Posted tagged ‘General Motors’

GM to Sell Cars on eBay

August 10, 2009

It appears that more than 225 General Motors dealers in California will sell vehicles through the eBay online auction site in a four-week trial.

From CNN:

Under the program, which begins Tuesday, consumers will be able to bargain with the dealers for Chevrolet, Buick, GMC and Pontiac cars and trucks from model years 2008, 2009 and 2010. The program ends Sept. 8.

The new car shopping website, gm.ebay.com, will feature a “wide selection” of up to 20,000 new GM vehicles at “competitive prices,” the companies said in a press release.

Customers will be able to buy cars outright at the advertised price using the Web site’s “Buy It Now” option. Alternatively, customers can suggest a price under the “Best Offer” option, which may then be negotiated with the dealer.

“Together with eBay Motors, GM and our dealers are reinventing the car-buying experience for our California customers,” said Mark LaNeve, GM vice president of U.S. sales, in a statement.

GM emerged from bankruptcy protection on July 10, concluding a 40-day stay in Chapter 11 with the sale of its key operations to a new company majority-owned by the U.S. Treasury. The company pledged to win back American consumers and taxpayers.

The automaker has sold certain new and certified-used GM models on eBay Motors in the past. But the scale of the new program marks a significant shift for the online auction house, which is traditionally focused on used cars and auto parts.

GM To Cut More Than 1100 US Dealers

May 15, 2009

General Motors notified 1,100 of its 6,000 dealerships today that it is terminating their contracts with the struggling automaker.

From CNN:

GM spokeswoman Susan Garontakos said that the dealers receiving notice Friday are being told that their contracts will not be renewed in October 2010. Many of them are expected to close shop this year.

The company has told the Obama administration that it plans to cut its network down to 3,600 dealers by next year.

Much of the rest of the cuts will come from GM’s plans to sell or close four brands – Saturn, Hummer, Saab and Pontiac.

Those four brands have about 600 dealerships that do not include other GM brands. But most Pontiac and Hummer dealers will stay in the GM family because they have one of the four remaining GM brands as part of their operation.

Chrysler To Close 789 Dealerships

May 14, 2009

Chrysler hopes to eliminate roughly a quarter of its 3,200 U.S. dealerships by early next month, saying in a bankruptcy court filing this morning that there are too many stores competing with each other.

From the Associated Press:

The company, in a motion filed with the U.S. Bankruptcy Court in New York, said it wants to eliminate 789 dealerships by June 9. Many of the dealers’ sales are too low, the automaker said. Just over 50 percent of dealers account for about 90 percent of the company’s U.S. sales, the motion said.

Dealers were told Thursday morning via United Parcel Service letter if they would remain or be eliminated. The move, which the dealers can appeal, is likely to cause devastating affects in cities and towns across the country as thousands of jobs are lost and taxes are not paid.

General Motors to Cut Jobs, Discontinue Pontiac Brand

April 27, 2009

General Motors has announced this morning that it will cut 21,000 U.S. factory jobs by next year and phase out its storied Pontiac brand.

The company will also ask the government to take more than half its stock in exchange for half of GM’s government debt as part of a major restructuring plan.

From the Associated Press:

The struggling automaker said it will offer 225 shares of common stock for every $1,000 in notes held by bondholders as part of a debt-for-equity swap that aims to retire most of GM’s $27 billion in unsecured debt.

The announcements came in a filing Monday with the Securities and Exchange Commission.

GM is living on $15.4 billion in government loans and faces a June 1 deadline to restructure and get more government money. If the restructuring doesn’t satisfy the government, the company could go into bankruptcy protection.

GM said in a news release that it will ask the government to take 50 percent of its common stock in exchange for canceling half the government loans to the company as of June 1.

In addition, GM is offering the United Auto Workers stock for at least 50 percent of the $20 billion the company must pay into a union run trust that will take over retiree health care expenses starting next year.

Obama: No Bailout Funds for Automakers

March 29, 2009

The White House says neither GM nor Chrysler submitted acceptable plans to receive more bailout money, setting the stage for a crisis in Detroit and putting in motion what could be the final two months of two American auto giants.

From the Associated Press:

President Barack Obama and his top advisers have determined that neither company is viable and that taxpayers will not spend untold billions more to keep the pair of automakers open forever. In a last-ditch effort, the administration gave each company a brief deadline to try one last time to convince Washington it is worth saving, said senior administration officials who spoke on the condition of anonymity to more bluntly discuss the decision.

Obama was set to make the announcement at 11 a.m. Monday in the White House’s foyer.

In an interview with CBS’ “Face the Nation” broadcast Sunday, Obama said the companies must do more to receive additional financial aid from the government.

“We think we can have a successful U.S. auto industry. But it’s got to be one that’s realistically designed to weather this storm and to emerge—at the other end—much more lean, mean and competitive than it currently is,” Obama said.

Frustrated administration officials said Chrysler cannot function as an independent company under its current plan. They have given Chrysler a 30-day window to complete a proposed partnership with Italian automaker Fiat SpA, and will offer up to $6 billion to the companies if they can negotiate a deal before time runs out.

General Motors CEO Rick Wagoner to Step Down

March 29, 2009

General Motors CEO Rick Wagoner will step down after more than eight years with the company.

From Bloomberg:

General Motors Corp. Chief Executive Officer Rick Wagoner will step down after more than eight years running the largest U.S. automaker, people familiar with the situation said.

The people, who asked not to be named because the announcement hasn’t been made, didn’t give a reason why Wagoner, 56, is leaving. Wagoner said as recently as March 19 that he didn’t plan to resign.

From the New York Times:

The chairman and chief executive of General Motors, Rick Wagoner, is resigning, just as President Obama prepares to unveil his rescue plans on Monday for G.M. and the ailing American auto industry, according to a person close to the decision.

The unexpected move by Mr. Wagoner, who has been at the helm of G.M. for eight years, was not confirmed by the company. But a statement about Mr. Wagoner’s future will be issued after the president’s address.

G.M. and Chrysler are on the verge of exhausting the $17.4 billion in federal loans given to them since December. G.M. has asked for up to $16.6 billion more, and Chrysler another $5 billion.

The president’s auto task force is expected to recommend more short-term assistance to the two Detroit companies, but with tight strings attached to the money and a new deadline to get concessions from union workers and creditors.

Barack Obama Signs Stimulus Bill

February 17, 2009

President Barack Obama finally signed a much hyped $787 billion economic stimulus bill into law today.

Time to see if this will help stimulate an economy that needs all the help it can get!

From USA Today:

President Obama called his $787 billion stimulus package the “most sweeping economic recovery act in our history” as he signed legislation in Denver Tuesday to create works projects and tax cuts designed to stimulate the sagging economy.

“I don’t want to pretend that today marks the end of our economic problems,” Obama said. “But today does mark the beginning of the end … the beginning of what we need to do to provide relief” for families that can’t pay their billls.

Before the signing Obama toured a solar panel installation project at the Denver Museum of Nature & Science in order to highlight the “green jobs” projects that are part of the stimulus package.

The bill will create or save 3.5 million jobs.

“We’re putting Americans to work, doing the work that America needs done,” the president said before signing the legislation.

From Reuters:

Obama, who has described the package as one part of a plan to solve his country’s economic ills, was expected to lay out a strategy on Wednesday to stem home foreclosures and address the housing crisis that sparked the financial sector meltdown.

Meanwhile financially strapped General Motors Corp (GM.N) and Chrysler LLC raced to finish restructuring plans that must be submitted to the Obama administration by the end of the day as part of efforts to keep America’s biggest carmakers afloat. [ID:nLH623622]

Obama, speaking in Denver where he visited a solar power installation, has staked his political reputation on the package, a mixture of tax cuts and spending projects, saying its success will determine his success as president.

“We’re putting Americans to work doing the work that America needs done in critical areas that have been neglected for too long … work that will begin real and lasting change for generations to come,” Obama said.

The White House has said it will take about a month for the money to start flowing from the package. Some economists, however, believe the measures will come too late to have an effect in 2009, when many forecasters predict full-year output will contract.

The package includes working class tax cuts, infrastructure spending, help for the poor and unemployed and investment in alternative energy.

Obama has predicted that the stimulus plan will save or create more than 3.5 million jobs over the next two years.

Though a major success for his young presidency, the stimulus debate in Congress laid bare bitter divisions over how to boost an economy suffering a rising jobless rate of 7.6 percent and a banking crisis that has nearly frozen lending.

Only three Republicans voted for the measure in the 100-seat Senate, and no Republicans broke ranks to support it the House, arguing it had too much spending and not enough tax breaks. The final plan was split into 36 percent for tax cuts and 64 percent in spending and other provisions.

GM Cuts 10,000 Jobs

February 10, 2009

Will the job cuts ever end in the US?

General Motors  is planning to slash another 10,000 salaried jobs this year, saying the cuts are unavoidable with a government restructuring deadline looming and industrywide sales in one of the worst downturns in history.

From the Associated Press:

The Detroit-based automaker said Tuesday it will reduce its total number of white-collar workers by 14 percent to 63,000. About 3,400, or 12 percent, of GM’s 29,500 salaried U.S. jobs will be eliminated.

Most of the company’s remaining salaried employees will have their wages cut.

In its plan to Congress submitted late last year, GM said it would have to reduce both salaried and hourly positions so that the company could become viable long-term. The company plans to reduce its total U.S. work force from 96,537 people in 2008 to between 65,000 and 75,000 in 2012, but did not specify how many of the surviving jobs will be salaried or hourly.

GM Chief Executive Rick Wagoner, who was meeting with congressional leaders in Washington about global warming legislation, said Tuesday’s announcement is “indicative of the kind of things we need to do to get this viability plan in shape and respond to these tough market conditions.”

GM has dramatically downsized both its salaried and hourly work forces in recent years as the U.S. auto market has shrunk from an annual sales rate of around 16 million vehicles to 13.2 million last year.

Since 2000, GM’s salaried work force has shrunk by 33 percent from its 2000 high of 44,000 people. At the same time, the number of hourly workers has plunged by more than half — to about 63,700 people at the end of last year from 133,000 in 2000.

Most of the cuts announced Tuesday are expected to take place by May 1. GM said the cuts will vary by global regions depending on staffing levels and market conditions.

The company’s statement said there would be no buyout or early retirement packages as GM had offered in the past, but laid-off employees will get severance pay, benefit contributions and other assistance.

Massive Job Cuts at Major US Companies

January 26, 2009

As a sign of an ever increasing downed economy, Caterpillar, Pfizer, Sprint Nextel, Home Depot and General Motors all announced thousands of job cuts early this morning.

From MSNBC:

Caterpillar had by far the worst news of the group. The world’s largest heavy equipment maker announced Monday it was slashing up to 5,000 jobs on top of several earlier actions. The latest cuts of support and management employees will be made globally by the end of March. An additional 2,500 workers already have accepted buyout offers, and ties have been severed with about 8,000 contract workers worldwide. In addition, about 4,000 full-time factory workers already have been let go.

In all, the job losses equal about 18 percent of the company’s work force.

Ailing automaker General Motors Corp. also said it would slash 2,000 jobs at plants in Michigan and Ohio as the recession slams sales of its vehicles.

Sprint Nextel Corp. said it would be eliminating about 8,000 positions in the first quarter as it seeks to cut annual costs by $1.2 billion. Home Depot said it would reduce about two percent of its associates, or about 7,000 jobs. And Pfizer, fresh from agreeing to buy rival Wyeth for $68 billion, announced cost cuts that will include slashing about 8,000 jobs.

The Year of the Ox, year 4706 in the Chinese lunar calendar, is supposed to represent prosperity through perseverance and hard work. But the hope for a better year in 2009 was being dashed by the job losses and the growing concern that many more would join the ranks of the 2.6 million who became unemployed in 2008.

The latest outlook from forecasters in a survey released Monday by the National Association for Business Economics showed 39 percent predicted job reductions through attrition or “significant” layoffs over the next six months, up from 32 percent in the previous survey in October. Around 45 percent in the current survey anticipated no change in hiring plans, while roughly 17 percent thought hiring would increase.

President Bush Announces Auto Industry Bailout

December 19, 2008

President Bush announced a rescue plan for General Motors and Chrysler this morning that will make $13.4 billion in federal loans available to the industry almost immediately.

From CNNMoney:

A senior administration official briefing reporters said he expects that GM and Chrysler LLC will be signing the loan papers to access the cash later Friday morning.

The money will come from the $700 billion fund set aside to bailout Wall Street firms and banks in October.

With these loans, Treasury will have committed virtually all of the $350 billion of that fund that it can hand out without additional authorization from Congress. Once Congress releases the other $350 billion, the two automakers will be able to borrow an additional $4 billion.

GM will get $9.4 billion from the first allocation of federal loan money, while Chrysler would get the other $4 billion.

The loans are for three years but the money will have to be repaid in full within 30 days if the firms do not show themselves to be viable by March 31. It is expected that the companies will have to negotiate new agreements with unions and creditors in order to do so.

Here is the text of President Bush’s remarks delivered this morning at the White House, courtesy of the Associated Press, on financial assistance to troubled auto makers:

BUSH: Good morning.

For years, America’s automakers have faced serious challenges; burdensome costs, shrinking share of the market and declining profits. In recent months, the global financial crisis has made these challenges even more severe.

Now, some U.S. auto executives say that their companies are nearing collapse and that the only way they can buy time to restructure is with help from the federal government. It’s a difficult situation that involves fundamental questions about the proper role of government.

On the one hand, government has the responsibility not to undermine the private enterprise system. On the other hand, government has a responsibility to safeguard the broader health and stability of our economy.

Addressing the challenges in the auto industry requires us to balance these two responsibilities. If we were to allow the free market to take its course now, it would almost certainly lead to disorderly bankruptcy and liquidation for the automakers.

Under ordinary economic circumstances, I would say this is the price that failed companies must pay. And I would not favor intervening to prevent the automakers from going out of business. But these are not ordinary circumstances.

In the midst of a financial crisis and a recession, allowing the U.S. auto industry to collapse is not a responsible course of action. The question is how we can best give it a chance to succeed.

Some argue the wisest path is to allow the auto companies to reorganize through Chapter 11 provisions of our bankruptcy laws and provide federal loans to keep them operating while they try to restructure under the supervision of a bankruptcy court.

But given the current state of the auto industry and the economy, Chapter 11 is unlikely to work for American automakers at this time. American consumers understand why. If you hear that a car company is suddenly going into bankruptcy, you worry that parts and servicing will not be available and you question the value of your warranty.

With consumers hesitant to buy new cars from struggling automakers, it would be more difficult for auto companies to recover. Additionally, the financial crisis brought the auto companies to the brink of bankruptcy much faster than they could have anticipated. And they have not made the legal and financial preparations necessary to carry out an orderly bankruptcy proceeding that could lead to a successful restructuring.

The convergence of these factors means there is too great a risk that bankruptcy now would lead to a disorderly liquidation of American auto companies. My economic advisers believe that such a collapse would deal an unacceptably painful blow to hardworking Americans far beyond the auto industry. It would worsen a weak job market and exacerbate the financial crisis. It could send our suffering economy into a deeper and longer recession.

And it would leave the next president to confront the demise of a major American industry in his first days of office.

The more responsible option is to give the auto companies an incentive to restructure outside of bankruptcy and a brief window in which to do it. And that is why my administration worked with Congress on a bill to provide automakers with loans to stave off bankruptcy while they develop plans for viability.

This legislation earned bipartisan support from majorities in both houses of Congress. Unfortunately, despite extensive debate and agreement that we should prevent disorderly bankruptcies in the American auto industry, Congress was unable to get a bill to my desk before adjourning this year.

This means the only way to avoid a collapse of the U.S. auto industry is for the executive branch to step in. The American people want the auto companies to succeed and so do I.

So today I’m announcing that the federal government will grant loans to all the companies under conditions similar to those Congress considered last week. These loans will provide help in two ways. First, they will give automakers three months to put in place plans to restructure into viable companies which we believe they are capable of doing.

Second, if restructuring cannot be accomplished outside of bankruptcy, the loans will provide time for companies to make the legal and financial preparations necessary for an orderly Chapter 11 process that offers a better prospect of long-term success and gives consumer confidence that they can continue to buy American cars.

Because Congress failed to make funds available for these loans, the plan I’m announcing today will be drawn from the financial rescue package Congress approved earlier this fall. The terms of the loans will require auto companies to demonstrate how they would become viable.

They must pay back all their loans to the government and show that their firms can earn a profit and achieve a positive net worth. This restructuring will require meaningful concessions from all involved in the auto industry — management, labor unions, creditors, bond holders, dealers, and suppliers.

In particular, automakers must meet conditions that experts agree are necessary for long-term viability, including putting their retirement plans on a sustainable footing, persuading bond holders to convert their debt into capital that companies need to address immediate financial shortfalls, and making their compensation competitive with foreign automakers who have major operations in the United States.

If a company fails to come up with a viable plan by March 31st, it would be required to repay its federal loans. The automakers and unions must understand what is at stake and make hard decisions necessary to reform.

These conditions send a clear message to everyone involved in the future of American automakers. The time to make hard decisions to become viable is now. Or the only option will be bankruptcy.

The actions I’m announcing today represent a step that we wish were not necessary. But given the situation, it is the most effective and responsible way to address this challenge facing our nation. By giving the auto companies a chance to restructure, we will shield the American people from a harsh economic blow at a vulnerable time and we will give American workers an opportunity to show the world, once again, they can meet challenges with ingenuity and determination and bounce back from tough times and emerge stronger than before.

Thank you.


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