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Filed under: Government/Legal , GM , Earnings/Financials A report by Barron's over the weekend cited (again) two unnamed sources that divulged General Motors has been after a loan from the Federal Reserve since last September. The Barron's article got somewhat specific about the unspecifics, namely how much, saying that the amount the General is after is unknown, "but it needs $5 billion to meet its goal of completing a $15 billion liquidity program, which actually is coming from cost cuts." Reuters (via Automotive News ) reports that GM isn't after the fed's cash, but isn't averse to the idea or "taking dramatic steps" to make ends meet during these tumultuous times. GM spokesperson, Greg Martin, said that the automaker isn't "actively pursing" the loans, but "you really can't rule out anything." M-kay. [Source: Barrons , Reuters , Automotive News - Sub. Req.] Permalink | Email this | Comments
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Filed under: Chrysler, LLC. , GM , Earnings/Financials It's been a crazy few days as news broke that Chrysler and General Motors have been in talks to combine operations . It turns out that there's a pretty significant back-story to these proceedings, and it involves Cerberus Capital Management's possible desire to shed its car-building operations and acquire the rest of GMAC, of which it already holds a controlling stake of 51%, with GM holding holding the other 49%. According to reports, Cerberus would like to combine Chrysler Financial with GMAC, which would allow it to merge the offices of the two financial institutions and reduce costs. All right, that might make some sense, but what about merging the two automakers? That's the part that seems so confusing to analysts and us meager bloggers. Somehow, we feel certain that there's more to this story, which we'll be hearing about for some time. [Source: The Detroit News ] Read | Permalink | Email this | Comments
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Filed under: Ford , GM , Earnings/Financials General Motors and Ford just concluded an absolutely brutal business day on Wall Street, which echoed the performance of the markets in general as the Dow Jones Industrial Average slid another 678.91 points to close below 9,000 at 8,579.19 points. GM closed the day at 4.94 after having dipped as low as 4.72 just minutes before the bell rang at 4PM, while Ford ended today at just 2.14 . Analysts are noting that GM shares haven't been this cheap since the 1950s and that a single share of Ford stock costs less than a gallon of gas at the moment. We are most certainly not financial analysts, but we do know these companies are heading in the wrong direction fast and that a brighter future is not weeks but months and years away. [Source: AOL Money and Finance] Read | Permalink | Email this | Comments
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Filed under: Government/Legal , Green , Chrysler, LLC. , Ford , GM , Earnings/Financials While the U.S. banking industry is still waiting for Congress to give it a $700 billion hand, President Bush signed into law last night the spending bill that gives U.S. automakers $25 billion in loans to get their collective act together. But unlike when a bank deems you worthy of their money, the Big Three won't be getting any cash for some time. Despite the companys' CEOs saying repeatedly how they were desperate for help and how automotive life as they know it would end if they didn't get financial help, there's at least a 60-day delay until they can cash this check. Written into the bill is a clause requiring the Energy Department to come up with regulations that will determine who gets what and when. The agency has 60 days to do this, but could take much longer, as much as 18 months according to a department spokesperson. Desperate or not, looks like GM, Ford and Chrysler are now...
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Filed under: Coupes , Economy , Sedans/Saloons , Plants/Manufacturing , Chevrolet , GM , Earnings/Financials Click above for more high-res shots of the Chevy Cobalt SS General Motors cites the success of the current Chevy Cobalt as the reason for delaying the launch of the Cobalt's replacement, the upcoming Cruze , in the States. In order to meet the market's soaring demand for small cars in general, and the Cobalt in particular, earlier this year GM added a third shift to the Lordstown Plant where the Cobalt is built. For '09, the General plans to build an extra 70,000 Cobalts, expecting fuel prices to remain high and demand for its compact sedan and coupe to follow suit. Unfortunately for the struggling automaker, those extra cars may not necessarily add up to extra profits, with the Cobalt priced below its main competitors from Japan. For this reason, GM will be adding a few bucks to the bottom line of the Cruze , in a pricing move similar to the recently released Malibu...
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Filed under: Etc. , Plants/Manufacturing , Chevrolet , GM , Earnings/Financials Giveth, and taketh away, isn't that always the story? On the taketh away side, GM has recently lost a serious chunk of change. On the giveth side, The General received a $56 milion package of tax credits and grants to keep an SUV factory open in Ohio. It has also just received another package of tax credits from the city of Flint, Michigan to aid its investment in a factory that will build engines for the new Volt and Chevy Cruze. Approved over some constituent disapproval by the Flint City Council, getting GM to build the factory there will keep 300 jobs in the city. GM is now looking to the state of Michigan for more tax incentives. [Source: Detroit News via Green Car Congress ] Read | Permalink | Email this | Comments
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Filed under: Plants/Manufacturing , GM , GMC , Toyota , Earnings/Financials Toyota Financial Services recently leaped over GMAC Financial services to take the lead as the biggest U.S. auto lender in terms of loan and lease contract volume. The study by AutoCount (a unit of the Experian Automotive company) estimates that Toyota captured 6.35% of the market from January through June, while GMAC had 6.2% for a close second place. Rounding out the top five were Chase Auto Finance, American Honda Finance, and Ford Credit (in that order). As GMAC has made major cutbacks in leasing over the summer, many industry experts expect Toyota to hold its lead through the end of the year. A spokesperson from GMAC was quick to point out that the study did not include two wholly owned subsidiaries: Nuvel Credit and National Auto Finance. When those two companies are included, GMAC's share increases to 6.72 percent -- effectively placing them at the top again. While the automakers battle for the title...
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Filed under: Government/Legal , Chrysler, LLC. , Ford , GM , Earnings/Financials No matter how you slice it, a proposed $25 billion loan from the Feds is a bailout, and that's exactly what Detroit's Big Three automakers are after, according to a report by the Wall Street Journal. Lobbyists for General Motors, Chrysler and Ford have met with White House officials, Rep. John Dingell and a smattering of Michigan Democrats to discuss the loan, with plans to unveil the proposal after Labor Day. The plan includes lending $25 billion to automakers in its first year at an interest rate of 4.5 percent (about one-third of what the companies are currently paying), with the government having the option to defer any payment for up to five years. Details are scarce, and naturally, GM, Ford and Chrysler reps aren't saying much, but if the automakers and the Feds are serious, expect more information to leak out before the proposal is officially announced. [Source: WSJ , Photo by Tracy O | CC2...
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Filed under: GM , Earnings/Financials There has been a lot said about GM in the wake of tough market conditions and the Detroit Automaker's $15.5B Q2 loss . As you can imagine, a lot of the talk isn't upbeat. GM Vice Chairman Bob Lutz seems to think much of the discussion surrounding the General is nothing more than speculation and uninformed bias, but then again Maximum Bob's got a bit of a pro-GM bias of his own. So you can imagine that Blogger Bob was interested to see an hour long special called Saving GM , which recently aired on CNBC. Mr. Lutz' assessment of the piece? He thought it was fair and unbiased, and it touched on the good and bad of GM over the past few years in an honest way. Lutz said he liked that the documentary concluded that GM needs the public to think "smash hit vehicle from GM" and think of "cars in showrooms, not museums." We haven't seen the hour long special Saving GM , so we reserve judgment as to whether or not it was...
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Filed under: Plants/Manufacturing , GM , Earnings/Financials According to the Center of Automotive Research (CAR), General Motors is the trauma patient with doctors gathered around the gurney giving their all to save it -- and just outside the ER doors, nurses are holding back concerned parties and shouting "It's better that you don't see!" CAR Chairman Dave Cole says it comes down to revenue, and with GM's $15.5 billion Q2 loss , revenue is down by $10 billion vs. Q2 of 2007. Cole says "Revenue is a measure of the business going forward." We think that's a bit overstated, and that revenue is more accurately a measure of business just transacted. True, multi-billion dollar losses and revenue decreases don't make the best stories, but did anyone really expect it to be cotton candy canes as the world's -- possibly -- largest automaker transfers nearly its entire product lineup from trucks to cars and crossovers? Admittedly, GM has nothing but an...
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Filed under: Economy , GM , Earnings/Financials GM currently owns about 13% of the small car market. With demand for small vehicles increasing with the price of black gold, GM is out to increase that market share. Nevertheless, even if it doesn't increase its share, it plans to make more money off of each small car sold. How? By raising the price, naturally. The plan is simple: make better small cars, charge more for them. The upcoming Cruze could run you a few thousand more than the outgoing Cobalt, for instance. The test is to see whether cars like the Cruze will be worth the premium. GM Global Design Chief Ed Welburn said, "In North America, we never did a good small car." The General plans to bury that piece of its history... but it's going to charge you, the consumer, for the funeral. The idea that GM can lasso the small car market while charging a premium, at the same time as slashes its marketing budget by $1.5 billion, takes some effort to swallow. One analyst...
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Filed under: GM , Earnings/Financials GM has had what can be conservatively called a difficult week . In a live press conference, CEO Rick Wagoner delivered sobering news about health care cuts, asset sales, retirement and separation packages, and the elimination of GM stock dividend. The doom and gloom hasn't scared off the General's Dealer Council, as 20 retailers purchased a combined $1m in GM stock to show their support. Of course $1m isn't going to help much in the face of $15 billion in cuts, but co-chair Duane Paddock wanted to make the gesture to show GM and its massive dealer body that the council believes in the struggling automaker. The move could be considered risky in light of the fact GM stock has dropped like a rock over the past couple months, and when the stock dropped to below $9 per share, it was a 50-year low point. So far the council looks both loyal and fiscally prudent. After Wagoner's press conference, GM stock rose by 16.6%. That translates into...
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Filed under: Car Buying , Podcasts , Chrysler, LLC. , Dodge , Ford , GM , Mazda , Toyota , Earnings/Financials We busted our humps getting to Podcast #100, and then promptly slacked off. Chris Shunk and Dan Roth make the effort this week to get Autoblog Podcast #101 out the door while the rest of the team remains difficult to corral. The usual banter about what's been in the Autoblog Garage starts us off before we dive headlong into the pithy GM news from earlier this week. Love it? Hate it? Send your comments, suggestions, or anything else to podcast at autoblog daht kahm. Thanks for listening! SUBSCRIBE to the Autoblog Podcast in iTunes ADD the Autoblog Podcast feed to your RSS aggregator DOWNLOAD the show now Permalink | Email this | Comments
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Filed under: Government/Legal , GM , Earnings/Financials A quick glance at today's announcements from America's largest automaker is an easy indicator that the U.S. auto market , at the very least, is under as strong as recession as could be imagined. According to Presidential hopeful Barack Obama, the entire industry as a whole is facing a "perfect storm" of "record gas prices, rising steel prices, a credit market contraction that has made it more difficult for consumers to purchase autos, and a weakening economy that has shed jobs for six straight months." As the auto industry goes, so go the livelihoods of countless workers -- both directly employed by the Detroit 3 and indirectly supported by suppliers, dealers and the like -- making today's announcements from GM a "sobering reminder" of the current state of the U.S. economy. Still, Obama holds out hope that the right Federal policies could dig the industry out of the hole it currently finds...
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Filed under: Chrysler, LLC. , GM , Earnings/Financials Despite recent rumblings to the contrary, both General Motors and Chrysler claim that they will not be going bankrupt any time soon. Still, as much as the two American automakers would love to quell fears of unsustainable liquidity, questions remain, especially as the pickup market in the United States continues to dwindle. In a note sent out to dealers, Chrysler's Jim Press and Steven Landry say that the automaker will focus its efforts on small cars for the rest of this year, though the current pickings from the automaker's stable seem a bit slim. Chrysler is surely banking on its alliances to bolster its line of small car offerings, which could help to dampen the blow of lost truck profits -- somewhat. General Motors , for its part, has invested heavily into its upcoming Delta platform vehicles, which will include a compact Chevrolet-branded car known as the Cruze as well as the Chevy Volt electric vehicle. [Source: Automotive...
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