A report from Europe late last week says General Motors Corp. and the government of Sweden could be hurrying to broker an arrangement for GM's wholly-owned Saab Automobile AB that would effectively re-establish Saab as an independent automaker.
GM's Karl-Peter Forster was reported as saying GM and the Swedish government are working quickly to refine the details of a deal - authorized and financed by Sweden - that would establish independent, Sweden-based management for Saab and re-establish most, if not all, of the company's auto manufacturing once again in the Scandinavian nation, said a story by Britain's AutoCar magazine.
GM is rushing to tie-up the plan so that Saab might at least technically no longer be a part of GM when the company presents its next restructuring blueprint to Congress Feb. 17 and other federal entities in order to be considered "viable" and worthy of receiving continued government funding.
Although Sweden reputedly continues to stress it has no interest in owning Saab, government representatives have said the country would help fund a plan to separate Saab from GM and help establish a new ownership structure, perhaps a coalition of investors.
GM likely will return the brand back to Sweden at virtually no cost for the benefit of showing U.S. government accountants money-losing Saab has been permanently shifted from GM's ledgers, while also demonstrating the company plans to focus its restructuring investment on its U.S. brands.
A deal to return Saab to indigenous control likely would not mean an abrupt end to manufacturing and engineering ties with GM, however; GM almost assuredly would continue to furnish Saab with design, manufacturing and engineering support, as at least three new Saabs based on GM-designed platforms are well along the development path. Saab 9-X biohybrid concept.jpg
General Motors Corp. is in talks to take back large portions of Delphi Corp., the parts supplier spun off by the auto maker a decade ago, people involved in the negotiations said. The move is part of a strategy to qualify for additional government loans.
GM also is expected to pursue the closure of more auto-assembly plants beyond the nine shutdowns it has already announced, people familiar with the matter said.
GM has seen sales fall further than expected since it submitted a plan to Congress in December that said it will shrink to as few as 65,000 employees from 96,000 and cut its plants to 38 from 47 in North America in 2012. The deepening woes are putting pressure on GM to absorb the crucial auto-parts plants, even as it pares its car-making operations.
GM executives have been in negotiations over the Delphi plants since December. Delphi and its lenders have asked for at least $2 billion, according to people briefed on the talks. But GM hopes to pay little or nothing because of previous agreements with Delphi -- and because of the plight the auto-parts maker finds itself in. At the heart of the talks: up to five Delphi plants that produce exclusive parts for GM, including steering systems, radios and air conditioners for models such as the Cadillac CTS and Chevrolet Silverado.
Late this week, Saturn dealers likely will get a narrowed-down list of options for the troubled General Motors brand.
Last week, GM marketing chief Mark LaNeve said those options include "everything from a new dualing pattern to a spinoff to a partnership to an outright sale."
In a two-day meeting late last week, GM and members of the Saturn Franchise Operations Team narrowed the options. The automaker and franchise team will refine those options and tell Saturn dealers this week, a team member says.
"And then individual retailers will be able to start talking about which options make sense to them," said Todd Ingersoll, a member of the franchise team and owner of Saturn of Danbury and Watertown in Connecticut. Ingersoll spoke with Automotive News during a break from his meeting with GM on Friday, Feb. 6.
Ingersoll declined to list the specific options. When asked whether one would be shuttering the Saturn brand, Ingersoll was fuzzy.
"Everything is fluid. You can't commit to any option," he said. "I'll say this: You don't need four options to kill a brand."
Texas politicians are offering to put up to $5,000 in your pocket if you join the first wave of buyers of new-generation plug-in hybrid vehicles.
Plug-ins will be green indeed, getting the equivalent of more than 100 miles per gallon and emitting just a whiff of a conventional car's pollution. But they'll cost a lot of green, too – about $40,000 for one of the first in the showroom, Chevrolet's Volt, due out late next year.
Although plug-ins have been in development for years, by a stroke of unlucky timing, they're headed for the market at a time when even regular vehicle sales are stalled.
To sweeten the deal, Gov. Rick Perry, in his State of the State speech Jan. 27, proposed a state subsidy of $5,000 to plug-in hybrid buyers. Two days later, Senate Natural Resources committee chairman Kip Averitt, R-Waco, proposed his own version, a $4,000 rebate, in his omnibus clean-air and energy bill.
Plug-in hybrids also qualify for a federal tax credit of up to $7,500, easing the burden on early buyers.
How to do away with a damaged brand? One way is the Isuzu way: Starve dealers of product over a long period and dribble out the bad news in small doses.
At least it has proved to be a relatively inexpensive way to dismantle a sales network. And in the end dealers didn't complain too much. So is Isuzu's M.O. a template for other carmakers with brands on the bubble?
On Jan. 31, Isuzu stopped delivering new light-duty vehicles to dealerships in North America -- a year after announcing it would do so. The remaining 214 Isuzu dealers offer only parts, service and warranty repairs.
Only about half a dozen dealers have cut ties with the company, said Terry Maloney, president of Isuzu Motors America LLC. Two dealers have brought lawsuits, which are pending.
"I think we did it right for the consumer, the dealer, and the company," Maloney said. "They thought we were fair. Just the fact that so many dealers signed up for the service agreement shows that."
He said the service business will provide dealers with steady income.
As GM ponders what to do with Saturn, Saab and Hummer -- after paying $1 billon to shut down Oldsmobile earlier in the decade -- the Isuzu approach may offer a few pointers.
"I do feel Isuzu has created a good model," Maloney said. "The majority of the dealers wanted to continue as service dealers. The dealers who terminated did so for good, sound reasons."
Texas politicians are offering to put up to $5,000 in your pocket if you join the first wave of buyers of new-generation plug-in hybrid vehicles.
So Rocky, what is Michigan doing to stimulate the auto industry? Sounds like Texas is a leader in trying to keep Michigan alive. Not sure why. Looks like Perry was a Democrat that saw the light and switched to the Party of true change and progress. :shades:
GM is definitely serious about shuttering Saab as part of their aggressive reorginization plan. :sick: Can we get another round of bailouts for the table please!?!? And a re-fill of my B.S. cocktail. Thanks.
GM is definitely serious about shuttering Saab as part of their aggressive reorginization plan. :sick: Can we get another round of bailouts for the table please!?!? And a re-fill of my B.S. cocktail. Thanks.
I am a little confused. Have you read any of my posts on this subject? GM is readying Saab for sale. These programs are ready to be introduced this year. Tooling is spent. To make Saab salable you do not just stop all the work and shut it down. You keep the engineers busy and show possible buyers the product that is ready to go.
Of course you can believe what you want. But I will bet you are wrong and we will know it soon.
To make Saab salable you do not just stop all the work and shut it down. You keep the engineers busy and show possible buyers the product that is ready to go.
All that costs money. In this economy, who's going to pay enough for Saab to allow GM to even break even? May just be cheaper to shutter it.
Focus. Fusion. The Escape isn't really a truck, or at least not much of one (except when it comes to EPA figures, heh). :shades: Heck, the Fusion is about to be replaced by an updated version and it's still on that chart...that tells ya something.
It may be cheaper to give it away but someone will have to take care of the dealer franchise. Just closing Saab does not do that. And whoever does take it over will be buying parts from GM for at least 5 years.
Closing it down does not make sense. Finding some other entity to take it over does.
It may be cheaper to give it away but someone will have to take care of the dealer franchise.
The Isuzu strategy sounds best, if there is no buyer real soon. Cut all expenses except for the direct-manufacturing ones, of 1 model. No engineering, no marketing, no advertising, cut all executives. Make a profit on whatever you can sell, for as long as dealers want to sell that 1 model; that wouldn't be long seeing how few Saabs are sold with the several models they have now.
Well they are going to cut salary pay (some has been going on as people are deleveled) and cutting jobs w/o the buy out pay.
By Jeff Green Feb. 9 (Bloomberg) -- General Motors Corp., racing to meet U.S. conditions to keep $13.4 billion in government loans, will include pay cuts for salaried employees in a restructuring plan to be submitted Feb. 17, people familiar with the plan said. The pay cuts will be in addition to firings of thousands of salaried workers required to cut expenses as the largest U.S.- based automaker tries to win concessions from bondholders, labor unions and dealers, the people said, who asked not to be identified because the plans haven’t been announced. Some of the details may be discussed this week, the people said.
Texas politicians are offering to put up to $5,000 in your pocket if you join the first wave of buyers of new-generation plug-in hybrid vehicles. *****
Awesome! 40 mile range!
Note - you could do this with $2000 in lead acid batteries and a used Civic in ~1985. GM isn't even trying.
You throw a $200 genset in the back and charge it back up while having a steak at the Black Angus. I am amazed that anyone at GM really believes the Volt will do anything for their bottom line. It will give them a lite green glow. To use all the tax credits you have to fit into a narrow band of buyers. If it is like the hybrids any of the growing number of folks caught in the AMT legislation will not be eligible. That means it would be a foolish purchase. That and I am sure that GM is just praying the unproven Li-ion batteries will hold up for the 10 year warranty period. I am totally skeptical they will. Knowing how short lived Li-ions are in electronics.
GM is definitely serious about shuttering Saab as part of their aggressive reorginization plan. Can we get another round of bailouts for the table please!?!? :sick: And a re-fill of my B.S. cocktail. Thanks.
From a media report: A report from Europe late last week says General Motors Corp. and the government of Sweden could be hurrying to broker an arrangement for GM's wholly-owned Saab Automobile AB that would effectively re-establish Saab as an independent automaker.
If GM Ford & Chysler go broke along with their dealerships would a service company open up called i.e. BIG3 Service to service the vhicles still on the road?
http://en.wikipedia.org/wiki/Toyota_RAV4_EV It gets worse. This is an electric RAV4. 120 mile range. And it can haul stuff and seat 5. Toyota already did it better a decade ago. Oops.
At least GM has one of the three "R"s down. The "Recycle" one... :P
Who would pay for the warranty work? There will be companies that can fix your car for a fee. An auto owner would more than likely be in the same position as a stockholder, SOL :sick: Same would go for aftermarket warranties. They go broke all the time leaving people with no warranty.
They are holding pretty good value I would say. Those batteries probably cost $12k in 2005 depending on how many he bought. There are a few Rangers built for that CA mandate as well as the RAV4 EVs. I'm not sure I would pay that much. I have toyed with the idea of converting my 99 Ranger to electric or diesel. Diesel would be about half the cost of electric and not have the range limit or towing issues.
But still, a lot less expensive than the Volt, which seems to be the same half-baked stuff GM has been making for decades, off and on. GM's strategy seems to be to repackage the same idiocy in new sheet metal and hope nobody notices. And use it as an excuse to get more billions form the government.
I would hope the targets in the Feb. 17th update from GM and C carry the adjusted SAAR numbers. 10.5MM isn't going to happen unless Obama takes over US auto and gives 50% discounts!
Mike DiGiovanni, General Motors Corp.'s executive director of global market and industry analysis, said last week he expected Chinese auto sales could hit 10.7 million units in 2009, more than his estimate of 9.8 million unit sales in the U.S. this year. Autodata forecasts 2009 U.S. sales at 9.57 million.
Which means one thing. C11 isn't that far fetched an option any longer.
French automakers Renault SA and PSA Peugeot-Citroen won a government rescue package Monday that includes 7.5 billion euros ($9.8 billion) in low-interest loans by promising not to lay anyone off this year or close factories.
An additional 500 million euros is to be lent to Renault Trucks -- which is owned by AB Volvo of Sweden -- under the same conditions.
The government is also allocating 1 billion euros in loans for the financing arms of Renault and Peugeot-Citroen, France's two automakers, doubling an existing facility set up in December.
General Motors Corp., racing to meet U.S. conditions to keep $13.4 billion in government loans, will include pay cuts for salaried employees in a restructuring plan to be submitted Feb. 17, people familiar with the plan said.
The pay cuts will be in addition to firings of thousands of salaried workers to cut expenses as the largest U.S.-based automaker tries to win concessions from bondholders, labor unions and dealers, said the people, who asked not to be identified because the plans haven’t been announced. Some of the details may be revealed this week, the people said.
Independent using GM platforms, parts, engines, whole vehicles rebadged, etc. etc. etc.
It'll be a GM brand except in the letterhead it won't say GM. And in return GM will recieve 4 billion in loans from Sweden.
The biggest development is that Saab would gain control over its own finances and decisions. Although GM would still be Saab's owner, the Swedish Patient would have its own budget (a figure that has yet to be determined). The idea behind the move is that giving Saab additional financial autonomy would demonstrate to potential buyers that the division is capable of standing on its own.
Just laying off 1000s of people does not make sense to me. Either they were dead weight or they are destroying current and future product development. They were clearly building more vehicles last year than they could possibly sell. So laying off production workers made sense. Though with the jobs bank still a burden it did not make any difference. Then the overlying LEGACY Costs have not gone away. Every time they lay off a UAW worker the cost per hour goes up from that elusive $78 per hour that GM claims. Why they were still paying health care to retirees over 65 is baffling at best. GM has been losing billions four years in a row. They were given the Golden Opportunity to get rid of the UAW during the 2007 Strikes. I don't think they deserve a bailout.
I think that Saab should be dumped in the lap of the Swedish Government. If they want to save those 6300 worker's jobs, they can pay the tab. Saab has lost all the panache that kept customers loyal. My partner would have nothing else but Saab. His 1990 Saab 9000 was a great car. He switched to Volvo around 2002 and does not like the car at all. He longs for the old Saab. His son ended up going to VW when Saab became the [non-permissible content removed] child of GM. I think it is safe to say that GM has destroyed the Saab customer base just as they have their own.
Looks like they finally announced it. Things are going to go pretty quick now. Sorry I will be gone next week!
General Motors, facing a Feb. 17 deadline to show the government it's a viable company, said today that it will cut 14 percent of its salaried jobs globally by the end of the year and slash the salaries of many who remain. Salaried employment will be reduced to 63,000, from 73,000, the company said in a statement. In the United States, about 3,400 of GM's 29,500 salaried employees will lose their jobs, and most will be eliminated by May 1. The cut in base pay for executives will be 10 percent. "Many other" salaried workers will have their pay reduced by 2 percent to 7 percent, GM said.
With all the program/model cuts (Hummer, Saab, Saturn, Pontiac models) there are quite a few extra workers around.
General Motors Corp. said this morning it will eliminate 10,000 salaried workers worldwide this year to cut costs, adapt to a sales slump and comply with requirements of the $13.4 billion federal loan package.
In the U.S., the Detroit automaker wants to eliminate 3,400 of GM's 29,500 salaried workers, who will receive severance payments, benefit contributions and outplacement help. Most of the job cuts will happen by May 1.
The decision, announced by GM this morning, comes a week after the Detroit automaker targeted hourly workers. GM is offering eligible hourly workers $25,000 vouchers to buy a new GM vehicle and $20,000 in cash. GM has 62,000 hourly U.S. workers, and 22,000 of those are eligible for retirement.
GM also is forcing most of its U.S. salaried workers to accept temporary pay cuts starting in May through the end of 2009. Executive employees will see their base salaries slashed by 10 percent while many other workers will see cuts ranging from 3 to 7 percent.
GM's overseas divisions are reviewing pay and benefits of salaried employees.
GM has 73,000 salaried workers worldwide.
GM almost ran out of cash in December before then-President Bush approved up to $13.4 billion in federal loans.
The loans require GM and Chrysler LLC, which also received aid, to trim costs and debt and become viable companies or the money could be taken back, forcing both into bankruptcy.
The conditions are attached to the $13.4 billion in loans for GM, as well as the $4 billion in loans Chrysler has been granted and the $3 billion it still seeks. The automakers must submit viability plans to the Treasury Department by Feb. 17.
"I wouldn't be surprised if the timetable got extended, because clearly the original plan was a temporary fix," said Mark Oline, a Fitch Ratings analyst in Chicago. "It was going to be up to the new Congress and Administration to put in a longer-term solution."
Auto analysts and bankruptcy lawyers say the deadline set out in the federal bailout of the automakers is too ambitious to get bondholders on board in just a few more weeks. They say GM in particular needs an extension to avoid being forced into bankruptcy if it can't show progress on its assignment to cut $27.5 billion of unsecured debt down to about $9.2 billion by the end of March.
The concern centers around GM because the public company has many junk bonds and unsecured creditors, said Judy O'Neill, partner with Foley & Lardner LLP's Detroit office and an expert on Chapter 11 bankruptcy.
Being private, the majority of Chrysler's bondholders are secured, said spokeswoman Chrysler Shawn Morgan. She said Chrysler doesn't need and will not seek a delay in the timing set forth by the U.S. Treasury Department.
The loan agreements between the automakers and the Treasury call for the reduction of unsecured public debt by not less than two-thirds through a bond exchange, but don't provide guidance on secured bondholders.
GM won't have final concessions in place from its bondholders and unions by the time it submits a restructuring plan Feb. 17. It will include additional plant closings, salaried pay cuts and more than 5,000 salaried job cuts.
"Certifying our plan and our progress resides with the presidential designee and we're ready to work with that person through every step of the process," GM spokesman Greg Martin said.
The loan agreements say the car companies must show "commencement of an exchange offer to implement a bond exchange" by March 31.
Hey, I do not work for GM. Just trying to be a data driven voice of reason.
Is that what they call PR these days.... :shades:
Anyway, I doubt things are "going to go fast." I think this was the "Hurry up and show that we did SOMETHING before we go to Congress for more cash" token gesture.
And still, GM could face bankruptcy, likely a pre-packaged one. The U.S. government, which has hired expert advisors on bankruptcy, could force GM as well as Chrysler into bankruptcy in order to put U.S. taxpayers ahead of other creditors for being re-paid loans.
GM insists as it has all along that bankruptcy is not an option and would be sure death as consumers would not buy vehicles from a company in bankruptcy
and more reasonable news...
"People in the market for new cars reacted to the difficult environment by choosing cars with lower sticker prices," said Johnson. "The average amount spent per car dropped 2.4 percent in the latest quarter."
GM does not make any low priced cars that are top competitors.
Sorry, the volt uses a smaller battery pack (less KW) than the pure electric vehicles you are discussing, the Volt is not a pure electric but a hybrid (like the prius) just that it can go 40 miles on the battery before the engine has to come on to charge the batteries agin, so comaring the Volt to a pure electric is not a fair comaprision to either car.
We just had a minor discussion on the Volt vs. the new Plug in Prius that is coming out. If you take away the battery cost (both use Li-ion) and gas engine (both use similar powertrain) it came out that the rest of the Volt powertrain may actually be cheaper than the Prius powertrain. Unfortunately I do not feel there was a good discussion on it. Any electric experts out there that can tell us?
Separately, J.P. Morgan analyst Himanshu Patel said that if GM fails to win big concessions from bondholders and the United Auto Workers, the White House may be forced to seriously consider allowing a bankruptcy filing. Bankruptcy, Patel contends, would likely have less negative ramifications then it would have last year and would allow the automaker to more aggressively reduce its debt. "The damage to the enterprise of a GM bankruptcy today is notably less than it would have been a few months ago, largely because of public desensitization to a bankrupt carmaker," Patel said in a note to clients. End of Story
GM has repeatedly ruled out seeking bankruptcy protection, saying such a step would scare off consumers, cause its revenues to plummet and risk that a Chapter 11-style restructuring would end up as a liquidation of its assets.
But some critics of the U.S. bailout for the auto industry have said that the government could provide bankruptcy financing for GM or Chrysler and allow them to win deeper concessions from creditors and the union.
The U.S. Treasury has retained two law firms with extensive bankruptcy experience and the investment bank Rothschild to advise officials on the taxpayer-backed restructuring of GM and Chrysler. One of the scenarios those advisers will consider will be a government-assisted bankruptcy filing, a person with direct knowledge of the work has said.
Another of the other immediate priorities will be working out an agreement between other creditors and the government that would provide senior status to the public funding, a second person involved in the discussions said.
JP Morgan's Patel said a bankruptcy filing by GM would likely cut the automaker's debt by over 60 percent compared with just a 25 percent cut in indebtedness under an out-of-court restructuring.
Time to do the right thing. Everything is falling into place for the inevitable.
The Volt is supposed to have a 16KWH battery. That is the break point to get the $7500 tax credit on an EV or Plug-in hybrid. So a smaller less expensive battery would take away the Tax Credit and most of the customers. I would be surprised if GM did not test it as a straight hybrid using NiMH battery.
That is interesting. I see the older Prius's had 17.8 KWH batteries while in 2003 they went to 13. That is about the time the tax credits went away on it due to minimum volume met? I cannot find any data on the 2010.
Wonder what the price would be on a NiMH battery powered Volt and how much cheaper? Could be an option for those who want a cheaper hybrid until the LI-ion batteries come down in price. Wonder how far it could go w/o gas?
Why I brought up the decade or two old models is because while they were purely electric, adding a small generator on board to extend the range is literally something you can do yourself. If such low-tech solutions beat the new GM Volt in price, reliability, and environmental damage to make, why is GM even bothering?
*quote* GM claims that 40 miles of all electric only driving is the best they can do with the batteries they are using before the small gas generator starts up to power the electric motor. ****
It's a complete joke. Minus the fancy electronics, transmission, and other bits to integrate the engine and EV on the Prius(since it's actually a dual engine vehicle) - and only keeping the electric system, you end up with a cost of less than a Corolla. A generator is, what? $500-$1000 to add?
If GM used normal batteries, they could get this out for well under $20K if they wanted. I smell another EV-1 in the making. "It's not ready..." "We're not able to make a gasoline replacement yet..."
The high end batteries for a Caddy lux hybrid and more inexpensive batteries for a Chevy could help defray the cost of production significantly, but again there needs to be money available for multiple models.
Comments
That is probably why GM is offering so little to the UAW right now.
Question is where is Chrysler getting their money?
GM's Karl-Peter Forster was reported as saying GM and the Swedish government are working quickly to refine the details of a deal - authorized and financed by Sweden - that would establish independent, Sweden-based management for Saab and re-establish most, if not all, of the company's auto manufacturing once again in the Scandinavian nation, said a story by Britain's AutoCar magazine.
GM is rushing to tie-up the plan so that Saab might at least technically no longer be a part of GM when the company presents its next restructuring blueprint to Congress Feb. 17 and other federal entities in order to be considered "viable" and worthy of receiving continued government funding.
Although Sweden reputedly continues to stress it has no interest in owning Saab, government representatives have said the country would help fund a plan to separate Saab from GM and help establish a new ownership structure, perhaps a coalition of investors.
GM likely will return the brand back to Sweden at virtually no cost for the benefit of showing U.S. government accountants money-losing Saab has been permanently shifted from GM's ledgers, while also demonstrating the company plans to focus its restructuring investment on its U.S. brands.
A deal to return Saab to indigenous control likely would not mean an abrupt end to manufacturing and engineering ties with GM, however; GM almost assuredly would continue to furnish Saab with design, manufacturing and engineering support, as at least three new Saabs based on GM-designed platforms are well along the development path. Saab 9-X biohybrid concept.jpg
GM also is expected to pursue the closure of more auto-assembly plants beyond the nine shutdowns it has already announced, people familiar with the matter said.
GM has seen sales fall further than expected since it submitted a plan to Congress in December that said it will shrink to as few as 65,000 employees from 96,000 and cut its plants to 38 from 47 in North America in 2012. The deepening woes are putting pressure on GM to absorb the crucial auto-parts plants, even as it pares its car-making operations.
GM executives have been in negotiations over the Delphi plants since December. Delphi and its lenders have asked for at least $2 billion, according to people briefed on the talks. But GM hopes to pay little or nothing because of previous agreements with Delphi -- and because of the plight the auto-parts maker finds itself in. At the heart of the talks: up to five Delphi plants that produce exclusive parts for GM, including steering systems, radios and air conditioners for models such as the Cadillac CTS and Chevrolet Silverado.
Last week, GM marketing chief Mark LaNeve said those options include "everything from a new dualing pattern to a spinoff to a partnership to an outright sale."
In a two-day meeting late last week, GM and members of the Saturn Franchise Operations Team narrowed the options. The automaker and franchise team will refine those options and tell Saturn dealers this week, a team member says.
"And then individual retailers will be able to start talking about which options make sense to them," said Todd Ingersoll, a member of the franchise team and owner of Saturn of Danbury and Watertown in Connecticut. Ingersoll spoke with Automotive News during a break from his meeting with GM on Friday, Feb. 6.
Ingersoll declined to list the specific options. When asked whether one would be shuttering the Saturn brand, Ingersoll was fuzzy.
"Everything is fluid. You can't commit to any option," he said. "I'll say this: You don't need four options to kill a brand."
Texas politicians are offering to put up to $5,000 in your pocket if you join the first wave of buyers of new-generation plug-in hybrid vehicles.
Plug-ins will be green indeed, getting the equivalent of more than 100 miles per gallon and emitting just a whiff of a conventional car's pollution. But they'll cost a lot of green, too – about $40,000 for one of the first in the showroom, Chevrolet's Volt, due out late next year.
Although plug-ins have been in development for years, by a stroke of unlucky timing, they're headed for the market at a time when even regular vehicle sales are stalled.
To sweeten the deal, Gov. Rick Perry, in his State of the State speech Jan. 27, proposed a state subsidy of $5,000 to plug-in hybrid buyers. Two days later, Senate Natural Resources committee chairman Kip Averitt, R-Waco, proposed his own version, a $4,000 rebate, in his omnibus clean-air and energy bill.
Plug-in hybrids also qualify for a federal tax credit of up to $7,500, easing the burden on early buyers.
At least it has proved to be a relatively inexpensive way to dismantle a sales network. And in the end dealers didn't complain too much. So is Isuzu's M.O. a template for other carmakers with brands on the bubble?
On Jan. 31, Isuzu stopped delivering new light-duty vehicles to dealerships in North America -- a year after announcing it would do so. The remaining 214 Isuzu dealers offer only parts, service and warranty repairs.
Only about half a dozen dealers have cut ties with the company, said Terry Maloney, president of Isuzu Motors America LLC. Two dealers have brought lawsuits, which are pending.
"I think we did it right for the consumer, the dealer, and the company," Maloney said. "They thought we were fair. Just the fact that so many dealers signed up for the service agreement shows that."
He said the service business will provide dealers with steady income.
As GM ponders what to do with Saturn, Saab and Hummer -- after paying $1 billon to shut down Oldsmobile earlier in the decade -- the Isuzu approach may offer a few pointers.
"I do feel Isuzu has created a good model," Maloney said. "The majority of the dealers wanted to continue as service dealers. The dealers who terminated did so for good, sound reasons."
So Rocky, what is Michigan doing to stimulate the auto industry? Sounds like Texas is a leader in trying to keep Michigan alive. Not sure why. Looks like Perry was a Democrat that saw the light and switched to the Party of true change and progress. :shades:
link title
to go along with this
link title
The Epsilon II-based 9-5 should be in European dealers this fall, with North American sales coming about a year from now
And this
link title
GM is definitely serious about shuttering Saab as part of their aggressive reorginization plan. :sick: Can we get another round of bailouts for the table please!?!? And a re-fill of my B.S. cocktail. Thanks.
Regards,
OW
GM is definitely serious about shuttering Saab as part of their aggressive reorginization plan. :sick: Can we get another round of bailouts for the table please!?!? And a re-fill of my B.S. cocktail. Thanks.
I am a little confused. Have you read any of my posts on this subject? GM is readying Saab for sale. These programs are ready to be introduced this year. Tooling is spent. To make Saab salable you do not just stop all the work and shut it down. You keep the engineers busy and show possible buyers the product that is ready to go.
Of course you can believe what you want. But I will bet you are wrong and we will know it soon.
Regards,
OW
All that costs money. In this economy, who's going to pay enough for Saab to allow GM to even break even? May just be cheaper to shutter it.
Focus. Fusion. The Escape isn't really a truck, or at least not much of one (except when it comes to EPA figures, heh). :shades: Heck, the Fusion is about to be replaced by an updated version and it's still on that chart...that tells ya something.
Closing it down does not make sense. Finding some other entity to take it over does.
The Isuzu strategy sounds best, if there is no buyer real soon. Cut all expenses except for the direct-manufacturing ones, of 1 model. No engineering, no marketing, no advertising, cut all executives. Make a profit on whatever you can sell, for as long as dealers want to sell that 1 model; that wouldn't be long seeing how few Saabs are sold with the several models they have now.
By Jeff Green
Feb. 9 (Bloomberg) -- General Motors Corp., racing to meet
U.S. conditions to keep $13.4 billion in government loans, will
include pay cuts for salaried employees in a restructuring plan
to be submitted Feb. 17, people familiar with the plan said.
The pay cuts will be in addition to firings of thousands of
salaried workers required to cut expenses as the largest U.S.-
based automaker tries to win concessions from bondholders, labor
unions and dealers, the people said, who asked not to be
identified because the plans haven’t been announced. Some of the
details may be discussed this week, the people said.
Texas politicians are offering to put up to $5,000 in your pocket if you join the first wave of buyers of new-generation plug-in hybrid vehicles.
*****
Awesome! 40 mile range!
Note - you could do this with $2000 in lead acid batteries and a used Civic in ~1985. GM isn't even trying.
http://www.carbuyersnotebook.com/fully-electric-1984-honda-civic/
Pathetic, really. $40,000 for such a miserable range?
The best part of this statement is the fact that they're saying "If you can afford a new $40k car, then we'll bail you out!"
Bailouts are only for thems that can afford them I guess.
GM is definitely serious about shuttering Saab as part of their aggressive reorginization plan. Can we get another round of bailouts for the table please!?!? :sick: And a re-fill of my B.S. cocktail. Thanks.
From a media report:
A report from Europe late last week says General Motors Corp. and the government of Sweden could be hurrying to broker an arrangement for GM's wholly-owned Saab Automobile AB that would effectively re-establish Saab as an independent automaker.
You may have to log into Ebay to see this - It sold for $18K. What's notable is that it's a S10 truck, has the same electric range and speed as the Volt, uses standard lead-acid batteries, and... came out in 1998 as a factory model(not a conversion).
GM fails to innovate. Completely.
http://en.wikipedia.org/wiki/Toyota_RAV4_EV
It gets worse. This is an electric RAV4. 120 mile range. And it can haul stuff and seat 5. Toyota already did it better a decade ago. Oops.
At least GM has one of the three "R"s down. The "Recycle" one... :P
Mike DiGiovanni, General Motors Corp.'s executive director of global market and industry analysis, said last week he expected Chinese auto sales could hit 10.7 million units in 2009, more than his estimate of 9.8 million unit sales in the U.S. this year. Autodata forecasts 2009 U.S. sales at 9.57 million.
Which means one thing. C11 isn't that far fetched an option any longer.
Regards,
OW
?? It has not been that far fetched for 3 months now. Where you been? The government loan kept it from happening.
An additional 500 million euros is to be lent to Renault Trucks -- which is owned by AB Volvo of Sweden -- under the same conditions.
The government is also allocating 1 billion euros in loans for the financing arms of Renault and Peugeot-Citroen, France's two automakers, doubling an existing facility set up in December.
General Motors Corp., racing to meet U.S. conditions to keep $13.4 billion in government loans, will include pay cuts for salaried employees in a restructuring plan to be submitted Feb. 17, people familiar with the plan said.
The pay cuts will be in addition to firings of thousands of salaried workers to cut expenses as the largest U.S.-based automaker tries to win concessions from bondholders, labor unions and dealers, said the people, who asked not to be identified because the plans haven’t been announced. Some of the details may be revealed this week, the people said.
http://bloomberg.com/apps/news?pid=20601103&refer=news&sid=aYOSXBZBwzQo
It'll be a GM brand except in the letterhead it won't say GM. And in return GM will recieve 4 billion in loans from Sweden.
The biggest development is that Saab would gain control over its own finances and decisions. Although GM would still be Saab's owner, the Swedish Patient would have its own budget (a figure that has yet to be determined). The idea behind the move is that giving Saab additional financial autonomy would demonstrate to potential buyers that the division is capable of standing on its own.
link title
General Motors, facing a Feb. 17 deadline to show the government it's a viable company, said today that it will cut 14 percent of its salaried jobs globally by the end of the year and slash the salaries of many who remain.
Salaried employment will be reduced to 63,000, from 73,000, the company said in a statement. In the United States, about 3,400 of GM's 29,500 salaried employees will lose their jobs, and most will be eliminated by May 1.
The cut in base pay for executives will be 10 percent. "Many other" salaried workers will have their pay reduced by 2 percent to 7 percent, GM said.
With all the program/model cuts (Hummer, Saab, Saturn, Pontiac models) there are quite a few extra workers around.
General Motors Corp. said this morning it will eliminate 10,000 salaried workers worldwide this year to cut costs, adapt to a sales slump and comply with requirements of the $13.4 billion federal loan package.
In the U.S., the Detroit automaker wants to eliminate 3,400 of GM's 29,500 salaried workers, who will receive severance payments, benefit contributions and outplacement help. Most of the job cuts will happen by May 1.
The decision, announced by GM this morning, comes a week after the Detroit automaker targeted hourly workers. GM is offering eligible hourly workers $25,000 vouchers to buy a new GM vehicle and $20,000 in cash. GM has 62,000 hourly U.S. workers, and 22,000 of those are eligible for retirement.
GM also is forcing most of its U.S. salaried workers to accept temporary pay cuts starting in May through the end of 2009. Executive employees will see their base salaries slashed by 10 percent while many other workers will see cuts ranging from 3 to 7 percent.
GM's overseas divisions are reviewing pay and benefits of salaried employees.
GM has 73,000 salaried workers worldwide.
GM almost ran out of cash in December before then-President Bush approved up to $13.4 billion in federal loans.
The loans require GM and Chrysler LLC, which also received aid, to trim costs and debt and become viable companies or the money could be taken back, forcing both into bankruptcy.
The conditions are attached to the $13.4 billion in loans for GM, as well as the $4 billion in loans Chrysler has been granted and the $3 billion it still seeks. The automakers must submit viability plans to the Treasury Department by Feb. 17.
If your job is gone they may as well shut out the lights. Who will be their voice on Edmund's?
Auto analysts and bankruptcy lawyers say the deadline set out in the federal bailout of the automakers is too ambitious to get bondholders on board in just a few more weeks. They say GM in particular needs an extension to avoid being forced into bankruptcy if it can't show progress on its assignment to cut $27.5 billion of unsecured debt down to about $9.2 billion by the end of March.
The concern centers around GM because the public company has many junk bonds and unsecured creditors, said Judy O'Neill, partner with Foley & Lardner LLP's Detroit office and an expert on Chapter 11 bankruptcy.
Being private, the majority of Chrysler's bondholders are secured, said spokeswoman Chrysler Shawn Morgan. She said Chrysler doesn't need and will not seek a delay in the timing set forth by the U.S. Treasury Department.
The loan agreements between the automakers and the Treasury call for the reduction of unsecured public debt by not less than two-thirds through a bond exchange, but don't provide guidance on secured bondholders.
GM won't have final concessions in place from its bondholders and unions by the time it submits a restructuring plan Feb. 17. It will include additional plant closings, salaried pay cuts and more than 5,000 salaried job cuts.
"Certifying our plan and our progress resides with the presidential designee and we're ready to work with that person through every step of the process," GM spokesman Greg Martin said.
The loan agreements say the car companies must show "commencement of an exchange offer to implement a bond exchange" by March 31.
Is that what they call PR these days.... :shades:
Anyway, I doubt things are "going to go fast." I think this was the "Hurry up and show that we did SOMETHING before we go to Congress for more cash" token gesture.
Regards,
OW
Bankruptcy Still An Option
And still, GM could face bankruptcy, likely a pre-packaged one. The U.S. government, which has hired expert advisors on bankruptcy, could force GM as well as Chrysler into bankruptcy in order to put U.S. taxpayers ahead of other creditors for being re-paid loans.
GM insists as it has all along that bankruptcy is not an option and would be sure death as consumers would not buy vehicles from a company in bankruptcy
and more reasonable news...
"People in the market for new cars reacted to the difficult environment by choosing cars with lower sticker prices," said Johnson. "The average amount spent per car dropped 2.4 percent in the latest quarter."
GM does not make any low priced cars that are top competitors.
Regards,
OW
Bankruptcy, Patel contends, would likely have less negative ramifications then it would have last year and would allow the automaker to more aggressively reduce its debt.
"The damage to the enterprise of a GM bankruptcy today is notably less than it would have been a few months ago, largely because of public desensitization to a bankrupt carmaker," Patel said in a note to clients. End of Story
Regards,
OW
But some critics of the U.S. bailout for the auto industry have said that the government could provide bankruptcy financing for GM or Chrysler and allow them to win deeper concessions from creditors and the union.
The U.S. Treasury has retained two law firms with extensive bankruptcy experience and the investment bank Rothschild to advise officials on the taxpayer-backed restructuring of GM and Chrysler. One of the scenarios those advisers will consider will be a government-assisted bankruptcy filing, a person with direct knowledge of the work has said.
Another of the other immediate priorities will be working out an agreement between other creditors and the government that would provide senior status to the public funding, a second person involved in the discussions said.
JP Morgan's Patel said a bankruptcy filing by GM would likely cut the automaker's debt by over 60 percent compared with just a 25 percent cut in indebtedness under an out-of-court restructuring.
Time to do the right thing. Everything is falling into place for the inevitable.
Regards,
OW
Wonder what the price would be on a NiMH battery powered Volt and how much cheaper? Could be an option for those who want a cheaper hybrid until the LI-ion batteries come down in price. Wonder how far it could go w/o gas?
Why I brought up the decade or two old models is because while they were purely electric, adding a small generator on board to extend the range is literally something you can do yourself. If such low-tech solutions beat the new GM Volt in price, reliability, and environmental damage to make, why is GM even bothering?
*quote*
GM claims that 40 miles of all electric only driving is the best they can do with the batteries they are using before the small gas generator starts up to power the electric motor.
****
It's a complete joke. Minus the fancy electronics, transmission, and other bits to integrate the engine and EV on the Prius(since it's actually a dual engine vehicle) - and only keeping the electric system, you end up with a cost of less than a Corolla. A generator is, what? $500-$1000 to add?
If GM used normal batteries, they could get this out for well under $20K if they wanted. I smell another EV-1 in the making. "It's not ready..." "We're not able to make a gasoline replacement yet..."