General Motors, Magna and Germany Agree To Deal That Saves Opel

It took last minute heroics and lots of euros, but now Opel will escape the bankruptcy certainly facing GM. Magna is a Canadian auto parts group with big plans for Opel, including a sales push into Russia. The deal includes a bridge loan of up to $1.5 billion euros which comes courtesy of the German government. The contract will take up to five weeks before being formalized.

From Automotive News:

Germany reached a landmark deal with Canadian auto-parts group Magna, General Motors and governments to save Opel from the imminent bankruptcy of its U.S. parent, German leaders said on Saturday.

Finance Minister Peer Steinbrueck told journalists waiting outside Chancellor Angela Merkel's offices for the six-hour meeting that a comprehensive accord had been forged.

"I can tell you that a deal has been reached," Steinbrueck said shortly after 2 a.m. He added that the agreement included bridge financing for Opel worth 1.5 billion euros ($2.1 billion) and a trustee model for the German carmaker.

Siegfried Wolf, co-CEO of Magna International Inc., cautioned there were still details to be ironed out.

"In five weeks' time we should have the formal signing of the contract," he said.

Hesse state premier Roland Koch said, for example, the state assemblies in both Hesse and North Rhine-Westphalia -- two of four states with Opel plants -- would still have to endorse it. He said he hoped that could be completed by Sunday.

Leaders of all four states have endorsed the deal.

Steinbrueck said U.S. Treasury representatives at the meeting had also backed the agreement.

Economy Minister Karl-Theodor zu Guttenberg renewed his reservations about risks involved with the rescue but added there would also have been risks if Opel declared bankruptcy.

Seeking support

Magna and Opel had presented their plan to senior German officials and representatives of the U.S. Treasury to win their support and ensure the release of the financing that Opel desperately needs to survive over the coming months.

An agreement between GM and Magna is a first step toward securing the future of Russelsheim-based Opel, which has been under GM's control for the past 80 years and traces its roots in Germany back to the 19th century.

"I think this is the start of a new future for Opel, for the workers, the company and the brand," GM Europe head Carl-Peter Forster told journalists. He added, however, that there would still be some hard negotiations on the fine print ahead.

The German government has been scrambling to safeguard Opel's future before GM files for bankruptcy, a step which is expected to come by Monday.

A first round of talks in Berlin collapsed amid mutual recriminations on Thursday morning, prompting the German government to set a new round of negotiations for Friday.

Italian carmaker Fiat S.p.A., Magna's main rival in the battle for Opel, pulled out of talks, leaving the door open for Magna, North America’s largest supplier. It was started by Austrian emigre Frank Stronach in a Toronto garage nearly half a century ago.

Magna plans to use Opel to push into Russia, Europe's fastest-growing car market before the economic crisis hit.

The company, which has 70,000 employees in 25 countries, supplies components and systems to many of the world's leading carmakers, including fuel tanks and radiator grilles for the Mercedes-Benz C-Class and fuel filters for the BMW X3.

Fiat: Life goes on

Speaking to reporters in Montreal, Fiat CEO Sergio Marchionne had earlier appeared to concede defeat to Magna, saying his focus was on the company's deal with Chrysler.

"If the Opel transaction is not available to Fiat, life will move on," he said.

A stumbling block had been U.S. Treasury opposition to German demands that Opel assets be temporarily placed in a trust to protect them from GM creditors. Germany now will release the bridge financing to tide Opel over until a merger is completed.

Opel employs 25,000 staff in four German plants.

It is part of a GM Europe operation that employs more than 50,000, with car manufacturing plants in Spain, Poland, Belgium and Britain, where Opel cars are sold under the Vauxhall brand, as well as engine and parts sites such as Aspern near Vienna.

Like its parent GM, Opel has suffered acutely from the worldwide economic slowdown. Its fate is being followed closely in Germany, where the auto industry remains a potent symbol of the country's postwar recovery and export-driven economy.

Merkel faces an election in September and was keen to ensure a deal that would avert large job losses.

Update On GM's Impending Bankruptcy

Here is a good update on the events leading up to Monday's deadline for General Motors.

From Yahoo News:

The speed at which General Motors Corp. exits bankruptcy protection would depend a lot on the shape the company is in when it enters. GM has three more days to tidy up.

Bankruptcy experts say the more operational, labor and financial concessions the automaker gets lined up in advance of its likely Chapter 11 reorganization, the faster the ailing automaker can emerge a leaner, stronger company — one that will be nearly three-quarters-owned by taxpayers.

More pieces started coming together Thursday after a bloc of GM's biggest bondholders agreed to the Treasury Department's sweetened deal to wipe out $27 billion of the automaker's unsecured debt in exchange for company stock.

Workers across the country won't know until Monday which 14 plants GM will close, shedding 21,000 more jobs, but an announcement on the fate of GM's Hummer brand is expected Friday, when talks are scheduled to resume in Germany about the future of GM's European Opel unit.

GM's union employees also finish voting Friday on whether to ratify a modified contract that would cut some of their benefits but slash the automaker's labor costs.

And GM's board of directors will begin two days of meetings to decide what the automaker will do when its government restructuring deadline arrives Monday.

A person familiar with GM's plans said it was "probable" that the company would file for Chapter 11 bankruptcy protection Monday. The person did not want to be identified because the plans were still under discussion with the U.S. and Canadian governments.

GM's new road map, outlined in a regulatory filing Thursday, would briefly send the automaker into bankruptcy protection, erase most of its debt and eventually have it emerge leaner and stronger.

A senior Obama administration official estimated that GM would be under bankruptcy protection for 60 to 90 days, longer than Chrysler's expected reorganization because GM is bigger and more complex. The official spoke on condition of anonymity because of the sensitivity of the negotiations.

The U.S. Treasury, which already has loaned GM $19.4 billion, would get 72.5 percent of the new company's stock and provide $30 billion in additional financing to keep the new GM operating under bankruptcy protection.

Canada's government is expected to provide an additional $9 billion, the administration official said.

A United Auto Workers trust that will take over retiree health care expenses will get 17.5 percent, and the old GM, effectively owned by the bondholders, would get a 10 percent stake.

GM's existing shareholders will probably lose everything.

"It's fair to say that there would be little to no recovery," the official said.

The proposal is similar to what has happened to Chrysler, already under Chapter 11 protection. A bankruptcy judge is expected to decide Friday whether to approve the sale of most of its assets to Italian carmaker Fiat Group SpA.

The administration official said that although the government hopes to get back as much of the money loaned to GM and Chrysler as possible, it never envisioned recovering much of the initial $13.4 billion in aid.

Eventually, the government hopes, GM can return to profitability, which would allow the government to sell its GM stock. But the risks for taxpayers are daunting, with U.S. auto sales near their lowest level in 27 years.

"We will come out of this rid of some of the historic legacy costs that have been dragging us down for the last 20 years or so," GM Vice Chairman Bob Lutz said Thursday at an Automotive Press Association luncheon in Detroit. "We will come out of it with an all new focus on product development."

Under the government's offer, bondholders would get 10 percent of the stock in a newly formed GM, the same as a proposal that they shunned earlier this week. But the new offer also gives them warrants to buy an additional 15 percent stake, possibly at a discount.

That would come only if they agree to support selling GM's assets to a new company under bankruptcy court protection.

The revised offer amounted to an ultimatum: Go along with the government auto task force's proposal or face substantial reduction in the amount of stock and warrants they will get.

"They have sweetened the deal by adding the warrants to the equation," said Pete Hastings, senior analyst with Morgan Keegan & Co. "It's enough for me to have moved from rejecting the deal and trying our luck in bankruptcy court to the side of recommending the deal."

A bloc of bondholders who represent about 20 percent of GM's $27 billion in unsecured debt called the deal unfair but said they'll take it rather than roll the dice in bankruptcy court and risk getting even less.

Two coalition of smaller bondholders, meanwhile, opposed the offer, saying it remained unfair to retirees who depend on GM bonds for income and was overly favorable to the UAW.

Union President Ron Gettelfinger said in a telephone interview he did not want to get into a debate with bondholders while the union was pushing for ratification of concessions to GM. Union members were to wrap up voting Friday.

The filing didn't specify how many bondholders would be needed to make the deal work. The government had demanded that 90 percent agree to the previous offer, and it fell far short. The Obama administration official said the government would not require a specific percentage of bondholders to approve the new proposal but would make a judgment call based on the level of support.

Representatives of the committee of larger bondholders were trying to contact the thousands of GM bondholders before a deadline of 5 p.m. Saturday.

The government plan envisions the slimmed-down new GM with $17 billion in long-term debt and $9 billion in debt-like preferred shares. That would be 61 percent less than its debt load now.

Only $8 billion of the existing U.S. government loans would remain on the books. The remainder would be converted into equity and preferred shares.

The Obama administration official said the holders of GM's $6 billion in secured debt would be "protected" but declined to elaborate.

Trading of GM shares was halted for a short time Thursday morning. They fell 3 cents to end at $1.12 after a day of volatile trading.

General Motors Withdraws Offer for Bond Debt Swap, Bankruptcy Imminent

General Motors World Headquarters








General Motors Corp. on Wednesday withdrew its offer to swap bond debt for company stock, saying that too few bondholders agreed to the deal. The move sets the stage for what almost certainly will be a bankruptcy filing.

GM has until Monday to finish restructuring or file for reorganization under Chapter 11. But the company said Wednesday that its offer to exchange $27 billion in unsecured debt for 10 percent of the company's stock had failed.

GM has received $19.4 billion in federal loans. The Monday deadline was set by the government and includes debt reduction, labor cost cuts and plant closures.

The automaker said its board will meet to decide its next step.

"The principal amount of notes tendered was substantially less than the amount required by GM to satisfy the debt reduction requirement under its loan agreements with the U.S. Department of the Treasury," GM said in a statement issued Wednesday.

The Obama administration has said it would only provide more funds if 90 percent of the bondholders, as well as unionized workers, agreed to concessions that substantially reduced GM's costs.

There was a small hope Tuesday that GM could avoid a bankruptcy filing when the United Auto Workers union disclosed that it would take a 20 percent stake in GM — down from the original plan of 39 percent. That seemingly freed 19 percent of the Detroit-based company's shares to sweeten the pot for its recalcitrant bondholders.

But because the bondholder deal did not go through, the equity freed by the UAW deal now apparently will go to the U.S. government, which may have to commit billions more for GM's restructuring in court.

The government's stake in the company originally was to be 50 percent, according to GM's regulatory filings. But it now could be as high as 69 percent. The Canadian government also could get equity for up to $8 billion in aid for the automaker.

Such an arrangement would leave bondholders back where they started — and a Chapter 11 filing all but certain. The deadline for GM's bondholders to tender their debt was midnight Tuesday.


Source: Yahoo News

Update On GM Progress (With Comments From Obama)

This is the last week before GM faces its June 1st deadline. I have included the scurrying events taking place this week.

From Automotive News:

UAW officials will gather on Tuesday to hear how many more U.S. factory jobs GM will cut as the 100-year-old automaker enters what may be its last week outside bankruptcy.

Union officials representing 54,000 General Motors workers are scheduled to meet in Detroit to prepare for a quick ratification vote on a cost-cutting labor deal negotiated last week. The union aims to complete those votes by Thursday.

Approval of the contract, which would change payment terms on $20 billion owed to a UAW trust fund, represents one of the hurdles for GM to clear before a June 1 deadline set by the Obama administration.

GM, which has received $19.4 billion in government funding since the beginning of the year, has been struggling to cut costs and reduce debts in order to continue to receive more government aid.

The company on Friday said it expected to need another $7.6 billion from the U.S. Treasury after June 1.

Across the border in Canada, GM workers at plants in Ontario on Monday ratified concessions negotiated last week with a vote of 86 percent in favor.

"This has been a grueling restructuring process, and no one has felt that more than our members and retirees," Canadian Auto Workers President Ken Lewenza said in a statement.

The new contract cuts GM's hourly labor costs in Canada by almost 30 percent, including an earlier round of concessions.

Task force on task

Meanwhile, GM and the U.S. auto task force worked through the weekend on a restructuring expected to send the automaker into bankruptcy.

"We have routine and frequent contact with the task force," GM spokesman Greg Martin said of the White House-appointed panel overseeing the overhaul of GM and bankrupt Chrysler.

GM faces a series of interim deadlines through this week. That includes a decision expected this week by the German government on the preferred bidder for GM's Opel unit.

GM will also learn on Wednesday how much of its $27 billion in bond debt was tendered in exchange for shares. GM has set a target of slashing 90 percent of its bond debt, a goal analysts see as unreachable.

Wednesday's bondholder deadline for GM coincides with an equally crucial turning point for its smaller rival Chrysler, which has been operating in bankruptcy since April 30.

Bankruptcy Judge Arthur Gonzalez could rule as early as Wednesday on whether Chrysler will be allowed to sell its most valuable assets to a new company that would be under the operational control of Italy's Fiat S.p.A.

If that approval is granted, a deal to create a merged Chrysler-Fiat with the backing of the U.S. government could be closed by the middle of next month.

Chrysler dealers object

The fiercest opposition has come from the ranks of the 789 dealers that Chrysler wants to drop from its retail network.

"Instead of allowing the free market to determine which dealers survive, Chrysler and the government are effectively playing the roles of judge, jury and executioner," a committee of dealers opposed to the action said in an e-mail seeking support for their position on Monday.

About 330 Chrysler dealers from 47 states have joined the group, lawyers for the group said in a court filing on Monday.

At Richard Chrysler Jeep Dodge, about 45 miles west of Chicago, on Monday a steady stream of shoppers were looking for a deal on the 50 remaining vehicles on the lot.

"We don't know why we're on the (closure) list," said Marni McClennan, a saleswoman at the dealership. "The irony is we could do with more inventory right now because we're actually selling cars. We've had so many people coming in over the past few days it's hard to keep up.

A U.S. Treasury spokeswoman declined to comment on the status of GM negotiations.

GM and the UAW reached a tentative contract last week but details of the proposed pact have not yet been released.

Local UAW bargaining units posted notices for workers to be prepared to vote on the new contract within a day after they were briefed on its details.

That fast-track schedule is needed "to meet the United States government-issued deadline," UAW Local 276 President Enrique Flores said in posting on the local's Web site.

Import controversy

A key question is whether GM rolled back on plans to cut 21,000 UAW-represented factory jobs at the same time that it presses ahead with increased imports to the United States from its factories in China, Mexico and South Korea.

Under pressure from the Obama administration, GM has been rushing to complete plans to cut costs and debt and spin off brands including Saab, Opel, Hummer and Saturn.

But bondholders have balked at proposals that they forgive debt in exchange for a 10 percent stake in a restructured company.

Under GM's current plan, a UAW trust fund for health care would get about a 39 percent GM stake. The U.S. Treasury would hold a 50 percent stake. Current shareholders would be left with just 1 percent of a restructured company.

The standoff between GM and its bondholders sets the stage for a bankruptcy filing, analysts have said.

A person familiar with Obama administration thinking on the matter said the administration was continuing to engage with GM bondholders to reach agreement on restructuring.

The person, who was not authorized to speak publicly on the situation, reiterated that there were no plans to steer GM into a bankruptcy filing before June 1.

Shares of GM, which the automaker has warned could be worthless in a bankruptcy, fell 36 percent from their highs in volatile trading last week to $1.43.

The U.S. government has provided a combined $36.6 billion to GM, Chrysler and their financing units since December.

In an interview broadcast over the weekend, Obama said he hoped GM and Chrysler would emerge from restructuring "leaner, meaner, more competitive."

"Ultimately, I think that GM is going to be a strong company," he said.

First Delivery of BMW Mini E All Electric Vehicle

Peter Trepp and His Newly Delivered Mini E







Here we go. The $850 per month Mini E has started rolling out to customers. About 200 will be delivered to California customers and 200 to NY/NJ customers. Basically, BMW is using this program as a "test drive" to gather data for future EV projects and at the end of one year, the electric Minis must be returned. If the vehicle delivers as promised, then returning the car would be very difficult indeed.

From USA Today:

Peter Trepp just can't keep his foot off the accelerator of his new Mini E. Sure, it's supposed to be an earth-friendly car. He even says he's trying to learning to nurse it around town to get the best range. He points out the "power meter" on the dashboard aimed at helping drivers conserve energy. But he admits the acceleration from a complete stop is so breathtaking, he become a lead-foot. "I've been racing it a bit," Trepp admits.

Trepp, a venture capitalist specializing in green industries, has become the first customer to lease a new Mini E. BMW's Mini has made 500 of the cars that it is

leasing for about $850 a month to learn more about how electric cars will hold up in service. Trepp has Number 111. Interviewed by Open Road at this home this weekend, he says he's not sure why he was picked as the first customer -- except maintaining a blog on his electric-car experience apparently didn't hurt matters. (Click here to see it.)

He picked up his car Friday and crawled 30 miles home through the usual obscene Los Angeles traffic to the Pacific Palisades section of Los Angeles, where he says the neighbors have already taken notice. On Saturday, he showed it off to about 100 guests at a party at his home. A car has close up to really see the E-features. The silver Mini E is emblazoned in fairly low-key fashion with a few electric-plug graphics but nothing that shouts to the world that it has a unique powerplant underneath its sheet metal. Trepp says he's going to try to gets splashier graphics.

The Mini E will become the third car in the Trepp household. Married with two young boys, Trepp says he plans to hang on to his Audi Q7 SUV and the Toyota Prius. The Mini will have a comparatively easy life since Trepp's commute is only about 15 miles roundtrip a day to nearby Santa Monica. He'll charge up the car from a 240-volt outlet that was installed in his garage. The Mini E can go about 156 miles between charges, says BMW. It has no auxiliary engine, like the small gas-engine that will be part of the Chevrolet Volt. Trepp figures it will be perfect for his commute. The Mini E is no family vehicle -- not with the backseat filled by 600 poundsof batteries, the same type that power laptop computers. But still, Trepp may have trouble keeping it to himself. His wife, Suzanne, has "gotten behind the wheel and she loves it."

General Motors Gets Another $4 Billion - How does That Make You Feel?

GM needs to make a $1 Billion note payment and is facing a very probable bankruptcy, yet now we read that they are receiving another $4 Billion loan from Uncle Sam. How does that make you feel? I find it inconceivable as well as irresponsible that we would give a huge loan to a company that is most certainly facing bankruptcy.

What is the point? Will another $4 Billion prevent them from filing for protection? Will more money cause GM to change their business strategies and let them offer better cars next month? They have one week left, so it won't take long for us to find out!

From Automotive News:

General Motors on Friday borrowed another $4 billion from the U.S. Treasury and won a cost-cutting deal from Canadian auto workers as a showdown with bondholders set the stage for a bankruptcy filing by the end of the month.

The latest emergency funds extended by the Obama administration take the total government funding to keep GM afloat since the start of the year to $19.4 billion.

GM said it expected that total to rise to $27 billion after June 1, a government-imposed deadline for the embattled automaker to achieve a sweeping restructuring analysts say will require bankruptcy to complete.

The tentative agreement with the Canadian Auto Workers union, if ratified, would reduce hourly compensation costs by about 28 percent after including a round of concessions the union agreed to give in March.

A day earlier, GM won similar concessions from the UAW to reduce operating costs and pay the union in stock instead of cash to fund a retiree healthcare trust.

Along with plans to drop dealers and unprofitable brands Hummer, Saturn, Pontiac, Saab and Opel, the pair of labor deals would help clear the way for GM to enter bankruptcy protection with the backing of the Obama administration.

"All of our discussions that we had, it's very likely that they will go into Chapter 11," CAW President Ken Lewenza said at a Toronto news conference to announce the union's tentative contract agreement with GM.

In Europe, GM also appeared to be nearing a resolution of its long-running effort to find a buyer for its Opel unit.

Magna International emerged as the favorite to acquire Opel after top German officials said Canada's largest car-parts group had submitted a better plan than rival bidders Fiat and Belgian-listed private equity investor RHJ International.

Bondholders next

GM faces a June 1 deadline to restructure its debt and operations and has said it could file for bankruptcy if it fails to get bondholders to agree to forgive some $24 billion -- or 90 percent -- of the amount they are owed.

Under Obama administration orders, GM has offered bondholders a 10 percent stake in a restructured company.

A spokesman for a committee representing GM bondholders said institutional investors solidly oppose that offer as insufficient.

"It's been a universal no from the get-go," said Nevin Reilly, a committee spokesman. "Bondholders are being seen as speculative bad guys; but bondholders are investors, many of whom put their retirement money into GM."

Creditors have complained their rights have been ignored in the restructuring of both GM and its smaller rival Chrysler, which has been operating in bankruptcy since April 30.

GM and Chrysler plan to drop about 2,400 U.S. dealerships in the next 18 months, a move criticized by some U.S. lawmakers.

Critics argue that the Obama administration has favored the position of unionized auto workers and has run roughshod over claims from other creditors in the process.

Four Republican lawmakers sent a letter of protest to Treasury Secretary Timothy Geithner on Friday saying that the Obama administration was undermining GM bondholders in order to favor the UAW, a political ally.

"We are extremely concerned that in the name of restructuring General Motors, the presidential task force on the auto industry has begun waging what some believe amounts to a war on capital," the letter said.

"Bondholders must have a seat at the table during negotiations in how the company would be restructured," said the letter to Geithner from Representatives Jeb Hensarling, Eric Cantor, Mike Pence and Pete Sessions.

Bondholder sacrifice

Austan Goolsbee, a member of the White House Council of Economic Advisers and the autos task force, said GM bondholders need to recognize that they must sacrifice.

Goolsbee said he expects GM's restructuring efforts to run right up to the June 1 deadline but not beyond. "Usually these things, and as you saw with Chrysler, go right up to the deadline," he said.

The CAW's Lewenza said the Canadian union had been told that it needed to reach a new contract deal with GM urgently so that Obama could review the terms of GM's business plan.

Lewenza said he was told that Obama would need to see the GM business plan, which will include details of how many jobs it will cut, by the weekend.

The Obama administration steered Chrysler into bankruptcy with an aim to push it through the court process within 60 days. That bankruptcy has been watched as a kind of dry run for the more complex reorganization expected from GM and has moved quickly so far.

The Chrysler plan is to sell substantially all of its assets to a new company owned by Fiat, a UAW healthcare trust, and the U.S. and Canadian governments.

Fiat, Chrysler and the automaker's creditors filed court papers on Friday in support of the planned sale and urged a federal judge to reject an appeal by a group of Indiana pension funds that have sought to have the transaction postponed.

Fiat said in court papers that it was concerned about the "deteriorating value" of Chrysler's assets and said a delay "could ultimately prove fatal" to its plans.

GM shares -- which the automaker has warned could be worthless in bankruptcy -- closed down 25 percent on Friday.

UAW and GM Reach Tentative Agreement.

Ron Getelfinger, UAW President

The UAW says it has reached a tentative new contract with General Motors and the U.S. Treasury Department aimed at helping the automaker restructure.

The terms include reworking $20 billion in debt owed to a UAW-administered retiree health care trust known as a Voluntary Employees' Beneficiary Association, or VEBA, the union said in a statement today.

Terms were not released, pending a ratification vote by rank-and-file union members. GM declined to comment.

The accord comes as GM faces a June 1 deadline to prove its viability to the federal government and a probable Chapter 11 bankruptcy filing. Along with the labor concessions, GM and Treasury also are asking GM bondholders to forgive about 90 percent of that unsecured debt.

By winning a new labor deal with the consent of the UAW and the Obama administration, GM is in a position take a plan for creditor concessions into bankruptcy even if it fails to win support from bondholders, analysts said.

"I'm convinced that they have no choice but to file bankruptcy," said Scott Peltz, managing director at the accounting and consulting firm RSM McGladrey in Chicago. "To the extent that you have constituencies with whom you've made an agreement prior to filing, it makes the outcome that much easier to achieve."

The automaker has offered bondholders with $27 billion in GM debt a 10 percent stake in the reorganized company. Bondhdolders have until the end of Tuesday to accept that offer.

The embattled automaker has indicated that it would likely file for bankruptcy unless about $24 billion in that bond debt -- or 90 percent of the total -- is extinguished in the debt exchange.

"I think the bond exchange that's on the table right now is dead on arrival, so unless the deal is somehow sweetened, then there's no way they're going to get the 90 percent approval that they need," said Pete Hastings, a fixed-income analyst at Morgan Keegan in Memphis, Tenn.

"All this is just positioning, in my view, for the bankruptcy filing that we expect to happen in the relatively near future."

GM has offered Treasury a majority stake in a restructured company. The UAW would get 39 percent, while existing shareholders would be left with a 1 percent ownership stake.

Treasury has kept GM operating with about $15.4 billion in bailout loans.

The company was seeking UAW concessions at least as deep as those negotiated last month by Chrysler LLC. That contract resulted in the union's allowing Chrysler to cut a $10.6 billion VEBA obligation to $4.59 billion in cash and the remainder in Chrysler equity.

That will give the UAW VEBA 55 percent of the equity in a new Chrysler when it emerges from Chapter 11 bankruptcy in a partnership with Italian automaker Fiat S.p.A.

Earlier this year, UAW workers at GM and Chrysler also agreed to forfeit cost-of-living raises, lump-sum bonuses and some break time.

Source: Automotive News

What is To Become of Dear Old General Motors?

A GM EV1 Prototype of a Series Hybrid - 1999










They have until June 1st. All indications point to utter failure. What will become of former US business icon, General Motors?

They need to sell Saturn.
They need to sell hummer.
They need to sell Opel.
They need to come to terms with the Canadian Auto Anion.
They need to make a one billion dollar payment.

They can do none of the above. What I would like to see GM do is repay the billions that were given them by the taxpayers of the United States. Do you think this will happen? Neither do I.

I would like to see them resume production of the EV1 and S-10 Electric pickup. Do you think that will happen? Neither do I. I would also like to see GM make the Volt TODAY with the Panasonic PbA battery that gave the EV1 a 100 mile range. That will not happen either. We have to wait another two years for them to perfect a Li ion battery for the Volt that may be incapable of perfection.

But really, what should be done with General Motors? Shouldn't they be left out to dry and go belly up? Then their sales would plummet like never before as auto buyers shy away from a miserable, decrepit bankrupt company and head over to the Toyota or Honda dealership. It is time for GM to be shuttered, have all their assets sold at auction with the proceeds going back to the US Treasury.

Daimler Acquires 10% Equity Stake in Tesla Motors

Here's some big news. Daimler has formally invested in Tesla Motors in order to further strengthen their alliance. This collaboration insures that Daimler receives the help it needs to get their electric Smart cars to market and also helps insure Tesla's financial viability in the near term.

From Automotive News:

Daimler AG said today it has acquired an equity stake of nearly 10 percent of Tesla Motors Inc.

The two companies have been working closely to integrate Tesla's lithium-ion battery packs and charging electronics into the first 1,000 units of Daimler's electric Smart car.

Daimler said its stake in Tesla will allow the companies to collaborate even more closely on the development of battery systems, electric drive systems and in individual vehicle projects.

"Our strategic partnership is an important step to accelerate the commercialization of electric drives globally," said Thomas Weber, Daimler's head of research.

Tesla, which is based in San Carlos, California, is the only production automaker selling a highway capable electric vehicle in North America and Europe.

Tesla CEO Elon Musk said the lithium-ion pouch-cell battery developed by Daimler is of interest to Tesla.

"We are looking forward to a strategic cooperation in a number of areas including leveraging Daimler's engineering, production and supply chain expertise. This will accelerate bringing our Tesla Model S to production," Musk said in a statement.

As part of the collaboration, Herbert Kohler, Daimler's vice president of E-Drive and Future Mobility, will take a seat on Tesla's board of directors.

Tesla currently sells the Roadster in North America and Europe. The Roadster can travel 244 miles or 390km per charge with zero tailpipe emissions and has fuel economy equivalent to 256 miles per gallon.

In March, the company unveiled the Tesla Model S, which it says is the world's first full electric sedan. Tesla plans to produce the car in California starting in late 2011.

Daimler is seeking to be a leader in the industrialization of lithium-ion technology.

In March, the company founded the Deutsche Accumotive GmbH, a joint venture with Evonik Industries AG. The joint venture will make the first vehicle manufacturer to develop, produce and market batteries for automotive applications, Daimler said.

The German carmaker has been testing 100 Smart ForTwo electric cars in London since 2007. Later this year, the Smart assembly plant in Hambach, France, will start production of up to 1,000 ForTwo cars with electric drive. The cars will be used for testing programs in Berlin and Italy.

Daimler is also starting small-series production of the Mercedes-Benz B-class with a fuel cell drive system later this year. In 2010, the company will introduce its first battery-powered Mercedes-Benz.

Starting in 2012, Daimler plans to equip all Smart and Mercedes-Benz electric vehicles with own produced lithium-ion batteries.

US and California Fuel Rules to be Combined By Obama

Apparently, Barack Obama thinks the US fuel standards should match those of California. Obviously a step in the right direction, but how much better off would we be if CARB had held onto its ZEV mandate of the late 90's? We would probably have EV1, Chevy S10 Electrics, Ford Ranger EV's, Honda EV's and Toyota RAV4 EV's all over the place by now. AND, we would have much more improved battery chemistries to boot.

From Automotive News:

The Obama administration was poised to unveil on Tuesday a new auto fuel-efficiency policy that would resolve a major dispute between California and the U.S. government over emissions, industry and other sources said.

The proposal to run from 2012-2016 would maintain a single national standard for fuel economy and give automakers flexibility for meeting it, people with knowledge of the plan said.

The effort would harmonize California's drive to curb greenhouse gasses by reducing tailpipe emissions with the federal approach for determining miles-per-gallon targets based on vehicle size and other attributes, the sources said.

The Wall Street Journal, citing people familiar with the plan, said the strategy calls for raising the overall fuel economy of cars and trucks to 35 mpg by 2016, four years faster than the current schedule.

In March, the government said fuel-economy standards for all U.S. light vehicles will rise 8 percent to an average of 27.3 mpg for the 2011 model year and will cost the industry $1.46 billion to make the change.

Under that timetable, cars will be required to travel an industry average of 30.2 miles on each gallon of fuel, up from 27.5 mpg, and light-truck standards will increase by 1 mpg, to 24.1 mpg, the National Highway Traffic Safety Administration said. The combined fleet average will rise by 2 mpg.

Those rules were the first fuel-economy mandates set by the Obama administration. They were to use a new system that sets standards for individual models based on their size.

They stem from the December 2007 U.S. energy law that had been scheduled to lift standards 40 percent by 2020, to a fleetwide average of at least 35 mpg.

In January, President George W. Bush decided not to establish the first phase of that increase because of the industry's financial straits and passed the decision to Obama. Because of those financial pressures, the administration postponed making any reqirements beyond the 2011 model year, Charles Territo, a spokesman for the Alliance of Automobile Manufacturers, said in March.

Federal law requires NHTSA to give automakers at least 18 months lead time before imposing higher standards under the corporate average fuel economy program.

GM Future and Possible Bankruptcy Clarified

Have you wondered what GM is trying to prove or what steps they need to take in order to avoid bankruptcy? Do you think they can avoid it? I believe it is inevitable and would prefer they started the process already and quit wasting time.

Here are the key highlights and associated dates:

• May 20 - Italy's Fiat S.p.A. is to present its plan for GM's Opel European operations under a deadline set by Germany. Fiat is in the process of acquiring as much as 35 percent of Chrysler.

• May 27 - Deadline for holders of some $27 billion of GM unsecured debt to decide whether they will exchange their debt. GM has said that it must get a 90 percent participation or it would have to seek bankruptcy protection.

• May 28 - GM plans to make monthly payment to North American parts suppliers, moving them forward from June 2.

• May 31 - Some 1,100 U.S. dealers notified by GM on May 15 that their long-term franchise agreements ending in October 2010 would not be renewed have until the end of the month to submit new information to the automaker. GM does not believe that new information would change its position.

• June 1 - $1 billion bond payment due, but GM has said it did not expect to make the payment because it would either be restructuring the debt voluntarily or through a bankruptcy court process.

• June 2 - Automakers scheduled to report May auto sales. Investors could put a special focus on Chrysler, which filed for bankruptcy protection April 30, and GM with expectations now leaning toward a bankruptcy filing.

The Misubishi iMiEV to Be Introduced in UK

This is a great little car that I wish would hurry to the US marketplace.

From Register Hardware:

The Mitsubishi iMiEV will go on sale in the UK this November, Register Hardware can reveal.

Mitsubishi's iMiEV: 50 of the £20k motors will arrive in November

Mitsubishi told us this morning that 50 of the five-door runabouts will arrive in the first batch, with a further 150 of the cars allocated to Blighty for the first half of 2010. Shipment numbers will increase if demand warrants it, of course.

The firm’s already talking about annual iMiEV demand hitting the 40,000 mark sooner rather than later – up from 30,000 cars the last time a number was mentioned back in April.

Each iMiEV will cost between £20,000 and £25,000 ($30,844-37,800/€22,339-27,900), depending on the vagaries on the Sterling/Yen exchange rate.

The cost of each motor will include the outright purchase of the battery pack - so no leasing arrangements – which will come with a ten-year warranty.

Sales and servicing will be available nationwide from selected Mitsubishi dealers, who’ll join the iMiEV programme in much the same way as Mitsubishi performance car support is currently available from its Ralliart dealers.

General Motors to Eliminate 1,100 Dealerships

General Motors on Friday told about 1,100 of its dealers — one in five — that they would be dropped by late next year, adding to the economic pain radiating from the beleaguered Detroit automakers to cities and towns across the country.

Including Chrysler's decision a day earlier to eliminate a quarter of its own, about 1,900 dealerships — many pillars of their communities and heavy advertisers for local media — learned in a matter of 48 hours that they would be forced either to sell fewer brands or close altogether.

The GM dealerships will be eliminated when their contracts end late next year.

"We're 98 years old. We're two years from a hundred, and I don't want to go out at 99 years," said Alan Bigelow, whose family runs a Cleveland-area Chevrolet dealer that learned it was on GM's hit list.

While GM doesn't own the dealers, the company says its network is too big, causing dealers to compete with each other and giving shoppers too much leverage to talk down prices and hurt future sales.

Several hundred of the GM dealers knew already they were headed for closure, but most of them learned for the first time Friday. The National Automobile Dealers Association, an industry group, says the GM and Chrysler cuts combined could wipe out 100,000 jobs.

Both GM and Chrysler are scrambling to reorganize and stay alive in a severe recession that has pummeled car and truck sales for U.S. automakers, which had already been losing market share to foreign companies for decades.

Chrysler LLC is already in bankruptcy protection, and industry analysts say General Motors Corp. is making its cuts now in preparation for a bankruptcy filing June 1. The company says it would prefer to restructure out of court.

GM declined to reveal which dealers will be eliminated. Many dealers vowed to fight, first through a 30-day company appeal process, then possibly in court.

GM's dealers are protected by state franchise laws, and the company concedes it would be easier to cut them if it were operating under federal bankruptcy protection. GM says it's trying to restructure outside of bankruptcy because of the stigma of Chapter 11.

Source: Yahoo News

Toyota To Lease 150 Plug-In Hybrid Vehicles in Europe

Charge Port of a Plug-In Prius




Toyota has announced it will make available 150 plug-in hybrid vehicles to various fleets across Europe. They already have some of these vehicles in test modes using NiMH batteries but the difference with this set will be the use of a lithium ion battery pack.

Unfortunately, these vehicles will not be available to the general public for quite some time. Aggravating, since Toyota built the wonderful Toyota RAV 4 EV over 10 years ago. Why would it take so long to bring the relatively simple Prius type plug-in to market? We desperately need these alternate energy vehicles in dealer showrooms.

From Green Car Congress:

Toyota Motor Europe (TME) will lease more than 150 units of its experimental Plug-in Hybrid Vehicle (PHV) to selected fleet customers across Europe as a next step towards commercialization. Toyota says it will deploy more than 500 new PHVs in global trials—including in Europe, Japan and the US—by 2010.

France will be the first country to participate in the three-year European pilot, with discussions ongoing in the UK, Germany and the Netherlands. Based on Toyota’s full hybrid technology, the new PHV will come equipped with a lithium-ion battery, extending the vehicle’s range in electric vehicle mode. The first wave of PHVs will reach Strasbourg in late 2009.

In the future, the PHV will be the perfect complement to Prius. It offers a low carbon transport solution for customers wanting to drive longer distances using electricity, while still experiencing the traditional benefits of a full hybrid. There is no better time to put our new PHV through its paces. We have to assess its performance in a variety of markets with different infrastructure constraints, driving conditions and customer expectations.

—Tadashi Arashima, President and Chief Executive Officer of TME

Toyota’s PHV can be driven as an electric vehicle for city commutes, while for high-speed, long-distance journeys it operates as a full hybrid, with its gasoline engine serving as both a power source and battery generator when required. The battery is charged during driving, deceleration or braking, or by connecting its plug to a standard electrical point at home or at work.

In partnership with EDF, Toyota has been road-testing a PHV (equipped with a Nickel Metal Hydride battery) in Europe since 2007. Around 100 units of the new lithium-ion PHV will be leased to selected fleet customers and public bodies in Strasbourg, France, for a period of three years. (Earlier post.)

Part of the Strasbourg-based PHV fleet will come equipped with an innovative charging system that ensures safe charging, communication between the plug and the vehicle, identification of the vehicle and automatic invoicing of electricity. A large number of charging points will also be established in users’ homes, the offices of business partners, in public parking lots and on public roads.

Better Place Battery Swap Video

Here is a cool video produced by Better Place that demonstrates their battery pack swapping station.

Bob Lutz And Five Other Execs Cash In Their GM Stock

GM World Headquarters







These six executives disclosed that they sold their GM shares this past Friday and Monday. This is an obvious sign of a GM bankruptcy. After all the free money they received from the government, GM simply could not make it work. Once they fold, Ford will be sole survivor of the "Detroit Three" to survive without bankruptcy. Chrysler is currently in the midst of their bankruptcy proceedings.

According to the filings, the five other executives who sold all of their GM stock holdings were: Lutz's successor, Thomas Stephens; GM North America President Troy Clarke; Chief Information Officer Ralph Szygenda; manufacturing chief Gary Cowger; and head of European operations Carl-Peter Forster.

In filings with U.S. securities regulators, the GM insiders led by former Vice Chairman and product chief Bob Lutz detailed stock sales on their behalf on Friday and Monday during a trading window for such transactions.

Lutz, who is now an adviser to the automaker, sold $130,989 worth of GM stock at the closing price of $1.61 on Friday.

That sale of the 81,360 shares cleared out all of Lutz's direct holdings of GM stock, according to his filing with the Securities and Exchange Commission.

GM is headed for either a bankruptcy filing or an out-of- court restructuring that would wipe out current stockholders by flooding the market with new shares to pay off creditors.

Nissan To Build its EV's At Oppama Plant Starting Fall 2010

Early Prototype Of The Nissan EV






Nissan Motor Co., Ltd. will produce electric vehicles (EV) at its Oppama Plant (Natsushima-cho, Yokosuka City, Kanagawa) from fall 2010.

The Oppama Plant is a core base of Nissan’s manufacturing and will be positioned as the model plant for best practices in EV production. In the fall of 2010, the plant will start EV production with capacity of 50,000 units a year, which will continuously increase for the start of EV mass-marketing in 2012.

Motors and inverters will be built at the Yokohama Plant (Takara-cho, Kanagawa-ku, Yokohama City, Kanagawa), and initially in the Zama Operations Center (Hironodai, Zama City, Kanagawa), respectively.

In addition, Automotive Energy Supply Corporation (AESC), one of Nissan’s affiliated companies based in Zama Operations Center, will produce laminated-type compact lithium-ion batteries for EVs.

Honda Insight is First Hybrid Best Seller in Japan

No need for further proof that hybrid and alternate energy vehicles are here to stay.

Honda's Insight ranked as the best selling car among all new vehicle registrations in Japan in April—excluding mini-vehicles with displacement of less than 660cc—with sales of 10,481 units, according to data from the Japan Automobile Dealers Association.

This marks the first time a hybrid model has been the best selling vehicle in Japan for any monthly sales period.

The Insight G. Click to enlarge.

The Honda Fit was the best-selling car among new vehicle registrations in Japan for calendar year 2008 and the fiscal year ended March 31, 2009. Fit was also the industry’s best-selling car for the month of March 2009, for the fourth consecutive month since December 2008, until it was displaced by Insight.

Fit then became the industry’s second best-selling car in April 2009,with sales of 9,443 units. It is the first time Honda has occupied the industry’s top two best-selling car positions.

It the first three months of sales, Insight has sold 19,475 units in Japan.

The Insight combines a 1.3-liter SOHC aluminum-alloy i-VTEC engine and CVT, with the fifth generation of Honda’s IMA hybrid system. The Insight’s IMA system includes a 10 kW (13 hp) electric motor that delivers 68 lb-ft (92 N·m) of torque and a compact Intelligent Power Unit (IPU) consisting of a 5.75 Ah, 100.8V NiMH battery pack, Power Control Unit (PCU), motor Electric Control Unit (ECU), and cooling system

In the US, the Insight carries an EPA city/highway/combined fuel-economy rating of 40/43/41 miles per gallon US.

Source: Green Car Congress

Treasury Secretary Geithner Says GMAC Will Receive Substantial US Aid

Want to hear more lovely news? Our misguided Treasury Secretary, Timothy Geithner has stated that the US government will continue spending good money after bad. Is it really that important that we keep GMAC afloat? How many readers feel that it is time for GM and GMAC to go bye bye? Let's allow better companies to fill the void left by these loser corporations.

From Automotive News:

U.S. Treasury Secretary Timothy Geithner said on Friday that the Obama administration will provide "substantial support" to troubled lender GMAC, a vital provider of financing for the domestic auto industry.

"We're going to provide substantial support to GMAC," Geithner said in an interview with Reuters Television. "It's likely, again, that GMAC will need to take additional capital from the government and we'll be prepared to provide that."

The Treasury and U.S. banking regulators said on Thursday that GMAC needs to raise $11.5 billion to fill a capital hole it could face if the economy were to deteriorate further.

After "stress tests" were performed on the 19 largest U.S. banks, the Treasury and the Federal Reserve concluded that 10 of them need to raise a combined $74.6 billion of capital to build a protective buffer and ensure they could keep lending even in the face of mounting losses.

Geithner said there were some signs that credit conditions were easing and fears of a catastrophic financial meltdown waning. But he said there was still "a long way to go" before credit conditions could be considered normal.

GMAC, partly owned by General Motors, has taken $5 billion in capital from the government already. In addition, the Treasury Department has lent GM $884 million to support GMAC's lending activities. Under the restructuring of Chrysler LLC, GMAC is assuming the business of Chrysler Financial.

As part of the GMAC bailout, GM and private equity firm Cerberus Capital Management LP were forced to reduce their respective 49 percent and 51 percent stakes in GMAC.

Cerberus-owned Chrysler has entered bankruptcy proceedings, and GM has until June 1 to show it can come up with a workable restructuring plan, underlining the importance of GMAC to the struggling U.S. auto industry.

"Financing is critical to this (restructuring) process, and that requires that GMAC have the ability to provide loans that Americans need to buy cars," Geithner said in explaining the Obama administration's rationale for supporting the lender.

General Motors Discontinuing Several Models

The Pontiac GX GXP




What do you think of General Motor's efforts to return to profitibility? Are they doing enough or too little? How much longer should the company be bailed out using public funds?

The latest news is that the company will discontinue the Pontiac G6 GXP, Chevy Impala SS and Cobalt SS. Also on the chopping block is the Cadillac STS-V. The Pontiac G6 announcement is not that surprising, given the entire brand will be phased out by 2010.

What more can GM do at this point? The CEO is gone, brands are being phased out or sold, but the fact remains that GM doesn't sell "must have" products. They have a boring lineup of gas gazzling non-descript cars and trucks. Instead of focusing on hybrids and electrics, they have pushed e85, which is simply not catching on here in the States.

Also, it is taking the company three years to bring a plug-in hybrid vehicle to market when they had the EV1 on the road 10 years ago. Would it have been so difficult to revive that car with lead acid batteries and a small genset? They have all the components needed to start up production once again. Toyota and Honda both have great hybrids at great prices and there is GM, dumbfounded on the sidelines.

Maybe the best possible scenario would be a GM bankruptcy and a start from scratch. Even then, they still have to sell the same old, same old in the showrooms, which is a script for failure. How can they possibly right the ship and get back in the game? Any ideas?

GM Pushes Forward With Volt Project in Spite of Staggering Financial Losses

The 2010 Chevrolet Volt





General Motors is working without interruption on the Chevrolet Volt plug-in hybrid despite mounting financial woes and the threat of bankruptcy, said Tom Stephens, the automaker's product development chief.

"At this point in time, I know of no reason why we can't be in production by November of 2010," Stephens told reporters on the sidelines of an event at the University of Michigan. Earlier today, GM posted a $6 billion net loss for the first quarter, its seventh straight quarterly loss.

Stephens said GM is deciding which of the three other surviving GM brands -- Cadillac, Buick or GMC -- would get a vehicle with the Volt's hybrid powertrain.

"It's best utilized in urban vehicles," Stephens said, referring to the Volt's ability to drive the first 40 miles on electric power only. "We have to consider what is the usage of the person buying the vehicle. For a commuter who drives 40 miles a day and takes it shopping on weekend, it's the perfect application.".

Stephens said the chief guiding factor behind GM's future products is that every vehicle being developed has be a leader in price, quality, styling and performance.

He said CEO Fritz Henderson and other top executives believe "the biggest thing you can do to have a sustainable automobile company is to make great cars and trucks."

Stephens succeeded Robert Lutz as vice chairman of global product development on March 31. Lutz will advise the company through the end of the year.

GM announced today that it is creating the Institute of Automotive Research and Education with the University of Michigan.

Source: Automotive News

Another Massive Loss Posted By General Motors

When will the bloodletting ever abate? How much longer should GM be allowed to wallow before declaring bankruptcy and starting over?

From Automotive News:

General Motors, facing a June 1 U.S. restructuring deadline to avoid bankruptcy, posted its seventh straight quarterly loss in the first quarter as its global auto sales fell 28 percent.

The company said it burned through $10.2 billion in cash while being supported by $13.4 billion in U.S. loans in the quarter and an additional $2 billion since.

The net loss was $6.0 billion, compared with a $3.3 billion loss a year earlier and adding to $82 billion in annual losses since 2004. GM's global revenue declined 47 percent to $22.4 billion.

"Our first-quarter results underscore the importance of executing GM's revised Viability Plan, which goes further and faster to lower our break-even point," said CEO Fritz Henderson in a statement. "Our plan is designed to fix the fundamentals of our business by restructuring and deleveraging our balance sheet, enhancing our revenue capability and dramatically reducing costs."

The first-quarter operating loss was $5.9 billion, compared with an adjusted net loss of $381 million in the first quarter last year.

GM is racing to beat the U.S. auto task force's June 1 deadline to complete a turnaround and secure deals with the UAW and bondholders to reduce debt.

Without additional concessions, Henderson, who took over more than a month ago from the ousted Rick Wagoner, has said the automaker will file for bankruptcy.

Even if it clinches debt-restructuring deals, GM said this week it could issue up to 60 billion new shares to pay off its debt to the government, bondholders and the UAW. That flood of new shares would leave current GM investors with 1 percent of the restructured company and take the value of the stock to less than 2 cents. GM shares fell 10.3 percent on Wednesday to $1.66. "We would like to see actions that will ultimately position GM to be a smaller but profitable automaker along with details on how it will achieve this," S&P equity analyst Efraim Levy said in a statement before today's results were released. "Unfortunately for GM current shareholders, we do not expect them to meaningfully share in any recovery."

Request to creditors GM has asked its three major creditor groups to write off at least $43 billion in debt in exchange for ownership stakes in a restructured company. GM bondholders, who are owed $27 billion, have also been offered new stock in exchange for writing off debt in a bond exchange the automaker launched last week. GM is targeting a reduction of at least $24 billion, or 90 percent, of its bond debt under the plan and has warned that it could be forced into bankruptcy if that cannot be achieved. Barclays Capital analyst Brian Johnson said the success of bankrupt Chrysler LLC in winning approval to sell most of its assets quickly made it more likely that GM would follow its smaller rival into court protection.

GM Will Use its Plug-In Hybrid Technology in One of its Four Core Brands

Good news for alternate energy vehicle fans! From Green Car Congress:

Prototype Saturn Vue PHEV plugging in to a Coulomb Chargepoint (earlier post) in San Jose, CA. Click to enlarge.

In a post on GM’s FastLane blog, Vice Chairman Tom Stephens said that the company will apply plug-in hybrid technology to one of the four core brands remaining after the restructuring: Chevrolet, Cadillac, Buick and GMC.

Saturn currently sells two hybrid vehicles (VUE and Aura with GM Hybrid System) and was scheduled to begin initially offering a two-mode hybrid Vue (earlier post), with a Vue plug-in two-mode hybrid version (earlier post) due in 2011 for use in a cooperative demonstration test fleet with the US Dept. of Energy (DOE) and nonprofit Electric Power Research Institute (EPRI). (Earlier post.)

In 2008, Stephens, then GM Group Vice President Global Powertrain and Global Quality, had said that the Vue two-mode hybrid would deliver about a 50% increase in combined fuel economy compared to the non-hybrid Vue XR and that the two-mode plug-in hybrid would have a battery-powered driving range at low speed of about 10 miles, and could double fuel economy compared to the conventional vehicle on short trips.

Based on the current restructuring plan, GM is accelerating the wind-down or sale of Saturn to the end of this year. (Earlier post.)

Although Saturn’s future is likely not to be within GM now, I can assure you our commitment to hybrid, plug-in hybrid and advanced battery technology is a key element of GM’s reinvention. I’m pleased to let you know the plug-in hybrid technology will be applied to one of GM’s four core brands. Stay tuned for which one, and in the meantime, I’ll enjoy reading the speculation.

Stephens said that GM is still planning initial delivery of plug-in hybrid vehicles using a modified version of the GM front-wheel drive two-mode hybrid system (earlier post) in 2011 to the DOE and EPRI for use in fleets.

The Volt and plug-in hybrid vehicle are two of 14 hybrid and electric vehicles GM plans to offer by 2012. So while it may seem at times we’re taking a step back, we’re really taking two steps forward.

Democratic Lawmakers Propose a Cash-For-Gas-Guzzler Deal

An H2 Hummer - The Epitome of a Gas Guzzler



Democratic lawmakers have proposed a cash-for-guzzlers bill that would provide vouchers of up to $4,500 to people who trade in cars and trucks for new, more fuel-efficient vehicles, Rep. John Dingell said.

The program, if approved by Congress and signed by President Barack Obama, would lead to about 1 million new-vehicle purchases, the Michigan Democrat said in a statement.

Customers would get a $3,500 voucher if they trade in a car that gets less than 18 mpg for a new car with mileage of at least 22 mpg. Vouchers of $4,500 would be awarded if the new car gets at least 10 mpg more than the old, the statement said.

The mpg standard is the EPA's combined city-highway average as listed on a vehicle's sticker.

It was not immediately clear whether the car would need to be a certain age to qualify for the program.

The statement also did not say how the agreement resolved a key difference between previous proposals: whether eligibility would be limited to vehicles made in North America or would include those made overseas.

The U.S. auto industry hopes such a program here can mirror its success in several countries, particularly Germany. So far this year U.S. vehicle sales have plunged 37.4 percent. But Germany, which passed a similar measure in February, posted gains of 19 percent in April and 40 percent in March.

General Motors, in a statement released today, said it supported the measure.

"Scrappage programs implemented in other countries around the world have proven to be very successful in re-invigorating car and truck sales," the statement said.

"The approach of providing vouchers for new vehicle purchases, which is tied to getting older, less efficient vehicles off the road at the same time is a huge win for consumers, the economy and the environment."

UAW President Ron Gettelfinger also endorsed the measure.

"Congress should act right away on this high-priority measure, to deliver an immediate stimulus to our auto industry and to keep Americans working," Gettelfinger said in a statement.

Dingell, Waxman play key roles

"This program will spur consumer demand for new vehicles, thereby injecting much-needed cash into our ailing domestic automakers," Dingell said.

It also would result "in meaningful reductions in energy use by American drivers," he said.

Vouchers would also be offered for swaps of small trucks and SUVs, large light-duty trucks and work trucks, the statement said. The program would be authorized for up to a year.

The agreement was brokered by Dingell and five other Democrats, including Rep. Ed Markey of Massachusetts and Rep. Henry Waxman of California, chairman of the House Energy and Commerce Committee.

A Dingell spokesman did not immediately respond to a question of when and in what form the legislation would be introduced.

Source: Automotive News

GM Looking At Offers for Saturn While Fiat Contemplates GM Europe Acquisition in Addition to Chrysler

General Motors issued a short statement announcing that it is proceeding to the next step with respect to the sale of Saturn.

A number of potential buyers have surfaced and expressed interest in the Saturn brand and retailer network. GM said it will be reviewing expressions of interest from the potential buyers and will look to secure an agreement with a specific buyer later this year.

Separately, Fiat said on Sunday that it was exploring the possibility of merging its auto business and interest in Chrysler with GM Europe to create a large automotive group with more than $100 billion.

The Detroit News reported that sources familiar with the negotiations say GM would have a stake in the new company grouping Fiat, Chrysler and GME operations if a deal were concluded. With annual sales of roughly 6 million cars and trucks, the group would be one of the top three or four in the world.

GM declined to comment on the prospects for a Fiat-GM Europe tie up.

Source: Green Car Congress

US Hybrid Sales Down 45.5% in April

Monthly US sales of hybrids. Click to enlarge.

Reported sales of hybrids in the US reported by Toyota, Honda, Ford, GM and Nissan dropped 45.5% year-on-year in April to 21,735, despite full month sales for the new Honda Insight and the Ford Fusion and Milan hybrids. Total LDV sales in the US were down 34.4%. (Earlier post.)

The reported sales represented a 2.65% hybrid new vehicle market share (based on Autodata’s total LDV sales figure)—the highest monthly new vehicle share for hybrids so far this year, but below the 3.2% high mark in April 2008. Year-to-date in 2009, hybrids are holding a 2.4% new vehicle market share.

Hybrid monthly new vehicle market share. Click to enlarge.

Toyota. Overall, Toyota saw a 62.8% drop year-on-year in its combined hybrid sales in April 2009. Year-to-date US sales of Toyota hybrids through April are down 51% to 49,660 units from 101,334 for the same period last year.

In advance of the market introduction of the new 2010 Prius, Toyota Prius sales dropped 61.5% in April to 8,385 units from 21,757. Other results:

• Sales of the Camry Hybrid were down 67.1% to 2,198 units, representing 8.7% of Camry sales. Sales of conventional Camry models were down 31%.

• Sales of the Highlander Hybrid were down 63.8% to 933 units, representing 16.7% of Highlander sales. Sales of conventional Highlander models were down 37%.

• Sales of the RX 400h Hybrid were down 59.7% to 655 units, representing 10.5% of RX sales. Sales of conventional RX models were up 1%.

• Sales of the GS450h were down 59.8% to 33 units, representing 7.1% of GS sales. Sales of conventional GS models were down 71%.

• Sales of the LS 600h L were down 84.4% to 19 units, representing 2.5% of LS sales. Sales of the conventional LS models were down 60%

Hybrid component of brand sales. Click to enlarge.

Honda. With the first full month of sales of the Insight, Honda moved up to the number two slot behind Toyota, with 5,457 units sold. The Insight sold 2,096 units in April, and pushed combined Honda hybrid sales up 25% year-on-year. In April 2008, Honda had the Civic Hybrid on sale as well as the low-selling Accord Hybrid (25 units in April 2008).

Honda sold 3,361 Civic Hybrids in April, down 22.3% year-on-year, and representing 12.8% of all Civics sold. Sales of conventional Civic models were down 23% in April.

Ford. The addition of the new Fusion and Milan hybrids pushed combined Ford hybrid sales to 2,299 units, up 21% compared to April 2008. Ford posted 1,134 units of the Escape and Mariner Hybrids, down 40.5% year-on-year, and representing 7.3% of Escape and Mariner sales. Sales of conventional Escape and Mariner models were down 13% year-on-year.

OEM hybrid sales as a percentage of total LDV sales. Click to enlarge.

The new Fusion and Milan hybrid sedans sold a combined 1,165 units, representing 5.7% of all Fusion and Milan sales in April. Sales of conventional models of the Fusion and Milan climbed 3% year-on-year in April.

GM. General Motors sold 1,534 hybrids in April, comprising:

• 523 units of the two-mode SUVs (Tahoe, Yukon, Escalade), representing 4.5% of combined sales of those models
• 95 units of the two-mode pickups (Silverado, Sierra), representing 0.27% of sales of those models
• 547 units of the Malibu hybrid, representing 3.7% of Malibu sales
• 338 units of the Saturn VUE hybrid, representing 11.3% of VUE sales
• 31 units of the Saturn Aura hybrid, representing 1.7% of Aura sales

Nissan. Nissan sold 222 units of the Altima hybrid in the US in April, down 72.3% year-on-year, representing 1.8% of Altima sales. Sales of the conventional Altima models were down 46%.

Source: Green Car Congress