The Brand That Wouldn’t Die: GM May Lift Saab Sale Deadline
A few weeks ago, General Motors' chairman Ed Whitacre was on a spree: he'd sacked the company's CEO, canned and shifted many others on the executive team, and boldly said that if a buyer for Saab weren't found by December 31, the brand would bite the big one. Fortunately for Saab fans, Whitacre's saber-rattling appears to have been partly for show: Saab board member Paul Aakerlund told the press that the New Year's Eve deadline "is not a date that's holy", and that GM may extend it if it thinks there's a viable bidder. (Spyker, of course, hopes to be that bidder, although it's getting some competition from Wyoming-based Merbanco Inc.) We'll put down the champagne long enough to give you details if and when they develop tomorrow. [AutoNews]
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Frugal Shopper: GM Unloading Pontiac, Saturn Vehicles
If you've been on the lookout for a new car but you're a little short on cash, General Motors may have a deal for you. In a clever shell game that should pay off nicely for consumers, the company is offering dealers $7,000 for every Pontiac and Saturn vehicle that they move to their rental-vehicle or service-vehicle fleets. That cash, in turn, will get passed on to shoppers who purchase from those fleets as discounts of up to 46% off the MSRP.
In making this pitch to dealers, GM is trying is to vet showrooms of units from its major shuttered marques. As GM spokesperson Tom Henderson said, "Our goal is to provide these dealers with another tool to help them reduce their inventories of noncore brands.... This in turn will help us move more quickly to focus on our Buick, Chevy, GMC and Cadillac brands." Earlier this decade, it took GM over three years to dump its stock of discontinued Oldsmobile vehicles, but with offers like this, GM could sell off its Pontiac and Saturn units much faster.
As attractive as this offer may seem, however, there are a couple of downsides. Technically, the vehicles sold under this plan will be listed as "used", since dealers will first buy them from GM, then re-sell them to consumers. Furthermore, because Pontiac and Saturn have been discontinued, the resale value on these units will take a pretty major hit. On the other hand, a $7,000 discount means that an essentially new Pontiac G3 with an MSRP of $14,335 would go for less than $8,000. Sounds like an offer that could be tough to refuse.
Note: GM has been offering $6,500 discounts (or 0% financing) on new vehicles for some time. That deal can't be combined with the $7,000 offer describe above. Sorry, Charlie.
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Geely Expecting To Seal The Volvo Deal By February 14
Although Ford hasn't set a deadline for the sale of Volvo the same way that General Motors fast-tracked Saab, Ford's preferred bidder -- Geely -- is hoping to wrap up things on the double. A source close to the negotiations told Reuters, "[The sale] is expected to be done before Chinese New Year [on February 14], and then Geely will quickly launch integration." To that end, the Chinese automaker has already hired a team of consultants to plan the restructuring of the company to accommodate Volvo's operations. We're sure that Volvo and Ford are eager for closure, and we're happy to see Geely's optimism -- especially during such dark economic days -- but we might offer a couple of cautionary examples.... [Reuters via MotorAuthority]
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Does Size Matter For The 2011 Chevrolet Spark?
Motor Trend has concluded that the highly anticipated 2012 Chevrolet Spark won't be much of a factor in the U.S. auto market because it's too small to be attractive to American buyers. Our feisty colleagues at GreenCarReports have taken that blanket assertion to task, pointing out that the Spark is around the size of the MINI Cooper, which is surely no slouch in showrooms. And furthermore, if gas prices creep up, SUV-lovers might be willing to downsize their American dreams. On the other hand, Chevrolet and General Motors have taken a lot of flack in recent months, and it'll be a while before they're back in everyone's good graces. Walk through John Voelcker's assessment and add your own $.02 to the mix. [GreenCarReports]
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GM Gives The Feds An Early Holiday Gift: $140 Million
Just last week, General Motors announced plans to speed up repayment of billions in loans from the U.S. government. Technically, the company's fast-track, $1 billion-per-quarter payback schedule doesn't kick in until December, but GM is getting a head start on things by returning $140 million right now. The cash comes from a $2.5 billion loan GM was given to pay suppliers, though we're not entirely sure how much of that -- if any -- is included in the $6.7 billion GM owes the U.S. government. GM credits the repayment to shrinking demand from suppliers and the company's improved bottom line. For us, however, the bottom line is that the money's hard to follow. [DetNews]
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General Motors Announces Q3 Results, Speedy Loan Repayment
It's been a busy day for General Motors CEO Fritz Henderson. Not only did he reveal GM's third quarter financials, but he also announced the company's souped-up plan to repay $6.7 billion in loans from the U.S. government. While the financial report was reasonably upbeat (the company ended Q3 $1.2 billion in the red, but that's an improvement on analysts' $2.5 billion loss estimate), the real attention-grabber was GM's aggressive loan repayment plan: the company will now cough up $1 billion at the close of each quarter, beginning in December 2009. At that rate, GM's debt should be fully erased by July 2011 -- far ahead of the 2015 date agreed upon with the U.S. Treasury.
Of course, that won't put GM in the clear -- not by a long shot. In total, General Motors took about $50 billion from the feds. Of that sum, $6.7 billion remains on the books as debt; the other $43.3 billion has been converted into the federal government's 61% stake in GM, and the feds hope to recoup that cash via stock sales when the company goes public down the line. (Whether the government's stake will ever be worth $43.3 billion is a matter for debate, although many on the auto industry task force would like to see $19 billion that GM received prior to bankruptcy written off, reducing the recoupable amount to $22.3 billion.)
In other words, repayment of the $6.7 billion debt won't have any effect on the federal government's role in General Motors operations -- something that GM desperately wants to eliminate. Although the feds have stated time and again that they don't want to be in the auto business, they have put some "big picture" items and restrictions in place, like the cap on executives salaries that chairman Ed Whitaker bemoaned last week.
What repayment will do, however, is improve GM's brand among the general public. As we've often discussed here at TCC, American consumers have been very critical of both GM and Chrysler for taking bailout dough, and that's seriously affected the two companies' sales. (By contrast, Ford is enjoying a surge of popularity, thanks in no small part to the fact that it avoided bankruptcy.) We're happy to see GM being proactive in its debt management, but as they say in the South, the company still has a long road to hoe.
[Freep]
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Koenigsegg To Trim 81 Dealers From Saab Network
General Motors may be looking to expand its (formerly) shrinking U.S. network, but the soon-to-be owner of GM's orphaned Saab is sticking with a leaner, meaner game plan: Koenigsegg intends to nix 81 Saab dealers from the company's current network, leaving just 137 outlets in the U.S. Of course, there's still a chance that the entire deal could go south (it's happened before), which would shutter all 218. But hey, it's Friday, and we're feeling optimistic about this one. [AutoEvolution]
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Lexus’s LF-A Leaked, More 911 Turbo Madness: Today’s Car News
We've been spying the 2011 Lexus LF-A, off and on, for over a year. We've seen it testing all over Europe. It's even contested the 24 Hours of Nurburgring in race car form--twice. But today the car was revealed during a brief test drive in Miami just before its official unveiling, due this week at the 2009 Tokyo Motor Show. [Jalopnik]
Fresh from our first drive review of the 2010 Porsche 911 Turbo, we now have new live photos of the car from Lisbon, Portugal. The car's easily identifiable side-inlet vents, flared fenders, 'Turbo' badging and classic 911 looks are only enhanced by the scenery of Lisbon's coast. [Motor Authority]
In honor of Jenson Button's world F1 championship crowning, Afzal Kahn, the man Project Kahn, has unveiled the Bugatti Veyron F1. The car features Britain's most expensive numberplate, the simple “F1”, which was sold last year for £440,625 ($721,743). [Newspress, sub req'd]
The Chevrolet Cruze is still more than a year away from arriving in local showrooms but General Motors is already working on a more efficient version the company claims will do 44 mpg on the highway. [Motor Trend]
Toyota has launched a new South Korean offensive, releasing four models on its rival Hyundai's turf, where more than 70% of consumers choose to buy the local brands. [The Korea Times]
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It’s A Lambo Christmas, We Drive The 911 Turbo: Today’s Car News
To celebrate Christmas Lamborghini-style, the Italian supercar company has produced a range of limited edition gift-boxed candles and ceramic baubles, inspired by its recently revealed Gallardo LP 550-2 Valentino Balboni. [Lamborghini]
Toyota has developed a new scratch resistant paint that works on a molecular level to help prevent lustre degradation caused by scratches and preserve the original color and gloss of the car. [Automotive World]
For performance fans, The Car Connection's Marty Padgett has posted his first drive of the 2010 Porsche 911 Turbo. He tells us how a 500-horsepower German-engineered piece of rolling history handles the twists and turns of the legendary Estoril race track. [Motor Authority]
The 2010 Geneva Auto Show will be a packed house, with organizers confirming today that all major automakers will be there. [The Auto Channel]
Last month, during a discussion with journalists about General Motors' new “May the Best Car Win” marketing campaign, Bob Lutz laid down the challenge to any journalist to a duel with the Cadillac CTS-V to see if any comparable car could topple the Caddy. Last week the challenge was put forward to anyone with a comparable sedan and today we can report that 120 people have applied. [InsideLine]
Japan gets a stylish new sedan from Toyota in the form of the 2010 Mark X. Fitting in the midsize sedan segment, the Mark X shares its rear-wheel drive platform with another Toyota, the Crown, as well as the Lexus GS. [CarScoop]
Mitsubishi is set to unveil a new proprietary plug-in hybrid system in the Concept PX MiEV at this month's 2009 Tokyo Motor Show and according to latest reports it may feature in the next-generation Evolution Lancer XI. [Autocar]
Jeremy Clarkson comments on the love-it-or-hate-it 2010 Porsche Panerma and as most would guess, he hates it. His final verdict of the car? “It makes Quasimodo look like George Clooney.” [Times Online]
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GM Launches Saturn On A 13-Month Death Spiral
And now comes the unpleasantness: in the aftermath of its failed sale of Saturn to Roger Penske, General Motors has begun winding down the Saturn network. The brand will close for good just over a year from now.
GM executives held a conference call with Saturn dealers yesterday to talk through the shutdown process. Each of Saturn's 350 dealerships will be offered between $100,000 and $1 million to remain open and sell down inventory. That could take very little time, considering that there are only 12,000 vehicles on Saturn lots at the moment, or roughly a four-month supply. If sales continue as they have -- which is not entirely likely, since the public may be wary of buying vehicles from a dying brand -- many dealerships could close their doors by the end of January 2010. All Saturn dealerships will be shuttered by the end of October 2010 .
Fortunately for General Motors, the company had a backup plan, just in case the sale of Saturn fell through. Back in September, the company sent notices to Saturn dealers, extending their retailer agreements until November 30, 2009; at heart, that was meant to ensure network stability in the event of a botched sale and give GM two more months to work out arrangements with another buyer. However, since no other buyer has stepped forward, it appears that GM has to go with Plan C. (Yes, they even had a Plan C.) Anticipating the possibility that no buyer for Saturn would be found, GM had Saturn dealers sign agreements earlier this year that provided for a lawful and orderly shutdown of the brand instead of sending everything to bankruptcy court. And that's where we find ourselves today.
Things might've worked out differently if Penske had had a Plan C, or even a Plan B. As it was, however, Renault's 11th-hour decision not to produce vehicles for the Saturn network left Penske completely in the lurch.
This is obviously terrible news for Saturn employees, dealers, and fans. However, since we hate to leave you on such a down note on a Friday, we'd like to point out that there is a silver lining: without Saturn, there's one less competitor for GM.
[DetNews]
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