than $51 billion in the past three years, has said it will try to raise up to $4 billion through asset sales.

Henderson said the automaker is also considering sales of other assets at this time.

Some analysts have said GM could sell its OnStar unit, which specializes in in-vehicle communications and safety technology. Henderson declined to comment.

But some investment bankers have said GM will probably get more money from capital markets than from asset sales as it seeks to raise $5 billion from a combination of both those efforts.

“We could very well sell debt,” Henderson said. “But trying to do even a secured financing deal in this market is pretty tough.”

General Motors COO Fritz Henderson spoke to reporters at a press conference in Detroit today and laid out a few more details on the planned sale of the Hummer brand. In a less-than-shocking admission, Henderson conceded that, while he’d like to see a decision made by the end of the year, no actual sale is likely until some time in 2009. As it has affected every aspect of the economy lately, the credit crunch has also impacted private equity buyers’ ability to borrow money, making large deals like car brand buying difficult to accomplish.

“Private equity, which was a source of capital, has really curtailed its appetite with concerns about credit,” says Fritz Henderson. “Ultimately, someone has to buy assets in order to sell them and there has been a dearth of buyers.”

Henderson assured reporters that GM was not intentionally delaying the sale to ride out the downturn in the auto industry and that he’d prefer to see Hummer gone sooner rather than later. For now, GM is working on getting all of Hummer’s financial documents together so it can present them to potential buyers, whomever they may be, in the next few weeks. The General also is looking at what other assets it can sell as it tries to generate $4 billion from sales as part of its $15 billion restructuring plan.

Henderson also noted that GM is facing slower sales in China and Europe as well, which isn’t helping the restructuring plan. On the other hand, he has hope that we may have seen the lowest point of the U.S. market over the summer.

“It feels like all the negative variables are factored into the market, are factored into the consumer,” says Henderson. “Perhaps we have found the bottom … in the U.S. I can’t say the same thing for other markets.”
2009 Hummer H2 SUT

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Delphi reached an agreement with GM on amended settlement http://www.igeneralcar.info/2008/09/12/delphi-reached-an-agreement-with-gm-on-amended-settlement/ http://www.igeneralcar.info/2008/09/12/delphi-reached-an-agreement-with-gm-on-amended-settlement/#comments Sat, 13 Sep 2008 01:10:11 +0000 admin http://www.igeneralcar.info/?p=1547 Friday, Delphi Corp. (DPHIQ.PK:  News ) announced that it reached an agreement with GM on amended settlement and restructuring agreements. Per the agreements, Delphi will receive support from GM that Delphi estimates to be valued at approximately $10.6 billion for its transformation, increased from about $6.0 billion in the January
2008 settlement. The agreement would modify the mechanics and expand the amount of Delphi’s net hourly pension liability transfer to GM pursuant to section 414(l) of the Internal Revenue Code from $1.5 billion under the original GSA to about $3.4 billion.

General Motors Corp. announced a deal to help its former parts unit emerge from bankruptcy Friday, agreeing to assume $3.4 billion of Delphi Corp.’s pension plan.

GM said it would also make $1.2 billion in payments through the remainder of 2008 to Delphi to shore up its liquidity.

GM and Delphi announced the deal late Friday, heading off the filing of a new lien against another $900 million in Delphi’s foreign assets by the Pension Benefit Guaranty Corp.

“Despite recent challenges — including difficult credit markets, the downturn in the U.S. auto industry, and other cost pressures — our operating performance has improved significantly,” Delphi President and CEO Rodney O’Neal said. “Our team has accomplished this global transformation in the face of a complete restructuring of a significant portion of our operations.”

O’Neal said Delphi is on track to complete its transformation plan by the end of this year.

GM said it would contribute $10.6 billion in Delphi’s emergence from bankruptcy, boosting the amount it had agreed to take of Delphi’s pension liabilities from $1.5 billion to $3.4 billion, which will “preserve and fund Delphi’s hourly and salaried pension plans” Delphi said in a statement.

Delphi said it would re-enter the capital markets seeking financing of its plan of reorganization and would ask a bankruptcy judge to approve the deals on Sept. 23.

The pension transfer “will enable Delphi to take the next steps in its transformation, including the actions that should allow it to emerge from chapter 11 as soon as practicable,” Delphi said.

The company will also seek to freeze its hourly and salaried defined benefit pension

“We have remained committed to fully funding our pension plans and to being well-planned, well organized, and well-financed from the beginning of our Chapter 11 cases,” said Delphi’s Chief Restructuring Officer John Sheehan. “If approved by the Court, these actions … are significant milestones in completing the final phases of the reorganization of our U.S. operations and positioning us to complete the financing required for our emergence from chapter 11 as soon as practicable.”

General Motors will provide $10.6 billion in financial assistance to Delphi Corp. enabling the parts maker emerge from bankruptcy protection by the end of the year.

Delphi Corp. said its former parent company will take on $3.4 billion in pension obligations for hourly workers. GM originally planned to take on $1.5 pension liabilities.

The move saves Delphi from a potential lawsuit as the U.S. Pension Benefit Guarantee Corp. threatened to file a $900 million claim against the company if it did not strike a deal to transfer the hourly pensions to GM.

The company plans to freeze pension plans once it receives permission from the union to proceed.

Delphi plans to seek court approval of the new deal on Sept. 23. Delphi was originally a spin off of GM’s part manufacturing division.

Delphi has been under chapter 11 bankruptcy protection since October 2005.

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General Motors may get $25 billion in government loans http://www.igeneralcar.info/2008/09/11/general-motors-may-get-25-billion-in-government-loans/ http://www.igeneralcar.info/2008/09/11/general-motors-may-get-25-billion-in-government-loans/#comments Thu, 11 Sep 2008 20:43:27 +0000 admin http://www.igeneralcar.info/?p=1546 General Motors Corp., Ford Motor Co. and their suppliers may get $25 billion in government loans to speed development of fuel-efficient vehicles this year and have to wait until next year for another $25 billion, analysts said.

The auto companies probably will be able to win support for $3.75 billion that must be appropriated to cover the costs of issuing the first $25 billion, Clint Currie, a Washington-based transportation analyst at Stanford Group, said in a report today. The odds against funding additional loans for the industry this year are 3-to-1, he said.

“We expect the attention needle on providing direct loans to Detroit to remain in the red zone for the next several weeks as executives from Ford, GM and Chrysler visit Washington,” said Currie, whose company advises investors on the likely outcome of federal policy. The companies may get the rest of what they seek in 2009, he said.

The U.S.-based automakers and their suppliers say they need the funding to help react to buyers’ rapid switch to more fuel- efficient cars from trucks after gasoline topped $4 a gallon earlier this year. GM and Ford get a majority of their U.S. sales from light trucks, and lost a combined $24.1 billion in the second quarter as industry sales of the pickups, sport-utility vehicles and vans fell 18 percent through June.

Funding for the loans may be included in the 2008 energy bill, in a second economic stimulus package or in legislation that would temporarily fund the government until Congress completes its budget work, House Speaker Nancy Pelosi, a California Democrat, told reporters.

Reduced Bankruptcy Risk

Funding the first $25 billion would “materially curtail” the bankruptcy risk at the U.S. automakers, JPMorgan & Chase Co. analyst Himanshu Patel wrote in a report released today. About 75 percent of the funds would go to GM, Ford and Chrysler LLC, adding $6 billion to liquidity for each over the next 1 to 3 years, the New York-based analyst said.

GM, with more emphasis on electric vehicles, may end up getting more of the funding, and the government loans would be in the same range as the $5 billion to $10 billion analysts estimate the Detroit-based company needs in additional liquidity during the U.S. decline, Patel said. He rates GM shares “overweight.”

GM spent $7.5 billion on capital projects and $8.1 billion on research and development last year.

The current structure of the loan program also would help automakers because any improvement in liquidity is allowed to be passed on to equity holders if the shares rise, Patel said.

Shares Decline This Year

GM shares have fallen 49 percent this year, and Dearborn, Michigan-based Ford’s have dropped 30 percent. Chrysler, owned by Cerberus Capital Management LP, isn’t publicly traded. GM today rose $1.33, or 12 percent, to $12.75 at 4:01 p.m. in New York Stock Exchange composite trading, and Ford gained 21 cents, or 4.7 percent, to $4.68.

The most likely place for automakers to get the funding they seek this year is the so-called continuing resolution, which is a law that lets the government keep operating when the current budget expires at the end of September, Patel said.

The auto companies may be able to get the rest of the money they seek next year after this November’s election, because both major presidential candidates, Republican Senator John McCain and Democratic Senator Barack Obama, back at least some funding, Currie said.

“It is our view that an additional $25 billion, bringing the total loan value to $50 billion, can (sort of) wait until next year,” Currie said. “Indications are that President Bush would tolerate a bill laden with the $3.75 billion appropriation to trigger the initial loan program, but would be less than giddy in signing off on additional funds.”

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F, , ) both saw their stocks buck early market weakness Thursday after J.P. Morgan said an expected $25 billion in loans would dramatically ease concerns of potential bankruptcies. Analyst Himanshu Patel said it is becoming more likely that the troubled auto industry will receive significant federal loans in the near future, with both presidential candidates supporting at least $25 billion in funding. Patel said GM’s risk profile, in particular, should improve markedly. GM’s stock jumped 8.3% while Ford’s gained 5.1%.

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the production version of the Chevy Volt http://www.igeneralcar.info/2008/09/10/the-production-version-of-the-chevy-volt/ http://www.igeneralcar.info/2008/09/10/the-production-version-of-the-chevy-volt/#comments Wed, 10 Sep 2008 21:30:26 +0000 admin http://www.igeneralcar.info/?p=1545 Web site The Car Connection on Tuesday managed to get its digital hands on photos of the what is said to be the production version of the Chevy Volt, the much-ballyhooed plug-in hybrid from General Motors.
Production version of the Chevy Volt from General Motors

The photos were made available on GM’s media Web site unintentionally, a company representative told The Detroit News. They were quickly taken down from GM’s site after The Car Connection posted them.

Perhaps the most striking aspect of the photos, besides the fact that the product managers feature prominently in many of them, is that there is a significantly different look between the supposed production version and the concept car.

Whereas the concept car was futuristic and very low to the ground, the photos captured by The Car Connection show a more normal-looking sedan.

Last month, the design director of the Volt released a few photos of the planned styling, showing just corners of the car. He said GM is focusing on creating a very aerodynamic shape to boost fuel efficiency.

The plug-in hybrid Chevy Volt concept car.
(Credit: CNET Networks)

GM has said it expects to ship the Volt at the end of 2010. It will be able to drive 40 miles on its lithium ion batteries and have a gasoline engine that will give the car a 400-mile range.

The car has piqued the interest of thousands of consumers, spawning the GM-Volt.com Web site–unaffiliated with General Motors–where people have signed up for a waiting list to get the car.

Financially, GM has a lot riding on the Volt, as it seeks to reduce its dependence on sales of sports utility vehicles and trucks at a time when high gasoline prices and a green-tech vogue are pushing consumers to look for more fuel-efficient cars.

A successful launch of the Volt and reliable battery technology would help demonstrate that GM can compete with other automakers in the market for environmentally oriented vehicles.

General Motors, the fifth largest car manufacturer by the number of cars sold in the country, today announced plans to hive off its marketing and sales activities into a separate company. The new company — called GM (India) Marketing — will oversee sales and distribution of the company’s Chevrolet brand of vehicles in the country. The company says its President and MD Karl Slym will head the new company.

GM China, which also has a separate company for its marketing initiatives (called GM Distribution), has formulated this model to help maintain timely delivery and achieve cost synergies.

“With GM’s operations in India expanding significantly in size and scale, it has become necessary to bring greater focus and efficiency to selling and distributing our world-class products and services. This move will help us improve planning, inventory and transport management, timely delivery and thus, maximize cost synergies,” says P Balendran, vice-president, GM India. Recently, the company announced plans to introduce more models under the Chevrolet brand.

The move to set up a new marketing company will entail the transfer of some employees to the new company and hence there will be no new hiring. Recently, the company announced plans to introduce more models under the Chevrolet brand, and to launch two new cars by 2010. They are the global compact car and GM’ Chevy Volt - the company’s first electric car.”General Motors (India) Marketing will also help us to unlock value in the near future, which in turn will seek to optimise effectiveness and maximise the company’s efficiency.”

The move to set up a new marketing company will entail the transfer of some employees to the new company and hence there will be no new hiring. Recently, the company announced plans to introduce more models under the Chevrolet brand, and to launch two new cars by 2010. They are the global compact car and GM’ Chevy Volt - the company’s first electric car.

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It’s back to the assembly line for workers at the H2 plant http://www.igeneralcar.info/2008/09/09/its-back-to-the-assembly-line-for-workers-at-the-h2-plant/ http://www.igeneralcar.info/2008/09/09/its-back-to-the-assembly-line-for-workers-at-the-h2-plant/#comments Tue, 09 Sep 2008 22:20:37 +0000 admin http://www.igeneralcar.info/?p=1544 It’s back to the assembly line for workers at the H2 plant.

But their return comes at a time when AM General announced the plant has laid off 80 employees, and scaled back production from 52 vehicles per day to 25.

Before the day started for employees, many sat down for a morning meeting with AM General leaders who announced the cutbacks and changes at the plant.

Sources tell WSBT there were some new faces inside the plant, and one of the changes involved getting new hires acclimated to their positions.

“Our bosses told us they will eventually ramp up to 25 vehicles per day over the next five weeks as people learn their job,” an H2 employee told WSBT News.

It hasn’t been a smooth transition according to some employees. They believe the plant hasn’t been upfront about job seniority. A worker told WSBT News, “I cannot see why they can’t bump some of the probationary people.”

Workers allege AM General is laying off more experienced employees who are at the top of the pay scale, while retaining newer hires who make less money. Those lower paid workers would get job opportunities at the H1 plant where there are job openings.

“We have rigidly conformed with all the provisions of our labor agreement. We have not violated any of those provisions,” said AM General spokesman Craig Mac Nab in a phone interview. “The provisions are rules the union has helped work out, we have a great relationship with our UAW local.

“They’ll have preferential hiring status,” Mac Nab continued. “There’s language that says when we have people laid off in one operation and if there are openings in another operation, some will be able to take advantage.”

In order for employees to transition to the H1 plant, certain requirements have to be met.

Mac Nab would only tell WSBT two of the requirements involved near-perfect attendance and drug testing. He would not comment further on the specifics or on the comments from employees who tell WSBT that doctors’ appointments, excused absences, and family illnesses could exclude an employee.

“I’m not going to argue the fine points of the rules with people,” Mac Nab said. “If people have concerns they can go through the union mechanism.”

Employees are also frustrated with their union. “We did not have union representation at the meeting this morning,” an employee told WSBT. “The union is not accountable.”

Repeated phone calls WSBT made to Local 5 representatives for the past week were not returned. It wasn’t until 4:45 p.m. that a response was faxed to the newsroom.

The AM General Bargaining Committee said, “The union is working with the company to address concerns by employees related to the layoffs at H2.” Union representatives also promise to keep meeting with management to find resolutions to employees’ issues.

Workers though, paint a different picture about UAW Local 5. “The people have been left in limbo between the company and the union,” an employee told WSBT. “I expect the company to keep things to themselves, but I expect the union to tell me what’s going on.”

The union reiterated, “Any employee who has issues concerning their layoff should bring these to the attention of the local union.”

While all of this unfolds, employees tell WSBT, “We wonder if our jobs are secure.”

Possibly hopping to get people excited about Hummer in light of dwindling sales and sketchy Russians, GM has released pictures of the 2009 Hummer H2 Black Chrome Edition, their annual special limited edition. What makes the Black Chrome edition so special? The so-called black chrome. Everywhere. The H2 gets the treatment on the wheels, grille, fuel door, penis pump, turn mirrors, everything.

If you’re in the market for an extra-special Hummer, it should come in three colors, including the unique Sedona Metallic, which is sort of like orange and only available on this edition. The Black Chrome treatment is available on both the H2 and H2T for a total of 1,300 units worldwide. If you’ve got the means, a gas card and a burgeoning real estate practice, this might just be the unnecessary special edition for you. We’ll take the 280Z Black Gold for the mustachioed win. [GM via AutoBlog]

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General Motors want $50 billion in government-backed loans http://www.igeneralcar.info/2008/09/08/general-motors-want-50-billion-in-government-backed-loans/ http://www.igeneralcar.info/2008/09/08/general-motors-want-50-billion-in-government-backed-loans/#comments Mon, 08 Sep 2008 20:56:30 +0000 admin http://www.igeneralcar.info/?p=1543 General Motors, Ford, Chrysler, and some U.S. auto-parts makers want $50 billion in government-backed loans to build fuel-efficient cars, according to Bloomberg news. They also want fewer restrictions on how they can spend the money.

Before government officials agree to this, they should examine how some of the people running our nation’s car companies have been spending money that makes it into company coffers.

In 2007, for example, General Motors had record losses of about $38 billion. That same year, according to In Money , CEO Rick Wagoner got a 41% raise. While he (and maybe hundreds of other managers) got pay raises, the company laid off a couple thousand workers.

Layoffs are not good for our nation’s economy.

In 2006, Ford had record losses of $12-plus billion. In 2007, according to Reuters, Ford CEO Alan Mulally’s compensation was about $21 million, and four executive vice presidents collectively took home about $39 million.

In short, just five Ford execs pocketed $60 million after a year of record losses. I don’t know how much money the hundreds of lower execs and managers pocketed. In 2008, Ford planned to lay off hundreds of workers.

In 2007, Chrysler had losses of $2.7 billion. I didn’t find compensation figures for Chrysler execs, because the company kept those numbers confidential. In 2007, Chrysler planned to lay off 13,000 workers within three years.

The more people who lose their jobs, the fewer people are out there buying things like I-Phones, TVs, cars, clothes, restaurant food.

Put another way, the more Americans unemployed, the less money in circulation to support businesses large and small. Less money in circulation can lead other businesses to lay off their workers, which results in even less money circulating in our economy. And so on.

I’m not sure how many autoworkers could have been paid (or how much equipment could have been bought) if GM’s and Ford’s execs had not received raises; or, better still, if they all had taken pay cuts.

And that’s just direct compensation. Don’t forget managerial perks that get labeled as legitimate business expenses: things like use of private jets, corporate condos, expense accounts.

It’s understandable that Congress wants to help automakers: keeping them afloat would preserve some jobs.

If we taxpayers financially assist car companies, however, then why shouldn’t we impose conditions to ensure that our generosity results in increased productivity and jobs?

Incidentally, Japanese automakers have been selling fuel efficient and highly reliable cars in the U.S. for 20-plus years. For decades, U.S. automakers refused to do likewise, which is why so many Americans buy Japanese cars.

Apparently, improving company health the old fashion way (by selling good products) was not a chief goal of the people running America’s Big Three automakers.

And now they want $50 billion in taxpayer-backed loans, with few conditions on spending, to build fuel-efficient cars?

It seems absurd to trust people with weak track records to use our tax dollars in ways that truly benefit this nation, unless Congress ties specific conditions to the money it doles out.

It was only a matter of time, unfortunately. And now that Michigan is an election-year swing state and Detroit’s auto makers are posting sales declines topping 20% each month, the time has arrived. The issue of a government bailout for General Motors, Ford and Chrysler is moving to center stage.

Barack Obama has said yes to this proposal early on, and last week John McCain climbed on board. So much for change and fighting pork-barrel spending. We’re moving beyond moral hazard here, folks, and into a moral quagmire. At least the Chrysler bailout of 1980 was structured so that taxpayers could reap a reward for taking a financial risk on the company’s future. That’s not what’s happening now.
[Ingrassia]
David Gothard

Late last year, in its energy bill, Congress authorized $25 billion of low-interest loans to high-risk borrowers — a strategy perfected by home-mortgage lenders in recent years. In this case the high-risk borrowers are the loss-plagued Detroit car companies. The loans are supposed to help them develop new, fuel-efficient cars, and retool their factories to produce them. Detroit, not being satisfied with this taxpayer largess, wants $50 billion.

This is bad public policy for reasons of philosophy, practicality and precedent. And by the way, this is a dumb idea for the car companies too, simply in terms of their own self-interest.

Philosophically, if the Freddie Mac and Fannie Mae debacles teach us any lesson, it is that subsidizing private profits with public risk is a terrible idea. Implicit government backing has led the managements of these two companies to make reckless investments that have backfired badly. Now government backing has become explicit, and under the plan announced by Treasury Secretary Henry Paulson yesterday, taxpayers likely will pay billions to keep Fannie and Freddie solvent — with the exact amount uncertain.

The Detroit Three got into their current quandary by making decades of bad decisions, with some help from the United Auto Workers union. Yet despite the current crisis, General Motors is still paying dividends to shareholders, the car companies are paying bonuses to executives, and the private-equity billionaires at Cerberus who bought Chrysler are trying to reap enormous rewards from their risky investment. Meanwhile the UAW’s Jobs Bank — which pays laid-off workers for doing nothing — remains in place.

Of course, we can all hope that shareholders do well, that executives reap handsome rewards for work well done, that the Cerberus billionaires make more billions on Chrysler, and that workers get paid on whatever terms the car companies agree. But we taxpayers shouldn’t subsidize any of this.

The only reason we should bail out any private company is the risk that its demise would wreak havoc on the entire economy. Bear Stearns conceivably passed the test; its collapse could have threatened the U.S. financial system, and the government didn’t make the mistake of bailing out shareholders or management.

But just what calamity are we trying to avoid by subsidizing loans to Detroit? That we’ll all be sentenced to the indignities of driving Hondas, Mazdas or BMWs? Toyota and Honda, the current leaders in hybrids and alternative-fuel technology, did their research and development on their own dimes.

Even if Ford, GM and Chrysler were to go out of business — and it’s highly unlikely that all three will simply cease to exist — there will be plenty of good cars for Americans to buy. And many will be made in America, even if they carry foreign nameplates. Toyota, Nissan, Honda, Hyundai and other foreign car companies have expanded greatly their U.S. manufacturing operations in recent years. They’re doing so because Americans are buying their cars.

As a practical matter, Americans could choose to buy more Detroit cars. Frankly, they should — considering such outstanding products as the Ford Focus, a fuel-efficient and comfortable compact, and the Chevrolet Malibu, a terrific new mid-sized sedan. But they’re not. Americans are voting with their dollars, which is their right.

And what about the precedent the government would set? If we bail out Detroit, where do we stop? The newspaper industry is in financial trouble because more readers and advertisers are turning to the Internet. Newspapers are good for democracy — Thomas Jefferson said he would choose newspapers over government, after all — so shouldn’t they get low-interest government loans to help them adjust to the Internet? Of course not, and ditto for Detroit.

If Detroit’s auto makers would apply more than knee-jerk analysis to what’s being proposed, they would reject it quickly. No matter what their spin, including the patently absurd claim that government-guaranteed, below-market loans aren’t a bailout, loan subsidies will paint them in the public mind as corporate welfare recipients that can’t compete on their own. That can’t be good for sales.

More fundamentally, the last thing these companies need just now is more debt. They are leveraged to the hilt, and risk climbing into a financial hole from which they’ll never recover. Better to raise money by selling more assets (e.g., Ford’s recent sale of Jaguar and Land Rover) or raising more equity — even if new investors would require management changes or other measures.

All this said, if Detroit’s short-sightedness and political expediency make a bailout inevitable, let’s make sure taxpayers stand to get rewarded for their risk. In 1980, the government didn’t lend any money directly to Chrysler, instead guaranteeing loans to the company made by private lenders, mostly banks, in the amount of $1.2 billion (bailouts, like everything else, were cheaper back then). But in return, the government got warrants to buy Chrysler stock at a very low price. When Chrysler staged its spectacular recovery and paid off the bank loans seven years early, the warrants soared in value and the government earned some $400 million.

Then CEO Lee Iacocca tried to get the government to forego its profits — he even got into a telephone shouting match with Treasury Secretary Donald Regan. But Regan, backed by President Reagan, stuck to his guns.

One other stipulation: any low-interest loans to develop fuel-efficient cars should be made available to all car companies, not just the Detroit Three. The law passed by Congress last year is framed to make this highly unlikely. But if developing fuel-efficient and alternative-energy cars is deemed worthy of taxpayer subsidies for public-policy purposes, it’s just common sense not to put all our eggs in Detroit’s basket.

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Vandals who mess with other people’s cars are scum http://www.igeneralcar.info/2008/09/07/vandals-who-mess-with-other-peoples-cars-are-scum/ http://www.igeneralcar.info/2008/09/07/vandals-who-mess-with-other-peoples-cars-are-scum/#comments Sun, 07 Sep 2008 21:50:05 +0000 admin http://www.igeneralcar.info/?p=1542 Vandals who mess with other people’s cars are scum — bottom-feeders who are beneath contempt. It doesn’t matter what the vehicle being damaged is. Cars are a major purchase, there’s often an emotional connection to them, and most importantly, they generally represent the owner’s primary source of mobility — getting him or her to work, to the store, to pick up the kids, and so on.

SUV owners know the deal, and it sucks. Stories of drivers (and dealers) finding trucks partially or completely trashed in the name of saving Mother Earth are nothing new, and now it seems that Prius owners are getting their own taste of this nonsense. Inside Line reports that a recent Los Angeles case in which one of the Toyotas was burned to the ground has been determined to be the result of arson. In Petaluma, CA, meanwhile, seven Priuses were vandalized over a two-week period in April. One poor woman had her car attacked twice, and then when it was in for repairs, the Prius rental she had also got worked over. The conventional wisdom suggests that the Prius is a juicy target because it’s a poster child for the environmental movement. And seriously, is this at all surprising? Some sort of anti-eco blowback like this was probably inevitable. People get fed up, so just as the HUMMER and other SUVs are targeted by greens looking to send a message, it was only a matter of time before the anti-HUMMER started getting the same kind of attention from the other direction.

What’s it all prove? Nothing, except that asshats are readily found on both sides of every issue. If you don’t like a particular car or truck, feel free to talk as much trash as you want (it’s practically a sport in the comments section around here). Think the HUMMER represents some sort of rolling apocalypse? Fine. Ditto if you feel that the Prius is nothing but a snob capsule for tree huggers. Just don’t turn those thoughts in to actions, because when you willfully screw with another person’s car or truck, you’re just another stupid criminal, and whatever message you think you’re advancing just falls on deaf (and angry) ears.

Topeka’s Hummer Sports Park has won over a fan in Randy Weseman, Lawrence’s superintendent of schools.

“I’ve been there several times and think it’s just a fantastic facility,” Weseman said. “I think Topeka really did it right.”
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File Photograph / The Capital-Journal

Then-USD 501 superintendent Robert McFrazier breaks ground at what would become Hummer Sports Park.

Where: Just north of S.W. 6th and Oakley.

Namesakes: Dana Hummer, a retired Topeka police chief who died in 2002, and his wife, Louise, who survives. The couple donated $360,000 to the park’s endowment fund.

Dedication: Sept. 6, 2003.

Offers: Two baseball fields, two softball fields, a soccer field, a football field, an eight-lane track, and areas for shot put, discus and javelin throws.

Annual expenses: $1,156,932 for the 2007-2008 school year.

Annual revenues: $323,316 for the 2007-2008 school year.

Web site: hummersportspark.com.

SOURCE: Topeka Unified School District 501HUMMER SPORTS PARK FACTS AND FIGURES’It’s a community treasure’Economic tourist impact estimated in millions

Weseman said his school district is looking at upgrading its outdoor athletic facilities and that Hummer Park “has certainly set a standard for quality against which any future facilities should be measured.”

Saturday marked the fifth anniversary of the dedication of Hummer Park, which was built after Topeka voters in April 2001 approved a $24.5 million bond issue that included $17.5 million to construct the sports park. The rest went to build 40 classrooms for schools in Topeka Unified School District 501.

Hummer Park was constructed near S.W. 6th and Oakley Avenue, on the grounds of the former Topeka State Hospital. USD 501 had bought the property for $1 million in 2000 after the institution for the mentally ill closed three years earlier.

Hummer Park supporters on Sept. 4, 2003, announced they were forming the Topeka/Shawnee County Sports Council to build on the park’s potential by turning Topeka into a hub for regional, state and national athletic events. Two days later, the park was dedicated in a ceremony in which then-USD 501 school board president Mark Braun described it as “one of the best high school athletic facilities in the Midwest, and possibly in the country.”

The park was named for Dana Hummer, a retired Topeka police chief who died in 2002, and his wife, Louise, who survives. The couple donated $360,000 to the park’s endowment fund, with $10,000 in the form of a gift and the rest in a bequest.

So far, the park’s endowment fund has received about $1.9 million in pledges and donations, said Tim Clothier, a former USD 501 board member hired by the district to raise money for the endowment. Clothier thinks the park eventually could become self-sustaining, but it isn’t there yet.

Mike Jones, general director of fiscal services for USD 501, said the park during the 2007-2008 school year incurred expenses of $1,156,932 and revenues of $323,316, with the latter stemming from such sources as concessions sales, rentals and special events.

Meanwhile, students and their families from all over Kansas have traveled to Hummer Park for sporting events. Rick Benke, who manages the park for USD 501, said it has hosted 26 Kansas state high school championships in football, swimming, softball, baseball and soccer.

Gary Musselman, executive director of the Kansas State High School Activities Association, said the park has helped foster a positive impression of Topeka.

“I think it’s represented the community well,” he said.

Hummer Park also has hosted the Olympic women’s softball team, college and junior college soccer games, and swim meets that brought in youths and their families from across the Midwest.

Such events have proven to be a financial boon for the community as competitors have shopped in Topeka, eaten in its restaurants and stayed in local hotels.

The most recent estimate available from USD 501 indicates that through June 2006, the park had generated about $5.2 million in revenue from tourism.

Bill Bagshaw, USD 501’s general director of school leadership and academic programs, said the district took into account the park’s role in promoting the community when it developed the Web site www.hummersportspark.com. The site includes links to Web pages maintained by such entities as the city of Topeka, the Greater Topeka Chamber of Commerce and Visit Topeka Inc.

Bagshaw said USD 501 is promoting those entities as part of its role as a partner in working to give the community a rich quality of life.

“There’s a bigger picture here than some football and baseball games at a sports park,” he said. “This is a community venue, and we’re very appreciative that we have it and that our taxpayers enabled us to build it.”

In Clothier’s view, the park doesn’t belong to USD 501 — but to Topeka.

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OPEL announced that testing of its Mk-I HCPV solar panel verified http://www.igeneralcar.info/2008/09/05/opel-announced-that-testing-of-its-mk-i-hcpv-solar-panel-verified/ http://www.igeneralcar.info/2008/09/05/opel-announced-that-testing-of-its-mk-i-hcpv-solar-panel-verified/#comments Fri, 05 Sep 2008 22:30:22 +0000 admin http://www.igeneralcar.info/?p=1541 OPEL International Inc. (CA:OPL: news, chart, profile) (”OPEL” or “the Company”), a leading global developer and supplier of high concentration photovoltaic (HCPV) and other solar products, today announced that testing of its Mk-I HCPV solar panel verified that it qualifies under the provisions of the IEC 62108 standard. With the achievement of this milestone, OPEL has positioned itself to be a leading supplier of HCPV panels in the important European market and beyond.
OPEL’s Mk-I will now ship bearing the CE label indicating compliance with European market requirements, meeting the quality standard for PV products and other solar equipment in European markets. The CE certification of OPEL’s Mk-I product will allow OPEL’s customers to apply for permits and feed-in-tariff contracts, thereby accelerating the deployment of their planned installations.
In addition, with CE qualification completed, a number of market opportunities are now open for OPEL’s Mk-I HCPV panels in other markets that use European standards as guidelines for their own installations.
“With this CE Qualification, we have achieved a very ambitious milestone that we set for ourselves earlier in the year, and done so ahead of schedule,” said Dr Javier Berrios, OPEL’s Vice President of Engineering. “I can’t be more pleased with our Qualification and the performance of the high efficiency Mk-I HCPV panel. Most importantly, our customers in Europe, Asia and the Mid-East will now receive Mk-I HCPV panels with CE labels for their applications.”
The Mk-I concentrates light more than 600 times and has one of the highest efficiencies of concentrators in commercial production today. The Mk-I was shipped to customers in the Czech Republic, France, Spain, Korea and the United States, for large scale solar grid field applications.
About OPEL International
With operations headquartered in Shelton, CT and Toronto, Ontario, Canada OPEL designs, manufactures and markets high performance concentrating photovoltaic (”HCPV”) panels to transform solar energy into electricity for worldwide application. Opel’s high performance photovoltaic concentrating panels generate up to 40% more kilowatt-hours than conventional flat plate silicon solar panels, resulting in more cost effective electricity generated from the sun. Opel also markets a complete line of dual axis solar trackers to mount solar panels for the optimum power output. Opel also designs infrared sensor type products for military and industrial applications.
A leader in gallium arsenide and solar photovoltaic technology, the Company has been awarded 23 patents and has 23 more patents pending. OPEL’s common shares trade on the TSX Venture Exchange under the symbol “OPL”. For more information about OPEL, please visit the Company’s website at www.opelinc.com.
ON BEHALF OF THE BOARD OF DIRECTORS
Michel Lafrance, Secretary
Investors are cautioned that except for statements of historical facts, certain statements contained in this news release may include forward-looking information with respect to the Company. Such forward-looking statements or information are based on current expectations, estimates and projections formulated using assumptions currently believed to be reasonable and involving a number of risks and uncertainties which could cause actual results to differ materially from those anticipated. The Company does not undertake any obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
The TSXV has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Opel will unveil a station wagon version of its new Insignia at the Paris Motor Show in October called the Sports Tourer. It is to go on sale in early 2009 and features a long sloping roofline and wraparound tailgate with fully integrated large rear lights.

Measuring 4.91 metres in length, the car is also eight centimetres higher than the sedan version. Opel lists the load volume at 540 litres, some 10 litres more than the predecessor Vectra Caravan.

Apart from petrol and diesel versions, customers can choose such extras as adaptive FlexRide chassis and the new Opel Eye camera system with lane departure warning system and traffic sign recognition.

After the launch of the sedan and five-door hatchback version at the London Motor Show in July, the Sports Caravan is the third in the model series. Opel is offering a more powerful turbodiesel and turbocharged petrol unit in addition to the five engines available for the sedan and hatchback.

According to Opel, an ecoFLEX Sports Tourer with low emissions and fuel consumption is planned for the near future.

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General Motors expects to sell its Hummer brand by the end of this year http://www.igeneralcar.info/2008/09/04/general-motors-expects-to-sell-its-hummer-brand-by-the-end-of-this-year/ http://www.igeneralcar.info/2008/09/04/general-motors-expects-to-sell-its-hummer-brand-by-the-end-of-this-year/#comments Thu, 04 Sep 2008 20:43:42 +0000 admin http://www.igeneralcar.info/?p=1540 General Motors (GM.N: Quote, Profile, Research, Stock Buzz) expects to sell its Hummer brand by the end of this year or early in 2009, as it shores up capital to survive a deep industry slump amid record losses, its chief operating officer said.

GM, which has lost $51 billion over the past three years, plans to free up $15 billion in liquidity with cost-cutting, asset sales and new borrowing under a July plan intended to reassure investors that it can ride out of the down turn.

“We are trying to approach this (Hummer sale) on an urgent basis,” he said. “End of this year is a fair amount of time. It can conceivably happen … but if it takes us to early next year, that is okay, too,” Fritz Henderson told reporters.

“We are working quickly. It will be premature to mention something,” Henderson said on Wednesday, adding that “several” suitors had approached GM. But he declined to name any.

U.S. VEHICLE SALES DROP

At the launch of a new model in the Indian capital he added he expected the U.S. auto industry to face challenges for some time and sees vehicle sales there falling to 14 million vehicles in 2008 from 16 million last year.
GM was not just looking at selling brands but also other businesses, but Hummer would be among the first, he said.

The gas-guzzling Hummer has hurt GM’s image at a time when consumers demand more fuel efficiency as high oil prices hurt. Hummer’s U.S. sales fell 40 percent in the first half of the year.

GM is getting serious about selling Hummer. So serious, in fact, that COO Fritz Henderson expects the brand to be gone by the end of the year or early 2009.

“We are trying to approach this on an urgent basis,” he said. “End of this year is a fair amount of time. It can conceivably happen…but if it takes us to early next year, that is okay, too,” Henderson told reporters at the inauguration of GM’s second plant in India. “We are working quickly. It will be premature to mention something.”

Fritz said that GM has been approached by “several” suitors, but declined to specify who they might be. This is the strongest statement on the subject yet from the General, which has until recently been tight-lipped about the future of Hummer.GM is hoping the sale of Hummer, whose sales are down 40% this year, will help offset some of GM’s monumental losses over the past few years and free up money that can be invested in other products. GM’s sales are down dramatically this year and the company predicts that the U.S. market will shrink to 14 million vehicles this year, down from 16 million in 2007.

Henderson said that GM’s top priority is to turn around its North American business and continue to invest in emerging markets like India, where GM hopes to hold one tenth of the market share by 2010, when Indian vehicles sales are expected to top two million units annually.

Speaking about whether investment in foreign markets will offset the slump in the North American market, Henderson said: “It is not about either/or, it is about both.”

GM is realigning its North American production to reflect a U.S. auto market reeling from an oil shock being compared to those of the 1970s. It plans to close four truck plants but add shifts at two others that build popular higher mileage cars.

Henderson expects softer sales in the United States in 2008 as oil prices and the credit crisis deter customers.

“It is going to stay challenging for some time,” he said. “Have we found the bottom? I don’t know.”

On Tuesday he said the top priority was to turn round the North American business and continue investments in emerging markets such as India and China.

He inaugurated the car maker’s second plant in India on Tuesday and GM hopes to control a 10th of the Indian market by 2010, when passenger vehicle sales are expected to hit more than 2 million vehicles.

When asked how soon he expected emerging markets to offset the slump in U.S, he said: “It is not about either/or, it is about both.” (Writing by Narayanan Somasundaram, Editing by Mark Williams, Greg Mahlich)

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General Motors Corp. (GM) and Ford Motor Co. (F) executives said sales of trucks and SUVs http://www.igeneralcar.info/2008/09/03/general-motors-corp-gm-and-ford-motor-co-f-executives-said-sales-of-trucks-and-suvs/ http://www.igeneralcar.info/2008/09/03/general-motors-corp-gm-and-ford-motor-co-f-executives-said-sales-of-trucks-and-suvs/#comments Wed, 03 Sep 2008 21:42:35 +0000 admin http://www.igeneralcar.info/?p=1539 General Motors Corp. (GM) and Ford Motor Co. (F) executives said sales of trucks and SUVs in August again made up a bigger share of total sales as gasoline prices continued to fall from record highs in July.

As gasoline prices topped $4 a gallon this summer, buyers switched to more fuel-efficient cars and shunned the trucks and SUVs that have traditionally driven Detroit’s profits. The industry also has been dragged down by declining retail sales for individual dealerships, tied to the weak economy and soft housing market.

Although General Motors Corp. (GM) and Ford Motor Co. (F) both reported double-digit percentage sales declines - 20% and 27%, respectively - from a year earlier, they said sales revived from July totals.

August was the third month in a row in which trucks and SUVs made up a bigger share of total sales, Mark LaNeve, GM vice president of vehicle sales, service and marketing, said in a conference call.

George Pipas, Ford’s U.S. sales analysis manager, said full-size pickups accounted for 12% of total August sales compared with 9% in May and June and about 11% in July.

Irv Miller, a spokesman for Toyota Motor Corp. (TM), said truck sales climbed slightly in August from July for several reasons, including increased dealer marketing, greater incentives and some pent-up demand from buyers seeking to replace older models.

Overall, Miller said Toyota’s August sales showed “marginal improvement” from July, though they were down 9.4% from a year earlier. Customers continue to seek fuel-efficient cars, and the company is working to boost production of its Corolla and Yaris models, which get 32 and 34 miles per gallon, respectively.

LaNeve said August was GM’s best month of 2008 in total sales, retail sales, fleet sales to rental companies and market share.

He gave some of the credit for the August recovery to the company’s employee- pricing incentive program, which was revived from 2005 to mark GM’s 100th anniversary. He added that the company did almost no leasing in August because of the credit crunch.

Both GM and Ford reported lower inventories at the end of August, while Miller said Toyota’s inventory was “coming down nicely” and 2009 models would be out as planned in November. The number of Tundra pickups has fallen to a 67-day supply from more than 100 days earlier this year, Miller added.

GM’s August inventory was the company’s lowest August level since 1998. The company reported a 22% decline from a year earlier to 736,000 vehicles. The number of pickups in inventory fell to about 200,000 in August from 335,000 in February.

Pipas said Ford’s total inventory fell by 37,000 vehicles to 461,000 at the end of August from a month earlier. The number of cars available was slightly higher while the number of trucks, SUVs, vans and crossovers was 50,000 lower.

He noted that higher prices as well as a limited supply lowered the sales of cars compared with trucks and SUVs, which carried greater incentives for customers.

Both companies also reduced fleet sales to rental companies as a percentage of August sales.

Pipas said fleet sales fell to 21% of total sales in August, compared with 35% of the total year-to-date through the end of July. He now expects fleet sales to be 20% lower for the full year of 2008 compared with 2007.

Pipas added that he expects September sales to be soft.

GM shares climbed 5.8% to $11.27 on Wednesday, while Ford’s rose 1.3% to $ 4.57. Toyota shares rose 1.4% to $90.04.

All three of Detroit’s old guard carmakers have struggled badly in the marketplace, particularly since rising petrol prices sparked a flight by US consumers away from the hefty, inefficient and profitable SUVs, pickup trucks and minivans upon which the companies have focused their marketing and product development since the 1990s.

But thanks largely to crude oil prices tumbling back towards $US100 a barrel, shares in GM have rebounded 21 per cent since touching a 54-year low in July, shortly before the firm’s latest staggering quarterly loss.

Ford shares have also gained ground in the past few days, and the US business media is suddenly full of stories about a resurgence of the car (and airline) firms thanks to cheaper oil.

If only it were that simple.

In reality, fluctuations in the stock prices for GM and Ford (Chrysler is now privately held, 80 per cent by buyout group Cerberus) are not much different to the recent ups and downs in the shares of Fannie Mae and Freddie Mac — the result of speculative players taking short-term punts on the latest gossip against a backdrop where investors with longer horizons believe straight-up equity in these firms is essentially worthless, given the probability of bankruptcy or an extremely dilutive capital raising.

Even investor enthusiasm earlier this year for GM’s preferred stock (whose holders in theory could wind up owning the company if it went bankrupt — but not too bankrupt) has faded away.

And the cost of buying default protection on corporate bonds issued by the carmakers has soared in the past few weeks, and is currently priced at a level that indicates the credit markets believe there is an 85 per cent probability of both GM and Ford defaulting at some point in the next five years.

The market scepticism is not surprising. Aggregate market share for the not-so-big three — GM, Ford and Chrysler — has been heading in the wrong direction for a decade, to the point where they accounted for only 43 per cent of US car and truck sales in July.

But if the figures are broken down further to focus on just passenger cars, the only part of the US market that is showing signs of life, their share drops to 32 per cent.

Strip out heavily discounted volume deals with fleets, such as car rental companies, and Detroit now only produces about one in four US cars sold to households.

Given the stampede among US consumers away from trucks and other bigger vehicles and towards fuel-efficient and hybrid smaller cars (which the big three until recently claimed were uneconomic to build in the US), the only part of the market that is growing is the part where the three are pitifully weak.

While GM, in particular, has won plaudits for recently reshaping its product line and finally delivering cars that are attractive and well enough built to attract mainstream US customers, there is no evidence as yet that it can translate this into either a reversal of market share losses or more sustainable financial performance.

In the meantime the firm is attempting to raise cash by selling its Hummer division, which makes some of the least fuel-efficient (but most profitable) vehicles sold in the US.

Similarly, Chrysler, which has released only limited financial information since it went private last year, is attempting to sell its Viper label, another absurdly gas-guzzling marque.

For its part, Ford has already divested its Aston Martin, Jaguar and Land Rover brands.

Despite plans at all three firms for asset sales, job cuts and plant closures, most shareholders and bondholders are left wondering how long it will be before existing reserves of cash run out, given the recent pace of losses and whether they can raise any more.

The situation is most obviously dire at General Motors, which in the six quarters since the start of 2007 has lost $US57.5 billion. That flood of red ink more or less wipes out the aggregate $US59.5 billion GM earned during its previous 22 years of operation between 1984 and 2006.

Meanwhile, Ford has lost a total of $US21 billion since the start of 2006, with a larger than anticipated loss in the latest quarter helping slash its stock price to the lowest level since the mid-1980s.

For investors, the magnitude of these losses over such a short period raises an obvious concern: is the US car industry going the way of the US airline industry, which over its history has lost more money than it has made?

Adding to anxiety is the fact that bankruptcy is the only conceivable way out of the key financial problem that GM, Ford and Chrysler confront — their vast accumulated legacy liabilities for the pensions and health insurance of retired workers, which add roughly $US1500 ($1800) to the cost of each vehicle.

While nothing would make the Detroit trio happier than the chance to shove their obligations on to US taxpayers, the path to a point when that could actually happen is not going to make any investor rich.

In the meantime, there are other ways to beg for help from Washington. It’s not just Australian carmakers that are attempting to use climate change as an excuse to gouge more money out of taxpayers. GM, Ford, Chrysler and several US car-parts makers are demanding $US50 billion in federally subsidised loans to “develop and build more fuel-efficient vehicles”.

Half of that sum has already been approved, albeit with conditions that prevent the car firms from using the funds as freely as they might wish. That’s not exactly turning off life support — but don’t expect it to spark any sustained recovery.

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