The Associated Press
updated 10:24 a.m. CT, Wed., Jan. 13, 2010
NEW YORK – General Motors Co. says an agreement with Tiger Woods that allowed the fallen golf star to have free access to its vehicles is over.
Woods’ endorsement contract with GM’s Buick brand ended in 2008, but an arrangement remained in place that allowed him to keep several GM loaner vehicles. A spokesman says the arrangement ended on Dec. 31.
Woods has lost a host of endorsement contracts since the Nov. 27 car crash outside his Florida home. The accident triggered allegations marital infidelity that led him to take a break from professional golf, though the GM spokesman says the vehicle arrangement had been previously scheduled to end on Dec. 31.
USA Today reported GM’s decision in a blog post Tuesday.Read More
The final decision on whether Swedish automaker Saab will live or die is likely to come later this month or in February, General Motors Co.’s top European executive said Tuesday.
But GM Europe President Nick Reilly said the longer the troubled brand lingers without being sold, the less likely a sale will be.
In another indication of Saab’s bleak outlook, GM also said Tuesday that two executives have been named to oversee the brand’s wind-down. The executives, Stephen Taylor and Peter Torngren, replace Saab’s CEO and board of directors and will be in charge of liquidating the brand, GM said.
GM started closing Saab operations last week but still is in talks with two possible suitors, despite Tuesday’s appointments.
CEO Ed Whitacre Jr. said last week that he was not optimistic Saab could be saved.
Reilly also told reporters at the Detroit auto show Tuesday that he expects to finish restructuring GM’s Opel operations this month. He says changes that combine GM Europe and Opel management will be announced Friday or Monday.
GM is trying to gain concessions from unions and loans from European countries as it restructures Opel.
GM has been trying to sell Saab for more than a year, but has entertained other bids after a deal with Swedish specialty car maker Koenigsegg collapsed last month.
Dutch automaker Spyker made a bid last week, as did Luxembourg private equity group Genii Capital and also emerged as a new suitor, saying it had teamed up with British billionaire and Formula 1 tycoon Bernard Ecclestone.
But GM announced last week that it had hired a company to start winding down Saab’s operations. The automaker employs about 3,400 people.
Reilly said while the negotiations continue, Saab continues to lose money.
“The longer it carries on as we start to wind it down, the more difficult it is for somebody to come along and buy it,” Reilly said.Read More
In a final attempt to rescue Saab Automobile AB, Dutch auto maker Spyker Cars on Sunday submitted a new offer to buy the Swedish brand from General Motors Co.
Spyker said it has submitted a new 11-point proposal to GM, addressing the issues that made talks collapse earlier this week.
GM on Friday said it would wind down Saab because issues arose during the sales talks with Spyker that could not be resolved, and the window of time to complete a deal was small.
Spyker Chief Executive Officer Victor R. Muller said he hoped the new offer would make GM change its mind.
“We are very confident that our renewed offer will remove the impasse that was standing in the way of an agreement on Friday, and this would still allow us to conclude the deal prior to the expiry of the deadline originally set by GM of Dec. 31,” he said in a statement.
“We have made every effort to resolve the issues that were preventing the conclusion of this matter and we have asked GM and all other involved parties to seriously consider this offer,” he added.
Muller said the new offer removes a demand that a loan from the European Investment Bank to Saab be approved before the end of the year, and has the full backing of Saab’s management.
It said the new offer expires on Monday, giving GM little time to make a decision.
Saab employs about 3,400 people worldwide, most of them at its main plant in Trollhattan, Sweden.
Gert-Inge Andersson, leader of the local government in Trollhattan, daid he did not yet dare to believe in the new offer.
“It’s bordering on torture, of citizens and the employees at Saab, when messages like these fly back and forth,” he told local news agency TT
Swedish government officials declined to comment.
GM bought a 50 percent stake and management control of Saab for $600 million in 1989 and gained full ownership in 2000 for $125 million more.
In February, the Swedish brand went into creditor protection in an effort by GM to sell the unit. A consortium led by Swedish sports car maker Koenigsegg Automotive AB signed a preliminary deal to buy the brand in June but dropped out in November.Read More
Chrysler won’t repay $3.7 billion TARP loan
Plan filed with bankruptcy court has no provision to return money
updated 2:39 p.m. CT, Tues., Dec . 15, 2009
NEW YORK – The U.S. Treasury will not recover any portion of the $3.7 billion still outstanding in loans it made to automaker Chrysler under the Troubled Asset Relief Program, according to the terms of a plan filed with bankruptcy court on Tuesday.
The U.S. government has filed proofs of claim for unpaid principal, interest, fees and expenses, but “will receive no recovery on account of such claim,” according to court documents filed on behalf of Old Carco LLC, the units of Chrysler that remain under bankruptcy protection while they are liquidated.
The proposal was laid out in a disclosure statement filed with the New York bankruptcy court in Manhattan.
A disclosure statement is a comprehensive document sent to creditors before they vote on a plan of reorganization. The Old Carco plan also proposed repaying Class 1 priority claims in full.
The case is In re Old Carco LLC, US Bankruptcy Court, Southern District of New York, No. 09-50002.Read More
The award is a welcome piece of good news for Chrysler Group LLC, which has seen its sales continue to lag even as competitors rebound. The Ram Heavy Duty beat out three other competitors: The Ford F-150 SVT Raptor, the Ford Transit Connect van and the Toyota Tundra 4.6-liter work truck.
The vehicle of the year designation is important to automakers, who often use Motor Trend’s endorsement in their advertising. Last year, Ford Motor Co.’s F-150 truck took the prize. Last month, Motor Trend gave the 2010 Ford Fusion its car of the year award.
Motor Trend praised the Ram Heavy duty for its powerful yet clean engine and its quiet comfortable ride. The magazine also said the truck’s 17,500-pound towing capacity beats out rivals, while the platform received significant upgrades that improve ride, handling and noise compared with the previous model.
“The 2010 Ram Heavy Duty absolutely nailed the award in terms of our criteria, from the attractive exterior styling, to the plush and quiet cabins, to the tough and capable powertrains,” said Angus MacKenzie, editor in chief of Motor Trend, in a statement.
The 2010 Ram Heavy Duty is available in five trim models and sports suspension and brake improvements that are designed to help in carrying heavy loads. The truck starts at $28,165 for a regular cab model, $36,865 for crew cab models and $36,865 for Mega Cab models. It is slated to arrive in dealerships before the end of the year.
Motor Trend said it has refocused the prize this year to reward trucks with greater utility, as leisure truck buyers have largely deserted the market. The magazine said the new focus is reflected in the choice of finalists, like the Ford Transit Connect, a cargo van.
The accolade comes at a time when Auburn Hills, Mich.-based Chrysler continues to suffer from poor sales as the broader industry is recovering. Sales at Chrysler, which merged with Italy’s Fiat Group SPA earlier this year, fell 25 percent in November. Industrywide sales were flat during the same month.
The Ram truck is the best-selling vehicle in Chrysler’s lineup, though sales fell 37 percent to 9,787 in November.
Copyright 2009 The Associated Press.Read More
General Motors Co. CEO Frederick “Fritz” Henderson stepped down Tuesday after the board determined that the company wasn’t changing quickly enough.
Chairman Ed Whitacre Jr. said at a hastily called news conference that he will serve as interim CEO, and an international search for a new CEO and president is planned.
Whitacre thanked Henderson for his work during a period of challenge and change, but said it is time to accelerate the pace of rebuilding the largest U.S. automaker.
The resignation comes just eight months after Henderson, 51, replaced former chairman and CEO Rick Wagoner, who was ousted March 29 by the Obama administration’s government’s auto task force.
Henderson has been with GM his entire career and was the government’s choice to run the beleaguered company after Wagoner left. Whitacre, picked by the government in June to be chairman of the new GM, is considered an industry outsider, having run AT&T Inc. for 17 years.
Whitacre and the board have become increasingly active in the company’s decisions, at times challenging some of Henderson’s decisions. In November, the board voted to abandon plans to sell GM’s European Opel unit. That reversed an earlier option favored by Henderson to sell it to a consortium led by Canadian auto parts supplier Magna International Inc.
“Based on the determination of the board and the pace of the change in the company, it was determined that it was best to initiate a change in direction,” spokesman Chris Preuss said.
An Obama administration official said in a statement that “this decision was made by the Board of Directors alone. The Administration was not involved in the decision.”
Henderson replaced Wagoner a few months before GM entered bankruptcy protection and led the company through a painful government-led and court-supervised reorganization.
With the government’s help, the company emerged from court protection in just 40 days cleansed of massive debt and burdensome contracts that would have sunk it without federal loans.
Henderson continued to downsize the automaker after its emergence from bankruptcy. He sought to scale down GM to just four core brands: Chevrolet, Cadillac, Buick and GMC.
While he has largely succeeded in that goal, attempts to sell the company’s other brands have hit obstacles. Earlier this week, Swedish luxury sports car maker Koenigsegg Group AB backed out of a deal to buy GM’s Saab brand. GM said Tuesday it has some interested bidders but will wind down Saab if nothing materializes by the end of the year.
GM also is winding down Pontiac and was successful in winning a tentative sale of Hummer to a Chinese construction machinery maker.
However, Henderson’s bid to sell Saturn to race car mogul Roger Penske fell through and the brand is now liquidating.
Henderson was scheduled to be the keynote speaker at the Los Angeles Auto Show on Wednesday. GM Vice Chairman Bob Lutz will now deliver the address.
© 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
URL: http://www.msnbc.msn.com/id/34227871/ns/business-autos/Read More
DETROIT – At Kevin Haner’s construction company in Las Vegas, three of the four Dodge Ram pickup trucks are starting to get a little old. He may replace one if he gets a great deal, but he’ll keep running the others until he’s convinced that the housing slump has ended.
Haner’s reluctance to spend is typical of contractors nationwide. This presents a huge problem for the Detroit automakers because truck sales are directly tied to new home construction. Pickup sales are on pace for their worst performance in 17 years, and GM, Chrysler and Ford still sell 91 percent of all full-size pickups in the U.S.
Even as Detroit tries to gain traction with new small cars and electric vehicles in a government-mandated shift toward greater fuel economy, it needs to sell more Rams, Chevrolet Silverados and Ford F-150s. Pickups often sell for $30,000 or more and typically command higher prices and generate more profits than small and midsize cars. They account for 22 percent of sales for the Detroit Three. Until pickup sales rebound, steady profits and solid financial footing will likely prove hard to come by.
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Haner and others have reason to be cautious. While October new home sales were up 6.2 percent over September, construction of homes and apartments fell a larger-than-expected 10.6 percent, and building permits, a key indicator of future construction, slid 4 percent.
“I’m not inclined to take on any more exposure until I see that the building-housing market is thoroughly back out of recession,” Haner said Wednesday after the Commerce Department released the latest reading on new home sales.
“Right now, construction companies are going out of business,” said Erich Merkle, president of the auto industry consulting firm autoconomy.com in Grand Rapids, Mich. “And those companies that are surviving are making do with the existing fleet.”
The housing slump has pushed U.S. pickup sales downward for the past three years. Sales routinely topped 200,000 per month as recently as 2007, but in February they fell to less than 89,000, the low point for the year. They’re off 32 percent from the first 10 months of 2008, according to Ward’s AutoInfoBank. Ford, Chrysler and GM combined to sell 843,000 pickups through October.
In Las Vegas, once among the hottest housing markets in the nation, building declined rapidly in the recession and is just starting to show signs of recovery, Haner said.
His work force surged to 25 during the boom years earlier this decade, but now its down to six. He paid off three of his trucks in 2007 while business was still good, and he’s maintained them so they’ll last.
With the casual truck buyer all but out of the market, automakers have been offering big incentives such as zero percent financing to entice contractors out of their bunkers. But like Haner, most are not budging because of uncertainty about a housing recovery.
The big drop in October home construction numbers brought fears of a double-dip recession in the industry and warnings that 2010 may still be sluggish for the sector. Yet inventory in October dropped to the lowest level in nearly four decades, leading at least one housing industry analyst to predict that builders will be swinging their hammers soon.
Mike DiGiovanni, General Motors’ top sales analyst, said the automaker still projects an upward trend in new housing into the fourth quarter of next year.
Pickup sales are particularly critical to GM. The Chevy Silverado is by far the company’s top-selling vehicle. Even in the recession, GM sold 261,142 Silverados through October, but that’s 35 percent fewer than in 2008.
DiGiovanni believes a recent stabilization in home prices, after months of declines, indicate the industry is starting a comeback.
Markets like Las Vegas have seen prices drop for 12 straight months. But prices have risen for at least six consecutive months in Denver, Washington D.C. and Chicago, according to the Standard & Poor’s/Case-Shiller index of 20 major cities.
Nationally, the median price of a new home was $212,200 in October, almost even with $213,200 a year earlier, but up almost 1 percent from September’s level of $210,700.
“We do think that as we move into next year, residential investment is going to become a small positive for the economy,” DiGiovanni said.
Merkle predicts that housing, and pickup sales, will lag behind the rest of the economy in recovering but still show small improvements next year. But it may take until late next year before contractors like Haner feel safe enough to buy new pickups.
Haner may replace his own Ram pickup because his dealer is offering zero-percent financing. But he plans to run the three company pickups, one of which is nearly six years old, for 250,000 miles or more. A 2004 model has only about 60,000 miles on it, he said.
Haner, who builds custom homes and does renovations and other work, has lived in the west for 35 years. He’s seen many boom-and-bust cycles in the real estate business, and he’s sure the Las Vegas market will rebound.
But when asked what it would take for him to replace his trucks sooner, Haner said: “A hell of a lot more work than we’ve got right now.”Read More
By DEE-ANN DURBIN AP Auto Writer
The Associated Press
The 2010 Ford Fusion was named Motor Trend magazine’s car of the year Tuesday, beating out the Toyota Prius, BMW 7-Series, Chevrolet Camaro and others in the closely watched competition.
It was yet another accolade for Ford Motor Co.’s midsize sedan, which got high reliability scores in the most recent rankings from Consumer Reports and was the top-selling car made by a Detroit automaker through October. U.S. Fusion sales were up 15 percent in the first 10 months of this year, to 148,045, despite a 25 percent drop in overall car sales.
Still, the mid-size Fusion continues to lag behind the Toyota Camry and Honda Accord — perennial leaders in the competitive U.S. mid-size market.
Motor Trend said the Fusion can compete with the Camry and Accord in performance, comfort and fuel efficiency. It praised Ford for offering several versions of the Fusion, including a fuel-efficient gas-electric hybrid and a sporty version with a V-6 engine.
“Ford has proven its resilience in these tough times by delivering to market a car with broad appeal to a broad range of consumers,” Motor Trend Editor in Chief Angus MacKenzie said in a statement.
Motor Trend considered 23 new or significantly refreshed vehicles. The Fusion, introduced in the 2006 model year, was redesigned for 2010 with a new lineup of engines and transmissions, new exterior and interior and new options, including the Sync entertainment system and a blind-spot warning system.
Derrick Kuzak, Ford’s group vice president of global product development, said the 2010 Fusion has a sportier look and better fuel economy than previous versions. It gets 34 miles per gallon on the highway when equipped with a four-cylinder engine and six-speed automatic transmission. The gas-electric hybrid version gets 41 miles per gallon in the city.
The Mercedes-Benz E-Class sedan, Buick LaCrosse, Lexus HS 250h and Hyundai Genesis coupe were among the cars Motor Trend considered. The Fusion also beat out other Ford models, including the Mustang sports car and Taurus sedan.
It was the first time a Ford car had won since 2003, when the Ford Thunderbird got the honor, Kuzak said. Ford’s 2009 F-150 was Motor Trend’s truck of the year last fall. The Nissan GT-R was the car of the year for 2009.
“It reinforces the progress that we’ve made, particularly on the car side of the business,” Kuzak told The Associated Press. “When people think of trucks they think Ford, but we needed to put Ford cars and crossovers in people’s consideration.”
Motor Trend conducts road tests on each vehicle and judges vehicles in six categories: design advancement, engineering excellence, intended function, efficiency, safety and value.Read More