Taxpayers are still owed $132.9 billion from companies like General Motors and the American International Group Inc. who benefited from the financial bailout. Christy Romero, the acting special inspector general for the $700 billion bailout said that some of that money may never be recovered.

Romero says that the bailout, which started in September of 2008, could last for several more years. Some bailout programs, like the effort to help homeowners avoid foreclosure, will last until 2017 and will cost the government at least another $50 billion.

According to the Huffington Post, the American International Group Inc. owes close to $50 billion. General Motors Co. owes $25 billion and Ally Financial Inc. about $12 billion.

Romero also reports that 371 banks still owe taxpayers money. Regions Financial Corp. and Zions Bancorporation both owe more than $1 billion. Synovus Financial Corp., Popular Inc., First Bancorp of San Juan, Puerto Rico, $M&T Bank Corp., all owe seven figure amounts.

USA Today reports that after the 2008 financial crisis Congress authorized $700 billion to lend out to companies in need. About $413 billion was lent out to financial companies and automakers. So far, 77%, or about $318 billion, has been paid back.

Treasury spokesman Matt Anderson said that it could take years for the Treasury to break even. The Huffington Post notes that the Treasury would have to sell its stock for GM at  $53.98 to break even. As of Wednesday, GM’s stock was at $24.92.

Anderson said:

“We’ll continue to balance the important goals of exiting our investments as soon as practicable and maximizing value for taxpayers.”

Romero’s report also uncovered fraud related to TARP. Criminal charges were brought against 10 people during the fourth quarter. Altogether, criminal charges have been brought against 61 people for fraud in relation to TARP.

$132.9 Billion Still Owed to Tax Payers From Bailout is a post from: The Inquisitr

General Motors is keeping up with the new age of technology which is most definitely the case with their research and development labs. As time goes on, high tech gets more and more integrated into vehicles.

From Ford’s Sync technology which is made by Microsoft that offers voice recognition and voice actions, to Mercedes-Benz vehicles that can automatically adjust speed while using cruise control if say someone in front of you slows down.

Examples of technology in cars are all over the place and one thing that GM is working on, could be quite the experience for the next generation of children.

Via MSNBC:

“Working with the Future Lab, at Israel’s Bezalel Academy of Art and Design, GM researchers are exploring ways to turn a car’s rear windows into interactive devices that could permit backseat passengers – children in particular – to have a more interesting experience while traveling.”

Transparent and interactive screens is something that has been further developed more recently. For example, Samsung showed off their Smart Window at CES 2012 which is a transparent, yet interactive screen. The technology is there, it just comes down to figuring out how to make it work in a smaller package and in GM’s case, in a vehicle.

 “Traditionally, the use of interactive displays in cars has been limited to the driver and front passenger, but we see an opportunity to provide a technology interface designed specifically for rear seat passengers,” said Seder. “Advanced windows that are capable of responding to vehicle speed and location could augment real world views with interactive enhancements to provide entertainment and educational value.”

What would you do with interactive rear windows in your car?

GM Developing Interactive Rear Windows is a post from: The Inquisitr

The Chevy Volt, a plug in hybrid from General Motors, hasn’t had the best news coverage since it’s release into the marketplace. Numerous stories of potential for fires have lead to much concern and even prompted a federal investigation.

Fortunately, GM has announced a fix to prevent any potential fires and hopefully boost more positive and not so negative press. The problem originally started with the National Highway Traffic Safety Administration. From doing crash testing, a Chevy Volt caught fire while sitting in their parking lot.

The NHTSA found that it was because of coolant from battery cells leaking onto a circuit board and causing a spark which ignited the car.

From Fox News:

“To prevent this from happening in the future, GM Global Product Chief Mary Barra says that the automaker has redesigned the vehicle safety structure that the pack is housed in to more evenly distribute impact forces during a collision, and is aslo adding a sensor to the coolant system reservoir to monitor the level of the fluid.”

Even though the findings from the NHTSA raised many concerns, no case of such things have happened with consumers. Still, that doesn’t mean they couldn’t which is why it’s good that they’ve finally found a way to fix the problem with the Chevy Volt.

“On a conference call with reporters, GM North America President Mark Reuss said that there have been no real world fires of this type in any of the nearly 8,000 Volts that have been sold to date.”

Would you buy a gas/electric hybrid? Why or why not?

GM Has A Fix To Prevent Future Chevy Volt Fires is a post from: The Inquisitr

If you’ve recently purchased a 2012 Chevrolet Sonic and felt that the brakes were a bit.. off, it’s likely that you’re not imagining it; General Motors announced today that select 2012 Chevrolet Sonic models are being recalled due to missing front brake pads.

GM says that (potentially) affected vehicles were produced at a Michigan factory between June 2, 2011 and November 21, 2011. The 4,873 brake pad-less Chevrolet Sonics were sold in both the U.S. (4,296 vehicles) and Canada (577 vehicles).

According to GM’s statement, the “error” resulted from the brake pads falling off during production, and the issue wasn’t spotted until regular warranty service was performed on a rental Chevrolet Sonic.

The company says it will begin notifying customers by January and, if you believe your vehicle is affected by the issue, GM says you can simply take it to your local authorized dealer. If your 2012 Chevrolet Sonic is found to be missing an inner or outer front brake pad, they’ll replace it free of charge.

On the bright side, GM says that no crashes have been reported as the result of the factory’s little mistake, and your Chevrolet Sonic should still be safe to drive.

Let us know if you own one of the affected vehicles, and if you’ve had any problems beyond abnormally long braking distances.

GM recalling nearly 5,000 Chevrolet Sonics due to missing brake pads is a post from: The Inquisitr

GM engineers believe recent battery fires found after two Chevrolet Volt crashes may have been the result of battery coolant leaks that interacted with on-board electronics.

After two initial crashes showed issues with the cars systems GM engineers have promises to make the car battery “more robust” according to GM product chief Mary Barra.

The goal at this point is for engineers to learn more about fundamental issues that may occur because of electric vehicle system. In each case the battery waited hours and even days after each crash to catch on fire.

GM engineers are working with government engineers to determine how the issue occurred in the first place and how they can avoid future issues with their lithium-ion battery setup. At this time vehicles involved in a crash have their batteries drained by a team of GM workers.

It should be noted that after more than 100 years on the road the same type of issues occur with gas-powered vehicles. 200 non-electric cars caught on fire in the U.S. during crashes in 2010.

In the meantime GM is offering their 6,400 Volt owners a loaner car until the issue can be fully resolved and they have said that buying back the vehicles from worried customers could become a possibility should the issue not be solved in a timely manner.

In the meantime Volt owners have shown almost no concern over their electric vehicles, in fact I saw three non-dealer Chevy Volt’s driving around my city in the last three days and I’m sure that tally will increase as I keep track.

With GM hoping to revitalize their image with the Chevy Volt line their approach to helping customers immediately may in fact end up providing an unexpected benefit, proof that the company want their customers to be happy and fully satisfied with the GM vehicles they decide to purchase.

Do you think the Chevy Volt battery issue will ultimately hurt sales or will GM’s quick response and excellent customer service help the company attract an entirely new demographic of buyers.

[Image via Eric Broder Van Dyke / Shutterstock.com]

Chevrolet Volt Fires May Have Been Result Of Coolant Leak is a post from: The Inquisitr

Over the last week we have been reporting about an issue with Chevy Volt batteries that caused one vehicle’s battery to burst into flames after a crash test and now GM has announced that they are looking for a solution and will buy back any vehicles from customers who don’t feel safe with their new hybrid electric vehicle.

Speaking to the Associated Press a company’s spokesperson says they will recall the vehicles if needed and:

“If we find that is the solution, we will retrofit every one of them.”

As GM Chairman Dan Akerson points out:

[During testing] “the fire broke out seven days later. Not seven minutes. Not seven seconds.”

His statement was meant to show that the fire  was not the fault of an immediate crash. Researchers believe a chemical reaction caused by a damaged battery may have led to the fire.

According to the company OnStar immediately notifies GM works of any crashes and they are immediately sent out to drain the car’s battery.  As Akerson points out:

“I think in the interest of General Motors, the industry, the electrification of the car, it’s best to get it right now than when you have—instead of 6,000—60,000 or 600,000 cars on the road.”

If you happen to own a Chevrolet Volt GM is currently offering loaner vehicles while they continue to investigate the battery issue.

[Image via Eric Broder Van Dyke / Shutterstock.com]

General Motors Prepared To Recall Chevy Volt, May Buy Back Vehicles is a post from: The Inquisitr

Owners of the Chevrolet Volt are being offered loaner vehicles by General Motors after the National Highway Traffic Safety Administration announced a probe into possible safety issues with the vehicles lithium ion-batteries.

The NHTSA announced on Monday that they were monitoring the vehicles after one vehicle caught on fire during a  crash test. The new finding comes only a short period of time after another crash test revealed a battery that gave off sparks and smoke.

Potential problems with the Volt’s batteries head all the way to June where a battery fire was witnessed at a test facility in Wisconsin.

GM in the meantime is phoning the 5,000 customers who have purchased a Volt since December 2010 to ensure them that their vehicles are safe and to offer a loaner vehicle if the customer feels unsafe in their Chevy Volt as the NHTSA continues to investigate the vehicle’s safety standards.

In an attempt to protect their new vehicles recent popularity GM had two top level executives on their Monday conference call as they announced their new vehicle loaner program.

According to GM there have been several Volt crashes on public roads and none of those vehicles have caught fire and their battery packs were not compromised.

Speaking about the confidence they have in their vehicles GM North American President Mark Reuss said:

“We don’t think there’s an immediate fire risk,” and “This is a post-crash activity.”

Are you impressed with GM’s quick and consumer friendly response to recent issues that may compromise the safety of the Chevy Volt?

[Image via Eric Broder Van Dyke / Shutterstock.com]

GM Offering Loaner Vehicles To Chevy Volt Customers is a post from: The Inquisitr

Federal safety regulators are investigating the safety of batteries used to power electric vehicles in light of a Chevrolet Volt’s battery caught fire three weeks after undergoing a routine crash test.

The National Highway Traffic Safety Administration said that it was questioning automakers who produce, or plan to produce, battery-powered cars to understand how each manufacturer handles the lithium-ion batteries that powers such cars.

Despite the Chevrolet Volt battery fire incident, both GM and Federal officials say that there is no reason to believe that the Chevrolet Volt is unsafe.

“First and foremost, I want to make this very clear: The Volt is a safe car,” said Jim Federico, GM chief engineer for electric vehicles.

“We are working cooperatively with NHTSA as it completes its investigation,” he continued. “However, NHTSA has stated that based on available data, there’s no greater risk of fire with a Volt than a traditional gas-powered car.”

Despite insistence by GM and federal officials that the Chevrolet Volt is still considered to be safe, GM stock took a bit of a plunge on Friday, falling by as much as 3% after Bloomberg first reported the Chevrolet Volt battery fire news. GM stock ended up down 12 cents a share at the end of trading.

Source: Reuters

Chevrolet Volt battery fire sparks probe by U.S. regulators is a post from: The Inquisitr

In an attempt to avoid bankruptcy automobile manufacturer Saab plans to sell to Zhejiang Youngman Lotus Automobile Co. and Pang Da Automobile Trade Co. for the low price of just $142 million.

The company’s have until November 15 to close the deal after singing a memorandum of understanding.

Saab was forced to scale back their production of vehicles to almost nothing starting in March when the company ran out of the money needed for production. The company then almost filed for bankruptcy last month but the process was halted when a Swedish court provided the company with creditor protection.

The announcement of the company’s problems come after General Motors offloaded the manufacturer in February 2010 for $400 million in preferred shares and cash.

Shares at the company fell by 32 percent upon news of the sellout while overall share prices have plummeted by 80 percent in 2011 which give the company a real world valuation of just 19.5 million Euros.

Under the proposed agreement Youngman will own 60 percent of Saab shares while Pang Da will control the remaining 60 percent.

For their purchase the two company’s will take control of an automobile manufacturer who’s production high of 133,000 cars in 2006 has been marred by ever decreasing sales with just 31,700 Saab’s being purchased in 2010.

It should be noted that this isn’t the first time Saab has neared bankruptcy, in 1989 the company was failing until GM purchased half of the company and in 2009 as GM was in a crisis of it’s own they said Saab could be closed down in the same fashion they did with the Saturn, Pontiac and Hummer brands.

With the new deal Saab hopes to offer delivery terms to their suppliers and begin full production again in the near future.

While governmental regulations and Sweden and China must approve the deal the biggest hurdle could come from former owner General Motors. Saab Chief Executive Officer and Chairman Victor Muller revealed:

“This is a transaction that requires a lot of consensus from General Motors. It’s not just the preference shares and technology rights. There are many, many relationships with General Motors, all of which need to be taken into consideration, so it will be a lot of work. What I can tell them is that Saab will be a fantastic client for them.”

Included in their debt to GM is $326 million in preferred shares which Pang Da and Youngman will assume should they purchase the company.

It is expected that the deal will see at least some of the company 3,7000 employees laid off.

Saab To Be Sold To Chinese Manufacturer, Will Likely Cut Jobs is a post from: The Inquisitr

GM recalls were issued on Wednesday for the company’s 2012 Chevrolet Equinox and 2012 GMC Terrain vehicles. The recall is related to the tire pressure monitoring system which according to the National Highway Traffic Safety Administration isn’t up to federal standards.

The recall only effects Equinox and Terrains built from July 18 through Sept. 6, 33,964 vehicles in total. GM says customers can determine if their vehicles are included in those dates by checking the sticker located  inside driver-side door jam.

GM completely redesigned the Equinox and Terrain models in 2010 and they have been big sellers since that time with Equinox sales numbers up 33% in September while Terrain vehicle sales increased by 45%.

According to GM the tire pressure warning light which is suppose to show when a tire is 25% below the recommend tire pressure was not illuminating when 25% below the recommended cold tire pressure.

According to USAToday:

An underinflated tire can cause tire overloading and overheating, leading to a blowout and possible crash. Not to mention it also wears out your tires, causes poor handling and cuts your fuel economy.

GM recalls are expected to begin in October and the body control module will be updated free of charge. Buyers looking for more information can call Chevrolet at 800-630-2438 or GMC at 866-996-9463.

GM Recalls 2012 Chevrolet Equinox and GMC Terrain SUVs is a post from: The Inquisitr

With consumers still concerned about the economy, Automakers across the country are beefing up their production of compact cars. Ford, GM, Toyota, and Hyundai have all added Saturday shifts to keep up with consumer demand as customers continue to look for smaller ticket prices and better gas mileage.

Compact car sales are up nearly 13 percent from last year. Through July, Automakers sold nearly 1 million compact cars, despite the fact that sales for the two most popular models, the Honda Civic and the Toyota Corolla, have dropped.

According to Boston.com, companies like Ford and GM are trying to scoop up compact car sales as Japanese manufacturers continue to struggle to find parts after the march earthquake.

Chevrolet is leading the compact car charge with the Chevrolet Cruze. Sales numbers for the Cruze are up 74% over Chevy’s previous compact offering, the Cobalt. GM introduced the Cruze last year, and this July it was the top selling car in the country.

Sales for the Nissan Sentra are up 33%, while Hyundai Elantra sales are up 54%.

In fact, automakers are selling so many compact cars that they are having a hard time keeping them in stock. At current sales rates, GM only has enough Cruzes for 27 days on their lots, which is well below the 60 day mark which is considered optimal.

Scott Fink, the president of Hyundai of New Port Richey in Tampa, Florida, told the CS Monitor:

“As the Elantras come in, nine out of 10 of them are pre-sold. So we really don’t have any in stock.”

But despite the compact car boom, the auto industry is still expecting sales to drop. IHS, which originally estimated that 12.7 million cars would be sold this year. Has dropped that number to 12.5 million. Automakers are expected to discount cars and add incentives at the end of the year to boost sales. Will you be buying a compact car?

Automakers Increase Compact Car Production is a post from: The Inquisitr

Hoping to increase new vehicle sales in 2011 General Motors on Wednesday announced a new program that provides free automobile insurance to new GM car buyers. Anyone who buys a new vehicle from the company will receive free automobile insurance for one full year in both Washington and Oregon states.

According to GM the insurance is offered with no additional costs and will be provided by MetLife Auto & Home.

Chris Perry, U.S. vice president of General Motors Marketing told CNN:

“We want to give residents of Oregon and Washington another reason to discover Chevrolet, Buick, GMC and Cadillac vehicles.”

The program runs through September 6 and includes liability and physical damage coverage and “exceeds the minimum coverage in both states” according to GM.

If the program is a success it may roll out in other states, however at this time those two areas were chosen because GM has had a hard time gaining market share in the area, despite overall country wide sales increasing by 11% so far this year.

Would you be willing to take a closer look at a GM vehicle if the offer came to your neighborhood?

GM: Free Car Insurance For New Automobile Buyers is a post from: The Inquisitr

The Chevy Volt has been the companies most highly touted “green” vehicle for over a year now and the first production milestone is also finally behind them.

The U.S. government has reportedly put in an order for 100 Chevy Volts, the first pre-production models to roll off the Hamtramck assembly line and a rousing show of support for the companies newest high mileage car.

While reports continue to circulate about the deal GM released the following statement:

“[GM is] pleased to see that the Federal government is interested in the greening of their vehicle fleet,” adding that they have “no further details regarding these purchases.”

U.S. Government Buys First 100 Pre-Production Chevy Volts [Rumor] is a post from: The Inquisitr

Well maybe not complete disaster since no-one will probably be able to save them from that, however a recent idea from the company hit Twitter and saw nothing but a chorus of boo’s and hisses causing GM to kill the idea.

And what was that idea you ask?

It seems the GM got the brilliant brainwave to do a Saturn Vue plug-in-hybrid-electric type car, I guess trying to cover all the bases. According to Ray Wert at Jalopnik two separate sources in GM told him that the idea was killed deader than dean when GM management saw the beating the idea was taking on Twitter.

I guess the car buffs on Twitter can now pat themselves on their collective Twitter backs over saving GM from even more embarrassing failures.

Twitter saves GM from disaster is a post from: The Inquisitr

In light of the massive bailout for the automobile industry and the constantly shifting executives a rather interesting story has surfaced as to one of the reasons that GM is having such a hard time. While it is somewhat of an inside joke many people have wondered why it is that GM cars has such bad interiors compared to their competition. Sure some of the blame can be transferred right down the supply chain but it turns out it could be much more basic than that.

According to a well placed GM insider who contacted the crew at The Truth About Cars (TTAC) blog it all boils down to the executives. As it turns out the executives of GM have never known, and still don’t know that there is any real problem. Robert Farago at TTAC writes

As you probably know, ever since GM was founded, its execs have either been driven by a chauffeur or provided with carefully prepared and maintained examples of the company’s most expensive vehicles. Of course, there are times when the suits must sign off on the company’s more prosaic products. Since 1953, this intersection between high flyer and mass market occurred at GM’s Mesa, Arizona, Desert Proving Grounds (DPG). The execs would fly into Phoenix’s Sky Harbor airport, limo out to the DPG and drive the company’s latest models.

Our agent says that all the vehicles the execs drove were “ringers.” More specifically, the engineers would tweak the test vehicles to remove any hint of imperfection. “They use a rolling radius machine to choose the best tires, fix the headliner, tighten panel and interior gaps, remove shakes and rattles, repair bodywork—everything and anything.”

Did the execs know this? “Nope. And nobody was going to tell them . . . As far as they knew, the cars were exactly as they would be coming off the line. That’s why Bob Lutz thinks GM’s products are world-class. The ones he’s driven are.”

I asked Agent X if the GM execs would ever drive the cars again. Did he know if Wagoner or Lutz dropped in at a dealership to test drive a random sample off the lot? He found the idea amusing.

Robert also writes that their contact says that rather than the situation improving it is actually getting worse. Between selling off their major testing grounds in Arizona and some real problems at the replacement facility in Michoacán, Mexico the situation doesn’t look good.

But then of course we all get to see these new television ads proclaiming the new GM …. I wonder if that means the executives driving the real cars that are going to market or just some more specially prepared ringers.

GM: Making something better means knowing about the problem is a post from: The Inquisitr

GM Dealership Closures

The specific General Motors dealerships closing list has yet to be revealed. GM says it will be holding discussions in the coming weeks to make its final decisions. The process, according to published reports, is beginning today.

The GM dealerships in question reportedly have 120,000 unsold vehicles valued at $2.5 billion. All of the GM dealership closures are expected to occur by next October.

General Motors announced it was cutting 47,000 jobs this past February. In April, the company discussed further cuts, including the elimination of the Pontiac brand.

Chrysler, meanwhile, revealed this week that it was shutting down a quarter of its American dealerships. A full list of Chrysler dealerships closing can be found here.

General Motors Dealerships Closing: 1,100 Locations Affected is a post from: The Inquisitr

The GM Announcement

GM’s announcement indicates up to 8,000 U.S. factory jobs will be cut and 2,600 dealers will be closed by 2010. The Pontiac line of vehicles will become history, allowing GM to instead focus on “four core brands” of Chevrolet, Cadillac, Buick and GMC.

“The revised plan moves up the resolution of Saab, Saturn, and Hummer to the end of 2009, at the latest,” the company says. Thus far, GM is engaged in “talks” about the Saab and Hummer brands, according to the Detroit Free Press — but the Saturn brand has yet to spark interest that could allow it to be built past the end of the year, the paper reports.

The full GM announcement follows.

General Motors (NYSE: GM) today presented an updated Viability Plan that will speed the reinvention of GM’s U.S. operations into a leaner, more customer-focused, and more cost-competitive automaker.

The Viability Plan is included in an exchange offer whereby GM is offering certain bondholders shares of GM common stock and accrued interest in exchange for certain outstanding notes.

Revised Viability Plan goes further and faster

The Viability Plan announced today builds on the February 17 Viability Plan submitted to the U.S. Treasury. The revised Plan accelerates the timeline for a number of important actions and makes deeper cuts in several key areas of GM’s operations, with the objective to make us a leaner, faster, and more customer-focused organization going forward.

Significant changes include:

- A focus on four core brands in the U.S. – Chevrolet, Cadillac, Buick and GMC – with fewer nameplates and a more competitive level of marketing support per brand.

- A more aggressive restructuring of GM’s U.S. dealer organization to better focus dealer resources for improved sales and customer service.

- Improved U.S. capacity utilization through accelerated idling and closures of powertrain, stamping, and assembly plants.

- Lower structural costs, which GM North America (GMNA) projects will enable it to breakeven (on an adjusted EBIT basis) at a U.S. total industry volume of approximately 10 million vehicles, based on the pricing and share assumptions in the plan. This rate is substantially below the 15 to 17 million annual vehicle sales rates recorded from 1995 through 2007.

“We are taking tough but necessary actions that are critical to GM’s long-term viability,” said Fritz Henderson, GM president and CEO. “Our responsibility is clear – to secure GM’s future – and we intend to succeed. At the same time, we also understand the impact these actions will have on our employees, dealers, unions, suppliers, shareholders, bondholders, and communities, and we will do whatever we can to mitigate the effects on the extended GM team.”

Fewer U.S. brands, nameplates, and dealers

As part of the revised Viability Plan and the need to move faster and further, GM in the U.S. will focus its resources on four core brands, Chevrolet, Cadillac, Buick and GMC. The Pontiac brand will be phased out by the end of 2010. GM will offer a total of 34 nameplates in 2010, a reduction of 29% from 48 nameplates in 2008, reflecting both the reduction in brands and continued emphasis on fewer and stronger entries. This four-brand strategy will enable GM to better focus its new product development programs and provide more competitive levels of market support.

The revised plan moves up the resolution of Saab, Saturn, and Hummer to the end of 2009, at the latest. Updates on these brands will be provided as these initiatives progress.

Working with its dealers, GM anticipates reducing its U.S. dealer count from 6,246 in 2008 to 3,605 by the end of 2010, a reduction of 42%. This is a further reduction of 500 dealers, and four years sooner, than in the February 17 Plan. The goal is to accomplish this reduction in an orderly, cost-effective, and customer-focused way. This reduction in U.S. dealers will allow for a more competitive dealer network and higher sales effectiveness in all markets. More details on these initiatives will be provided in May.
Sales volume and market share projections

The Viability Plan anticipates improved financial results despite more conservative U.S. sales volume expectations going forward. The lower volume expectations are the result of managing the business with fewer nameplates and dealers, leaner inventories, and reduced market share. To address the inventory issue, GM on April 23 announced U.S. production schedule reductions of approximately 190,000 vehicles during the second and early third quarters of 2009.

The Viability Plan also reduces GM’s market share projections to adjust for the impact of the brand and dealer consolidation, as well as for the short-term impact of speculation regarding a GM bankruptcy. The plan assumes a 19.5% share in 2009, with share stabilizing in the 18.4 to 18.9% range in subsequent years.

“We have strong new product coming for our four core brands: the Chevrolet Camaro, Equinox, Cruze and Volt; Buick LaCrosse; GMC Terrain; and Cadillac SRX and CTS Sport Wagon and Coupe,” said Henderson. “A tighter focus by GM and its dealers will help give these products the capital investment, marketing and advertising support they need to be truly successful.”

Lower structural costs, lower breakeven point

The Viability Plan also lowers GMNA’s breakeven volume to a U.S. annual industry volume of 10 million total vehicles, based on the pricing and share assumptions in the plan. This lower breakeven point (at an adjusted EBIT level) better positions GM to generate positive cash flow and earn an adequate return on capital over the course of a normal business cycle, a requirement set forth by the U.S. Treasury in its March 30 viability plan assessment.

GM will lower its breakeven point by cutting its structural costs faster and deeper than had previously been planned:

- Manufacturing: Consistent with the mandate to accelerate restructuring, we plan to reduce the total number of assembly, powertrain, and stamping plants in the U.S. from 47 in 2008 to 34 by the end of 2010, a reduction of 28 percent, and to 31 by 2012. This would reflect the planned acceleration of six plant idling/closures from the February 17 plan, and one additional plant idling. Throughout this transition, GM will continue to implement its flexible global manufacturing strategy (GMS), which allows multiple body styles and architectures to be built in one plant. This enables GM to use its capital more efficiently, increase capacity utilization, and respond more quickly to market shifts.

- Employment: U.S. hourly employment levels are projected to be reduced from about 61,000 in 2008 to 40,000 in 2010, a 34% reduction, and level off at about 38,000 starting in 2011. This further planned reduction of an additional 7,000 to 8,000 employees from the February 17 Plan is primarily the result of the previously discussed operational efficiencies, nameplate reductions, and plant closings. GM also anticipates a further decline in salaried and executive employment as it continues to assess its structure and execute the Viability Plan. More details will be announced as soon as they are finalized with the various stakeholders.

- Labor costs: The Viability Plan assumes a reduction of U.S. hourly labor costs from $7.6 billion in 2008 to $5 billion in 2010, a 34 percent reduction. GM will continue to work with its UAW partners to accomplish this through a reduction in total U.S. hourly employment as well as through modifications in the collective bargaining agreement.

As a result of these and other actions, GMNA’s structural costs are projected to decline 25 percent, from $30.8 billion in 2008 to $23.2 billion in 2010, a further decline of $1.8 billion by 2010 versus the February 17 Plan.

Strengthening GM’s balance sheet

Another key element of GM’s restructuring will be taking the necessary actions to strengthen its balance sheet. GM today took an important step in improving its balance sheet by launching a bond exchange offer for approximately $27 billion of its unsecured public debt. If successful, the bond exchange would result in the conversion of a large majority of this debt to equity.

“A stronger balance sheet would free the company to invest in the products and technologies of the future,” Henderson said. “It will also help provide stability and security to our customers, our dealers, our employees, and our suppliers.”

Another important part of improving the balance sheet will be the ongoing discussions with the UAW to modify the terms of the Voluntary Employee Benefit Association (VEBA), and with the U.S. Treasury regarding possible conversion of its debt to equity. The current bond exchange offer is conditioned on the converting to equity of at least 50% of GM’s outstanding U.S. Treasury debt at June 1, 2009, and at least 50% of GM’s future financial obligations to the new VEBA. GM expects a debt reduction of at least $20 billion between the two actions.

In total, the U.S. Treasury debt conversion, VEBA modification and bond exchange could result in at least $44 billion in debt reduction.

Throughout the Plan, GM will continue to make significant investment in future products and new technologies, with an investment of $5.4 billion in 2009, and investments ranging from $5.3 to $6.7 billion from 2010 to 2014. Very importantly, development and testing of the Chevy Volt extended-range electric car remains on track for start of production by the end of 2010 and arrival in Chevrolet dealer showrooms soon thereafter.

“The Viability Plan reflects the direction of President Obama and the U.S. Treasury that GM should go further and faster on our restructuring,” Henderson said. “We appreciate their support and direction. This stronger, leaner business model will enable GM to keep doing what it does best – provide great new cars, trucks and crossovers to our customers, and continue to develop new advanced propulsion technologies that are vital for our country’s economy and environment.”

GM Announcement: Jobs and Dealers Cut; Pontiac Eliminated is a post from: The Inquisitr

Obama and other administration officials have said they would demand deeper restructuring from General Motors Corp. and Chrysler LLC before they would get any more government loans.

Both GM and Chrysler are living on a total of $17.4 billion in federal aid.

Source: MNBC.com

While one might question the While House making demands like this I’m glad that they are. The automotive industry can’t be expected to live off of the people’s money and still retain the same people who have been responsible for its current situation.

[picture courtesy of Critique Auto / hat tip to Brian Sullivan via FriendFeed]

GM boss told to step down by White House is a post from: The Inquisitr

The criticism from the right blaming autoworkers for the demise of the American auto industry hasn’t always been fair. It isn’t the fault of workers that the big three have produced products people don’t want; management fairly takes a big share of the blame. But then you read these stories you can see partially where the right was coming from.

Reuters reports:

Ford Motor Co expects operating savings of $500 million per year from an agreement with the United Auto Workers that will push hourly wage rates into the “ballpark” of foreign-based rivals, the company said on Wednesday.

The agreement trims average wages and benefits for UAW hourly workers to about $55 per hour this year, while the U.S. operations of foreign-based automakers — or what executives call “transplants” — pay workers on average $48 to $49 per hour, Ford said.

That’s right, $55 per hour. If they work a 36 hour week or longer, that’s $100,000 USD a year, and that’s the reduced pay.

Now I’m all for people getting paid what they deserve, and many of these assembly line jobs could involve a fair bit of technical knowledge. But in a market that in part has been killed by cheap Asian imports, and where many Americans struggle to find jobs, let alone get $10/ hour, workers at Ford have their pay cut to $55/ hour. And a non-American owned company pays workers in the United States $48-$49 per year.

Ford didn’t take a handout from the US Government, but presuming their pay rates are similar to workers at GM and Chrysler, you can safely say that this is part what the auto industry bailout is paying for. Your taxpayer money at work indeed

Ford and Unions negotiate a pay cut…to $55/ hour is a post from: The Inquisitr

General Motors (GM) will slash 47,000 jobs and attempt to sell off prime brands as part of a viability plan submitted to the US Government.

GM was required to submit the viability plan as a condition of receiving an additional $8-$12 billion in bailout loans.

The job cuts will come from the closure of five additional plants on top of the nine plants it had previously announced would close. The locations of the plants have not been disclosed. The plant closures will be accompanied by a reduction in model lines.

GM Dealerships will be reduced from 6,246 in 2008 to 4,700 by 2012, and to 4,100 by 2014.

GM will also attempt to sell, or failing a sale close three prime brands as part of the plan: Saab, Hummer and Saturn.

Reports suggest that Saab will survive, with the Swedish Government negotiating to inject $3 billion into the division, and for all intents and purposes taking over the company.

Hummer looks like it may be in trouble, with rumors of a possible Chinese buyer not confirmed. The Hummer product, popular with the US Army, struggled last year as oil prices pushed the gas price higher, driving down demand for the large gas-guzzling SUV’s Hummer is famous for.

Saturn will live on until 2011, the end of the current model cycle. GM said that it was willing to consider a buyout for the brand, but experts believe this is unlikely to happen. The Saturn brand was launched in 1990 and has never made money for GM.

GM also said that it was in negotiations to reduce costs in Canada, and had already found $1.2 billion in savings in its European operations. Of its Asia-Pacific operations, which include Daewoo in Korea, and Holden in Australia, GM only said that “some of the proposed capacity expansion projects and product programs in the region are no longer financially feasible and will not proceed without financial support from either the respective governments or from other partners.”

GM Viability Plan: 47,000 jobs to go, Saab, Hummer and Saturn for sale, may close is a post from: The Inquisitr