Michigan Automotive News

Senators seek more info on auto dealer closures

Fri, 20 Nov 2009 23:33:24 UTC

Senators are calling on General Motors and Chrysler to release more details on ongoing talks over the automakers' plans to close thousands of auto dealerships as part of their bankruptcies. In letters Friday to the two companies, the majority of the Senate Commerce Committee sought information on the negotiations brokered by Congress between dealers and the automakers over whether the...

Senators are calling on General Motors and Chrysler to release more details on ongoing talks over the automakers' plans to close thousands of auto dealerships as part of their bankruptcies.

In letters Friday to the two companies, the majority of the Senate Commerce Committee sought information on the negotiations brokered by Congress between dealers and the automakers over whether the decisions to shutter dealerships should be reversed.

"Given the federal government's ownership stake in GM, it is our shared obligation to ensure all impacted dealers are treated as fairly as possible," the letter to GM stated, signed by 22 of the committee's 25 members. The Chrysler letter included similar language.

GM is cutting 2,400 dealerships from its 6,000-dealer network by the fall of 2010 by not renewing franchise agreements and winding down stores with outgoing brands. Chrysler slashed 789 dealers as part of its bankruptcy proceedings this summer, leaving it with about 2,400.

The companies say the moves are needed to cut costs and align their dealerships with the lower demand for cars.

The federal government owns roughly 60 percent of GM and nearly 10 percent of Chrysler as part of its rescue of the auto industry, and lawmakers worried about big job losses are pressuring the companies to reverse course on dealer closures.

That includes legislation to force GM and Chrysler to restore closed dealerships. The House passed legislation in July that would force GM and Chrysler to restore franchise agreements with dealers as a condition of partial government ownership. The Senate has yet to take it up. The Obama administration opposes efforts to overturn the dealer closings.

Talks began in September over ways to resolve the issue without legislation, but no agreements have been reached yet. Sticking points include the appeals and review process for closed dealers and financial assistance from the automakers to those that will be shuttered.

GM spokesman Greg Martin said in a statement that the company is in "productive discussions" on the dealer restructuring plan and that it hopes to reach a solution without legislation. A Chrysler spokeswoman did not immediately reply to a request for comment.

Rep. Chris Van Hollen, D-Md., said this week that a deal needs to be made by the end of the year.

"Either we have to come to some kind of compromise between the manufacturers and the dealers — a non-legislative compromise — or I think it's very likely that you're going to see some legislation on this issue because it's hard to see the House budging at this point," he said.

The letters to GM and Chrysler also asked for additional details on issues such as whether closed dealers get the first right to reopen if the automakers decide to open franchises in the area and on help for closed car lots such as retraining of auto mechanics.

Associated Press Writer Ken Thomas contributed to this report.

Can the Pontiac Aztek save General Motors?

Fri, 20 Nov 2009 19:09:22 UTC

General Motors doesn't need another vehicle with a universally loathed design. Nor does it need another sales flop that makes the Edsel look like a success. But it does need another vehicle that "represents the kind of risk-taking design that the post-bankruptcy firm will need to move forward."

WikiMedia CommonsThe Pontiac Aztek
General Motors needs another Pontiac Aztek to lead the automaker into the future.

That, according to a WTF-inducing but though-provoking piece by Matthew DeBord for Slate partner The Big Money.

Let's be clear here: General Motors doesn't need another vehicle with a universally loathed design. Nor does it need another sales flop that makes the Edsel look like a success.

But, according to DeBord, General Motors does need another vehicle that "represents the kind of risk-taking design that the post-bankruptcy firm will need to move forward."

Instead of resting on its laurels and responding to market successes, DeBord posits that GM needs to push the envelope and define its own market, as it did with the Aztek.

TheBigMoney, Nov. 17: It’s easy to berate GM for always failing to see where the market is going. But in this instance it was the first to recognize the need for a new kind of vehicle to fill the crossover segment, which would grow rapidly in subsequent years. A crossover is basically a 21st-century station wagon. SUVs are usually built on the same platform used for trucks—and they often feel that way when you drive them. They also inhale gas. Crossovers, by contrast, are built on platforms used for cars, so they have better road manners, and they’re more fuel-efficient. There were some crossover-ish vehicles before the Aztek, such as the Subaru Forester, but these were seen as neo-wagons, or small/compact SUVs. With the Aztek, GM created something that had SUV size, minus the SUV stigma.

In hindsight (and according to many a worst-car-of-all-time-list), the Aztek failed miserably.

But while DeBord's argument is laughable on its face, the Aztek does resemble the sort of market breakthrough General Motors ~~made with the EV1~~ is trying to make with the Chevy Volt.

Maybe they'll get it right this time.

New construction, upgraded presses give General Motors' Flint Metal Center new lease on life

Fri, 20 Nov 2009 10:00:59 UTC

FLINT -- There's a lot of digging going on in General Motors' Flint Metal Center, but contrary to some predictions, workers here aren't preparing their own burial site. There's new life in the 55-year-old stamping plant, which is laying the foundation for the addition of two massive, new transfer stamping presses while several smaller presses have been, are being,...

Ryan Garza/The Flint JournalConstruction workers continue to make way for two new presses at Flint Metal Center that will be the largest metal stamping presses in the plant.

FLINT -- There's a lot of digging going on in General Motors' Flint Metal Center, but contrary to some predictions, workers here aren't preparing their own burial site.

There's new life in the 55-year-old stamping plant, which is laying the foundation for the addition of two massive, new transfer stamping presses while several smaller presses have been, are being, or are scheduled to be rebuilt.

"They had us written off for dead," said Don Reinhart, shop chairman for UAW Local 659. "We are out to do what they said we can't do. This plant's not going anywhere."

The Metal Center is fortifying its position as a part of GM’s long-range plans by taking on work that had once been done at other company stamping plants, including Pontiac, Mansfield, Ohio, and Grand Rapids.

In addition to new and rebuilt presses, workers are installing equipment that will allow it to produce aluminum hoods for the electric Chevrolet Volt.

The future didn't look so bright for the Metal Center as recently as last year because of GM’s bankruptcy and because the company had too much stamping plant capacity.

The 2007 UAW-GM national contract implied that Flint Metal might be in jeopardy for closing because of non-concrete language on future work for it and other stamping plants.

The contract gave no guarantees that work would continue at Flint Metal, only saying that poducts were scheduled to remain there unless reallocated to another GM facility.

But with the new equipment investment and new non-truck products the plant will be able to produce, plant officials say there’s reason to be optimistic, partly because of increasing diversification.

Where now 62 percent of parts produced go into trucks or sport utility vehicles, that percentage is expected to even out to a 50-50 mix of car and truck stampings by 2011.

"If you're going to be a one industry town, it's better to be diversified within that one industry," said Kristin Dziczek, group director and assistant research director for the Center for Automotive Research in Ann Arbor.

"You want a diversified base there for the community," Dziczek said. "You want those engines and stampings you make going to other plants" outside Flint.

GM officials at the Metal Center said employees deserve credit for their flexibility and willingness to do so much in such a compressed period of time, allowing GM to justify keeping Flint Metal operating.

Ryan Garza/The Flint JournalMachine repairman Mark Spence works on modifying a small transfer press at Flint Metal Center adding new parts for the machine to process metal faster and be more productive.

"There's been a tremendous pride in what's going on," said Plant Manager Amy Farmer. "The amount of attention to detail and engagement of all of our people" has been incredible.

Some of that attention went into rebuilding a transfer press that had been mothballed and used for scrap for eight years. Workers replaced motors, belts and other parts in the big press, putting it back in service in October.

"This press was dead. We increased its capacity and (it) runs faster than it ever has before," said Telva McGruder, engineering manager for the plant. "We're extending the life of the press so we can continue to operate ... without a lot of capital investment."

Dave Spyhalski, an electrician and team leader in the plant, said employees rose to the challenge of putting new technology in the old stamping press, fixing problem spots they knew existed.

"That machine sat there for eight years," Spyhalski said shortly after the press turned metal sheets into pieces of door and window frame. "This is quite an improvement. Before we could only do so much. With the new technology — what a difference.

"It feels good to know you're building something you can take pride in."

Dziczek said the investment in Flint Metal is a good sign for the plant's longer-term survival even though it comes "at the expense of other stamping operations” in GM.

Assistant Plant Manager Philip Renner said the new equipment at Flint Metal won't increase employment but should protect jobs that are already here.

"We are one of the few plants that are maintaining employment," Renner said.

About Flint Metal Center

•History: Opened in 1954.

• Size: 1.6-million square feet on 85-plus acres at 2238 W. Bristol Road, Flint.

• Total employment: 1,349 with 1,193 hourly workers

• Production: Averaged 292 tons of metal stampings shipped per day in 2008

General Motors analyst predicts solid November US sales

Thu, 19 Nov 2009 22:34:25 UTC

GM's top sales analyst says U.S. auto sales in November could top an annual rate of 10.8 million for the first time year besides this summer, which was helped by the Cash for Clunkers rebates. General Motors Co. Executive Director of Market Analysis Mike DiGiovanni says the auto industry is having a solid sales month through the first 19 days...

GM's top sales analyst says U.S. auto sales in November could top an annual rate of 10.8 million for the first time year besides this summer, which was helped by the Cash for Clunkers rebates.

General Motors Co. Executive Director of Market Analysis Mike DiGiovanni says the auto industry is having a solid sales month through the first 19 days of November. He says it's another sign that the economy is beginning a slow recovery.

The Edmunds.com automotive Web site forecasts an annual light vehicle sales rate of 10.3 million for the month and J.D. Power and Associates predicts 10.2 million.

DiGiovanni also says GM could see its fourth straight month of market share gains in November.

The government's Cash for Clunkers program offered rebates to people who traded in older vehicles, boosting sales in July and August.

Economy 101: The post-Clunker rise in car prices

Wed, 18 Nov 2009 22:42:09 UTC

The government's Cash for Clunkers program offered a lot of Americans great deals on new cars. Now, those falling prices have shifted into reverse. Prices for new and used cars rose sharply in October, partially reflecting a whiplash from the government trade-in program that winnowed inventories at dealership lots. The price spike also has to do with car companies...

AP file photo

The government's Cash for Clunkers program offered a lot of Americans great deals on new cars. Now, those falling prices have shifted into reverse.

Prices for new and used cars rose sharply in October, partially reflecting a whiplash from the government trade-in program that winnowed inventories at dealership lots. The price spike also has to do with car companies delivering more expensive 2010 models to the showroom.

The Labor Department reported Wednesday that consumer prices for new cars rose 1.6 percent, the largest monthly increase since May 1981. Used cars also saw a price hike of 3.4 percent in October — their largest increase since September 1980.

All of this came against the backdrop of a sluggish economy — consumer prices are lower than a year ago and the higher car prices accounted for 90 percent of the overall 0.3 percent consumer price gains last month.

Economists and analysts said the steeper prices reflected a combination of factors in the new and used car market. Here's a look at what happened and what to expect in the months ahead.

Q: Why did new car prices spike when everything else was flat?

A: Cash for Clunkers, the summertime government program that gave consumers up to $4,500 to trade in a clunker for a more fuel-efficient vehicle, helped many new car dealers reduce their inventories in July and August. And most car companies have cut production because of the tough economy so many consumers had less to choose from when they surveyed dealerships in October.

The tighter inventories came as the new 2010 model year vehicles arrived en masse and many dealerships and manufacturers were less inclined to offer incentives.

"The Cash for Clunkers program may have wiped out the '09 models that have been sitting there but the brand-new 2010 models come and they can command a higher price for those," said Dr. James Brock, an economist at Miami University in Oxford, Ohio.

Q: How was the used car market affected?

A: Clunkers reduced the inventory of used cars because the government required the traded-in cars and trucks to be scrapped.

"A lot of (the used cars) were taken off the road in the Cash for Clunkers program so a lot of those trade-ins were scrapped instead of being available," said David Wyss, chief economist for Standard and Poor's in New York. "On top of that you had a pretty healthy demand for used cars because people aren't buying new ones."

Tom Webb, chief economist at Manheim Consulting, which produces an index of the used car market, said the lower new car sales in 2009 have reduced the number of vehicles traded-in to dealerships, reducing inventories and allowing used car dealers to charge a higher price.

Car companies have also cut their sales to rental companies, leading to fewer trade-ins of used cars from fleets.

Q: What does this say about the overall economy?

A: Hard to tell. Analysts noted that auto sales stabilized in October and showed improvements compared with the dramatic decline during the fall of 2008. If projected for an entire year, October sales rose to 10.5 million units compared with 9.2 million in September, a positive development but well below the annual sales of 15 million cars and trucks or more in the late 1990s and early 2000s.

The Cash for Clunkers program, meanwhile, galvanized auto showrooms during the summer but has led to reduced inventories, making it difficult to gauge the market until carmakers replenish car lots in the coming months.

"It's distorted the data both for new and used cars," Wyss said.

Q: Should I wait for prices to cool down? Or should I buy now?

A: Jesse Toprak, vice president for industry trends and insight with Truecar, a Santa Monica, Calif., company that tracks car buying habits, said he expects car prices to remain high for the rest of the year because dwindling vehicle inventories will keep dealer incentives down. Sport utility vehicles and pickup trucks, which tend to be more expensive, also take up a larger share of the market in November and December as consumers in cold weather states plan for the snow, mud and ice of winter.

But Toprak said consumers can still find a deal, especially if they're willing to buy an '09. His company found that "Black Friday," the hot shopping day after Thanksgiving, was the best day of the year to buy a car. Most consumers are shopping for sweaters instead of cars, average car incentives tend to be higher than normal that day and many dealers facing end-of-the-month sales quotas are more willing to bargain.

"It creates a perfect storm for car buying that day," Toprak said.

Republicans John McCain, Michael Steele suddenly oppose GM, Chrysler bailouts, blame unions

Wed, 18 Nov 2009 22:21:08 UTC

Politicians' recent statements are misleading and an affront to autoworkers.

The Republican Party has long been known as the party of business.

But we're learning that not all businesses are welcome to the party, including:

• Companies with unionized work forces.

• Corporations that receive more money in federal loans from a Democratic administration than from a Republican presidency.

• General Motors Co. and Chrysler Group LLC.

Those are the only explanations I can offer as to why two of the nation's most prominent Republicans, Arizona Sen. John McCain and party Chairman Michael Steele, recently dumped on the recovery efforts of the two Detroit automakers.

McCain, speaking at a NASCAR race, no less, got all mavericky with reporters last Sunday, saying he was opposed to the federal bailouts of GM and Chrysler (after he was in favor of them), and predicted Chrysler would fail.

Sen. John McCain
Michael SteeleAnd Monday, Steele said GM's third-quarter loss of $1.2 billion is "further proof that President Obama's economic experiments are wrong for America."

Steele failed to mention, though, that Republican President George Bush started the experiment by approving $13.4 billion of the $50 billion loaned to GM.

GM said Monday it's doing well enough to start repaying some of it unused federal loans in December, years ahead of schedule.

The statements by Steele and McCain were, of course, calculated to build political support for their party by those who are opposed to organized labor and government intervention in the economy.

They also were misleading and an affront to the hundreds of thousands of men and women who are working to rebuild GM and Chrysler following bankruptcy reorganizations last summer.

McCain said the government had to lend GM and Chrysler $80 billion because the United Auto Workers union wouldn't renegotiate their "very generous contracts" to trim costs.

"It was all about the unions," McCain said, according to the Detroit News.

But the UAW did renegotiate its contracts with GM and Chrysler, taking what amounts to a $7 per hour cut in wages and benefits, and giving up the right to strike until 2015.

The union also agreed to accept large equity stakes in the company instead of cash to fund retiree health care benefits.

Rather than lend money to GM and Chrysler, McCain said the federal government should have let them go bankrupt and reorganize the way most troubled companies do.

Here's the problem: The near collapse of the banking industry in the fall of 2008 dried up the credit markets, making it virtually impossible for GM and Chrysler to find needed bankruptcy financing.

Their only option was to obtain so-called "debtor-in-possession" loans from the federal government. Otherwise, GM and Chrysler likely would have been liquidated.

Auto industry analysts said the liquidation of the two probably would have taken down the entire domestic auto industry, including Ford Motor Co.

Even the plants of nonunion Asian automakers in the South could have been shut for extended periods for lack of parts, some analysts concluded.

Is that the outcome McCain and Steele would have preferred? I hope not.

E-mail Rick Haglund: rhaglund@boothmichigan.com

Ford tops annual insurance industry list of safest new vehicles

Wed, 18 Nov 2009 13:44:38 UTC

Ford, Subaru and Volkswagen lead the insurance industry's annual list of the safest new vehicles, according to a closely watched assessment used by car companies to lure safety-conscious consumers to showrooms.

Ford | AP PhotoThis product image released by Ford shows the all new 2010 Ford Taurus.
Ford, Subaru and Volkswagen lead the insurance industry's annual list of the safest new vehicles, according to a closely watched assessment used by car companies to lure safety-conscious consumers to showrooms.

The Virginia-based Insurance Institute for Highway Safety awarded its "top safety pick" on Wednesday to 19 passenger cars and eight sport utility vehicles for the 2010 model year. The institute substantially reduced the number of awards compared with 2009, because of tougher requirements for roof strength.

Ford Motor Co. and its Volvo unit received the most awards with six, followed by five awards apiece for Japanese automaker Subaru and German automaker Volkswagen AG and its Audi unit.

Chrysler Group LLC received four awards followed by two each for Honda Motor Co. and General Motors Co.

MORE FORD AWARDS

• Ford Fusion selected as Motor Trend's Car of the Year

Toyota Motor Corp., BMW AG, Mazda Motor Corp. and Mitsubishi Motors Corp. were shut out in the annual IIHS review.

Ford's recipients include the Ford Taurus and Lincoln MKS passenger cars and the Volvo S80 and C30 passenger cars and the XC60 and XC90 SUVs.

Ford said in a statement it is "committed to providing customers with safe vehicles for a broad range of real-world crash conditions."

Subaru recorded winners with the Subaru Legacy, Outback and Impreza cars and Tribeca and Forester SUVs. Subaru was the only automaker with an IIHS winner in all four vehicle classes in which it competes.

The automaker, which has bucked the brutal U.S. sales market with a 13 percent increase during the first 10 months of 2009, attributed its safety success to a unique engine design that sits low in the vehicle chassis and moves down and under occupants in a frontal collision.

Tom Doll, executive vice president and COO of Subaru of America, said the awards were a "tribute to the engineering that goes into Subaru products."

Volkswagen scored with the 4-door versions of the Jetta, Passat and Golf, the Audi A3 and the Volkswagen Tiguan, a small SUV. Mark Barnes, Volkswagen of America's chief operating officer, said the "safety of our cars is of the utmost concern, from the initial design stages all the way through the maintenance procedures at dealerships."

Chrysler won the award for the Chrysler Sebring and Dodge Avenger sedans equipped with optional electronic stability control, the Dodge Journey midsize SUV and the Jeep Patriot with optional side thorax air bags.

Scott Kunselman, Chrysler's senior vice president-engineering, said the awards underscore the Auburn Hills, Mich., automaker's "engineering capability and leadership in occupant protection."

General Motors Co. and Honda Motor Co. both received two awards. GM was recognized for the Buick LaCrosse and the Chevrolet Malibu while Honda won for 4-door versions of the Civic with optional electronic stability control and the Honda Element.

Other winners included the Nissan Cube, the Kia Soul and the Mercedes C Class.

The vehicles are selected for best protecting motorists in front, side and rear crash tests based on Institute evaluations during the year. The vehicles are required to have electronic stability control, or ESC, to qualify for the award. Earlier this year, the Institute said vehicles would need to receive its highest score in its roof strength evaluation to qualify the safety pick designation.

"With the addition of our roof strength evaluation, our crash test results now cover all four of the most common kinds of crashes," said Institute president Adrian Lund. "Consumers can use this list to zero in on the vehicles that are on the top rung for safety."

The Institute awarded its top prize to 94 vehicles in 2009 and attributed the decline in awards this year to the roof strength requirement. The Honda Accord and the Ford Fusion both dropped off the list because 2010 versions didn't earn high enough scores on the roof test.

The Toyota Camry would have made the list, the Institute said, if it had received the highest rating in rear crash protection. The Institute said the Camry's seats and head restraints were rated marginal for protection against whiplash injuries.

GM gets tax break to stay in Detroit headquarters

Wed, 18 Nov 2009 04:08:15 UTC

LANSING, Mich. — General Motors Co. is promising to keep its headquarters in Detroit in return for expanded state tax credits approved Tuesday.

AP photoGeneral Motors world headquarters in Detroit

LANSING, Mich. — General Motors Co. is promising to keep its headquarters in Detroit in return for expanded state tax credits approved Tuesday.

The Michigan Economic Growth Authority gave the go-ahead to extend tax credits the company won in June for agreeing to build a new small car at its Orion Township plant near Pontiac. The tax credits now cover some workers at GM's Renaissance Center headquarters in downtown Detroit.

The new agreement says GM must keep 22,500 employees in the state rather than just 20,000 to get the tax credits, including around 2,500 in the Renaissance Center. About 4,000 GM employees work there now, GM spokesman Greg Martin said.

How many employees will remain in Detroit will be worked out with state economic development officials over the next month. But Martin says the automaker is committed to keeping its headquarters in the Motor City.

"We understand how important it is to maintain a presence in Detroit," he said.

Gov. Jennifer Granholm echoed that sentiment during a Tuesday news conference in Lansing.

"From a symbolic and a real perspective, it is incredibly important," she told reporters. "The city, obviously, benefits enormously from having those employees there in the Renaissance Center. It's iconic. It's a symbol. For it to abandon Detroit would send a terrible message."

Martin said GM is looking at moving some Renaissance Center employees to other GM sites as it realigns its shrunken staff.

It's likely some workers will be moved from Detroit to the GM Technical Center in Warren. Those workers could include marketing employees who work with the engineers and technicians designing new cars.

"Those are instances of where it makes sense to probably have those people together," Martin said.

The size of the tax credit is still being determined, but the state agreement now covers 17 GM facilities in Michigan plus the Renaissance Center.

GM bought the Renaissance Center in the mid-1990s and houses most of its corporate employees in two of the seven towers that rise beside the Detroit River and anchor downtown. It erected an earlier headquarters in Detroit in 1919.

Rep. Gary Peters challenges John McCain to come to Michigan and meet Chrysler workers

Tue, 17 Nov 2009 22:17:07 UTC

U.S. Rep. Gary Peters (D-Bloomfield Township) is taking Arizona Sen. John McCain to task for saying he believes Chrysler won't be able to survive, and has challenged McCain to meet with employees of the struggling automaker.

File PhotoGary Peters
U.S. Rep. Gary Peters (D-Bloomfield Township) is taking Arizona Sen. John McCain to task for saying he believes Chrysler is unlikely to survive, and has challenged McCain to meet with employees of the struggling automaker.

Peters took issue with McCain saying if "anybody believes that Chrysler is going to survive, I'd like to meet them.” That comment was one of several critical remarks McCain made about the federal bailout of Chrysler and General Motors while he served as grand marshal of a NASCAR race in Arizona, according to The Detroit News.

Peters sent a letter to McCain Tuesday, saying he accepts McCain's unintentional invitation:

"I would like to take you up on your offer and will meet with you at your convenience to discuss the future of Chrysler and the contribution they make to our nation’s economy. Better yet, I’d be more than happy to bring you to my district to meet with thousands of Americans who are working hard everyday to design new and exciting vehicles and ensure the continued future of the American automobile industry. I think that after seeing first hand all the great things that are happening at Chrysler and learning more about the business plan they released earlier this month, you may find yourself more optimistic. Hopefully then you might choose to be a partner in the continued success of an industry critically important to our country."

The full text of Peters' letter to McCain is available on his Web site.

Tax credits approved for GM to keep employees at Renaissance Center in Detroit

Tue, 17 Nov 2009 20:56:27 UTC

State officials have approved tax credits that will allow General Motors Corp. to keep its headquarters at the Renaissance Center in Detroit, but only if the automaker agrees to maintain a minimum number of employees at that site.

MLive File PhotoThe Renaissance Center, which houses the world headquarters of General Motors, in downtown Detroit.State officials have approved tax credits that will allow General Motors Corp. to keep its headquarters at the Renaissance Center in Detroit, but only if the automaker agrees to maintain a minimum number of employees at that site.

The Michigan Economic Growth Authority (MEGA) voted Tuesday to extend an existing tax credit for the Renaissance Center, but included a provision that GM must keep at least 2,500 employees at the facility, according to the Detroit Free Press.

A Freep report on Monday said GM is considering whether to relocate about 1,500 of its 4,000 employees at the Renaissance Center to other sites in metro Detroit, such as GM's Warren Technical Center.

The minimum staffing requirement is negotiable, but GM must "maintain a significant presence” at the Renaissance Center, Gov. Jennifer Granholm said in a press conference after the MEGA meeting.

Eric Henning, GM's vice president for state and local affairs, told the Freep that the company did not expect staffing requirements to be part of the tax credit agreement. He said GM has not yet decided whether it will move employees out of the Renaissance Center.

Ford Fusion selected as Motor Trend's Car of the Year

Tue, 17 Nov 2009 18:43:57 UTC

The Fusion, which was first introduced in 2005 and was redesigned this year, was up against 22 other vehicles for the award, including the Toyota Prius, the BMW 7-Series and the Chevrolet Camaro.

AP file photoThe Ford Fusion has been selected by Motor Trends magazine as Car of the Year. The award is among the most prestigious in the automotive industry.The Ford Fusion has been selected by Motor Trend magazine as Car of the Year, one of the most prestigious awards in the automotive industry.

The magazine made the announcement this afternoon in an official Webcast.

The Fusion, which was first introduced in 2005 and was redesigned this year, was up against 22 other vehicles for the award, including the Toyota Prius, the BMW 7-Series and the Chevrolet Camaro.

Motor Trend says Ford Motor Co. deserved the chops for making the Fusion one of the most versatile cars on the market.

Motor Trend, Nov. 17: Today, the 2010 Ford Fusion's impressive bandwidth as a model range was one of the many factors that helped it earn the 2010 Motor Trend Car of the Year award.

Want an economical midsize sedan that doesn't cost much, yet won't bore you to tears? Need to please your greener side with a high-tech hybrid? Fancy a near-sport sedan with AWD, 18-inch rolling stock, and the latest infotainment and electronics? Depending on which model you choose and how many option boxes you tick, the Fusion can be any of the above. Arthur St. Antoine calls the Fusion "a compelling sweep across one of the market's most hotly contested segments."

The Ford Fusion is the tenth best-selling vehicle in America, but quickly gaining on the market.

According to the Detroit Free Press, the Fusion saw a 15.3% sales gain in October, while rivals Toyota Camry and Honda Accord saw large declines in sales numbers last month.

RNC Chairman Michael Steele: GM's $1.2 billion loss 'further proof that President Obama's economic experiments are wrong for America'

Tue, 17 Nov 2009 12:33:21 UTC

While General Motors yesterday said its $1.2 billion third-quarter loss hinted toward future gains, Republican National Committee Chairman Michael Steele focused on what he described as past failures.

Mark Copier | The Grand Rapids PressRepublican National Committee chairman Michael Steele in Holland last week.
While General Motors yesterday said its $1.2 billion third-quarter loss hinted toward future gains, Republican National Committee Chairman Michael Steele focused on what he described as past failures.

"Today’s release of General Motors’ financial results is further proof that President Obama’s economic experiments are wrong for America,” Steele said yesterday in a statement.

"Sadly, GM has not only failed to turn a profit since the president poured $50 billion of the taxpayers’ dollars into GM’s bankruptcy restructuring, but it has actually lost $1.2 billion.”

Steele isn't afraid to make controversial statements about the auto industry (he predicted back in June that GM will turn into Amtrak under Obama administration), but several critics have cried foul on this latest claim.

Detroit Free Press columnist Tom Walsh today pointed out a few flaws in Steele's logic:

The third quarter began July 1. GM exited bankruptcy July 10. "Perhaps in Steele's foggy fantasyland of pre-Obama economics, all bankrupt companies became wildly profitable within days of exiting bankruptcy," Walsh wrote. "But in the real world, that's rare."

Wait, didn't President Bush approve aid for the automaker too? As Walsh writes, "Two presidents, of course, acted to keep GM alive, with the first $13.4 billion coming from the guy who was neither Obama nor a Democrat."

Brad Woodhouse, communications director for the Democratic National Committee, took his rebuttal a bit further.

"Republicans will politicize anything — even good news — and have no problem cheering against America,” he wrote in an e-mail to reporters.

“This morning, GM announced that they are making progress in turning an iconic and vital American company around — and that they would repay government loans four years early — something even the most cynical of the president’s political opponents could cheer — unless you’re Michael Steele and the Republican Party."

So, who to believe? Is a $1.2 billion loss really a good sign for General Motors?

As Walsh points out, GM's losses were much less than in previous quarters and less than predicted, the company took in $3.3 billion more cash than it spent in the third quarter and sales were up 21 percent.

A $1.2 billion loss isn't ideal, and GM's future isn't a sure bet. But taken in context, the automaker's reported loss seems a long way from "proof that President Obama’s economic experiments are wrong for America."

Report: GM may move 1,500 jobs from Renaissance Center in downtown Detroit

Tue, 17 Nov 2009 11:48:27 UTC

General Motors is going after state tax breaks to help keep 2,500 corporate workers in its Renaissance Center headquarters in downtown Detroit, but another 1,500 employees could be forced to move.

File PhotoGeneral Motors headquarters in downtown Detroit
General Motors is going after state tax breaks to help keep 2,500 corporate workers in its Renaissance Center headquarters in downtown Detroit, according to the Detroit Free Press, but another 1,500 employees could be forced to move.

Freep.com, Nov. 16: GM has an estimated 4,000 workers at the complex. In a blow to Detroit, the 37% of employees not covered by the tax credits -- roughly 1,500 -- could be transferred to other GM facilities in southeastern Michigan, including the Warren Technical Center, a person familiar with the discussion said.

As GM announced its third-quarter earnings yesterday, CEO Fritz Henderson confirmed some employees would be moving but did not offer a specific number an maintained that the Renaissance Center will remain the company's headquarters.

Warren Mayor Jim Fouts in October predicted most GM employees would eventually move to the Technical Center.

"Let them keep Fritz Henderson and his secretary and his board down at the Renaissance Center and they can call that their world headquarters," Fout said. "But ultimately, everything else is coming to Warren. It makes no sense for them to stay at the Ren Cen. If they are going to survive, they are going to have to consolidate."

GMAC CEO Alvaro de Molina steps down

Tue, 17 Nov 2009 02:13:41 UTC

GMAC Financial Services said Monday that Alvaro de Molina has stepped down as CEO, a surprise departure that comes as the troubled auto lender remains in negotiations with the government over its third round of taxpayer aid. A person familiar with the situation said De Molina was asked to step down by GMAC's board of directors. The person declined...

AP File PhotoIn this undated portrait provided by GMAC Financial Services, outgoing CEO Alvaro de Molina is shown. Troubled auto and home lender GMAC Financial Services on Monday, Nov. 16, 2009 said de Molina is stepping down.GMAC Financial Services said Monday that Alvaro de Molina has stepped down as CEO, a surprise departure that comes as the troubled auto lender remains in negotiations with the government over its third round of taxpayer aid.

A person familiar with the situation said De Molina was asked to step down by GMAC's board of directors. The person declined to be named because the reasons behind De Molina's exit have not been made public.

Treasury Department officials stressed that they had nothing to do with Molina's departure, calling the decision "100 percent GMAC's." That's in contrast to the Obama administration's ouster earlier this year of GM CEO Rick Wagoner, who was pressured to step down as a condition for taxpayer aid.

GMAC director Michael A. Carpenter will take over as CEO. In an interview, Carpenter affirmed that no government entity had any say in De Molina's departure.

"To the contrary, the board reached its own conclusions," Carpenter said. "As the board looked forward, it decided that it really wanted some more strategic skills. It wanted more turnaround skills, more operations skills. So that is, in short, the basis I believe for a change."

De Molina's resignation comes as the lender is negotiating with the Treasury Department over additional taxpayer aid. GMAC is instrumental to the operations of automakers General Motors Co. and Chrysler Group LLC, but its finances have been haunted by bad loans it made during the housing boom.

GMAC, which became a bank holding company late last year, has received $12.5 billion in taxpayer money and is 35 percent owned by the federal government. The FDIC also took the rare step earlier this year of allowing the junk-rated company to gain access to its debt-guarantee program, called the Temporary Liquidity Guarantee Program. It agreed to guarantee up to $7.4 billion in GMAC-issued debt in case the company defaulted on payment.

But results of the federal government's "stress tests" earlier this year demanded that GMAC raise an $11.5 billion capital cushion to help it weather further economic decline. Of 10 banks asked to raise additional cash, GMAC was the only one that failed to be able to raise the funds privately.

The Detroit lender has asked the government to postpone any decision on additional taxpayer aid until Carpenter and the company's management assess GMAC's situation and are able to advise Treasury on the amount needed.

Carpenter told The Associated Press that the company would need no more than $5.6 billion in aid. Senate Banking Committee Chairman Chris Dodd has said the company would receive between $2 billion and $5 billion more in aid.

De Molina's exit ends a tenure that lasted less than two years. GMAC declined to make him available for interviews, but he said in a statement it was a "good time for me to move on to my next chapter."

"I came to GMAC thinking that it was a short-term assignment working through a liquidity crisis. That crisis lasted two years," he said. De Molina did not say what his next move would be.

De Molina was named CEO in April 2008 by private-equity firm Cerberus Capital Management LP, which held an ownership stake in the lender at the time. He was recruited the year before as GMAC's chief operating officer after spending 17 years at Bank of America Corp.

Bank of America has been seeking a new CEO since announcing Ken Lewis would step down. A Bank of America spokesman declined to comment on speculation that De Molina could fill the role. Richard Bove, a banking analyst at Rochdale Securities, said de Molina would be a good successor to Lewis, but his appointment is unlikely.

"He took like 150 people out of Bank of America to help him at GMAC. He left a really bad taste in the mouth of the board and managers," Bove said.

Carpenter, 62, has been on GMAC's board since May. He was previously CEO of Citigroup's Global Corporate and Investment bank from 1998 to 2002. He headed investment bank Salomon Smith Barney until it merged with Citigroup and also held leadership positions at Travelers Group Inc. and Kidder Peabody Group Inc.

GMAC said Carpenter has resigned from the board of commercial lender CIT Group, which is operating under bankruptcy protection, to devote his full attention to GMAC.

GMAC provides the financing for dealers and customers of GM and Chrysler and its survival is a crucial part of the Obama administration's restructuring of the auto industry. Carpenter said in an interview that providing auto financing is the company's No. 1 priority. Paying back the federal government ranks No. 2.

The lender has been hammered by the downturn in the mortgage and automotive industries. Earlier this month, it said it lost $767 million during the third quarter, as bad loans in its mortgage division, ResCap, weighed on its books. Its auto lending division, however, posted a profit.

Carpenter acknowledged ResCap's finances have weighed on the company and said GMAC is exploring ways to address the division's woes. He said "everything is on the table" and would not rule out a bankruptcy filing for the unit.

A bright spot for GMAC has been Ally Bank, its online consumer banking unit. The bank has offered some of the highest interest rates on CDs in the industry, helping bring in billions of dollars in new deposits this year. But the rates have also irked rivals and drawn the attention of regulators, since as the rebranded banking unit of GMAC, Ally has the backing of billions of government dollars loaned to GMAC.

Federal regulators have since intervened, after an industry group expressed concerns about Ally's ability to afford to pay such rates for deposits. Company executives have said that Ally's rates remain competitive.

GM to decide on European plants within 2 weeks

Tue, 17 Nov 2009 01:49:31 UTC

General Motors Co. said Monday that it plans to decide on the future of its European car making plants within the next two weeks. Nick Reilly, the head of GM's Adam Opel GmbH and Vauxhall divisions, told reporters that he knew workers at plants in Germany, Belgium, Britain, Spain and Poland were waiting to hear about the company's restructuring...

AP PhotoCEO for General motors Europe, Nick Reilly, looks up during a meeting with Minister-President of the Flemish Government Kris Peeters, unseen, at his office in Brussels, Monday, Nov.16, 2009. GM last week called off the planned sale of Germany-based Opel to car parts maker Magna and Russian lender Sberbank.General Motors Co. said Monday that it plans to decide on the future of its European car making plants within the next two weeks.

Nick Reilly, the head of GM's Adam Opel GmbH and Vauxhall divisions, told reporters that he knew workers at plants in Germany, Belgium, Britain, Spain and Poland were waiting to hear about the company's restructuring plans after it reversed a decision to sell the European business.

"We know it is disturbing and unsettling to have this hanging over your head for such a period of time and so we intend to take that decision in a relatively short period of time, approximately two weeks or so," he said after meeting the head of Belgium's Flanders region.

Reilly said GM was weighing options to cut costs at the troubled Opel unit and "we're going to have to take some tough decisions somewhere in Europe to reduce our capacities."

Belgium is keen to keep Opel's Antwerp plant open and earlier this year offered nearly $750 million to upgrade the facilities. Flanders Premier Kris Peeters said the money was still available on certain conditions that he did not mention.

Peeters earlier complained that Belgium could not match the amount of financial support that Germany was willing to offer Opel and Opel's potential buyers — allegedly in return for keeping jobs in Germany while shedding posts at other European plants.

Any condition protecting German jobs at the expense of other countries would break EU state aid rules.

Under pressure from EU regulators, Germany told GM last month that aid would be available whether it hung on to Opel or sold it to any buyer — and even if it rejected the Magna and Sberbank offer that Germany openly favored. GM subsequently decided to ditch the planned sale.