http://charts.tradingmarkets.com/prcharts/index.cfm?from=11/03/2008&to=02/26/2009&prtype=pr&barlen=daily&style=ohlc&months=3&prnumbers=1,2,3,4,5,6,7,8,9,10&cma10=1&cma50=1&cma200=1&sym=GM
Thursday, February 26, 2009
GM Stock Chart February-26 2009
http://charts.tradingmarkets.com/prcharts/index.cfm?from=11/03/2008&to=02/26/2009&prtype=pr&barlen=daily&style=ohlc&months=3&prnumbers=1,2,3,4,5,6,7,8,9,10&cma10=1&cma50=1&cma200=1&sym=GM
Wednesday, February 25, 2009
Ford Motor Company -F- (NYSE) Chart February-25 2009
$2.01 Change: +0.01 Volume: 54,331,708 Percent Change: +0.50%
GM Chart 5-Years February-25 2009
$2.55 Change: +0.33 Open: 2.32 High: Volume: 24,416,103 Percent Change: +14.86%
Auto Parts Companies Performing Satisfactorily
Profits Won't Come from Car Sales
There are 10 large-, mid- and small-cap stocks in the S&P 1500 Automotive Retail subindustry index, two of which are not followed analytically by S&P equity analysts. Two of these index components have favorable investment recommendations: Advance Auto Parts (AAP), which carries a 5 STARS (strong buy) ranking, and O'Reilly Automotive (ORLY), ranked 4 STARS (buy). Auto Nation (AN), with a 2 STARS (sell) opinion, is the only member with an unfavorable investment ranking.
S&P equity analyst Efraim Levy, CFA, says S&P's fundamental outlook for the automotive retailers subindustry is negative, with a greater-than-normal amount of dealerships closing, including more than 900 in 2008. S&P expects hundreds more dealership to disappear in 2009. With the residential housing market tumbling, a more difficult credit environment, and lower consumer confidence, S&P expects reduced demand for big ticket items such as cars. However, bright spots include the sharp decline in gas prices to less than $2 per gallon, from a peak above $4, and the Federal Reserve including new-car dealer floor-plan loans in a $200 billion program, as this should help prevent some dealership failures.
Most auto retailers generate their sales and profits from four different operations: new vehicles, used vehicles, parts and services, and finance and insurance. New vehicle sales typically have the lowest operating margins, but drive business for more profitable finance and insurance sales and parts and services. With its forecast for lower new vehicle sales, S&P expects retailers to focus on generating more business from the remaining categories to offset lower new vehicle profits.
http://www.businessweek.com/investor/content/feb2009/pi20090224_537984.htm?chan=investing_investing+index+page_top+stories
There are 10 large-, mid- and small-cap stocks in the S&P 1500 Automotive Retail subindustry index, two of which are not followed analytically by S&P equity analysts. Two of these index components have favorable investment recommendations: Advance Auto Parts (AAP), which carries a 5 STARS (strong buy) ranking, and O'Reilly Automotive (ORLY), ranked 4 STARS (buy). Auto Nation (AN), with a 2 STARS (sell) opinion, is the only member with an unfavorable investment ranking.
S&P equity analyst Efraim Levy, CFA, says S&P's fundamental outlook for the automotive retailers subindustry is negative, with a greater-than-normal amount of dealerships closing, including more than 900 in 2008. S&P expects hundreds more dealership to disappear in 2009. With the residential housing market tumbling, a more difficult credit environment, and lower consumer confidence, S&P expects reduced demand for big ticket items such as cars. However, bright spots include the sharp decline in gas prices to less than $2 per gallon, from a peak above $4, and the Federal Reserve including new-car dealer floor-plan loans in a $200 billion program, as this should help prevent some dealership failures.
Most auto retailers generate their sales and profits from four different operations: new vehicles, used vehicles, parts and services, and finance and insurance. New vehicle sales typically have the lowest operating margins, but drive business for more profitable finance and insurance sales and parts and services. With its forecast for lower new vehicle sales, S&P expects retailers to focus on generating more business from the remaining categories to offset lower new vehicle profits.
http://www.businessweek.com/investor/content/feb2009/pi20090224_537984.htm?chan=investing_investing+index+page_top+stories
Ford Motor Co United Auto Workers President Calling For Members Concessions
DETROIT. United Auto Workers President Ron Gettelfinger is telling union members to vote for contract concessions to Ford Motor Co., saying the automaker can't survive in the long term without major restructuring.
Gettelfinger says in a letter to 42,000 hourly Ford workers that the company is burning through $1 billion per month to stay in business because revenue has dropped so dramatically.
But the union has also agreed to give up cost of living pay raises and cash bonuses, and the company will offer another round of buyout and early retirement incentives to shed more workers.
Gettelfinger says in a letter to 42,000 hourly Ford workers that the company is burning through $1 billion per month to stay in business because revenue has dropped so dramatically.
But the union has also agreed to give up cost of living pay raises and cash bonuses, and the company will offer another round of buyout and early retirement incentives to shed more workers.
Tuesday, February 24, 2009
2009 Ford Escape Hybrid
Escape is a very competitive choice in the small SUV segment, and for someone looking to help save the planet while bringing their spouse, 2.5 kids, and associated accoutrement along for the ride, a nice alternative to a MINI Cooper.
There’s a new 2.5 liter, 4-cylinder engine that brings with it a much needed boost in power. While the old Escape Hybrid’s 133 horsepower was barely adequate, the 153 hp in the 2009 model is firmly adequate. It’s also a bit quieter and smoother, but not exactly either.
The added power is appreciated, and the gasoline engine works in better concert with the electric motor and continuously variable transmission to move the Escape Hybrid around with less obvious effort than before. Watching the power flow chart on the multimedia screen, I was surprised at how often the juice is on, even at highway cruising speed, not to mention how easy it is to drive the Escape Hybrid without looking out of the windshield.Around town a judicious right foot can keep the fossil fuel at bay for a couple of miles before running the battery down. I often traveled several city blocks without emitting any CO2 and was once able to get the Escape Hybrid up to 35 mph using only the flow of electrons. Impressive for a vehicle that weighs 700 pounds more than a Toyota Prius, a car in which I have never come close to that speed without combusting something internally.
Base Price: $30,635
As Tested: $33,725
Type: Front-engine, front-wheel drive, 5-door crossover
Engine: 2.5-liter Inline-4 cylinder w/electric assist
Power: 153 horsepower, 136 lb-ft torque
Transmission: Electronically Controlled Continuously Variable
MPG: 34 city/31 highway
What do you think about the Escape Hybrid?
http://www.foxnews.com/story/0,2933,486729,00.html
New Top Adviser on Auto Industry Bailout Appointment
Steven Rattner, a financier known in New York society and a counselor to many corporate chieftains, will join the Treasury Department as a lead adviser on the auto industry bailout.
Rattner, 56, will advise Treasury Secretary Timothy Geithner and Lawrence Summers, the director of the National Economic Council, on reorganization efforts by General Motors and Chrysler, two carmakers that are receiving U.S. government bailout money.
He was widely considered the front-runner to become the car czar, the Obama administration's point person in mediating negotiations involving GM and Chrysler and parts suppliers, bondholders and unions. The car czar would have had a direct oversight role for the industry
The stakes for a bailout of the auto industry have never been higher. As part of the $17.4 billion in U.S. government aid GM and Chrysler received in December, they have submitted updates of their reorganization plans, which outlined steep cuts throughout their operations. They have also asked for an additional $14 billion in aid.
Many analysts and industry insiders have said, however, that the only solution to the carmakers' problems is some sort of bankruptcy filing. Should that happen, the U.S. government would almost certainly be responsible for billions of dollars in loans to help keep the factory lights on and the critical vendors like parts suppliers paid. GM and Chrysler have estimated that they would need a combined $125 billion in bankruptcy financing, an amount they are unlikely to get from the government.
http://www.iht.com/articles/2009/02/24/business/24rattner.php
Rattner, 56, will advise Treasury Secretary Timothy Geithner and Lawrence Summers, the director of the National Economic Council, on reorganization efforts by General Motors and Chrysler, two carmakers that are receiving U.S. government bailout money.
He was widely considered the front-runner to become the car czar, the Obama administration's point person in mediating negotiations involving GM and Chrysler and parts suppliers, bondholders and unions. The car czar would have had a direct oversight role for the industry
The stakes for a bailout of the auto industry have never been higher. As part of the $17.4 billion in U.S. government aid GM and Chrysler received in December, they have submitted updates of their reorganization plans, which outlined steep cuts throughout their operations. They have also asked for an additional $14 billion in aid.
Many analysts and industry insiders have said, however, that the only solution to the carmakers' problems is some sort of bankruptcy filing. Should that happen, the U.S. government would almost certainly be responsible for billions of dollars in loans to help keep the factory lights on and the critical vendors like parts suppliers paid. GM and Chrysler have estimated that they would need a combined $125 billion in bankruptcy financing, an amount they are unlikely to get from the government.
http://www.iht.com/articles/2009/02/24/business/24rattner.php
Sunday, February 22, 2009
Tuesday, February 17, 2009
General Motors and Chrysler Asks the Government for an Additional $14 Billion
DETROIT – General Motors and Chrysler asked the government for an additional $14 billion in aid, a dramatic acknowledgment that conditions in the U.S. auto industry have grown significantly worse in just two months. GM presented a survival plan that also calls for cutting a total of 47,000 jobs globally and closing five more U.S. factories.
That represents the largest work force reduction announced by a U.S. company in the economic downturn. Chrysler said it will cut 3,000 more jobs and stop producing three vehicle models.
Meanwhile, the United Auto Workers union said it has reached a tentative agreement with Chrysler, GM and Ford Motor Co. on modifications to labor contracts. Such concessions were also a condition of the government bailout.
GM said it could need up to $30 billion from the Treasury Department, up from a previous estimate of $18 billion. That includes $13.4 billion previously allocated and $9.1 billion in new loans. The world's largest automaker said it could run out of money by March without new funds.
GM's request includes a credit line of $7.5 billion to be used if the downturn in the auto industry is more pronounced than expected. But the automaker claimed it could be profitable in two years and fully repay its loans by 2017.
Chrysler LLC requested $5 billion in new loans on top of the $4 billion it received in December. The company had said it might need an extra $3 billion.
Both requests were part of restructuring plans the two automakers owed the government in exchange for earlier loans.
Ford, which borrowed billions from private sources before credit markets tightened, has said it can make it through 2009 without government help.
GM and Chrysler plan to reduce the number of models they offer to car buyers. GM on Tuesday raised the possibility its Saturn brand could be phased out.
The restructuring plans must be vetted by the Obama administration's new autos task force. In a sign the administration views the U.S. steel industry as a case study for revamping the auto industry, one of the task force's appointees played a key role in the reshaping of that industry earlier this decade.
President Barack Obama's top spokesman told reporters aboard Air Force One on Tuesday that he wouldn't rule out bankruptcy for the Detroit automakers.
The GM job cuts include 10,000 salaried and 37,000 blue-collar positions, amounting to 19 percent of its current global work force of 244,500. A total 26,000 of the cuts will come from outside the U.S. The cuts would take place by the end of this year.
The new plan has the U.S. work force declining from about 92,000 hourly and salaried employees at year-end 2008 to 72,000 by 2012.
GM Chairman and CEO Rick Wagoner said the plan submitted Tuesday is more aggressive than the one presented to the government on Dec. 2 because the global economy and auto sales have deteriorated in the time that has passed since then.
"Today's plan is significantly more aggressive because it has to be," Wagoner told reporters. "We have taken stronger actions, we needed to."
Chrysler had 54,007 employees at the end of 2008, so Tuesday's cuts would equal about 6 percent.
Auburn Hills, Mich.-based Chrysler said the economy and the market for new cars has deteriorated significantly since its initial request. Chrysler said it now projects that automakers will sell 10.1 million vehicles in the U.S. this year, the lowest level in four decades.
Chrysler will eliminate the Dodge Aspen, Durango and Chrysler PT Cruiser, according to company president Jim Press. GM said it plans to sell or spin-off its Saturn brand. If those attempts are unsuccessful, GM will phase out the brand.
GM is also evaluating options for a sale of its Hummer division and sought buyers for its Saab unit. Selling or eliminating those brands would leave GM to focus on Chevrolet, Cadillac, GMC and Buick, with Pontiac reduced to one or two models.
Details were unveiled on a day when President Barack Obama signed into law a massive economic recovery plan. Signs that the recession is deepening were more immediate for investors, however, and they dumped stocks and pushed oil prices sharply lower.
The UAW said discussions are continuing regarding the union-run trust fund that will take on retiree health care expenses starting next year. Under terms of the government loans, both Chrysler and GM are required to reach concessions with the UAW and debt holders.
"The changes will help these companies face the extraordinarily difficult economic climate in which they operate," UAW President Ron Gettelfinger said in a statement released by the union.
GM Chief Financial Officer Ray Young said the company hopes to exchange two-thirds of its roughly $28 billion in unsecured bond debt by the end of March. Bondholders, he said, signed a letter saying that they were making progress with the company.
House Speaker Nancy Pelosi, D-Calif., said she was hopeful the plans would help lead to the "transformation of our domestic automobile industry into a viable, technologically advanced, and globally competitive manufacturing force."
She said "Congress looks forward to working with the Obama Administration" to make the domestic auto sector competitive "while ensuring accountability to the taxpayers."
That represents the largest work force reduction announced by a U.S. company in the economic downturn. Chrysler said it will cut 3,000 more jobs and stop producing three vehicle models.
Meanwhile, the United Auto Workers union said it has reached a tentative agreement with Chrysler, GM and Ford Motor Co. on modifications to labor contracts. Such concessions were also a condition of the government bailout.
GM said it could need up to $30 billion from the Treasury Department, up from a previous estimate of $18 billion. That includes $13.4 billion previously allocated and $9.1 billion in new loans. The world's largest automaker said it could run out of money by March without new funds.
GM's request includes a credit line of $7.5 billion to be used if the downturn in the auto industry is more pronounced than expected. But the automaker claimed it could be profitable in two years and fully repay its loans by 2017.
Chrysler LLC requested $5 billion in new loans on top of the $4 billion it received in December. The company had said it might need an extra $3 billion.
Both requests were part of restructuring plans the two automakers owed the government in exchange for earlier loans.
Ford, which borrowed billions from private sources before credit markets tightened, has said it can make it through 2009 without government help.
GM and Chrysler plan to reduce the number of models they offer to car buyers. GM on Tuesday raised the possibility its Saturn brand could be phased out.
The restructuring plans must be vetted by the Obama administration's new autos task force. In a sign the administration views the U.S. steel industry as a case study for revamping the auto industry, one of the task force's appointees played a key role in the reshaping of that industry earlier this decade.
President Barack Obama's top spokesman told reporters aboard Air Force One on Tuesday that he wouldn't rule out bankruptcy for the Detroit automakers.
The GM job cuts include 10,000 salaried and 37,000 blue-collar positions, amounting to 19 percent of its current global work force of 244,500. A total 26,000 of the cuts will come from outside the U.S. The cuts would take place by the end of this year.
The new plan has the U.S. work force declining from about 92,000 hourly and salaried employees at year-end 2008 to 72,000 by 2012.
GM Chairman and CEO Rick Wagoner said the plan submitted Tuesday is more aggressive than the one presented to the government on Dec. 2 because the global economy and auto sales have deteriorated in the time that has passed since then.
"Today's plan is significantly more aggressive because it has to be," Wagoner told reporters. "We have taken stronger actions, we needed to."
Chrysler had 54,007 employees at the end of 2008, so Tuesday's cuts would equal about 6 percent.
Auburn Hills, Mich.-based Chrysler said the economy and the market for new cars has deteriorated significantly since its initial request. Chrysler said it now projects that automakers will sell 10.1 million vehicles in the U.S. this year, the lowest level in four decades.
Chrysler will eliminate the Dodge Aspen, Durango and Chrysler PT Cruiser, according to company president Jim Press. GM said it plans to sell or spin-off its Saturn brand. If those attempts are unsuccessful, GM will phase out the brand.
GM is also evaluating options for a sale of its Hummer division and sought buyers for its Saab unit. Selling or eliminating those brands would leave GM to focus on Chevrolet, Cadillac, GMC and Buick, with Pontiac reduced to one or two models.
Details were unveiled on a day when President Barack Obama signed into law a massive economic recovery plan. Signs that the recession is deepening were more immediate for investors, however, and they dumped stocks and pushed oil prices sharply lower.
The UAW said discussions are continuing regarding the union-run trust fund that will take on retiree health care expenses starting next year. Under terms of the government loans, both Chrysler and GM are required to reach concessions with the UAW and debt holders.
"The changes will help these companies face the extraordinarily difficult economic climate in which they operate," UAW President Ron Gettelfinger said in a statement released by the union.
GM Chief Financial Officer Ray Young said the company hopes to exchange two-thirds of its roughly $28 billion in unsecured bond debt by the end of March. Bondholders, he said, signed a letter saying that they were making progress with the company.
House Speaker Nancy Pelosi, D-Calif., said she was hopeful the plans would help lead to the "transformation of our domestic automobile industry into a viable, technologically advanced, and globally competitive manufacturing force."
She said "Congress looks forward to working with the Obama Administration" to make the domestic auto sector competitive "while ensuring accountability to the taxpayers."
Sunday, February 15, 2009
Saturday, February 14, 2009
GM to say, 'more aid or bankruptcy'
General Motors Corp. will offer the government the choice of giving it billions more in bailout money or seeing it file for bankruptcy when it presents a restructuring plan next week, according to a report published Saturday.
The online edition of The Wall Street Journal, citing unnamed sources, said the competing choices present a dilemma for the Obama administration, which may fear seeing the industrial icon carmaker (GM:General Motors Corporation
News , chart , profile , more
GM 2.50, -0.15, -5.7%) fall into bankruptcy and cut more jobs if it's refused more aid.
The government has already committed $13.4 billion http://www.marketwatch.com/news/story/gm-say-more-aid-bankruptcy/story.aspx?guid=%7BD2483F8A%2D638A%2D4A2B%2D9EC2%2D428EE920D5E5%7D&tool=1&dist=bigcharts&
The online edition of The Wall Street Journal, citing unnamed sources, said the competing choices present a dilemma for the Obama administration, which may fear seeing the industrial icon carmaker (GM:General Motors Corporation
News , chart , profile , more
GM 2.50, -0.15, -5.7%) fall into bankruptcy and cut more jobs if it's refused more aid.
The government has already committed $13.4 billion http://www.marketwatch.com/news/story/gm-say-more-aid-bankruptcy/story.aspx?guid=%7BD2483F8A%2D638A%2D4A2B%2D9EC2%2D428EE920D5E5%7D&tool=1&dist=bigcharts&
Friday, February 13, 2009
Toyota Motor Corp Cutting Production and Executive Salaries
Toyota Motor Corp. is reacting to the slump in U.S. auto sales by further cutting North American production, slashing executives’ compensation up to 30 percent and offering buyouts to about 18,000 workers.
The company said it will cut production days at some U.S. factories in April — from two to eight days according to the amount of inventory at the particular plant.
The company said it will cut production days at some U.S. factories in April — from two to eight days according to the amount of inventory at the particular plant.
Wednesday, February 11, 2009
Tesla Motors to show off electric sedan next month
Electric luxury car company Tesla Motors is on target to be profitable and to demonstrate a "street-drivable" prototype of its next car next month: the Model S sedan.
http://news.cnet.com/greentech/?tag=hdr;snav
Tuesday, February 10, 2009
GM Woes Selling Off Brands February-10 2009
GM has a few other pieces of its viability plan that are still in the works. When GM laid out its initial plan in December, the company said that it would explore options for its bloated family of brands, including selling or shuttering Saab, Saturn, and Hummer, while shrinking Pontiac down to a brand selling just two cars—likely to be the G8 sedan and the Solstice two-seater—at Buick/GMC dealerships.
The company has explored selling Hummer, Saab, and Saturn. Right now, there are two bidders for Hummer—a Chinese automaker and a private equity player—according to sources familiar with the sale efforts. The sources would not identify the bidders.
But it won't be an easy sell. Even with gasoline prices down, Hummer's aging product line is drawing fewer buyers. Hummer sales fell 62% in January. GM was talking to two players, former Hummer owner AM General and China's Chengfeng Motors. But both have backed away, say sources involved with the sale efforts.
GM still needs to peel Saab out from GM's European business and recapitalize it. For the past month, GM has been in intense negotiations with the Swedish government to get loans through one of two programs. One program has up to $24 billion available to Swedish industrial firms from the European Investment Bank, and another program has up to $600 million available from Sweden's government, said Frank Nilsson, a spokesman for the Swedish Ministry of Enterprise & Energy.
http://www.businessweek.com/bwdaily/dnflash/content/feb2009/db20090210_067970.htm?campaign_id=headlines_daily
The company has explored selling Hummer, Saab, and Saturn. Right now, there are two bidders for Hummer—a Chinese automaker and a private equity player—according to sources familiar with the sale efforts. The sources would not identify the bidders.
But it won't be an easy sell. Even with gasoline prices down, Hummer's aging product line is drawing fewer buyers. Hummer sales fell 62% in January. GM was talking to two players, former Hummer owner AM General and China's Chengfeng Motors. But both have backed away, say sources involved with the sale efforts.
GM still needs to peel Saab out from GM's European business and recapitalize it. For the past month, GM has been in intense negotiations with the Swedish government to get loans through one of two programs. One program has up to $24 billion available to Swedish industrial firms from the European Investment Bank, and another program has up to $600 million available from Sweden's government, said Frank Nilsson, a spokesman for the Swedish Ministry of Enterprise & Energy.
http://www.businessweek.com/bwdaily/dnflash/content/feb2009/db20090210_067970.htm?campaign_id=headlines_daily
GM General Motors Corporation Stock Chart February-10 2009
2.70 Change: -0.13 Open: 2.89
High: 2.93 Low: 2.70 Volume: 9,185,785 Percent Change: -4.59%
General Motors Corp. said it will cut 10,000 white-collar Jobs World-wide
General Motors Corp. said Tuesday it will cut 10,000 white-collar jobs world-wide this year, a move that could help prod the company's main union and bondholders into making concessions as required by GM's $13.4 billion federal loan package.
GM announced the cuts, amounting to 14% of its salaried workers globally, as it rushes to pull together a plan it must submit to the Treasury Department by Feb. 17. The plan is supposed to describe how GM will return to profitability and compete with Japanese rivals such as Toyota Motor Corp.
GM has been talking to the United Auto Workers union ...
http://online.wsj.com/article/SB123427251478068135.html?mod=yahoo_hs&ru=yahoo
GM announced the cuts, amounting to 14% of its salaried workers globally, as it rushes to pull together a plan it must submit to the Treasury Department by Feb. 17. The plan is supposed to describe how GM will return to profitability and compete with Japanese rivals such as Toyota Motor Corp.
GM has been talking to the United Auto Workers union ...
http://online.wsj.com/article/SB123427251478068135.html?mod=yahoo_hs&ru=yahoo
GM Cuts white-collar Workforce By 14% February-10 2009
General Motors said on Tuesday it was cutting its global white-collar workforce by 14 per cent as it copes with a plunge in worldwide vehicle sales and prepares to present a restructuring plan to the US government.
The carmaker also said it was cutting its US salaried workers’ pay temporarily by up to 10 per cent as of May 1.
GM ‘product guru’ leaves the driving seat - Feb-09GM fights to avoid bankruptcy protection - Feb-09Carmakers target R&D departments to survive - Feb-09Lex: GM and Delphi - Feb-09US eyes ways to accelerate car purchases - Feb-09GM said it was notifying its employees of the job cuts, which will take place this year, and reduce its worldwide employment from 73,000 to about 63,000. In the US, about 3,400 of its 29,500 employees will be affected.
Most of the job cuts would also take place by May 1, GM said.
GM said it was cutting its executives’ base pay by 10 per cent, and that of many of its other salaried employees by 3 to 7 per cent.
The carmaker said that the laid-off employees would receive severance payments, benefit contributions and outplacement assistance.
“These difficult actions are necessitated by a severe drop in vehicle sales worldwide and by the need to restructure GM for long-term viability,” the company said in a statement.
GM’s sales plunged by 49 per cent in the US in January.
The carmaker’s other global operations were currently reviewing their pay and benefits for salaried employees, GM said.
Sales of cars in overseas markets, until recently a buffer for GM’s declining US business, have fallen sharply in recent months.
RL Polk, a Michigan-based consultancy, estimated on Tuesday that global light vehicle sales will fall to 56.8m this year, a 13 per cent drop from 2008. It expects US sales to fall by another 19 per cent this year, following a 17 per cent decline in 2008.
Even in Asia, which was expected to cushion the industry, Polk expects sales to fall to 12.4m vehicles a year from 13.3m in 2008, excluding Japan.
GM, which is receiving $13.4bn of emergency bridge loans, pledged to cut its white-collar staff in a restructuring plan submitted to Congress in December. The job cuts announced on Tuesday mark the beginning of “implementation of this aspect of the plan,” GM said.
GM and Chrysler are in talks with bondholders and the United Auto Workers’ union aimed at cutting their fixed costs as they prepare viability plans to present to the government by February 17.
These talks are currently at the due diligence stage. Congress has asked the two carmakers to reduce their debt by two-thirds and bring their labour costs down to those of their Asian competitors as the price of bail-out aid. Chrysler is receiving $4bn from the US government.
Shares in GM added 3 cents to $2.86 in early New York trading. The stock has fallen sharply from its 52-week high of $27.84, reached last November.
http://www.ft.com/cms/s/0/b28f475e-f77d-11dd-81f7-000077b07658.html?nclick_check=1
The carmaker also said it was cutting its US salaried workers’ pay temporarily by up to 10 per cent as of May 1.
GM ‘product guru’ leaves the driving seat - Feb-09GM fights to avoid bankruptcy protection - Feb-09Carmakers target R&D departments to survive - Feb-09Lex: GM and Delphi - Feb-09US eyes ways to accelerate car purchases - Feb-09GM said it was notifying its employees of the job cuts, which will take place this year, and reduce its worldwide employment from 73,000 to about 63,000. In the US, about 3,400 of its 29,500 employees will be affected.
Most of the job cuts would also take place by May 1, GM said.
GM said it was cutting its executives’ base pay by 10 per cent, and that of many of its other salaried employees by 3 to 7 per cent.
The carmaker said that the laid-off employees would receive severance payments, benefit contributions and outplacement assistance.
“These difficult actions are necessitated by a severe drop in vehicle sales worldwide and by the need to restructure GM for long-term viability,” the company said in a statement.
GM’s sales plunged by 49 per cent in the US in January.
The carmaker’s other global operations were currently reviewing their pay and benefits for salaried employees, GM said.
Sales of cars in overseas markets, until recently a buffer for GM’s declining US business, have fallen sharply in recent months.
RL Polk, a Michigan-based consultancy, estimated on Tuesday that global light vehicle sales will fall to 56.8m this year, a 13 per cent drop from 2008. It expects US sales to fall by another 19 per cent this year, following a 17 per cent decline in 2008.
Even in Asia, which was expected to cushion the industry, Polk expects sales to fall to 12.4m vehicles a year from 13.3m in 2008, excluding Japan.
GM, which is receiving $13.4bn of emergency bridge loans, pledged to cut its white-collar staff in a restructuring plan submitted to Congress in December. The job cuts announced on Tuesday mark the beginning of “implementation of this aspect of the plan,” GM said.
GM and Chrysler are in talks with bondholders and the United Auto Workers’ union aimed at cutting their fixed costs as they prepare viability plans to present to the government by February 17.
These talks are currently at the due diligence stage. Congress has asked the two carmakers to reduce their debt by two-thirds and bring their labour costs down to those of their Asian competitors as the price of bail-out aid. Chrysler is receiving $4bn from the US government.
Shares in GM added 3 cents to $2.86 in early New York trading. The stock has fallen sharply from its 52-week high of $27.84, reached last November.
http://www.ft.com/cms/s/0/b28f475e-f77d-11dd-81f7-000077b07658.html?nclick_check=1
Monday, February 9, 2009
Cuts Loom at GM and Chrysler
DETROIT -Fear of more plant closures and other cuts that are likely to cost thousands of jobs is spreading through General Motors Corp. and Chrysler LLC as the companies approach a Feb. 17 deadline to show the government they can be viable.
Both companies' plans are presumed to include concessions from bondholders and the United Auto Workers. GM's plan will include shuttering additional factories as well as salaried pay and job cuts, according to people familiar with the plans.
Both GM and Chrysler must prove to the government that they are able to repay the federal loans that are keeping the companies afloat in the worst U.S. auto sales climate in 26 years. GM has received $9.4 billion and expects to get $4 billion more, while Chrysler has received $4 billion and is hoping to get another $3 billion.
That means the automakers will have to make substantial cost cuts. The companies are required to show the government they can achieve "positive net present value," which means that the present value of a company's expected net cash flows exceeds the initial investment in the company.
White-collar workers may not get buyouts or early retirement offers like they have in the past, and pay cuts could go beyond 5 percent, according to the people, who spoke on condition of anonymity because workers have yet to be notified.
GM workers across the country are dreading Feb. 17, the date that some of the plan's details could become public. Many realize that GM has announced the closure of four pickup truck and SUV plants in the past year, but it hasn't shut down a corresponding number of the engine, transmission and parts stamping factories that feed the assembly lines.
GM Vice Chairman Bob Lutz, in an interview with The Associated Press on Monday, wouldn't give details but conceded that GM will have to get smaller in the U.S. before it can grow again.
"It's going to be a smaller company in the U.S.," he said, adding that GM will grow in other parts of the world such as China. "We may have to take a step back in General Motors to find the right-sizing that's going to permit a profitable existence in a much smaller market."
GM and Chrysler must present their plans to the government by Feb. 17, but they do not have to have them completed until March 31, when the government can demand repayment of the loans if it decides the companies can't become viable.
Some of the targets in the loan terms require bondholders to swap part of the companies' debt for equity. The UAW also must make concessions that will reduce labor costs to the level of Japanese automakers' plants in the U.S.
GM is to hold a big meeting of its bondholders as early as this week, while the union has been waiting to see what concessions other parties make before agreeing to anything.
A so-called car-czar will ultimately decide on the companies' viability, but that person has not yet been appointed by the Obama administration. There also has been talk in Washington of extending the auto companies' deadlines.
Industry analysts say more vehicle assembly plants may need to close. Due to an unprecedented drop in U.S. sales, GM is operating some plants on only one shift at slow line speeds, which is not profitable.
Among the assembly plants at risk is the Pontiac, Mich., truck plant, which makes Chevrolet Silverado and GMC Sierra. Analysts say GM has plenty of pickup truck capacity at other factories.
Also at risk is the Orion Township, Mich., plant that makes the Chevrolet Malibu and Pontiac G6. GM has enough capacity to satisfy demand for the midsize cars at its plant in Kansas City, Kan., according to analysts.
"We always worry, especially after the national contract, where there was no future product put out there," said Mike Dunn, bargaining chairman for the UAW local at the Orion Township plant.
Some analysts say Chrysler may also have to close factories due to slumping sales of some models.
GM last year announced it would close pickup truck and SUV plants in Moraine, Ohio; Janesville, Wis.; Oshawa, Ontario; and Toluca, Mexico. But that was before the U.S. auto market shrunk from an annual sales rate of around 16 million vehicles to 13.2 million last year. Analysts and automakers are predicting industrywide sales to drop as low as 10.5 million this year.
Meanwhile, GM closed only one stamping plant near Grand Rapids, Mich., and no engine or transmission factories, especially those that make parts for slower-selling pickups and SUVs.
"They've been putting most of their efforts into cutting back on big production, but they haven't made the corresponding cuts in powertrain production," said Mike Omotoso, senior manager of global powertrain for J.D. Power and Associates.
GM, wary that Delphi Corp.'s financial woes could interrupt parts supplies and further cripple the automaker, is in talks with its former parts arm about taking back some Delphi factories that make key parts for GM vehicles, a person familiar with the negotiations said Monday.
Troy, Mich.-based Delphi has been operating under Chapter 11 bankruptcy protection for more than three years, and like many suppliers is struggling with the shrinking U.S. auto market.
The person, who asked not to be identified because the talks are private, said they have been under way for several weeks and might not lead to any takeover of the plants. GM has the option to take back factories in its 1999 agreement to spin off Delphi as an independent parts supplier.
Delphi plants make thousands of key parts for the Detroit-based GM's vehicles, including its top selling pickup trucks, the Silverado and Sierra.
Both companies' plans are presumed to include concessions from bondholders and the United Auto Workers. GM's plan will include shuttering additional factories as well as salaried pay and job cuts, according to people familiar with the plans.
Both GM and Chrysler must prove to the government that they are able to repay the federal loans that are keeping the companies afloat in the worst U.S. auto sales climate in 26 years. GM has received $9.4 billion and expects to get $4 billion more, while Chrysler has received $4 billion and is hoping to get another $3 billion.
That means the automakers will have to make substantial cost cuts. The companies are required to show the government they can achieve "positive net present value," which means that the present value of a company's expected net cash flows exceeds the initial investment in the company.
White-collar workers may not get buyouts or early retirement offers like they have in the past, and pay cuts could go beyond 5 percent, according to the people, who spoke on condition of anonymity because workers have yet to be notified.
GM workers across the country are dreading Feb. 17, the date that some of the plan's details could become public. Many realize that GM has announced the closure of four pickup truck and SUV plants in the past year, but it hasn't shut down a corresponding number of the engine, transmission and parts stamping factories that feed the assembly lines.
GM Vice Chairman Bob Lutz, in an interview with The Associated Press on Monday, wouldn't give details but conceded that GM will have to get smaller in the U.S. before it can grow again.
"It's going to be a smaller company in the U.S.," he said, adding that GM will grow in other parts of the world such as China. "We may have to take a step back in General Motors to find the right-sizing that's going to permit a profitable existence in a much smaller market."
GM and Chrysler must present their plans to the government by Feb. 17, but they do not have to have them completed until March 31, when the government can demand repayment of the loans if it decides the companies can't become viable.
Some of the targets in the loan terms require bondholders to swap part of the companies' debt for equity. The UAW also must make concessions that will reduce labor costs to the level of Japanese automakers' plants in the U.S.
GM is to hold a big meeting of its bondholders as early as this week, while the union has been waiting to see what concessions other parties make before agreeing to anything.
A so-called car-czar will ultimately decide on the companies' viability, but that person has not yet been appointed by the Obama administration. There also has been talk in Washington of extending the auto companies' deadlines.
Industry analysts say more vehicle assembly plants may need to close. Due to an unprecedented drop in U.S. sales, GM is operating some plants on only one shift at slow line speeds, which is not profitable.
Among the assembly plants at risk is the Pontiac, Mich., truck plant, which makes Chevrolet Silverado and GMC Sierra. Analysts say GM has plenty of pickup truck capacity at other factories.
Also at risk is the Orion Township, Mich., plant that makes the Chevrolet Malibu and Pontiac G6. GM has enough capacity to satisfy demand for the midsize cars at its plant in Kansas City, Kan., according to analysts.
"We always worry, especially after the national contract, where there was no future product put out there," said Mike Dunn, bargaining chairman for the UAW local at the Orion Township plant.
Some analysts say Chrysler may also have to close factories due to slumping sales of some models.
GM last year announced it would close pickup truck and SUV plants in Moraine, Ohio; Janesville, Wis.; Oshawa, Ontario; and Toluca, Mexico. But that was before the U.S. auto market shrunk from an annual sales rate of around 16 million vehicles to 13.2 million last year. Analysts and automakers are predicting industrywide sales to drop as low as 10.5 million this year.
Meanwhile, GM closed only one stamping plant near Grand Rapids, Mich., and no engine or transmission factories, especially those that make parts for slower-selling pickups and SUVs.
"They've been putting most of their efforts into cutting back on big production, but they haven't made the corresponding cuts in powertrain production," said Mike Omotoso, senior manager of global powertrain for J.D. Power and Associates.
GM, wary that Delphi Corp.'s financial woes could interrupt parts supplies and further cripple the automaker, is in talks with its former parts arm about taking back some Delphi factories that make key parts for GM vehicles, a person familiar with the negotiations said Monday.
Troy, Mich.-based Delphi has been operating under Chapter 11 bankruptcy protection for more than three years, and like many suppliers is struggling with the shrinking U.S. auto market.
The person, who asked not to be identified because the talks are private, said they have been under way for several weeks and might not lead to any takeover of the plants. GM has the option to take back factories in its 1999 agreement to spin off Delphi as an independent parts supplier.
Delphi plants make thousands of key parts for the Detroit-based GM's vehicles, including its top selling pickup trucks, the Silverado and Sierra.
GM and Chrysler Bankruptcy Looks Increasingly Likely
With $17.4 billion owed to the U.S. government amid falling auto sales, General Motors Corp. (GM) and Chrysler LLC may be forced into bankruptcy to reassure loan repayment.
And in a separate story yesterday - which underscores that the auto sector’s woes are going global - Nissan Motor Corp. (ADR:NSANY) said it would cut 20,000 jobs by the end of 2010 and expects to book a net loss for the year ended March 31, which would be its first loss in 14 years.
But the outlook for Detroit’s “Big Three” is clearly worse, right now. From the time U.S. carmakers first approached Congress about obtaining bailout money for the American auto industry, GM and Chrysler have adamantly opposed bankruptcy. Indeed, as far back as their first visit to Washington - when the CEOs caused a firestorm of controversy by flying to the meeting in their corporate jets - the automakers’ top executives said the bankruptcy labels would weaken their companies’ reputations by pushing potential customers to other brands.
However, the government could force bankruptcy by applying the debtor-in-possession status to the loans, which would make debts owed to the government the top priority.
GM and Chrysler have until next Tuesday (Feb 17) to demonstrate progress on their plans - reducing labor costs and showing how they’ll begin repaying loans - enacted in order to receive loans from the Troubled Asset Relief Program (TARP).
GM said it plans to close dealerships and continue cutting union retirement benefits. Chrysler’s CEO Robert Nardelli previously said the company would try reducing debt, Bloomberg reported.
GM is talking with parts maker and supplier Delphi Corp. (DPHIQ) - which was spun off from GM 10 years ago - about buying back assets, which will shore up GM’s supply chain, Reuters reported.
And in a separate story yesterday - which underscores that the auto sector’s woes are going global - Nissan Motor Corp. (ADR:NSANY) said it would cut 20,000 jobs by the end of 2010 and expects to book a net loss for the year ended March 31, which would be its first loss in 14 years.
But the outlook for Detroit’s “Big Three” is clearly worse, right now. From the time U.S. carmakers first approached Congress about obtaining bailout money for the American auto industry, GM and Chrysler have adamantly opposed bankruptcy. Indeed, as far back as their first visit to Washington - when the CEOs caused a firestorm of controversy by flying to the meeting in their corporate jets - the automakers’ top executives said the bankruptcy labels would weaken their companies’ reputations by pushing potential customers to other brands.
However, the government could force bankruptcy by applying the debtor-in-possession status to the loans, which would make debts owed to the government the top priority.
GM and Chrysler have until next Tuesday (Feb 17) to demonstrate progress on their plans - reducing labor costs and showing how they’ll begin repaying loans - enacted in order to receive loans from the Troubled Asset Relief Program (TARP).
GM said it plans to close dealerships and continue cutting union retirement benefits. Chrysler’s CEO Robert Nardelli previously said the company would try reducing debt, Bloomberg reported.
GM is talking with parts maker and supplier Delphi Corp. (DPHIQ) - which was spun off from GM 10 years ago - about buying back assets, which will shore up GM’s supply chain, Reuters reported.
Thursday, February 5, 2009
The Auto Show Viper February-5 2009
January U.S. auto sales down 37%, including slides of 41.6% for Ford, 49% for GM and 55% for Chrysler — was this anomalous factoid: Sales of the Dodge Viper were up 74%. The company sold 127 of the poisonous snakes last month, up from 73 in January 2008.
Why would this be strange? Well, for one thing, the Viper ($91,220 to $104,020) is constructed of pure, unalloyed discretionary income, so you would assume its sales would be a least a little susceptible to the larger effects of the recession. Also, the 10-cylinder, 8.4-liter, 600-hp throttle monster under the hood returns some of the worst fuel economy on the market (13 mpg city/22 highway).
—In January, for the first time in the car's history, Chrysler offered sales incentives, including — get this — a significant discount for AARP members. (Is grandma going to get a mullet too?) "They never ever, ever, ever offered a discount before," Marshall said.
Also, fuel prices collapsed in December and January and — while Viper buyers would drive them if gas were $20 per gallon — the lower fuel cost removed one de-incentivizing element. "It's a matter of perception," Marshall said. "When gas was over $4 a gallon, people who were driving Hummers were generally spat upon. Now that gas is cheap again it's OK to drive gas guzzlers."
Another possible explanation: Chrysler’s owner, Cerberus, is currently shopping Viper around, hoping to sell it as part of the company's restructuring plan to be presented soon to Congress, upon which future federal funds are conditioned. It may be that would-be Viper buyers decided to get in on the last Dodge-branded Vipers before the car becomes, say, the Mahindra Viper. "Those die-hard Mopar fans want to get it while they can," Marshall said. Chrysler officials have said that if no one takes the Viper division/brand off its hands, it would end production in 2011.
Ford Fusion Hybrid Fuel Effiency February-4th 2009
The 2010 Ford Fusion Hybrid, and its twin, the Mercury Milan Hybrid, are mid-to-full-size sedans that seat five in surprising comfort and offer a full-size trunk measuring around 12 cubic feet. They measure 190.6 inches long and weigh a goodly 3,720 pounds. The gas-electric output is 191 horsepower and zero to 60 mph acceleration is under 9 seconds.The retail price of a nicely equipped Fusion Hybrid -- with blandishments such as rearview camera, blind-spot alert and 17-inch alloy wheels -- is $27,270. With the applicable federal tax credit, the car should cost consumers about $25,000, I estimate (final numbers have not been announced).
http://www.newsday.com/classified/automotive/la-fi-neil19-2008dec19,0,4727950.story
Auto Market GM and Ford Huge Drop in Sales February-3rd 2009
General Motors Corp. and Ford Motor Co. said U.S. sales plummeted at least 40 percent in January and Toyota Motor Corp. dived by almost a third, dragging the world’s biggest auto market toward the worst month since 1982.
The declines were 49 percent at GM, the largest U.S. automaker; 40 percent at Ford and 55 percent for Chrysler LLC. Toyota dropped 32 percent, Honda Motor Co. fell 28 percent and Nissan Motor Co. was down 30 percent.Today’s reports showed the toll of sinking confidence among car and truck buyers. GM, Ford and Chrysler said January deliveries may have tumbled to an annual rate of fewer than 10 million vehicles, after full-year sales averaged about 16 million this decade.
“In this downward spiral, as a company it’s hard to plan your business and as a consumer it’s hard to change your sentiment,” said Joe Barker, an analyst at consulting firm CSM Worldwide Inc. in Northville, Michigan. “We’re all looking for some sense of stability in the sale rate.”
Weak consumer and business demand adds to the challenges facing GM and Chrysler as they work to restructure with the help of $17.4 billion in federal loans, and ratchets up pressure on Ford, which says it doesn’t need government aid.
“If 20 percent to 30 percent retail declines persist, it would be more difficult” for Ford to avoid accepting U.S. loans, Standard & Poor’s equity analyst Efraim Levy in New York wrote in a report today. He rates Ford shares as “hold.”
Annual Sales Rate
Light vehicles haven’t sold at an annual pace of fewer than 10 million units in any month since the 9.8 million rate posted in August 1982, according to Autodata Corp. of Woodcliff Lake, New Jersey. The last full year of fewer than 10 million sales was 1970, according to trade publication Automotive News.
Hyundai Motor Co. was alone among large automakers with a gain, saying sales rose 14 percent.
January’s industrywide sales rate may have slipped to fewer than 10 million vehicles, Chrysler President James Press said today in an interview. Ford also raised that prospect, and Michael DiGiovanni, the chief sales analyst at Detroit-based GM, estimated the rate at 9.8 million. December’s figure was 10.3 million and November’s was 10.2 million, the lowest in 26 years.
GM’s Sales
GM said January sales fell to 129,227 cars and trucks, including a 58 percent decline in cars and 43 percent drop in light trucks. The automaker said it will cut North American first-quarter production 57 percent to keep pace with flagging demand.
Ford’s sales to non-business customers were in line with company expectations and retail demand “appears to be stabilizing,” the Dearborn, Michigan-based automaker said in a statement. Ford initially released a tally that didn’t include Volvo, showing a 39 percent drop for its domestic brands.
January had 26 selling days, 1 more than a year earlier. Some automakers release results adjusted for sales days, meaning the totals will be about 4 percent lower than unadjusted numbers. Bloomberg uses unadjusted figures.
Plummeting sales hamper efforts by GM and Chrysler to pare labor costs, cut debt, trim dealers and idle plants to reduce cash use and make a case to keep $17.4 billion in loans from the U.S. Treasury that kept them from slipping into bankruptcy. The companies face a Feb. 17 federal deadline for a progress report.
GM and Auburn Hills, Michigan-based Chrysler are offering cash and vehicle vouchers to entice more factory workers to leave and ended a 25-year-old program that assured union employees most of their pay even when there weren’t any tasks for them to perform.
Job Losses
Buyers shunned showrooms last month as shrinking payrolls sent consumer confidence plunging to the lowest in 42 years of recordkeeping by the Conference Board. The Labor Department probably will say on Feb. 6 that January nonfarm job losses totaled 535,000, based on economists surveyed by Bloomberg.
Tight credit also is damping sales, said George Pipas, Ford’s sales analyst. The Treasury Department provided a $6 billion bailout to GMAC LLC, the lender affiliated with GM, and $1.5 billion in loans to Chrysler Financial to help ease borrowing.
http://www.bloomberg.com/apps/news?sid=afVlRy4hJDLE&pid=20601087
The declines were 49 percent at GM, the largest U.S. automaker; 40 percent at Ford and 55 percent for Chrysler LLC. Toyota dropped 32 percent, Honda Motor Co. fell 28 percent and Nissan Motor Co. was down 30 percent.Today’s reports showed the toll of sinking confidence among car and truck buyers. GM, Ford and Chrysler said January deliveries may have tumbled to an annual rate of fewer than 10 million vehicles, after full-year sales averaged about 16 million this decade.
“In this downward spiral, as a company it’s hard to plan your business and as a consumer it’s hard to change your sentiment,” said Joe Barker, an analyst at consulting firm CSM Worldwide Inc. in Northville, Michigan. “We’re all looking for some sense of stability in the sale rate.”
Weak consumer and business demand adds to the challenges facing GM and Chrysler as they work to restructure with the help of $17.4 billion in federal loans, and ratchets up pressure on Ford, which says it doesn’t need government aid.
“If 20 percent to 30 percent retail declines persist, it would be more difficult” for Ford to avoid accepting U.S. loans, Standard & Poor’s equity analyst Efraim Levy in New York wrote in a report today. He rates Ford shares as “hold.”
Annual Sales Rate
Light vehicles haven’t sold at an annual pace of fewer than 10 million units in any month since the 9.8 million rate posted in August 1982, according to Autodata Corp. of Woodcliff Lake, New Jersey. The last full year of fewer than 10 million sales was 1970, according to trade publication Automotive News.
Hyundai Motor Co. was alone among large automakers with a gain, saying sales rose 14 percent.
January’s industrywide sales rate may have slipped to fewer than 10 million vehicles, Chrysler President James Press said today in an interview. Ford also raised that prospect, and Michael DiGiovanni, the chief sales analyst at Detroit-based GM, estimated the rate at 9.8 million. December’s figure was 10.3 million and November’s was 10.2 million, the lowest in 26 years.
GM’s Sales
GM said January sales fell to 129,227 cars and trucks, including a 58 percent decline in cars and 43 percent drop in light trucks. The automaker said it will cut North American first-quarter production 57 percent to keep pace with flagging demand.
Ford’s sales to non-business customers were in line with company expectations and retail demand “appears to be stabilizing,” the Dearborn, Michigan-based automaker said in a statement. Ford initially released a tally that didn’t include Volvo, showing a 39 percent drop for its domestic brands.
January had 26 selling days, 1 more than a year earlier. Some automakers release results adjusted for sales days, meaning the totals will be about 4 percent lower than unadjusted numbers. Bloomberg uses unadjusted figures.
Plummeting sales hamper efforts by GM and Chrysler to pare labor costs, cut debt, trim dealers and idle plants to reduce cash use and make a case to keep $17.4 billion in loans from the U.S. Treasury that kept them from slipping into bankruptcy. The companies face a Feb. 17 federal deadline for a progress report.
GM and Auburn Hills, Michigan-based Chrysler are offering cash and vehicle vouchers to entice more factory workers to leave and ended a 25-year-old program that assured union employees most of their pay even when there weren’t any tasks for them to perform.
Job Losses
Buyers shunned showrooms last month as shrinking payrolls sent consumer confidence plunging to the lowest in 42 years of recordkeeping by the Conference Board. The Labor Department probably will say on Feb. 6 that January nonfarm job losses totaled 535,000, based on economists surveyed by Bloomberg.
Tight credit also is damping sales, said George Pipas, Ford’s sales analyst. The Treasury Department provided a $6 billion bailout to GMAC LLC, the lender affiliated with GM, and $1.5 billion in loans to Chrysler Financial to help ease borrowing.
http://www.bloomberg.com/apps/news?sid=afVlRy4hJDLE&pid=20601087
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