general-motors

GM and LG Corp to develop hybrids

by on August 29, 2011

menafn.com…

(MENAFN) General Motors Co. and LG Corp said that they signed a deal to develop electric cars together, a first-of-its-kind alliance between the top US automaker and a leading Korean conglomerate …

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GM and LG Corp to develop hybrids

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‘From The Brink Of Extinction’

by AP on May 28, 2011

Huffington Post…

WASHINGTON — Vice President Joe Biden on Saturday credited the Obama administration’s intervention for the American auto industry’s recovery from “the brink of extinction” and pointed to Chrysler’s early repayment of the federal loan that saved it from disaster. “This announcement came six years ahead of schedule – and just two years after Chrysler Corp. emerged from bankruptcy,” Biden said in the administration’s weekly radio and Internet address. “It’s a sign of what’s happening throughout the American automobile industry.” Biden also said that General Motors, which went through bankruptcy and has come back strong, announced in the past week that its Detroit Hamtramck factory in Michigan will run three shifts for the first time in its 26-year history. “You know, that’s 2,500 more good, paying jobs,” he said. Biden, who provided the weekly address because President Barack Obama was traveling in Europe, credited the efforts of the Obama administration for the resurgence of the auto industry through its assistance. “Because of what we did, the auto industry is rising again,” Biden said. “Manufacturing is coming back. And our economy is recovering and it’s gaining traction.” Obama will visit a Chrysler plant in Toledo, Ohio, next Friday to discuss the carmaker’s recovery. Chrysler announced Tuesday the repayment of $5.9 billion in U.S. loans and $1.7 billion in loans from the governments of Canada and Ontario. It covers most of the federal bailout money that saved the company after it nearly ran out of cash in 2009 and went through a government-led bankruptcy. GM and Chrysler were on the verge of collapse in the final days of the Bush administration after Congress failed to approve an emergency loan package. The Bush administration gave the companies $17.4 billion in loans and required them to develop a restructuring plan by mid-February 2009. Obama’s administration pumped billions more into the carmakers later that spring but won concessions from industry stakeholders, allowing them to push GM and Chrysler through bankruptcy court in the summer of 2009. The Republicans’ weekly address focused on the party’s plan to create jobs. House Majority Leader Eric Cantor, R-Va., said boosting employment requires cutting taxes, reducing regulations, completing bogged-down trade agreements with several countries and expanding energy exploration in the United States. “All of these elements will help encourage growth and long-term economic stability,” Cantor said. “By putting in place policies that encourage businesses to expand, innovators to innovate and allows leaders to lead, we will not only begin to put our budget on a path to balance, but we’ll get Americans working again.” ___ Online Array Array

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‘From The Brink Of Extinction’

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Two New GM Plants To Create Jobs In Michigan

May 13, 2011

DETROIT — General Motors says it will invest $109 million in its Flint and Bay City, Michigan, operations, keeping or creating 96 jobs. The investment will fund production of engines for the Chevrolet Cruze compact and Volt electric car. GM says the money is part of a $2 billion investment announced earlier this week that will create or keep more than 4,000 jobs at 17 GM facilities in eight states. The company says it will spend $84 million at a Flint engine plant to increase production capacity for a 1.4-liter four-cylinder engine. GM will put $25 million into a Bay City factory to build parts for the engines. GM’s sales are up 25 percent this year, led by the Cruze. The company sold more than 25,000 of the compact cars last month.

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GM To Invest $2 Billion in U.S. Plants, Adding 4,000 Jobs

May 11, 2011

General Motors Co. plans to invest about $2 billion in U.S. assembly and component plants, creating or preserving more than 4,000 jobs at 17 facilities in eight states. “We are doing this because we are confident about demand for our vehicles and the economy,” GM chairman and CEO Dan Akerson said during an event at the 54-year-old Toledo (OH) Transmission Plant. “This new investment is on top of $3.4 billion and more than 9,000 jobs that GM has…

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GM Makes Big Investment In U.S. Plants

May 10, 2011

(Bernie Woodall) – General Motors Co said on Tuesday it will invest about $2 billion in 17 U.S. plants, including a facility here that makes transmissions for small cars, as the automaker shifts from recovery mode to investing in future products. GM said the plans will create or preserve more than 4,000 jobs as it retools the plants in eight states. The company employs 202,000 people globally, including 77,000 in the United States. “We are doing this because we are confident about demand for our vehicles and the economy,” GM Chief Executive Daniel Akerson said in a statement. Investors and analysts have speculated on GM’s plans for its growing pile of cash as the company’s liquidity has reached $36.5 billion. It earned $3.2 billion in the first quarter after posting net income of $4.7 billion for all of last year, its first full-year profit since 2004. GM did not disclose the timeline for the investments or in what other facilities it will invest other than to say more announcements will be made “over the next few months.” Executives previously signaled GM’s focus on building cars would only grow, as shown by last week’s announcement to invest $131 million revamping a Kentucky factory for a new version of the iconic Chevrolet Corvette sports car. The Kentucky announcement is part of the $2 billion plan. Another key issue as GM adds jobs is how many will be in the so-called second-tier wages that are about half those of veteran union-represented employees. The lower wage will figure prominently as major U.S. automakers face labor talks with the United Auto Workers this summer. GM filed for bankruptcy in 2009 after the U.S. housing downturn and a spike in gasoline prices the year before that caused consumers to turn away from its high-profit but fuel-hungry trucks. The U.S. automaker emerged from bankruptcy 40 days later thanks to a $52 billion taxpayer-funded bailout and sold shares in an initial public offering last November. Since exiting bankruptcy, GM said it has invested $3.4 billion in its U.S. plants, creating or retaining more than 9,000 jobs. The investment is not a surprise and by delaying the details of the specific plants affected GM maximizes the attention it will receive as it works to assure taxpayers the bailout was money well-spent, said Mirko Mikelic, senior portfolio manager with Fifth Third Asset Management. “They probably underinvested in some of these plants for the last few years,” said Mikelic, whose firm has held GM bonds and preferred securities in the past and still follows the stock. “They were keeping a handle on their cash. For years, in terms of R&D, they’ve been behind particularly Toyota.” The U.S. government still owns 32 percent of GM’s common shares and many investors see that as an overhang on the stock. Last month, sources said the Treasury could sell a significant portion of its GM shares by fall. GM shares were up 0.4 percent at $31.51 on Tuesday afternoon, compared with their IPO price last November of $33. (Additional reporting by Ben Klayman in Detroit, editing by Matthew Lewis) Copyright 2011 Thomson Reuters. Click for Restrictions .

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GM Posts Best Earnings Quarter in More Than A Decade

May 5, 2011

General Motors reported first quarter earnings of $3.2 billion, its fifth consecutive profitable quarter and its best quarter in more than a decade. The performance, combined with the impact of the earthquake in Japan last March on Toyota’s operation, should drive the company to regain the global lead in auto sales this year.

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GM’s Profit More Than Triples On Strong Asia Sales

May 5, 2011

DETROIT: General Motors Co’s quarterly profit more than tripled, beating expectations, driven by a recovery in the U.S. market and strong sales in Asia. The U.S. automaker also said on Thursday it expects its full-year adjusted earnings before interest and taxes to show “solid improvement” from 2010 helped by better pricing and lower fixed costs in North America. Net income in the first quarter rose to $3.2 billion, or $1.77 a share, compared with $900 million, or 55 cents a share, in the year earlier quarter. Excluding such one-time items as its sales of stakes in parts maker Delphi and Ally Financial, it earned 95 cents a share. That was 4 cents better than what analysts polled by Thomson Reuters I/B/E/S had expected. Revenue rose to $36.2 billion from $31.5 billion last year. Analysts had expected $35.59 billion. GM Chief Financial Officer Dan Ammann said GM is set up well to profit from higher gasoline prices with a much more diversified portfolio than three years ago when gas prices last topped $4 per gallon. “We had a very high, robust April, 19.8 percent market share in April with the lowest incentives we’ve had as the new company,” he told reporters. Ammann said GM’s incentives are currently running slightly below the industry average and that they will be at or slightly below the industry for the rest of the year. GM was heavily criticized by Wall Street analysts for its lofty incentives in January and February that cut into profit per vehicle. GM cut back incentives in March and April, but still offers more incentives per vehicle sold than its cross-town rival Ford Motor Co, analysts said. GM’s North American operations posted adjusted earnings in the quarter before interest and taxes of $1.3 billion, up $100 million from last year. It expects those results to improve on average for the rest of the year as better pricing and lower fixed costs more than offset higher commodity costs and more sales of less-profitable vehicles. GM’s European unit broke even on an adjusted earnings before interest and taxes basis and is targeting break-even before restructuring charges for the entire year. GM’s liquidity at the end of the quarter rose to $36.5 billion after the sales of the Delphi and Ally stakes. Cash and marketing securities grew to $30.6 billion from $27.6 billion at the end of the fourth quarter. (Reporting by Ben Klayman and Bernie Woodall in Detroit; Editing by Derek Caney) Copyright 2010 Thomson Reuters. Click for Restrictions .

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Video: Vaidya Says Toyota in Danger of Slipping Behind GM, VW

May 4, 2011

May 4 (Bloomberg) — Vivek Vaidya, automotive and transportation director at research company Frost & Sullivan, talks about the global auto industry. General Motors Co., less than two years after declaring bankruptcy, is poised to reclaim the global auto sales lead this year from Toyota Motor Corp., Japan’s automaker rattled by natural disasters and reports of slipping quality. Vaidya speaks from Singapore with Rishaad Salamat on Bloomberg Television’s “On the Move Asia.” (Source: Bloomberg)

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GM’s U.S. Sales Rise Despite Production Concerns

May 3, 2011

DETROIT (Bernie Woodall and Ben Klayman) – General Motors Co’s U.S. sales rose 26 percent in April, a sign that the automaker has not been greatly affected by supply disruptions from Japan after the March 11 earthquake. Auto sales are an early indicator each month of U.S. consumer demand, and GM, as the biggest U.S. seller of autos and the first to report April sales on Tuesday, indicated that industry sales will be strong. A Thomson Reuters poll of 40 economists and analysts had predicted a gain of 16 percent over last year. GM said that its retail sales were up 25 percent, driven by higher sales for its fuel-efficient Chevrolet compact cars and compact crossovers: the Cruze, Equinox and Terrain. The Cruze, the compact car that GM introduced last year, is now the second-biggest selling vehicle in the automaker’s lineup, behind only its Silverado pickup truck. Cruze sales so far this year are about triple the sales of the car it replaced, the compact Cobalt. “Consumers are continuing to rethink their vehicle choice,” said Don Johnson, GM vice president for U.S. sales. Ford Motor Co sales analyst George Pipas said this week that Ford is also showing a major shift in consumer taste toward smaller and more fuel-efficient cars as gasoline prices rise. U.S. retail gasoline prices rose 8 cents in the past week to $3.96 per gallon and are now $1.07 higher than a year ago, according to government figures released on Monday. Pipas said the he believes that high gasoline prices are convincing many consumers to “pull the trigger” on a new vehicle purchase. “I believe there is a call to action,” Pipas said of consumer purchases this spring. “Summer is the driving season, and I’m going to pull the trigger,” he said of consumers. Sales for the other automakers in the U.S. market will be issued later on Tuesday. On Monday in Japan, new-vehicle sales in April halved, sinking to the lowest monthly tally on record, as Japanese automakers felt the full brunt of the March earthquake. Also on Monday, French car sales fell 1.2 percent, reflecting the end of a scrappage scheme. In Italy, they fell to the lowest level in 15 years. Last month, Ford outsold GM for only the second time in 13 years. Ford and other automakers will report U.S. sales later on Tuesday. The world’s top automaker by sales, Toyota Motor Corp, is expected to show weaker sales than its U.S. counterparts, due to production and inventory problems, analysts said. GM shares were up 2.4 percent at $32.94 on the New York Stock Exchange on Tuesday morning. (Additional reporting by Deepa Seetharaman, editing by Matthew Lewis) Copyright 2011 Thomson Reuters. Click for Restrictions .

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GM Will Become World’s Biggest Automaker This Year

April 22, 2011

DETROIT — General Motors is almost certain to claim the title of world’s biggest automaker this year, retaking the top spot from Toyota, which has been hurt by production problems since the Japanese earthquake and still can’t escape the shadow of major safety recalls. The No. 1 title, a morale booster for the winner’s employees and managers, would cap GM’s remarkable comeback from bankruptcy. GM’s sales are up, mainly in China and the U.S, the world’s top two markets. Its cars are better than in the past, especially small ones. But even though GM came within 30,000 sales of Toyota last year and began strong in 2011, any sales victory this year has more to do with Toyota’s problems. First, a series of big recalls has ballooned to 14 million vehicles worldwide and damaged Toyota’s reputation for reliability. That has spurred loyal buyers to look at other brands. Second, a March 11 earthquake and tsunami in Japan curbed Toyota’s car production. On Friday, Toyota Motor Corp. said its factories worldwide won’t return to full production until November or December. That means buyers across the globe may not be able to get the models they want. Already the crisis has cost the company production of 260,000 vehicles. Last year, Toyota sold 8.42 million cars and trucks, barely ahead of a resurgent GM, which sold 8.39 million. GM held the No. 1 spot from 1932 until 2008. Here’s why GM is almost a lock to retake the lead this year: A BETTER GM: General Motors Co. was dysfunctional three years ago, hobbled by enormous debt and a giant bureaucracy. Its quality was suspect, it lost billions, and it had few products other than pickups that buyers found appealing. After a government bailout, a leaner GM emerged from a 2009 bankruptcy with new vehicles and a focus on Chevrolet, Buick, GMC and Cadillac. Since then, GM has come up with hits including the Chevrolet Equinox small SUV, the Buick LaCrosse luxury car, and the Chevrolet Cruze compact. Its quality is better. Sales so far this year are up 25 percent in the U.S. and 10 percent in China. The efficient Cruze compact and Chevrolet Volt car both hit the market as U.S. gasoline prices started rising. TOYOTA TROUBLES: Bad publicity from the recalls, mainly for cars that can accelerate without warning, was hurting Toyota long before the earthquake. The recalls began late in 2009, and came just as GM, Ford, Hyundai, and others introduced more competitive cars and trucks. With a bunch of nice alternatives and doubts about quality, customers who once dutifully returned to Toyota started considering other brands. Many Toyota models look old and need upgrades. Despite rebates and low-interest financing, Toyota was the only major automaker with lower U.S. sales last year. Sales are up 12.5 percent so far in 2011, but only at half the growth of GM. Toyota is scrambling to keep factories open after the earthquake, and U.S. dealers expect to run out of some models. Already dealers are reporting shortages of the Prius gas-electric hybrid, a high-demand model because of gas prices. Merle Gothard, general manager of North Park Toyota in San Antonio, says he’s not worried about GM retaking the title because it still has a tarnished image from bankruptcy. “It’s important from a marketing standpoint,” he says. “But Toyota has other things going for it.” He notes that Toyota is still profitable and never took a dime of stimulus money from the government. THE CHINA FACTOR: Toyota has nowhere near GM’s presence in China, now the world’s largest auto market. Through March, Toyota sold 208,000 vehicles there, but GM and its joint ventures sold more than three times that number. Growth in China by itself probably would have moved GM ahead of Toyota in worldwide sales. Toyota’s lead was only about one day’s worth of sales for GM. CAVEATS: Toyota still has a loyal customer base that believes the cars are safe and will last forever. Many Toyotas run for hundreds of thousands of miles with little more than routine maintenance. It also has a reputation for fuel efficiency, led by the Prius. GM would have to run into major problems to let No. 1 slip away this year. So far it has not been seriously hurt by parts shortages, but if some key electronic components from Japan can’t be made elsewhere, the company could run short of models. A new management team also is pushing to speed up introduction of new models, and that could hurt quality. If GM takes No. 1 this year, it won’t crow much, says Jesse Toprak, vice president of industry trends and insights for TrueCar.com, an auto price tracking website. “It’s because of (factory) capacity restrictions, and that’s not something they want to brag about,” he says.

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Video: Caldwell Says New Models May Help Ford Maintain Prices

April 15, 2011

April 15 (Bloomberg) — Jessica Caldwell, an analyst at Edmunds.com, talks about the outlook for Ford Motor Co. and General Motors Co. Ford, after increasing its share of the U.S. light-vehicle market for the last two years, is falling short of its retail goal this year, which may put pressure on the automaker to offer larger discounts. Caldwell talks with Matt Miller and Carol Massar on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

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Amazon Will Release Cheaper Kindle With On-Screen Ads

April 12, 2011

SAN FRANCISCO — Amazon.com Inc. is dropping the price on its Kindle e-reader, but the change comes with a trade-off: On-screen ads. The online retailer was set to announce Tuesday that the new Kindle with Special Offers will cost $114 – $25 less than the currently lowest-priced Kindle – and include advertisements on the bottom of the device’s home page and on its screen savers. Seattle-based Amazon will start shipping the newest Kindle on May 3, and it will also be sold in Target and Best Buy stores on that date. Amazon has consistently lowered the price of the Kindle since it released the first version of the device at $399 in 2007, though this is the first time it is doing so while including ads on the e-reader. Kindle director Jay Marine said in an interview Tuesday that the release of a cheaper, ad-studded Kindle is Amazon’s way of getting the device into the hands of more people. But it also shows Amazon is getting more aggressive in its efforts to lure consumers tempted by competing e-readers and bombarded by ads for Apple Inc.’s latest iPad and a growing number of competing tablet computers. Some potential buyers may be turned off by the idea of having ads on an e-reader, but Marine thinks that serving up a number of money-saving offers will be appealing. “We think customers are going to love it,” he said. The advertisers sponsoring screen savers at launch will be General Motors Co.’s Buick car brand, Procter & Gamble Co.’s Olay cosmetics brand and payments processor Visa Inc. JPMorgan Chase & Co. will advertise the Amazon.com Reward Visa Card. And other than the addition of ads, the latest Kindle is identical to the current one that uses Wi-Fi to wirelessly download books (a more expensive model uses 3G for wireless content delivery). It has a grayscale “electronic ink” screen that measures 6 inches at the diagonal, a battery that lasts for three weeks with Wi-Fi on, and enough space to store 3,500 books. In a demo of the device, a screen saver showed a deal where customers would pay $10 for a $20 gift card to Amazon. If a user is interested in that deal, they can click to have details of the offer e-mailed to them. A much smaller ad shown across the bottom of the Kindle’s home screen – the screen that shows you the content stored on the e-reader – was less obtrusive, but still clearly an advertisement. The ads will change frequently, Marine said, and there will not be any ads in Kindle books. “It was very important that we didn’t interfere with the reading experience,” he said. Users will be able to log on to their Kindle account on Amazon.com and adjust preferences about the types of screen savers they’d like to see. Amazon has never revealed how many Kindles it has sold.

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GM Sales Soar 11.4 Percent In March On Market ‘Shift’

April 1, 2011

DETROIT (By Deepa Seetharaman and Ben Klayman) – General Motors Co. said on Friday that its U.S. sales rose 11.4 percent in March as higher gasoline prices drove demand for smaller, more fuel-efficient vehicles such as the Chevrolet Cruze. The U.S. automaker said total U.S. sales in March for its four brands rose to 206,621 vehicles from 185,406 last year. Including its four former brands — Hummer, Pontiac, Saab and Saturn — GM sales rose 9.6 percent. Auto sales represent one of the first snapshots every month of U.S. consumer demand, and 34 economists surveyed by Reuters estimated March sales would rise 12 percent on average. Other automakers are scheduled to report March U.S. sales later on Friday. March is traditionally a stronger sales month than February, but lower incentive spending by GM, Toyota Motor Corp and others likely resulted in a lower growth rate than February’s stronger-than-expected 27 percent gain. GM sales chief Don Johnson said incentives per vehicle on average were $600 to $800 lower last month and the automaker would be prudent and disciplined with its deals going forward. The expected slower industry growth has raised concerns about the recovery in the U.S. auto market, although U.S. employment on Friday recorded a second straight month of solid gains in March and the jobless rate fell to a two-year low of 8.8 percent, marking a decisive shift in the labor market that should help underpin the economic recovery. Despite the sales increase, rising oil prices and the resulting pain at the pump could push consumers away from more lucrative light trucks. Light truck sales, which include pickup trucks and sport utility vehicles, make up a little more than half of U.S. auto sales and account for a disproportionate share of profits at the U.S. automakers because of their higher prices. Gasoline prices rose more than 3 cents to $3.60 a gallon over the last week, the Energy Department said. The average price of regular gas is 80 cents higher than a year ago as conflict in Libya and rising tensions in the Middle East have sent the cost of crude oil to above $100 a barrel. Another focus is the aftermath of the Japanese earthquake and subsequent tsunami last month which caused many supplier plants there to close or cope with power outages. GM said total U.S. sales for passenger cars rose 15 percent in March, while crossover and pickup truck sales rose 20 percent and 11 percent, respectively. “Clearly, as the market has shifted, we’re much better positioned from a product portfolio to take advantage of it,” Johnson said. GM shares were up 0.2 percent at $31.09 on the New York Stock Exchange on Friday morning. (Reporting by Ben Klayman and Deepa Seetharaman in Detroit, editing by Matthew Lewis) Copyright 2010 Thomson Reuters. Click for Restrictions .

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Auto Union Grows For First Time In Years

March 31, 2011

DETROIT – United Auto Workers membership rose for the first time in six years in 2010, helped by a recovering U.S. auto industry and expanding to include workers outside that industry, the UAW said in a federal filing on Thursday. UAW membership rose 6 percent in 2010 to 376,612 members, the first rise since 2004, when UAW-represented workers totaled 654,657. Still, membership is way down since 1979, when it hovered near 1.5 million. “This increase is a reflection of new organizing by the UAW, the recovery of the domestic auto industry and UAW members who won a first contract during the year,” said UAW President Bob King. “We hope to continue this growth in 2011 and beyond, as we fight to win a more fair and democratic process for workers to organize unions in the United States.” Membership has risen in areas outside of the auto industry as the UAW expanded its footprint with gaming workers in Atlantic City, New Jersey, post-doctoral workers at the University of California system and other public and private company workers. The UAW is currently trying to increase membership by appealing to auto workers at U.S. plants of companies based in Japan including Toyota Motor Corp (7203.T: Quote, Profile, Research, Stock Buzz), Honda Motor Co (7267.T: Quote, Profile, Research, Stock Buzz), and Nissan Motor Co (7201.T: Quote, Profile, Research, Stock Buzz), South Korea’s Hyundai Motor Co (005380.KS: Quote, Profile, Research, Stock Buzz) and Kia Motors (000270.KS: Quote, Profile, Research, Stock Buzz) and Germany’s Volkswagen AG (VOWG_p.DE: Quote, Profile, Research, Stock Buzz) and BMW (BMWG.DE: Quote, Profile, Research, Stock Buzz). The UAW enters contract talks this summer with the three major U.S. automakers General Motors Co (GM.N: Quote, Profile, Research, Stock Buzz), Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz) and Chrysler, which is managed by Fiat SpA (FIA.MI: Quote, Profile, Research, Stock Buzz). (Reporting by Bernie Woodall; Editing by Gary Hill) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Tesla Stock Soars After It’s Called ‘America’s Fourth Automaker’

March 31, 2011

Ford, General Motors, Chrysler and Tesla? A new report by Morgan Stanley suggests that electric car startup Tesla is in good position to break into the Big Three to become “America’s fourth automaker.” The brokerage believes that increasing gas prices and promises of governmental support for alternative fuel vehicles may help launch the manufacturer to global success. Tesla’s stock rose 20 percent following the report, to $28.51, but the firm’s price target for the end of the year is $70, about double its current price. Not everyone is quite so optimistic, however. Though Morgan Stanley’s report estimates that electric cars will reach 7 percent of total U.S. car sales by 2020, previous estimates have placed that figure closer to 1 or 2 percent. “I’d say that the praise is a little bit of a hyperbole,” said Ed Kim, director of industry analysis with AutoPacific. “In fact more than a little — Tesla still has a long way to go before they become a true volume automaker in North America.” Major obstacles still confront the electric vehicle industry from reaching widespread adoption. Unlike gasoline-run cars, or even hybrids, pure electric cars require significant infrastructure to be at all viable outside of urban areas where driving distances tends to be shorter. Ultimately, though, experts believe EV adoption will come down to price: if gas prices continue to rise, and the government actually steps in to provide major subsidies on electric vehicle purchase, American consumers may come to regard the cars as worthwhile investments. “As long as we’re still in a world where we don’t have a vastly expanded infrastructure, in a world where gasoline is still cheap enough, the mainstream is not going to embrace them,” said Kim. “Consumer behavior is affected first and foremost by price.” Watch a short video about Tesla below by AOL Autos: PRODUCTION PLAYER! DO NOT DELETE.

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Japanese Auto Production Falls To Disastrous Lows

March 21, 2011

DETROIT (Reuters) – Japan automakers in the first two weeks after the March 11 earthquake and tsunami will lose about 65 percent in light vehicle production, industry consultant IHS Automotive Insight said Monday in a report. Japan output is normally about 37,200 vehicles per day, or about 521,000 in a two-week period. IHS said that nearly 338,000 vehicles of that production through Friday will have been lost. Lost production outside of Japan is so far about 10,000 vehicles, but that number will rise “exponentially” as more plants of suppliers are affected, making components for cars and trucks become less available, IHS said. Indeed, General Motors Co (GM.N: Quote, Profile, Research, Stock Buzz) has idled a plant in Louisiana that makes Canyon and Colorado pickup trucks, and a plant near Buffalo, New York, that makes engines for those trucks. “It could take seven weeks of full production with overtime at a (plant) to compensate for one week of lost production volume — if all components are available and volume is not lost due to demand decline,” said IHS. IHS noted that damage at the plants is only one factor that will limit production. Other factors include rolling blackouts and the availability of water and sewer services, and the conditions at ports, railways, and roads. The crisis involving the damaged Fukushima Daiichi nuclear plant in northeastern Japan also has slowed production at suppliers and automakers. “The lack of clarity surrounding the Fukushima nuclear radiation situation has provided an additional brake on meaningful restoration efforts” of services and production plants, IHS said. “For each production workday that Japanese light-vehicle production is not functional, around 37,000 vehicles are lost,” IHS said. “This loss would need to be compensated for once output can resume.” Normal production at Japan’s automakers studied is 37,217 per day, led by Toyota Motor Corp (7203.T: Quote, Profile, Research, Stock Buzz), which accounts for almost 44 percent of total Japanese output, followed by Nissan Motor Co Ltd (7201.T: Quote, Profile, Research, Stock Buzz) at about 12 percent. (Reporting by Bernie Woodall, editing by Gerald E. McCormick) Copyright 2011 Thomson Reuters. Click for Restrictions

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GM Lays Off Workers, Halts Some Production

March 21, 2011

DETROIT — General Motors Co. on Monday is halting some production and temporarily laying off workers at a Buffalo, N.Y., engine plant, another sign that Japan’s disaster is affecting automakers around the globe. GM’s Tonawanda plant in Buffalo makes four- and five-cylinder engines for the Chevrolet Colorado and GMC Canyon compact pickups, which are assembled at a GM plant in Shreveport, La. GM has shut down the Shreveport plant this week because of a shortage of parts from Japan. GM spokeswoman Kim Carpenter Carpenter said Tonawanda has the parts it needs to make the engines, but it’s not producing the engines because Shreveport doesn’t need them. She said GM doesn’t know when production will resume at either plant. Carpenter said 59 of the 623 workers at the engine plant will be affected. Workers will get around 75 percent of their pay while they’re laid off. GM hasn’t said which parts are affected in Louisiana. Automakers tend to withhold such information for competitive reasons. GM uses a five-speed manual transmission made by Japanese supplier Aisin Seiki Co. in the Canyon and Colorado, but Aisin said last week that it has enough transmissions and parts to continue supplying GM and hasn’t shut down any of its plants in North America. So far, GM is the only U.S.-based automaker to be affected by parts shortages. Ford Motor Co. and Chrysler Group LLC said Monday that they haven’t slowed production but are monitoring the situation. Also Monday, GM slowed production of its Corsa compact car in Europe because of a shortage of parts. GM cancelled two of the three shifts at its Eisenach, Germany, plant and closed another plant in Zaragoza, Spain. GM said last week it was cutting unnecessary spending companywide as it assesses the impact of production disruptions from the March 11 earthquake and tsunami in Japan.

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Carolyn Ziel: Who Says Business Isn’t Personal?

March 21, 2011

Remember the scene in You’ve Got Mail when Tom Hanks tells Meg Ryan, “It’s not personal, it’s business”? I love her response: “What is that supposed to mean? I am so sick of that. All that means is that it wasn’t personal to you. But it was personal to me. It’s PERSONAL to a lot of people. And what’s so wrong with being personal, anyway?” What a great question. When the movie came out, I had just launched my career as an executive recruiter. Back then, I would have agreed with Tom Hanks. I was operating, like most of us in those days, from a place where I was more in my head than my heart. Now, I know that Meg was right when she said “Whatever else anything is, it ought to begin by being personal!” Being as connected as we are in the world today makes business very personal. Japanese businesses affected by last week’s devastating earthquake and tsunami have already affected automobile manufacturing plants in the U.S. such as General Motors, Toyota and others. It has affected computer availability and sales for Apple products and countless other business across the country. As we, here in Redondo Beach Marina, watched the literal ripple effect of the Tsunami flow into our harbor, I thought about business connections. To make a real connection with others in our business, we have to connect with our hearts. Everything we do, from defining and planning business structures, systems, marketing, to sales – all of it needs to align with our core mission. It’s about being congruent. Our core mission is the heart of our business. I call this being Heart Forward in business. For me it extends to the partnerships I create; the people and businesses I align with and the employees and partners I work with as well as the clients I attract. Sometimes this is challenging. For many, as for me, it has become a spiritual practice of sorts. Yes, your business can become your spiritual practice. Why not? We are living in unique times. The paradigms of the past are no longer supporting our ever-changing business world. As entrepreneurs we are ideally positioned to contribute and take advantage of new paradigms. Now more than ever, it is not only possible, but imperative to be Heart Forward in business. When we lead with our hearts, rather than our heads, we are better able to make a difference in this world, no matter what our business. The greatest example and a woman who has made the greatest success of her life’s work is Oprah Winfrey. Nancy F. Koehn is a historian at the Harvard Business School where she holds the James E. Robison chair of Business Administration. Koehn’s research focuses on entrepreneurial leadership and how leaders, past and present, craft lives of purpose, worth, and impact. In her eBook, Oprah, Leading With Heart she shares how Oprah built her media empire, learning her lessons and leading with her heart. A true leader uses all her assets: head, heart and power. However, inspirational leaders rely first and foremost on their hearts as their business barometer. Oprah has brought self-awareness and emotional intelligence to the forefront of her business strategy. She has connected emotionally and created an intimate relationship with her audience by being honest and leading with her heart. The more personal she is with her audience and the more she reveals of her journey, the more successful she becomes. This month’s O Magazine is her first poetry Issue. She shares her view on poetry: “For me, poetry is the unexpected utterance of the soul. It is where the soul touches the everyday. It is less about words and more about awakening the sense of aliveness we carry within us from birth. To walk quietly till the miracle in everything speaks is poetry, whether we write it down or not. I confess I started out wanting to write great poems, only to be worn by life to wanting to discover true poems, and now in the second half of life, I feel humbled and excited to want to be the poem!” This is the perfect example for today’s entrepreneur. Oprah made up her own rules based on her personal journey. We were witness to her poetic discoveries and the journey to her life’s purpose. We began to contemplate our own hearts as she contemplated hers. Being the poem can be as simple as shifting your perspective by listening to your heart to find out what you really want and staying true to your purpose. Business is personal when you are living your heart’s mission. Whether you are an actor, own a hair salon, or the CEO of a computer software company, you will transform your business and your life when you lead with your heart. Like the countless ripples created by a small pebble tossed into a lake, you can create your own ripple effect just by striving to be the poem. Let your heart lead you to your own poetry. Like Oprah says, “That is, for sure, an aspiration worth holding: to not just appreciate the poetry, but to be the poem.”

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GM Cuts Unnecessary Spending After Japan Disaster

March 20, 2011

NEW YORK — GM said Saturday it is cutting unnecessary spending companywide as it assesses the impact of production disruptions from the earthquake and tsunami in Japan. The move will help the automaker preserve cash as it deals with the financial implications from shortages of parts made in Japan, a company spokesman said. The cost-cutting effort, which includes travel, took effect last week and will be in place for an undetermined period. The news follows General Motors Corp.’s announcement Friday that two of three shifts will be canceled at a plant in Eisenach, Germany on Monday and Tuesday. Another plant in Zaragoza, Spain will remain closed Monday. The plants produce the Corsa compact car. In the U.S., GM said Thursday it will halt production at its pickup plant in Shreveport, Louisiana, next week. “The whole industry is still in the process of figuring out what the implications are from the disaster in Japan,” said GM spokesman Klaus-Peter Martin. On Friday, Honda Motor Co. said it expects to resume auto and motorcycle production in Japan on Wednesday. But in an e-mail Thursday to U.S. dealers, it said it can’t guarantee when production will return to full capacity. The carmaker also asked dealers to suspend May orders for Japan-made vehicles because they may be needed to fill existing orders that have been delayed because of disruptions. Typically, dealers order cars six weeks in advance. More than 80 percent of Honda and Acura vehicles sold in the U.S. are made in North America. Models sold in North America but made in Japan are the Fit, CR-Z, Civic Hybrid, Insight, Acura TSX, Acura RL and a small number of CR-Vs.

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Lack Of Parts From Japan Forces GM To Halt Production

March 17, 2011

DETROIT — A shortage of parts from Japan will force General Motors Co. to halt production at its pickup plant in Shreveport, La., next week, the company said Thursday. It’s the first time a U.S.-based automaker will stop production in North America over parts shortages caused by the earthquake and tsunami in Japan. Toyota Motor Co. and Subaru have already slowed North American production to conserve parts that they normally import from that nation. GM makes two compact pickups at its Shreveport plant, the GMC Canyon and Chevrolet Colorado. Both use a five-speed manual transmission made by Japanese supplier Aisin Seiki Co, which has halted production in Japan and suspended overtime in North America. GM’s other North American plants haven’t been affected so far. GM said it will resume production as soon as possible. Meanwhile, the company has enough of the trucks in inventory that it would take more than two months to sell them all. The trucks could be at the plant, en route to showrooms or on dealer lots. Ford Motor Co. and Chrysler Group LLC said their plants haven’t been affected by shortages.

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Global IPOs Have Best Start To Year On Record

February 25, 2011

LONDON (By Kylie MacLellan and Simon Jessop) – Global listings activity has been the highest on record so far this year, with firms raising a total of $24 billion to date, according to Thomson Reuters data, boosted by buoyant stock markets and improved investor interest. It follows a record quarterly volume of initial public offerings (IPOs) in the final three months of 2010, which saw $122.2 billion raised globally, lifted by the mega floats of Asian insurer AIA Group (1299.HK) and U.S. automaker General Motors (GM.N). Fundraising activity has been buoyed by relatively strong stock markets, with world equities, measured by the MSCI All-Country World Index .MIWD00000PUS, hitting 2-1/2 year highs this month despite unrest in the North Africa region. “Investor appetite for IPOs is effectively leveraged to equity market tone, and we finished 2010 with an exceptionally strong four month window from September to December that continued into early 2011,” said Chris Whitman, global co-head of equity capital markets at Deutsche Bank. “A larger universe of willing buyers then entices a larger universe of aspiring sellers.” Last year pockets of market volatility linked to euro zone sovereign debt worries created windows in which the IPO market, particularly in Europe, effectively closed, with billions of dollars worth of planned listings pulled. “It’s a sign of confidence that businesses which have been holding off in the past, as conditions weren’t right, feel there’s enough demand at the moment to get their floats away,” said Henk Potts, equity strategist at Barclays Wealth. “Valuations remain attractive and investors believe the equity market is a promising place to invest and therefore demand for those riskier equities has been increasing, and of course that very quickly filters through into a flourishing IPO market.” Although there are still some difficulties in the macro environment, investors are viewing the corporate environment more positively, Potts added. The $24.3 billion raised globally since the start of January is a 20 percent increase on the same period last year, the data showed. Secondary offerings have also seen a boost, up 23 percent year-on-year to raise $67.7 billion globally. Asia, which dominated equity capital markets in 2010, has continued to lead the field so far this year, with China accounting for 41 percent of issuance, including wind turbine maker Sinovel Wind’s (601558.SS) $1.4 billion listing last month. Boosted by strong energy and commodity prices, energy and power has been the most active sector, making up 30 percent of fundraising, followed by industrials on 16 percent. U.S. pipeline company Kinder Morgan (KMI.N) raised around $2.86 billion earlier this month in the largest U.S. energy-related IPO since 1998, upping the size and price of its offering after strong demand. With several big listings — including a $3.7 billion offering from U.S. hospital operator HCA Holdings and a $2.4 billion IPO by Denmark’s ISS — currently in the works, and a huge pipeline of deals still to launch, the market shows no signs of slowing. In particular, Europe is braced for a flurry of stock market listings in the next two months as firms use annual results as launching pads for share sales and hope to complete deals before investors disappear for the Easter break. “If equity markets continue to be stable-to-higher, IPO activity is poised to continue to intensify,” said Whitman. “There is a good chance that IPO volumes for 2011 will be markedly higher than 2010.” (Editing by Hans Peters) Copyright 2010 Thomson Reuters. Click for Restrictions .

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GM Withdraws 144B DoE Loan Request

January 30, 2011

General Motors is dropping its request for 144 billion in government loans due to its improved cash position

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GM Hurrying Its Electric Volt To Market

January 27, 2011

WASHINGTON — General Motors’ top car designer says the company will accelerate distribution of the Chevrolet Volt electric car so it’s sold in every U.S. state by the end of this year. Design chief Ed Welburn made the announcement Thursday in a speech at the Washington, D.C., auto show. Previously, GM had said the $41,000 Volt would be sold in every state by sometime next year. Volt sales began in December in California, New York, New Jersey, Connecticut, Washington, D.C., and Texas. It’s scheduled to go on sale in Michigan next. GM plans to make 10,000 Volts this year. Welburn says the company is looking at ways to increase production and expand use of the technology. The Volt can go about 35 miles on battery power before a gas generator kicks in.

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GM Expands Recall Of 2011 Models

January 16, 2011

NEW YORK — General Motors is expanding an earlier recall of some 2011 model-year trucks and SUVs to fix a problem that could cause the vehicles’ rear axles to lock. The recall, originally announced in December, now covers 26,751 Cadillac, Chevrolet and GMC trucks and SUVs. The models affected are: Cadillac Escalade, Escalade ESV, Cadillac EXT, Chevrolet Avalanche, Colorado, Silverado, Suburban, Tahoe; and GMC Canyon, Sierra, Yukon and Yukon XL. GM said rear-axle cross pins, used to hold the axle in place, weren’t properly heat-treated and may not be durable. They can fracture, interfere with the axle and cause it to lock. The driver could then lose control of the vehicle. One customer has reported a loss of power to the axle, GM says. But no crashes have been reported. GM says owners of the vehicles are being contacted and urged against driving the trucks until the axle pin is replaced. The December recall for this same issue covered 1,262 trucks and SUVs. But the company has since discovered that more vehicles were built with the faulty axle pin. In addition, the earlier recall didn’t include the Chevrolet Colorado and GMC Canyon midsize trucks. A GM spokesman said Saturday that the company is confident all the faulty parts have now been discovered.

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Video: Colas Says GM Stock a `Leveraged Play’ on U.S. Economy

December 30, 2010

Dec. 30 (Bloomberg) — Nicholas Colas, chief market strategist at BNY ConvergEx Group LLC, talks about the outlook for General Motors Co. He speaks with Carol Massar on Bloomberg Television’s “In the Loop.” (Source: Bloomberg)

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GM Recalling 100,000 Crossover Vehicles Over Seat Belt Issue

December 17, 2010

WASHINGTON — General Motors Co. is recalling about 100,000 crossover vehicles to fix seat belts that could fail in a crash. GM said Friday in a posting with the National Highway Traffic Safety Administration that the recall involves 2011 model year versions of the Cadillac SRX, Chevrolet Equinox and GMC Terrain. The automaker said the seat belt buckle anchor for the driver and front passenger seats could break apart in a crash. GM spokesman Alan Adler said there have been no crashes or injuries reported. GM said it discovered the problem during testing in September. Dealers will modify the seat belt buckles free of charge. The recall is expected to begin in mid-January. Owners can contact Cadillac at (866) 982-2339, Chevrolet at (800) 630-2438 and GMC at (866) 996-9463. They can also consult the GM owner center website at . http://www.gmownercenter.com

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GM Wants ‘Some Relaxation’ Of Government’s Pay Restrictions

December 10, 2010

WASHINGTON (By John Crawley) – General Motors Co Chief Executive Dan Akerson said on Friday that the automaker is seeking “some relaxation” in the restrictions on executive pay imposed by the U.S. government. “We have to be competitive and retain talent,” Akerson said in response to a question at the Economic Club of Washington, D.C. “We’re starting to lose them now.” Akerson said he would meet with the U.S. Treasury’s special paymaster on Friday to discuss the issue of executive compensation. Akerson guided GM through its blockbuster initial public offering in November that reduced the U.S. Treasury’s stake to about 33 percent from 61 percent. The IPO for the top U.S. automaker came just over a year after it was put through a restructuring in bankruptcy funded by the Obama administration. Akerson, who in September became GM’s fourth CEO in under two years, said the automaker was determined to never repeat the missteps that led to its 2009 bailout. “We are humbled by our near-death experience,” he said. In his speech, one of his highest profile public appearances since the IPO, Akerson repeated several key points that GM and its bankers made to investors during the run-up to the record $23.1 billion share offering. Akerson said investors “saw a new company” with a competitive cost structure, leaner inventories, stronger brands and new success in avoiding the damaging discounting that it relied on to drive sales earlier this decade. “All of which is resulting in improved earnings and cash flow,” Akerson said just blocks from the executive office building where Obama administration officials orchestrated the company’s wrenching overhaul. Akerson said GM was positioned to break even if industry-wide auto sales were to retreat and was “better positioned” than other automakers to take advantage of the “huge growth potential” of China, India and Brazil. (Reporting by John Crawley; writing by Kevin Krolicki, editing by Gerald E. McCormick, Dave Zimmerman) Copyright 2010 Thomson Reuters. Click for Restrictions .

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Video: Greenbriar’s Greenwald Expects U.S. Auto Sales to Rise

November 19, 2010

Nov. 18 (Bloomberg) — Gerald Greenwald, managing partner at Greenbriar Equity Group LLC and a former chairman of Chrysler Motors, discusses General Motors Co.’s initial public offering and the outlook for the automobile industry. Greenwald talks with Pimm Fox on Bloomberg Television’s “Taking Stock.” (Source: Bloomberg)

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Video: Greenbriar’s Greenwald Expects U.S. Auto Sales to Rise

November 19, 2010

Nov. 18 (Bloomberg) — Gerald Greenwald, managing partner at Greenbriar Equity Group LLC and a former chairman of Chrysler Motors, discusses General Motors Co.’s initial public offering and the outlook for the automobile industry. Greenwald talks with Pimm Fox on Bloomberg Television’s “Taking Stock.” (Source: Bloomberg)

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Video: UAW’s King Calls General Motors IPO a `Huge Success’

November 19, 2010

Nov. 18 (Bloomberg) — Bob King, president of the United Auto Workers union, talks about General Motors Co.’s initial public offering and the outlook for the company. King talks with Adam Johnson on Bloomberg Television’s “Street Smart.” (This is an excerpt from the full interview. Source: Bloomberg)

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Video: Magliano Says U.S. Auto Industry Now on `Solid Footing’: Video

November 18, 2010

Nov. 18 (Bloomberg) — George Magliano, director of North American research for IHS Automotive, talks about General Motors Co.’s initial public offering that raised more than $20 billion and the outlook for the company and the U.S. auto industry. Magliano talks with Mark Crumpton on Bloomberg Television’s “Bottom Line.” (Source: Bloomberg)

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GM IPO The Biggest In U.S. History

November 18, 2010

NEW YORK (By Clare Baldwin and Soyoung Kim) – General Motors Co (GM.UL) pulled off the biggest initial public offering in U.S. history on Wednesday, raising $20.1 billion after pricing shares at the top of the proposed range in response to huge investor demand. Including an option that would allow underwriters to sell more shares, expected to be exercised in coming days, GM looks set to raise $23.1 billion, making it the biggest initial public offering ever. “What was that statement that used to float around? What’s good for GM is good for America? Well, I think in this case, what’s good for GM is good for the American taxpayer,” said Adrian Cronje, chief investment officer at Atlanta-based wealth management firm Balentine LLC. The strong response to the stock sale reflects a groundswell of investor confidence that GM is moving beyond its unpopular, taxpayer-funded bankruptcy in June 2009 with sharply lower costs and higher profit potential. The government’s stake in GM will drop to about 33 percent from 61 percent if all available shares are sold. The success of the IPO is good news for the Obama administration, which faced criticism for bailing out GM, and will help the automaker shed its “Government Motors” label. “General Motors’ IPO marks a major milestone in the turnaround of not just an iconic company, but the entire American auto industry,” President Barack Obama said in a statement. The stock will begin trading on Thursday on the New York and Toronto exchanges, and underwriters expect the shares to gain 10 to 20 percent on the first day. Auto industry executives and analysts said the reversal in Wall Street sentiment toward GM pointed to renewed confidence in an industry that was hit hard by the credit crisis of 2008. That is a positive sign for a range of auto-related companies, including Chrysler, that are looking to tap the credit and equity markets in coming months, analysts said. “You’re not in GM for a three-month investment,” Tim Leuliette, a director at auto parts maker Visteon Corp (OTC BB:VSTO.OB – News), said at the Reuters Autos Summit. “You’re into GM because a critical element, a critical building block of the economy, has significantly repositioned itself to be competitive. United Auto Workers President Bob King, whose union stands to reap $3 billion from the IPO for an affiliated trust fund for retiree health care, said GM’s factory workers had an interest in seeing its shares perform well. “The higher that stock price is, the more money General Motors has got to invest in products, new facilities,” King told Reuters. GM sold 478 million common shares at $33 each, raising $15.77 billion, as well as $4.35 billion in preferred shares, more than the initially planned $4 billion. More than 20 percent of the IPO — or more than $3 billion worth of stock — went to individual investors, making it the largest retail placement ever in value terms, a source familiar with the situation said. FROM BLUE-CHIP TO BAILOUT AND BACK The stock sale represents a big step toward taxpayers recouping the government’s $50 billion rescue of the 102-year-old company, which had fallen from blue-chip status to bailout basket case in recent years. GM earned $5 billion in the first nine months of 2010 and is on track for its first full-year profit since 2004. Earnings will accelerate if U.S. auto sales continue to creep back up toward the 15-million or 16-million vehicle-per-year sales rates the U.S. industry last saw in 2007, analysts say. Sales plunged to 10.4 million vehicles in 2009 and have staged a slow recovery to near 11.5 million this year. “The automotive markets are not yet at their best, far from that, but they’re certainly recovering from last year,” said Xavier Mosquet, senior partner at the Boston Consulting Group and an adviser to the government in the GM restructuring. In a road show for investors spearheaded by GM Chief Executive Dan Akerson and Chief Financial Officer Chris Liddell, the automaker has emphasized both its sharply lower costs and its exposure to key growth markets like China. One of the open questions was whether GM’s China partner, state-owned SAIC Motor Corp Ltd (Shanghai:600104.SS – News), was able to move beyond a last-minute regulatory hurdle that threatened its plans to take a 1 percent stake in GM. Under a tentative deal, SAIC had agreed to invest $500 million to $1 billion in GM pending Chinese government approval, people with knowledge of those discussions said. As of late on Wednesday, China’s Ministry of Commerce had not approved the SAIC investment, said three people familiar with the matter. Sources have said that sovereign wealth funds in the Middle East and Asia are among the investors. GOVT EXIT TO TAKE YEARS A study released on Wednesday by the Center for Automotive Research estimated that the Obama administration’s aid to the auto industry had saved over 1 million jobs by sparing the automaker from liquidation. U.S. officials and advisers said the GM IPO represented a validation for the Obama administration’s intervention. At its IPO price, GM will be valued at about $63 billion, based on a diluted share count. The U.S. Treasury will remain GM’s largest shareholder for now. U.S. officials have said unloading the entire stake is likely to take several years. The stock price will need to rise by 47 percent to near $49 — about what it costs to fill the gasoline tank of a 2010 Chevy Malibu — for the government to break even on its follow-on stock sales. At $49 per share, GM would have a market value of more than $90 billion. In comparison, its closest rival, Ford Motor Co (NYSE:F – News), has a market capitalization of $59 billion after a rally that has sent its stock up 65 percent this year. The GM stake held by Canada could fall from 12 percent to just over 9 percent. The retiree health care trust affiliated with the United Auto Workers union could see its stake drop from almost 20 percent to 13 percent. With overallotments, GM’s IPO would eclipse the record $22.1 billion raised by Agricultural Bank of China (Shanghai:601288.SS – News) in its IPO in July. The previous top U.S. IPO was Visa Inc’s (NYSE:V – News) $19.7 billion stock sale in 2008. Morgan Stanley, JPMorgan, Bank of America and Citi are listed as lead underwriters on the offering. Barclays Capital, Deutsche Bank, Goldman Sachs, Credit Suisse and Royal Bank of Canada are the other major underwriters. Lazard and Boston Consulting Group served as advisers to the Treasury. Evercore Partners advised GM. (Reporting by Kevin Krolicki in DETROIT; Additional reporting by James Kelleher in DETROIT and John Crawley in WASHINGTON; Editing by Matthew Lewis, Ted Kerr and Anshuman Daga) Copyright 2010 Thomson Reuters. Click for Restrictions .

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GM May Raise 228B In IPO

November 17, 2010

General Motors could raise 228 billion through an initial public offering

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Video: Greenwald Says GM to `Do Very Well’ Over Next 2-3 Years

November 16, 2010

Nov. 16 (Bloomberg) — Gerald Greenwald, managing partner at Greenbriar Equity Group LLC and a former chairman of Chrysler Motors, discusses General Motors Co.’s plan to raise as much as $12 billion in the second-largest U.S. initial public offering on record after increasing the asking price by 14 percent. Greenwald speaks with Carol Massar and Jon Erlichman on Bloomberg Television’s “In the Loop With Betty Liu.” (Source: Bloomberg)

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GM’s IPO Just Got More Expensive

November 16, 2010

DETROIT — A confident General Motors has added 20 million shares of preferred stock to its initial public offering, and it raised the estimated price range for common shares by about 14 percent to $32 to $33. The Detroit automaker, just 16 months out of bankruptcy protection, will now sell 80 million shares of preferred stock for $50 each when its offering takes place on Thursday. Common shares will be sold by the U.S. government and two other owners, who inherited the stock for helping GM get through a painful restructuring last year. GM announced the changes in a statement issued Tuesday morning. The automaker gave no reason for the increases, but people briefed on the sale say it’s because of high investor demand. One person said bankers handling the sale had seven times more orders for the common stock than shares. Earlier this month, GM said its owners will sell 365 million common shares for $26 to $29 each. GM also planned to sell 60 million preferred shares for $50 each. The increase in preferred shares lifts the amount GM will raise in the sale from $3 billion to $4 billion, according to the statement. Final pricing is to be set Wednesday, and bankers may stop taking orders for the shares as early as Tuesday afternoon, according to the person, who asked not to be identified because he is not authorized to speak publicly about the sale. GM and its owners could sell even more preferred and common shares in the offering. Bankers have yet to exercise an option to sell 15 percent more of the shares due to high demand. The preferred stock price will stay at $50, but GM’s total cost for those shares will remain about the same because it’s reducing the expected dividend rate from a range of 5.5 to 6 percent to between 4.75 and 5.25 percent, the person said. The preferred shares will be converted to common stock in 2013. Bankers have the option to sell roughly 55 million more common shares, although they have not yet decided to do that, the person said. The common stock price increase is a boon for the U.S. government, which is GM’s largest stockholder. The government is trying to get back the $50 billion it gave the company last year to get through bankruptcy protection. Other owners selling stock are the Canadian and Ontario governments and a union health care trust fund. Demand for the automaker’s shares is rising as its financial outlook improves. Last week, GM announced a third-quarter profit of $2 billion, bringing its earnings to a healthy $4.2 billion for the year. In presentations to investors, GM said its debt and labor costs have been cut so much that it can break even at the low point in an auto sales slump. When sales fully recover, the company said it could make $17 billion to $19 billion per year before taxes. The price hike comes during a week that could be the biggest for IPOs since 2007, according to investment adviser Renaissance Capital LLC. The IPO market has improved steadily since August 2009. The sector had been almost frozen for nearly a year after massive losses on mortgage bonds upended global credit markets.

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Chinas SAIC Eyes 500M GM Stake

November 16, 2010

SAIC Motor is planning to acquire a 1 stake in US auto maker General Motors

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Video: Saginaw Mayor Welcomes Sale of GM Unit to China Firm

November 12, 2010

Nov. 12 (Bloomberg) — Greg Branch, mayor of Saginaw, Michigan, discusses General Motors Co.’s sale of its Nexteer Automotive steering-parts unit, located in Saginaw, to China’s Pacific Century Motors for $440 million. GM is expected to complete the sale as early as next week. Branch speaks with Margaret Brennan on Bloomberg Television’s “InBusiness.” (Source: Bloomberg)

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GM Financial Raises 700M In Note Sale

November 11, 2010

Auto lender General Motors Financial has raised 700 million in a sale of automobile receivablesbacked notes

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GM Financial Raises 700M In Note Sale

November 11, 2010

Auto lender General Motors Financial has raised 700 million in a sale of automobile receivablesbacked notes

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UBS Employee Reportedly Leaked Info On GM IPO

November 10, 2010

DETROIT — A person briefed on the matter says Swiss bank UBS is no longer working on General Motors’ initial stock offering because a bank employee leaked information about the sale in an e-mail. GM disclosed the e-mail in a filing with the Securities and Exchange Commission on Wednesday. The filing says investors who buy GM stock could seek refunds or damages because of it. UBS and the SEC would not comment. The person would not say what the e-mail said or where it was distributed. The person did not want to be identified because the bank has not been publicly named as the source of the e-mail. GM’s owners, including the U.S. government, plan to sell about $10 billion in common stock on Nov. 18.

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Most Reliable Cars: Honda, Toyota Top Consumer Reports Rankings

October 26, 2010

DETROIT — The most problem-free cars and trucks are made by Honda and Toyota, but U.S. automakers Ford and General Motors are closing the gap in quality, according to an annual survey by Consumer Reports magazine. Ford and GM continue to narrow the disparity that once separated Asia-based automakers from their Detroit rivals. Large overhauls of American car companies in the last few years have resulted in fewer brands and better vehicles from Detroit. For the third year in a row, Toyota’s Scion had the fewest problems of any brand in the survey. It was followed by Porsche, Acura, Honda, and Nissan’s Infiniti luxury brand. The Toyota brand ranked sixth, down from third last year. It was followed by Subaru and Volvo. Lexus, which had been a top finisher in past years, fell to ninth. Ford was 10th, but rose from 16th the previous year. Consumer Reports rankings, released Tuesday, are widely used by buyers shopping for cars and trucks. The magazine ranks No. 3 on the list of information sources used by Americans to pick vehicles, topped only by brand loyalty and recommendations from friends and family. Scion, Toyota’s youth brand, was tops because it sells just three models, the xD hatchback, xB wagon and tC coupe. Those models haven’t been revamped recently. As a result, they have fewer reliability problems, said David Champion, senior director of auto testing for Consumer Reports. Toyota generally fared well in the survey despite recalling more than 10 million vehicles worldwide for safety problems including sticky gas pedals, floor mats that can trap accelerators and brake fluid leaks. “Toyota’s taken a slight knock from the issues with their recalls,” Champion said. He said the magazine’s survey asks owners to ignore recalls unless they have experienced a problem, easing the impact. Toyota’s luxury brand, Lexus, has expanded its model lineup and the quality has slipped, he said. The survey of about 960,000 of the magazine’s subscribers also restored recommended ratings for eight recalled Toyota brand models. Toyota in January recalled 2.3 million vehicles in the U.S. due to sticky gas pedals, including the 2009-10 RAV4 crossover, 2009-10 Corolla, the 2009-10 Matrix hatchback, the 2005-10 Avalon, the 2007-10 Camry, the 2010 Highlander crossover, the 2007-10 Tundra pickup and the 2008-10 Sequoia SUV models. It stopped selling the models until the vehicles on dealer lots were fixed. When sales were halted, Consumer Reports yanked the recommended ratings. Champion said Honda is the top manufacturer for reliability, with the Honda and Acura brands consistently at the top of the survey due to a continued emphasis on quality. Champion said the Dearborn, Mich.-based Ford has several individual models that have better quality than Toyotas. Ford’s quality resurgence was led by the Fusion midsize sedan, which outranked Honda’s Accord and Toyota’s Camry, two of the most reliable cars on the road. Ford’s improvements began five years ago and have continued, Champion said. General Motors showed the most improvement. GM had 69 models with average or better reliability, up from only 21 last year. GM’s top-ranked brand was Chevrolet at 17, up from 25 last year. GM shed some poor-quality models when it got rid of Saturn, Hummer and Pontiac, Champion said, and its new models like the Chevrolet Equinox crossover and Buick LaCrosse sedan are performing well. The Chrysler brand was ranked last of 27 brands shown in the survey, the magazine said, while Jeep ranked 20th and Dodge was 24th. No Chrysler vehicles scored above average in reliability. Champion said the company under its previous owners cut costs, and it’s showing in the quality rankings. The company’s in the process of updating its entire model lineup. New models like the Jeep Grand Cherokee are showing promise. The most reliable vehicle in the survey was the Porsche Boxster sports car, while the least reliable was the Jaguar XF luxury car. Complete rankings and recommendations will be revealed in the magazine’s December issue.

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Companies That Received Bailout Money Giving Generously To Candidates

October 25, 2010

Senate Minority Leader Mitch McConnell (Ky.) was a fierce critic of the federal bailout of General Motors and Chrysler last year, saying he “cannot ask the American taxpayer to subsidize failure.” But General Motors doesn’t seem to hold a grudge.

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General Motors eyes India’s LCV market

October 11, 2010

General Motors eyes India’s LCV market

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GM Reduces Offering To 810B

September 26, 2010

General Motors has reduced the value of its stock offering

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GM IPO Will Be Scaled Down By Government: Report

September 24, 2010

DETROIT — The initial public stock offering by General Motors will be smaller than previously suggested, and the federal government will most likely sell a relatively small portion of its 61 percent stake in the company, according to people with knowledge of the preparations.

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Video: GM IPO Said Reduced to $8 Billion to $10 Billion: Video

September 23, 2010

Sept. 23 (Bloomberg) — General Motors Co. will probably seek to raise $8 billion to $10 billion in an initial public offering in November, a smaller sale than the automaker originally targeted, said two people familiar with the matter. Bloomberg’s David Welch reports. (Source: Bloomberg)

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Video: Rattner Says U.S. Made `Right Decision’ on Chrysler: Video

September 21, 2010

Sept. 21 (Bloomberg) — Steven Rattner, the former head of President Barack Obama’s automotive task force and co-founder of private-equity firm Quadrangle Group LLC, discusses the government bailouts of Chrysler Group LLC and General Motors Co. Rattner is the author of “Overhaul: An Insider’s Account of the Obama Administration’s Emergency Rescue of the Auto Industry.” He speaks with Deirdre Bolton on Bloomberg Television’s “InsideTrack.” (This report is an excerpt. Source: Bloomberg)

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GM-Chrysler Bailout: Was It A Blank Check?

September 21, 2010

WASHINGTON — To hear President Barack Obama’s account of the government’s rescue of General Motors and Chrysler, you might think the Bush administration handed the automakers a big blank check – billions of dollars in loans with no strings attached. Obama, defending his administration’s relations with the business community on Monday, said the White House knew the bailout of GM and Chrysler would be unpopular with the public but was crucial to preserving 1 million jobs. He said his administration forced the auto companies to make drastic changes in return for the money, unlike his predecessor. “Now keep in mind the previous administration had been helping them, giving them billions of dollars, and just asking nothing in return,” Obama said in a CNBC town hall meeting. Not exactly. ___ EDITOR’S NOTE – An occasional look at assertions by public officials and how well they adhere to the facts. ___ President George W. Bush’s administration, only weeks before leaving office, gave GM and Chrysler $17.4 billion in loans after legislation to speed loans to the companies failed in Congress. The Dec. 19, 2008, terms signed by GM and Chrysler required them to reduce their debt levels, negotiate wage and benefit cuts for auto workers and submit detailed restructuring plans by Feb. 17, 2009, showing a path to “long-term viability, international competitiveness and energy efficiency.” By the end of the Bush administration, both companies were running out of money and there was no time for drastic restructuring. In all likelihood, forcing the companies into bankruptcy in December 2008 would have led to liquidation, making the Bush loans a lifeline to keep the companies afloat and buy more time for an overhaul. Some critics have questioned whether the Bush requirements were tough enough. The loan terms instructed the companies to file restructuring reports by March 31, 2009, including “any deviations from the restructuring targets.” That was to include an explanation why failing to meet the specific terms would “not jeopardize the borrower’s long-term viability.” But the companies still faced a looming checkmate: The Bush loans gave the Obama administration the ability to recall the loans if the conditions weren’t met, which would have essentially forced GM and Chrysler into bankruptcy. “We knew that we were the front part of the arrangement and that we would not be there to enforce the terms of the loan,” said Keith Hennessey, a former Bush economic adviser. “Our team wrote the terms of the loan to be tightly binding on the firms and specifically that the loans had to be repaid to the Treasury unless the conditions were met.” The Obama administration pumped billions more into the car makers but gained concessions from company stakeholders and pushed GM and Chrysler through quick bankruptcies last year. Both companies have shown signs of a comeback. GM has posted two straight profitable quarters and is expected to conduct an initial public offering later this year that would help the U.S. reduce its 61 percent stake in the company. Chrysler, placed under control of Italian automaker Fiat, has narrowed its losses and is considering a public stock offering sometime in 2011. Obama and White House officials have made similar claims about the auto bailout before. In a July 30 visit to a GM plant, Obama described three options to address the near GM and Chrysler collapse. “Option number one was to keep on doing what the previous administration had been doing, which is basically give about a billion dollars a month to the auto industry, but not really ask for any kind of change that would get it on the right track,” Obama said. White House chief of staff Rahm Emanuel said in a June interview with ABC News’ “This Week” that “in the case of General Motors, the prior administration wrote a check without asking any conditions of change.” Austan Goolsbee, the new chairman of the White House Council of Economic Advisers, said in a Fox News Sunday interview in June that the White House was confronted with the distressed automakers “because somebody else kicked the can down the road.” In his new book, “Overhaul,” Steven Rattner, who led Obama’s auto task force, credits the Bush team for giving the incoming auto task force “a little breathing room” to restructure the companies and for providing a framework of “expected sacrifices that paved the way for our demands for give-ups from the stakeholders.”

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