From Automotive News and Reuters:
Visteon Corp., the auto-parts maker that hasn't posted an annual profit since being spun off from Ford Motor Co. nine years ago, said on Thursday it had filed for Chapter 11 bankruptcy protection for its U.S. operations.
Visteon said Ford has committed to ensure long-term continuity of supply and to support debtor-in-possession (DIP) financing for the restructuring efforts.
Ford is still Visteon's biggest customer and accounted for about 31 percent of its $1.35 billion of sales last quarter.
"During the reorganization period, we will seek to address our capital structure and legacy costs that are not sustainable given the current economic environment," Visteon CEO Donald Stebbins said in a statement.
No Visteon subsidiaries or joint ventures outside the United States are part of the filing in the U.S. Bankruptcy Court for the District of Delaware, the company said.
Thursday, May 28, 2009
Thursday, May 21, 2009
UAW says it has tentative contract with GM
From Automotive News:
By David Barkholz
The UAW said that it has reached a tentative new contract with General Motors and the U.S. Treasury aimed at helping the automaker restructure.
The terms include modifications to a UAW-administered retiree health trust known as a Voluntary Employee Beneficiary Association, the union said in a statement today.
Terms were not released, pending a ratification vote by rank-and-file union members at GM.
The UAW agreed to the concessions as GM faces a June 1 deadline to prove its viability to the federal government or face Chapter 11 bankruptcy protection. Along with the labor concessions, GM and the U.S. Treasury also are asking GM bondholders to forgive about 90 percent of that unsecured debt.
Treasury has kept GM operating with about $15.4 billion in bailout loans.
By David Barkholz
The UAW said that it has reached a tentative new contract with General Motors and the U.S. Treasury aimed at helping the automaker restructure.
The terms include modifications to a UAW-administered retiree health trust known as a Voluntary Employee Beneficiary Association, the union said in a statement today.
Terms were not released, pending a ratification vote by rank-and-file union members at GM.
The UAW agreed to the concessions as GM faces a June 1 deadline to prove its viability to the federal government or face Chapter 11 bankruptcy protection. Along with the labor concessions, GM and the U.S. Treasury also are asking GM bondholders to forgive about 90 percent of that unsecured debt.
Treasury has kept GM operating with about $15.4 billion in bailout loans.
Monday, May 18, 2009
The man-mobile: You don't buy a BMW 528i for its wood trim or leather seats; this midsize sedan is a driver's car
As published in The Daily Report:
Monday, May 18, 2009
By Karl W. Ritzler, Special to the Daily Report
“This is a man car,” said my wife shortly after sliding into the passenger seat of the BMW 528i.
I agree, starting with the six-speed manual transmission—in a $54,000 car—and the 3.0-liter, 230-horsepower inline six-cylinder engine. It has a manly feel, synchronizing your feet and hands to shift through the gears, giving it enough gas to push the needle on the tachometer and sound an exhaust note that you can't hear with an automatic.
From her preferred spot in the passenger seat, my wife assumes the job of pressing buttons, opening storage areas and assessing cupholders in test vehicles. The verdict on the 528i: acceptable, except for the cupholders. There are only two, and they pop out from the dash on the passenger side, offering not only a clumsy reach but also too many spilling opportunities. The elegant leather and wood trim were masculine, she said, but still appealed to her good taste and sense of style.
But you don't buy BMWs for the cupholders or the view from the passenger side. The 528i is a driver's car. From the outside, it has the classic sporty grille of a BMW—ready to leap down the road—and finishes off with twin chrome-tipped exhaust pipes. The shifts are as smooth or racy as you make them, and the engine responds with verve. Handling is taught, as you would expect in a sporty German car. There's barely any sway on sharp side-to-side maneuvers, just enough to cause your latte to slosh around.
An open freeway or mountain road ahead is a pure joy as you finally can upshift all the way to sixth gear. The 528i hums along in the left lane like it was on the Autobahn. Atlanta freeway traffic, however, puts a damper on straight-ahead driving and requires constant shifting as you stop and start and poke along Georgia 400 or the Perimeter.
One of the tricks is getting started. Unlike other high-end cars with keyless ignition where you just push a button to start the engine, it's a three-step process: key in the ignition, press your left foot down on the clutch, then press the starter. On the positive side, the 528i is equipped with a device they should have put on cars with stick shifts when I was learning to drive. When you're stopped heading uphill, just tap the brake, and it will hold while you hit the gas and release the clutch to take off—no fear of sliding into the car behind you.
The tachometer and speedometer are equal and side-by-side in this instrument cluster. And for the environmentally aware, there's even a small gauge showing how your miles per gallon react to your driving. The EPA estimates mileage at 18 mpg city and 28 mpg highway, a bit on the low side for midsize cars. There are lots of controls on the three stalks on the steering wheel: lights, wipers, cruise control, audio and phone.
The trunk is deep, and there's even a diagram showing how to stow four golf bags. In this car, the rear seats do not fold down to increase cargo space. You don't take a BMW to Home Depot to buy lumber.
It's not just the driver who can enjoy this ride. The optional multicontour seats are long-haul comfortable in soft leather. Even in the back seat, you sink slightly into a form-fitting bucket seat, and you can stretch your legs as well. A massive center console in the rear makes a fine separation for two people, but I wouldn't want to be the one stuck in the middle if five people need to ride.
The one advantage of shifting gears is that the driver can't take time to mess around with the still-annoying iDrive system that controls climate, audio, car information and, when equipped, a navigation system. Better to preset your air conditioning and radio station at home and leave it alone.
The test car's base price was $45,800, plus a $825 destination charge. A sport package of 18-inch wheels and performance tires, sport suspension and multicontour seats added $2,900. A package with garage door opener and auto-dimming mirrors added another $2,400. You even pay extra ($400) for an iPod and USB adapter, among other things, raising the sticker to $53,920. The car is virtually unchanged from 2008.
Standard equipment includes halogen headlights and foglights, antilock brakes, stability and traction control, AM/FM/CD/MP3 player and airbags all around. The car earned three of five stars for the driver's side in frontal crash tests, but five stars for the passenger and for both seats in a side crash.
Karl W. Ritzler is a freelance writer who contributes to the Daily Report.
Monday, May 18, 2009
By Karl W. Ritzler, Special to the Daily Report
“This is a man car,” said my wife shortly after sliding into the passenger seat of the BMW 528i.
I agree, starting with the six-speed manual transmission—in a $54,000 car—and the 3.0-liter, 230-horsepower inline six-cylinder engine. It has a manly feel, synchronizing your feet and hands to shift through the gears, giving it enough gas to push the needle on the tachometer and sound an exhaust note that you can't hear with an automatic.
From her preferred spot in the passenger seat, my wife assumes the job of pressing buttons, opening storage areas and assessing cupholders in test vehicles. The verdict on the 528i: acceptable, except for the cupholders. There are only two, and they pop out from the dash on the passenger side, offering not only a clumsy reach but also too many spilling opportunities. The elegant leather and wood trim were masculine, she said, but still appealed to her good taste and sense of style.
But you don't buy BMWs for the cupholders or the view from the passenger side. The 528i is a driver's car. From the outside, it has the classic sporty grille of a BMW—ready to leap down the road—and finishes off with twin chrome-tipped exhaust pipes. The shifts are as smooth or racy as you make them, and the engine responds with verve. Handling is taught, as you would expect in a sporty German car. There's barely any sway on sharp side-to-side maneuvers, just enough to cause your latte to slosh around.
An open freeway or mountain road ahead is a pure joy as you finally can upshift all the way to sixth gear. The 528i hums along in the left lane like it was on the Autobahn. Atlanta freeway traffic, however, puts a damper on straight-ahead driving and requires constant shifting as you stop and start and poke along Georgia 400 or the Perimeter.
One of the tricks is getting started. Unlike other high-end cars with keyless ignition where you just push a button to start the engine, it's a three-step process: key in the ignition, press your left foot down on the clutch, then press the starter. On the positive side, the 528i is equipped with a device they should have put on cars with stick shifts when I was learning to drive. When you're stopped heading uphill, just tap the brake, and it will hold while you hit the gas and release the clutch to take off—no fear of sliding into the car behind you.
The tachometer and speedometer are equal and side-by-side in this instrument cluster. And for the environmentally aware, there's even a small gauge showing how your miles per gallon react to your driving. The EPA estimates mileage at 18 mpg city and 28 mpg highway, a bit on the low side for midsize cars. There are lots of controls on the three stalks on the steering wheel: lights, wipers, cruise control, audio and phone.
The trunk is deep, and there's even a diagram showing how to stow four golf bags. In this car, the rear seats do not fold down to increase cargo space. You don't take a BMW to Home Depot to buy lumber.
It's not just the driver who can enjoy this ride. The optional multicontour seats are long-haul comfortable in soft leather. Even in the back seat, you sink slightly into a form-fitting bucket seat, and you can stretch your legs as well. A massive center console in the rear makes a fine separation for two people, but I wouldn't want to be the one stuck in the middle if five people need to ride.
The one advantage of shifting gears is that the driver can't take time to mess around with the still-annoying iDrive system that controls climate, audio, car information and, when equipped, a navigation system. Better to preset your air conditioning and radio station at home and leave it alone.
The test car's base price was $45,800, plus a $825 destination charge. A sport package of 18-inch wheels and performance tires, sport suspension and multicontour seats added $2,900. A package with garage door opener and auto-dimming mirrors added another $2,400. You even pay extra ($400) for an iPod and USB adapter, among other things, raising the sticker to $53,920. The car is virtually unchanged from 2008.
Standard equipment includes halogen headlights and foglights, antilock brakes, stability and traction control, AM/FM/CD/MP3 player and airbags all around. The car earned three of five stars for the driver's side in frontal crash tests, but five stars for the passenger and for both seats in a side crash.
Karl W. Ritzler is a freelance writer who contributes to the Daily Report.
Toyota rolls out new Prius amid hybrid price war
From The Associated Press:
By YURI KAGEYAMA
AP Business Writer
TOKYO — Toyota rolled out the revamped Prius on Monday, and said it already had 80,000 advance orders in Japan for the remodeled hybrid amid intensifying competition with Honda's rival offering, the Insight.
The world's largest automaker said it aims to sell up to 400,000 units globally a year of the car.
"We are resting the future of cars in this model," said incoming president Akio Toyoda, the grandson of the company's founder, who drove the new model onto a stage at a packed Tokyo showroom.
Both Toyoda's presence and the new Prius are symbolic of Toyota Motor Corp.'s pursuit of a turnaround from its worst annual loss since its 1937 founding.
The Prius, now in its third generation since its 1997 introduction, is the best-selling gas-electric hybrid in the world, racking up a cumulative 1.256 million units sold in more than 40 nations and regions. The new Prius will be sold in 80 nations and regions, Toyoda said.
But now Toyota faces a challenge from Honda Motor Co., whose more cheaply priced Insight has sold briskly since it was introduced in Japan in February. In April, the Insight ranked as the top-selling vehicle in Japan — the first time a hybrid clinched that spot.
Toyota said its Japan prices for the Prius would start at 2.05 million yen, or about $21,600, less than its predecessor model's Japan base price.
But in an unusual move aimed at competing against the Insight, Toyota also said it will continue to sell the current Prius in Japan — mainly to corporate and rental customers — and cut its price to 1.89 million yen, the same price as the Insight.
In Japan, Toyota is hoping to sell 10,000 of the new Prius a month, and an additional 2,000 of the cheaper old-style Prius.
The Japanese government is offering incentives to encourage people to buy green cars, which is expected to help the Insight and Prius sales here.
Christopher J. Richter, senior analyst with Calyon Capital Markets Asia in Tokyo, said Toyota may be making a mistake by competing with Insight's price because the Prius is a much bigger car than the Insight compact and gets better mileage.
"Given that the two vehicles are different animals, I think that probably isn't the way to go," he said. "It probably damages the Prius brand image by trying to chase after what is an inferior car in price."
Richter also noted that Toyota faces some challenges in selling the Prius not only because of the competition from the Insight but because of the global slowdown and a decline in oil prices.
Ravaged by a global slump, tight credit in the critical U.S. market and the strong yen, Toyota racked up a larger-than-expected 436.94 billion yen ($4.4 billion) loss for the fiscal year ended March 31, a dramatic reversal from the record profit of 1.72 trillion yen it earned the previous year.
Toyota had already given the U.S. prices for the 2010 Prius — starting at $22,000, unchanged from the base price for the 2009 model. It is also promising a more basic U.S. model as well for later this year starting at $21,000.
The Insight, which is smaller than the Prius, carries a lower manufacturer's suggested retail price of $19,800 for the base model in the U.S.
Honda has sold 19,492 Insights in Japan since it went on sale in February, and 2,665 in the U.S. since March.
"We've come up with a price that we think is close to what will make people happy," Toyoda said.
Toyoda, 53, was tapped in January to take the helm at the world's biggest automaker, the first time in 14 years it has turned to the charisma of its founding roots for top leadership — mainly to bring employees and affiliates together and steer the automaker through deep troubles.
The new Prius gets a combined 50 miles per gallon, compared with 46 mpg for the 2009 model, according to Toyota.
It does even better under Japanese government testing standards. Hybrids, by going back and forth between a gasoline engine and electric motor, tend to offer better mileage in slow-speed and stop-and-go driving common on Japanese streets, rather than on highways — just the reverse of conventional cars.
Toyota is promising 38 kilometers per liter, which converts to 90 miles per gallon, in Japan, for the latest Prius.
Underlining its determination to compete with the Insight, Toyota showed a clip from its Japan TV ad at Monday's Prius event, which showed Superman zooming around a city before returning to his human form as Clark Kent, the reporter, with a scoop about the car's low price.
Toyoda hinted there may be a wait for the Prius.
"I already ordered mine," Toyoda said. "If you want yours before the end of the year, go rush to your dealer."
By YURI KAGEYAMA
AP Business Writer
TOKYO — Toyota rolled out the revamped Prius on Monday, and said it already had 80,000 advance orders in Japan for the remodeled hybrid amid intensifying competition with Honda's rival offering, the Insight.
The world's largest automaker said it aims to sell up to 400,000 units globally a year of the car.
"We are resting the future of cars in this model," said incoming president Akio Toyoda, the grandson of the company's founder, who drove the new model onto a stage at a packed Tokyo showroom.
Both Toyoda's presence and the new Prius are symbolic of Toyota Motor Corp.'s pursuit of a turnaround from its worst annual loss since its 1937 founding.
The Prius, now in its third generation since its 1997 introduction, is the best-selling gas-electric hybrid in the world, racking up a cumulative 1.256 million units sold in more than 40 nations and regions. The new Prius will be sold in 80 nations and regions, Toyoda said.
But now Toyota faces a challenge from Honda Motor Co., whose more cheaply priced Insight has sold briskly since it was introduced in Japan in February. In April, the Insight ranked as the top-selling vehicle in Japan — the first time a hybrid clinched that spot.
Toyota said its Japan prices for the Prius would start at 2.05 million yen, or about $21,600, less than its predecessor model's Japan base price.
But in an unusual move aimed at competing against the Insight, Toyota also said it will continue to sell the current Prius in Japan — mainly to corporate and rental customers — and cut its price to 1.89 million yen, the same price as the Insight.
In Japan, Toyota is hoping to sell 10,000 of the new Prius a month, and an additional 2,000 of the cheaper old-style Prius.
The Japanese government is offering incentives to encourage people to buy green cars, which is expected to help the Insight and Prius sales here.
Christopher J. Richter, senior analyst with Calyon Capital Markets Asia in Tokyo, said Toyota may be making a mistake by competing with Insight's price because the Prius is a much bigger car than the Insight compact and gets better mileage.
"Given that the two vehicles are different animals, I think that probably isn't the way to go," he said. "It probably damages the Prius brand image by trying to chase after what is an inferior car in price."
Richter also noted that Toyota faces some challenges in selling the Prius not only because of the competition from the Insight but because of the global slowdown and a decline in oil prices.
Ravaged by a global slump, tight credit in the critical U.S. market and the strong yen, Toyota racked up a larger-than-expected 436.94 billion yen ($4.4 billion) loss for the fiscal year ended March 31, a dramatic reversal from the record profit of 1.72 trillion yen it earned the previous year.
Toyota had already given the U.S. prices for the 2010 Prius — starting at $22,000, unchanged from the base price for the 2009 model. It is also promising a more basic U.S. model as well for later this year starting at $21,000.
The Insight, which is smaller than the Prius, carries a lower manufacturer's suggested retail price of $19,800 for the base model in the U.S.
Honda has sold 19,492 Insights in Japan since it went on sale in February, and 2,665 in the U.S. since March.
"We've come up with a price that we think is close to what will make people happy," Toyoda said.
Toyoda, 53, was tapped in January to take the helm at the world's biggest automaker, the first time in 14 years it has turned to the charisma of its founding roots for top leadership — mainly to bring employees and affiliates together and steer the automaker through deep troubles.
The new Prius gets a combined 50 miles per gallon, compared with 46 mpg for the 2009 model, according to Toyota.
It does even better under Japanese government testing standards. Hybrids, by going back and forth between a gasoline engine and electric motor, tend to offer better mileage in slow-speed and stop-and-go driving common on Japanese streets, rather than on highways — just the reverse of conventional cars.
Toyota is promising 38 kilometers per liter, which converts to 90 miles per gallon, in Japan, for the latest Prius.
Underlining its determination to compete with the Insight, Toyota showed a clip from its Japan TV ad at Monday's Prius event, which showed Superman zooming around a city before returning to his human form as Clark Kent, the reporter, with a scoop about the car's low price.
Toyoda hinted there may be a wait for the Prius.
"I already ordered mine," Toyoda said. "If you want yours before the end of the year, go rush to your dealer."
Friday, May 15, 2009
GM eliminating about 1,100 dealer franchises
From the Associated Press:
By DAN STRUMPF and TOM KRISHER, AP Auto Writers
NEW YORK – A day after Chrysler LLC moved to eliminate nearly 800 dealerships, General Motors Corp. on Friday told about 1,100 U.S. dealers their franchises will be terminated late next year.
The cuts are part of a larger GM plan to slash 2,600 of its 6,200 dealerships as the automaker tries to restructure to become profitable again. The moves likely will cause the loss of thousands of jobs across the nation. Governments will lose thousands of dollars in tax revenue as dealerships are forced to close.
Both Chrysler and GM say they are cutting dealers because they have too many outlets that are too close to each other, and the competition drives down prices. But as the ranks of dealers thin and competition decreases, that likely will mean higher prices for car and truck buyers.
As GM and Chrysler lost market share to Japanese and other overseas brands, the automakers, as well as Ford Motor Co., ended up with too many dealerships. Many are barely getting by and can't afford to upgrade their facilities or hire the best personnel to compete with the Japanese, who have far fewer dealerships.
With fewer dealers, consumers won't see as much competition, said Aaron Bragman, an automotive industry analyst with the consulting firm IHS Global Insight.
"No longer will people be able to shop between three or four dealers within 15 minutes of each other for the best cutthroat price," he said.
GM knows it will lose sales in the short-term, but over the long haul, fewer dealers will mean higher per-vehicle profits, Bragman said.
"As the dealers go, so goes the company in terms of financial health," he said.
In the 1980s, GM, Chrysler and Ford controlled more than 75 percent of U.S. sales, but that dropped to 48 percent last year. GM alone held nearly 51 percent of the market in 1962, but only 22 percent last year.
Bragman said GM likely will go into bankruptcy protection on June 1, but it's starting to negotiate deals ahead of the filing to speed up the Chapter 11 process.
"GM has been ... acting as if they are negotiating a prepackaged bankruptcy," he said.
By DAN STRUMPF and TOM KRISHER, AP Auto Writers
NEW YORK – A day after Chrysler LLC moved to eliminate nearly 800 dealerships, General Motors Corp. on Friday told about 1,100 U.S. dealers their franchises will be terminated late next year.
The cuts are part of a larger GM plan to slash 2,600 of its 6,200 dealerships as the automaker tries to restructure to become profitable again. The moves likely will cause the loss of thousands of jobs across the nation. Governments will lose thousands of dollars in tax revenue as dealerships are forced to close.
Both Chrysler and GM say they are cutting dealers because they have too many outlets that are too close to each other, and the competition drives down prices. But as the ranks of dealers thin and competition decreases, that likely will mean higher prices for car and truck buyers.
As GM and Chrysler lost market share to Japanese and other overseas brands, the automakers, as well as Ford Motor Co., ended up with too many dealerships. Many are barely getting by and can't afford to upgrade their facilities or hire the best personnel to compete with the Japanese, who have far fewer dealerships.
With fewer dealers, consumers won't see as much competition, said Aaron Bragman, an automotive industry analyst with the consulting firm IHS Global Insight.
"No longer will people be able to shop between three or four dealers within 15 minutes of each other for the best cutthroat price," he said.
GM knows it will lose sales in the short-term, but over the long haul, fewer dealers will mean higher per-vehicle profits, Bragman said.
"As the dealers go, so goes the company in terms of financial health," he said.
In the 1980s, GM, Chrysler and Ford controlled more than 75 percent of U.S. sales, but that dropped to 48 percent last year. GM alone held nearly 51 percent of the market in 1962, but only 22 percent last year.
Bragman said GM likely will go into bankruptcy protection on June 1, but it's starting to negotiate deals ahead of the filing to speed up the Chapter 11 process.
"GM has been ... acting as if they are negotiating a prepackaged bankruptcy," he said.
Thursday, May 14, 2009
Chrysler memo says 789 dealers will close by June 9
From Automotive News:
By Bradford Wernle
Chrysler LLC will eliminate 789 dealers, or 25 percent of its U.S. network, by June 9, according to a memo sent today to retailers in one sales region.
Dealers are learning of their fate via UPS letters to be delivered this morning, the memo says.
Dealers will get 23 business days for a "court review" of their cases, according to the memo, from a sales manager to district dealers.
"All of this information is subject to change," the memo says. Chrysler officials said they could not comment until documents are filed in U.S. Bankruptcy Court.
"Chrysler will not be required [per bankruptcy law] to buy back the vehicles or tools and parts from rejected dealers," the memo says. "We will match you with an accepted dealers(s) to buy your parts, tools and vehicles."
The memo says Chrysler will send letters to 4 million customers of the rejected dealers after June 9, when the stores are to close.
In the memo, Chrysler says that after the closings, 80 percent of its dealers will carry all three brands under one roof, compared with 62 percent currently. Since early 2008, Chrysler has been consolidating its dealer body under Project Genesis, a plan to put the Dodge, Jeep and Chrysler brands under one roof wherever possible.
By Bradford Wernle
Chrysler LLC will eliminate 789 dealers, or 25 percent of its U.S. network, by June 9, according to a memo sent today to retailers in one sales region.
Dealers are learning of their fate via UPS letters to be delivered this morning, the memo says.
Dealers will get 23 business days for a "court review" of their cases, according to the memo, from a sales manager to district dealers.
"All of this information is subject to change," the memo says. Chrysler officials said they could not comment until documents are filed in U.S. Bankruptcy Court.
"Chrysler will not be required [per bankruptcy law] to buy back the vehicles or tools and parts from rejected dealers," the memo says. "We will match you with an accepted dealers(s) to buy your parts, tools and vehicles."
The memo says Chrysler will send letters to 4 million customers of the rejected dealers after June 9, when the stores are to close.
In the memo, Chrysler says that after the closings, 80 percent of its dealers will carry all three brands under one roof, compared with 62 percent currently. Since early 2008, Chrysler has been consolidating its dealer body under Project Genesis, a plan to put the Dodge, Jeep and Chrysler brands under one roof wherever possible.
Monday, May 11, 2009
Stanley Fish: Car Nuts
Opinion in The New York Times:
By Stanley Fish
Published: May 10, 2009
The news regarding the auto industry has been dire, but magazines devoted to car buffs just roll along. Read full article.
By Stanley Fish
Published: May 10, 2009
The news regarding the auto industry has been dire, but magazines devoted to car buffs just roll along. Read full article.
Thursday, May 7, 2009
VW, Porsche to merge
(CNN) -- Iconic German automakers Volkswagen and Porsche have reached an agreement to merge operations -- the latest move in an industry that has seen whiplash changes in recent weeks.
Porsche, which recently debuted its luxury sedan Panamera, will merge with Volkswagen.
The two companies have been in talks in recent weeks about merging manufacturing operations. A statement released on the Porsche Web site said the management boards of Porsche and Volkswagen have agreed in principle for the creation of an integrated car manufacturing group.
"In the final structure ten brands shall stand below an integrative leading company alongside each other, whereby the independence of all brands and explicitly also of Porsche shall be ensured," the statement said.
Porsche had been aggressively trying to take over Volkswagen, building a 51 percent stake in the company with ambitions to raise the stake to 75 percent. But Porsche also built a debt of nearly $12 billion as the world automotive market began to shrink during the financial crisis.
The agreement includes undisclosed "capital measures," the Porsche statement said.
The move comes as Chrysler filed for bankruptcy protection and Italian carmaker Fiat has announced ambitions to combine with Chrysler and GM Europe operations to form one of the world's largest car companies.
Porsche, which recently debuted its luxury sedan Panamera, will merge with Volkswagen.
The two companies have been in talks in recent weeks about merging manufacturing operations. A statement released on the Porsche Web site said the management boards of Porsche and Volkswagen have agreed in principle for the creation of an integrated car manufacturing group.
"In the final structure ten brands shall stand below an integrative leading company alongside each other, whereby the independence of all brands and explicitly also of Porsche shall be ensured," the statement said.
Porsche had been aggressively trying to take over Volkswagen, building a 51 percent stake in the company with ambitions to raise the stake to 75 percent. But Porsche also built a debt of nearly $12 billion as the world automotive market began to shrink during the financial crisis.
The agreement includes undisclosed "capital measures," the Porsche statement said.
The move comes as Chrysler filed for bankruptcy protection and Italian carmaker Fiat has announced ambitions to combine with Chrysler and GM Europe operations to form one of the world's largest car companies.
Wednesday, May 6, 2009
GM details plans to wipe out current shareholders
From Reuters:
DETROIT (Reuters) -- General Motors on Tuesday detailed plans to all but wipe out the holdings of remaining shareholders by issuing up to 60 billion new shares in a bid to pay off debt to the U.S. government, bondholders and the UAW.
The unusual plan, which was detailed in a filing with U.S. securities regulators, would only need the approval of the U.S. Treasury to proceed since the U.S. government would be the majority shareholder of a new GM, the company said.
The flood of new stock issuance that could be unleashed has been widely expected by analysts who have long warned that GM's shares could be worthless whether the company restructures out of court or in bankruptcy.
The debt-for-equity exchanges detailed in the filing with the Securities and Exchange Commission would leave GM's stock investors with just 1 percent of the equity in a restructured automaker, ending a long run when the Dow component was seen as a bellwether for the strength of the broader U.S. economy.
GM shares closed on Tuesday at $1.85 on the New York Stock Exchange. The stock would be worth just over 1 cent if the first phase of GM's restructuring moves forward as described.
Once GM has issued new shares to pay off its debt to the U.S. government, bondholders and its major union, it said it would then undertake a 1-for-100 reverse stock split.
Such a move would take the nominal value of the stock back to near where it had been before the flood of new shares. But in the process, GM's existing shareholders would see their stake in the 100-year-old automaker all but wiped out.
The automaker said it expected to draw another $2.6 billion from the U.S. Treasury before a June 1 deadline set by the Obama administration for it to reach agreements with all of its key stakeholders.
That borrowing would take GM's debt to the U.S. government to $18 billion, and the automaker said it expected to have to borrow a total of nearly $27 billion.
DETROIT (Reuters) -- General Motors on Tuesday detailed plans to all but wipe out the holdings of remaining shareholders by issuing up to 60 billion new shares in a bid to pay off debt to the U.S. government, bondholders and the UAW.
The unusual plan, which was detailed in a filing with U.S. securities regulators, would only need the approval of the U.S. Treasury to proceed since the U.S. government would be the majority shareholder of a new GM, the company said.
The flood of new stock issuance that could be unleashed has been widely expected by analysts who have long warned that GM's shares could be worthless whether the company restructures out of court or in bankruptcy.
The debt-for-equity exchanges detailed in the filing with the Securities and Exchange Commission would leave GM's stock investors with just 1 percent of the equity in a restructured automaker, ending a long run when the Dow component was seen as a bellwether for the strength of the broader U.S. economy.
GM shares closed on Tuesday at $1.85 on the New York Stock Exchange. The stock would be worth just over 1 cent if the first phase of GM's restructuring moves forward as described.
Once GM has issued new shares to pay off its debt to the U.S. government, bondholders and its major union, it said it would then undertake a 1-for-100 reverse stock split.
Such a move would take the nominal value of the stock back to near where it had been before the flood of new shares. But in the process, GM's existing shareholders would see their stake in the 100-year-old automaker all but wiped out.
The automaker said it expected to draw another $2.6 billion from the U.S. Treasury before a June 1 deadline set by the Obama administration for it to reach agreements with all of its key stakeholders.
That borrowing would take GM's debt to the U.S. government to $18 billion, and the automaker said it expected to have to borrow a total of nearly $27 billion.
Tuesday, May 5, 2009
Non-guilty pleasure: The Tahoe Hybrid gets a respectable mpg for a full-size SUV
As appeared in The Daily REport:
By Karl W. Ritzler, Special to the Daily Report
A full-size SUV without the guilt. Well, almost.
The 2009 Chevrolet Tahoe is big and comfortable. It's got lots of power and towing capability. And it gets a combined city/highway 21 miles per gallon, compared with a combined 16 mpg for the gasoline-only version.
OK, so that's not Toyota Prius class, but we are talking about a full-size SUV that doesn't feel like a compromise. Along with its General Motors siblings from Cadillac and GMC, it is the biggest vehicle out there available as a hybrid.
Chevrolet introduced the Tahoe Hybrid in 2008, and it describes the hybrid system “two mode.” Electric motors can start the car off, up to about 30 miles per hour, Chevrolet says, to boost in-city mileage. In real driving, the gasoline engine kicked on at about 15 mph. At highway speeds, the engine uses GM's active fuel management, under which four of the V-8's cylinders are shut off when all you need to do is maintain speed. That boosts highway mileage.
The 6.0-liter V-8 produces 332 horsepower and is augmented by two 60-kilowatt electric motors. The system also employs other, standard hybrid technologies, such as regenerative braking, which recharges the batteries when the brakes are applied.
A continuous hybrid transmission blends the gasoline and electric power plants. The result is a ride that is smooth, but not horsepower heavy. Other reviewers' comparisons with the standard Tahoe showed better performance in the Hybrid than in a Tahoe equipped with a smaller V-8.
The Tahoe Hybrid moved out smoothly for a heavy (5,617 pounds) vehicle, and there was never any question about its ability to merge into freeway traffic or ride in the left lane. Towing capacity is a respectable 6,200 pounds—down from more than 8,000 pounds for a gas-only Tahoe.
The Hybrid, because of the extra weight of its batteries and engines, is only slightly different from its gas-only counterpart. There are some lighter body elements, more aerodynamic additions and low rolling resistance tires.
This is a vehicle you'd want to take on a family vacation, with a caveat only if you plan to take a lot of gear and people. Either is OK, but not both.
The front seats—leather is standard in the Hybrid—are comfortably firm, just right for piling on the miles. A navigation system and satellite radio/CD/Bose premium sound system—all standard—make the trip enjoyable from the front seat, while the optional ($1,295) rear seat entertainment system keeps the back-seat passengers entertained. A rearview camera, also standard, makes backing up easier in a vehicle that can fill a driveway. A parking assist system beeps when you get too close to objects or cars in the next parking space.
The squeeze comes with the third row. It's a bit crowded back there for full-size people, and the seats eat into the rear cargo area. While many competitors have third-row seats that fold flat, you have to remove the Tahoe's seats to get full benefit of the 60.3 cubic feet of cargo room. With the third row in place, there's room for a load of groceries, but not the camping gear.
And you'll be safe. The Tahoe has five-star crash ratings all around as well as head curtain side air bags for all three rows. Antilock brakes and stability and traction control are standard.
The test vehicle had a base sticker price of $50,455 for the two-wheel drive Hybrid, not including destination charges. Beside the entertainment system, the only other option on the well-appointed vehicle was a power sliding sunroof ($995). There is only one trim level. That compares with a starting base price of $36,680 for the least expensive of three trim levels for the gasoline-only Tahoe, where buyers also have a choice of three engines, 4.8-liter 5.3-liter and 6.2-liter V-8's. Four-wheel drive is available in both Hybrid and gas-only Tahoes for $3,000 to $4,000 extra.
2009 Chevrolet Tahoe Hybrid:
• Buy this car if: You want a full-size sport utility and still want to feel good about the environment.
• Not for you if: You really want to make a difference about the environment.
• Look-at-me factor: The Hybrid labels all over the vehicle.
• Competitors: Cadillac Escalade Hybrid, GMC Yukon Hybrid, BMW X5 (non-hybrid), Acura MDX (non-hybrid)
• What others are saying: “Prius drivers may use less gas on their trips around town, but Tahoe Hybrid drivers will be able to bring more toys and people along, and arrive in comfort and style.”—US News & World Report
Karl W. Ritzler is a freelance contributor to the Daily Report.
By Karl W. Ritzler, Special to the Daily Report
A full-size SUV without the guilt. Well, almost.
The 2009 Chevrolet Tahoe is big and comfortable. It's got lots of power and towing capability. And it gets a combined city/highway 21 miles per gallon, compared with a combined 16 mpg for the gasoline-only version.
OK, so that's not Toyota Prius class, but we are talking about a full-size SUV that doesn't feel like a compromise. Along with its General Motors siblings from Cadillac and GMC, it is the biggest vehicle out there available as a hybrid.
Chevrolet introduced the Tahoe Hybrid in 2008, and it describes the hybrid system “two mode.” Electric motors can start the car off, up to about 30 miles per hour, Chevrolet says, to boost in-city mileage. In real driving, the gasoline engine kicked on at about 15 mph. At highway speeds, the engine uses GM's active fuel management, under which four of the V-8's cylinders are shut off when all you need to do is maintain speed. That boosts highway mileage.
The 6.0-liter V-8 produces 332 horsepower and is augmented by two 60-kilowatt electric motors. The system also employs other, standard hybrid technologies, such as regenerative braking, which recharges the batteries when the brakes are applied.
A continuous hybrid transmission blends the gasoline and electric power plants. The result is a ride that is smooth, but not horsepower heavy. Other reviewers' comparisons with the standard Tahoe showed better performance in the Hybrid than in a Tahoe equipped with a smaller V-8.
The Tahoe Hybrid moved out smoothly for a heavy (5,617 pounds) vehicle, and there was never any question about its ability to merge into freeway traffic or ride in the left lane. Towing capacity is a respectable 6,200 pounds—down from more than 8,000 pounds for a gas-only Tahoe.
The Hybrid, because of the extra weight of its batteries and engines, is only slightly different from its gas-only counterpart. There are some lighter body elements, more aerodynamic additions and low rolling resistance tires.
This is a vehicle you'd want to take on a family vacation, with a caveat only if you plan to take a lot of gear and people. Either is OK, but not both.
The front seats—leather is standard in the Hybrid—are comfortably firm, just right for piling on the miles. A navigation system and satellite radio/CD/Bose premium sound system—all standard—make the trip enjoyable from the front seat, while the optional ($1,295) rear seat entertainment system keeps the back-seat passengers entertained. A rearview camera, also standard, makes backing up easier in a vehicle that can fill a driveway. A parking assist system beeps when you get too close to objects or cars in the next parking space.
The squeeze comes with the third row. It's a bit crowded back there for full-size people, and the seats eat into the rear cargo area. While many competitors have third-row seats that fold flat, you have to remove the Tahoe's seats to get full benefit of the 60.3 cubic feet of cargo room. With the third row in place, there's room for a load of groceries, but not the camping gear.
And you'll be safe. The Tahoe has five-star crash ratings all around as well as head curtain side air bags for all three rows. Antilock brakes and stability and traction control are standard.
The test vehicle had a base sticker price of $50,455 for the two-wheel drive Hybrid, not including destination charges. Beside the entertainment system, the only other option on the well-appointed vehicle was a power sliding sunroof ($995). There is only one trim level. That compares with a starting base price of $36,680 for the least expensive of three trim levels for the gasoline-only Tahoe, where buyers also have a choice of three engines, 4.8-liter 5.3-liter and 6.2-liter V-8's. Four-wheel drive is available in both Hybrid and gas-only Tahoes for $3,000 to $4,000 extra.
2009 Chevrolet Tahoe Hybrid:
• Buy this car if: You want a full-size sport utility and still want to feel good about the environment.
• Not for you if: You really want to make a difference about the environment.
• Look-at-me factor: The Hybrid labels all over the vehicle.
• Competitors: Cadillac Escalade Hybrid, GMC Yukon Hybrid, BMW X5 (non-hybrid), Acura MDX (non-hybrid)
• What others are saying: “Prius drivers may use less gas on their trips around town, but Tahoe Hybrid drivers will be able to bring more toys and people along, and arrive in comfort and style.”—US News & World Report
Karl W. Ritzler is a freelance contributor to the Daily Report.
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