Archive for February, 2009

$25 Billon allocated to the Advanced Technology Vehicles Manufacturing Loan Program still untouched

  The future of the American auto industry is getting off to a slow start. The Energy Department has $25 billion to make loans to hasten the arrival of the next generation of automotive technology — electric-powered cars. But no money has been allocated so far, even though the Advanced Technology Vehicles Manufacturing Loan program, established in 2007, has received applications from 75 companies, including start-ups as well as the three Detroit automakers. With General Motors and Chrysler making repeat visits to Washington to ask for bailout money to stave off insolvency, some members of Congress are starting to ask why the Energy Department money is not flowing yet. The loans also are intended to help fulfill President Obama’s campaign promise of putting one million electric cars on American roads by 2015. “Politicians are breaking down the door asking why the money isn’t being …

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GM asks government officials for additional $16.6 billion

  General Motors Chief Executive Officer Rick Wagoner pressed his case for as much as $16.6 billion in U.S. aid to a White House auto task force in a session that ran almost six hours, according to a person familiar with the matter. Meeting today for the first time with a panel of government officials and advisers that has the authority to push the biggest U.S. automaker into bankruptcy, Wagoner, Chief Financial Officer Ray Young and Chief Operating Officer Fritz Henderson provided additional details of the company’s plans to trim its brands to four and eliminate 47,000 jobs worldwide, according to the person. The task force attendees were led by Ron Bloom and Steven Rattner, according to the person, who requested anonymity because the meeting was private. Bloom, a former Lazard Ltd. vice president, has served as an adviser to the United Steelworkers …

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GM burns through $6.2 billion in the fourth quarter

  General Motors (GM), after posting a $9.6 billion fourth-quarter loss Thursday, said its auditors are examining whether they believe GM can continue as a going concern — a foreboding sign that could mean the auditors are worried GM can’t stay in business or will need to file for bankruptcy protection. Chief Financial Officer Ray Young says a lot is riding on whether GM gets more government aid. GM has already received $13.4 billion, but is burning through billions each quarter. During the fourth quarter, the automaker went through $6.2 billion. The first quarter of 2009 is expected to be worse. Young says GM expects to receive the “going concern” notice, which casts doubt on the future of the company. Many companies that get this notice soon file for bankruptcy court protection. If it comes, it will be in GM’s 10-K filing, …

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Magna, North America’s largest auto-parts supplier posts second straight quarterly loss

  Magna International Inc., North America’s largest auto-parts supplier, reported a second straight quarterly loss as the recession eroded vehicle demand. The fourth-quarter loss was $148 million, or $1.33 a share. Excluding costs for cutting jobs and writing down assets, Magna had a loss of 68 cents a share, wider than the 64-cent average estimate of 14 analysts surveyed by Bloomberg survey. A slump in U.S. auto sales last year to the lowest since 1992 helped chop Magna’s quarterly revenue by 29 percent to $4.84 billion. General Motors Corp., Ford Motor Co. and Chrysler LLC represent as much as 85 percent of North American revenue at Magna, which makes parts and also assembles vehicles. “We are facing one of the most difficult automotive environments in decades,” Co-Chief Executive Officer Siegfried Wolf said today in a statement. Customers cut quarterly output …

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Chrysler denies having talks with Chinese Automaker on asset sales

  Chrysler LLC said on Monday that it was not in talks with any Chinese automakers regarding an assets sale, denying a Chinese report of Beijing Auto’s intention to purchase Chrysler. “We are no longer engaged nor pursuing any discussions with any automakers other than Fiat,” said Chrysler spokesman Stuart Schorr in an email statement to China Daily. “We must emphasize we have an exclusive non-binding agreement with Fiat. Chrysler is 100 percent focused on executing our viability plan and potentially forming a global alliance with Fiat.” China Business News reported on Monday that Beijing Auto, the Chinese partner of Hyundai Motor and Daimler AG, was interested in buying assets and technologies in both the vehicle and engine segments for its self-developed brands, citing an unnamed executive of the Chinese automaker. However, Reuters reported later that a Beijing Auto spokesman also denied the purchase report, …

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General Motors and Chrysler are seeking as much as $39 billion in federal loans

  The U.S. stimulus package — the $787-billion spending initiative designed to help fix the suffering economy, save jobs and lift consumer confidence — includes few measures aimed at directly boosting sales of new cars and trucks. The collapse of auto sales has led the domestic auto industry so far to seek nearly $100 billion in federal assistance and put tens of thousand of jobs in jeopardy. But key provisions of the stimulus package that would have given auto sales a substantial boost, and helped the industry out of its current woes, were left out due to both a lack of consensus within the automotive industry and last-minute efforts to trim the size of the package. “When you look at the whole stimulus package, there is really not that much that is directed at consumers, or consumer spending,” said Charles Territo, spokesman for the …

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Swedish automaker Saab files for bankruptcy protection

  Saab, the Swedish automaker, filed for bankruptcy protection Friday and asked its government for financial support to remain in business as an independent company, separate from General Motors, its parent. It was the latest example of auto companies asking governments in different countries — including the United States and Canada — to step in with aid, opening the door to those governments playing a direct role in deciding the future form of their automobile industries. “This looks to me like it’s going to be a subsidized industry forever,” said Donald R. Grimes, an economist with the University of Michigan. “And then the question becomes, do you view it as a public benefit that the government should provide?” Hours after Saab made its case to the Swedish government, General Motors submitted a request to the Canadian government approaching $6 billion, which is double the …

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GM Opel brand needs $4.2 Billion from German Government to get through economic crisis

  Germany’s new economic minister said he has set up an informal working group with the U.S. treasury secretary aimed at finding a way to save General Motors Corp.’s Germany-based Opel unit, according to comments published in a newspaper today. Karl-Theodor zu Guttenberg said he had contacted Timothy Geithner in Washington about setting up a working group in hopes of finding a way to secure the future of Adam Opel GmbH, according to Bild am Sonntag. “I will use my first visit to the USA in March to hold further talks” on the issue, zu Guttenberg was quoted as saying. A member of Opel’s supervisory board — the equivalent of a U.S. board of directors — said Friday that Opel needs $4.2 billion to get through the economic crisis. The company has sought government help, but German officials insist that its U.S. parent GM …

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GM, Chrysler are seeking $8 billion in aid from the Canadian government

  The Canadian units of General Motors Corp and Chrysler are seeking as much as C$8 billion ($6.4 billion) in aid from the Canadian and Ontario governments as they fight to survive an industry-wide crisis, officials said on Friday. The request represents a doubling of the aid that the companies said they need. The governments had pledged C$4 billion in support at the end of last year. GM’s plan, outlined on its website, would require the company close no more Canadian plants at this time, but did not provide specific details on any further planned job cuts. But the plan said GM Canada’s workforce would shrink to 7,000 by 2010 from 20,000 in 2005 as a result of plant closures that have already been announced. GM also called for “changes sufficient to achieve legacy cost reductions and align active worker wages and benefits to benchmark …

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GM outlines its future in its viability plan

  Among the plethora of information gleaned from the viability plan submitted by General Motors to the U.S. government this week is the first image of the production 2011 Cadillac CTS Coupe, which will be built alongside the sedan and Sport Wagon in Lansing, Michigan, starting in 2010. The shapely two-door that debuted as a concept at the 2008 Detroit auto show originally was to be released later this year as a 2010 model, but the automaker recently delayed the project as a means to save development funds. While the coupe is expected to be available with a range of powertrains, including a possible 556-hp CTS-V variant, GM’s documents only confirm the direct-injected 3.6-liter V-6 and six-speed automatic will be the most fuel-efficient combination offered. GM also confirms it will eventually rid itself of the Hummer, Saab, and Saturn brands, all …

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