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GM/Cerberus talks over full ownership of GMACIt's been a crazy few days as news broke that Chrysler and General Motors have been in talks to combine operations. It turns out that there's a pretty significant back-story to these proceedings, and it involves Cerberus Capital Management's possible desire to shed its car-building operations and acquire the rest of GMAC, of which it already holds a controlling stake of 51%, with GM holding holding the other 49%. According to reports, Cerberus would like to combine Chrysler Financial with GMAC, which would allow it to merge the offices of the two financial institutions and reduce costs. All right, that might make some sense, but what about merging the two automakers? That's the part that seems so confusing to analysts and us meager bloggers. Somehow, we feel certain that there's more to this story, which we'll be hearing about for some time.
posted : 10/15/2008 @9:22:43 PM
BREAKING: GM and Chrysler talking about merger

Our heads are still reeling from one of the most tumultuous financial weeks on record, and the auto industry was far from immune. But despite our best efforts to drown our concerns in Racer5 IPA, the hits keep coming, and this time it's courtesy of the New York Times. The Gray Lady is reporting that General Motors and Chrysler have been in talks about a possible merger for the past month, that "negotiations are not certain to produce a deal," "would most likely still take weeks to work out" and that two unnamed sources say that the chances of the merger going through are "50-50." Obfuscate much? With GM's stock prices ending the week below $5 a share and Cerberus – the private equity firm that owns Chrysler – grasping at the flimsiest of straws, including continued talks with Nissan/Renault, a merger of unequals is two parts disturbing and one part intriguing. Cerberus' people haven't been returning phone calls and the only comment offered to the NYT from the General's spokesperson, Tony Cervone, was, "Without referencing that specific rumor, as we've often said at GM officials routinely discuss issues of mutual interest with other automakers." Broad, unclear and exactly what we'd expect. The merger of GM and Chrysler would put Cerberus in charge of an "unspecified equity stake" in the corporation, making the two-headed General-Chrysler (or Chrysler Motors?) the world's largest automaker, controlling over 35 percent of the U.S. vehicle market, causing rifts among brand faithful and offering more potential (vehicle) cannibalization than the Donner Party. Not to mention both automakers' labor contracts, supplier dealers and slipping market share. Shocked? Don't be. We give it a snowball's chance on the Sun.
posted : 10/15/2008 @9:03:37 PM
GM and Ford take a beating on Wall St.

General Motors and Ford just concluded an absolutely brutal business day on Wall Street, which echoed the performance of the markets in general as the Dow Jones Industrial Average slid another 678.91 points to close below 9,000 at 8,579.19 points. GM closed the day at 4.94 after having dipped as low as 4.72 just minutes before the bell rang at 4PM, while Ford ended today at just 2.14. Analysts are noting that GM shares haven't been this cheap since the 1950s and that a single share of Ford stock costs less than a gallon of gas at the moment. We are most certainly not financial analysts, but we do know these companies are heading in the wrong direction fast and that a brighter future is not weeks but months and years away.
posted : 10/15/2008 @7:35:25 PM
Hyundai buys up GM's abandoned Oscar ads

General Motors and Hollywood's little gold statue have been friends for 11 years, but with a reduction in its marketing and ad budget, the U.S. automaker has walked away from high profile events such as the Super Bowl, Emmys, and Oscars. Thankfully for ABC, the multimillion-dollar breach in the 2009 Oscars telecast created by GM's departure has been immediately filled by Hyundai. As of now, Hyundai has only signed on to take over an unknown quantity of the $1.7-million-plus ad slots – it isn't known whether the Korean automaker will completely replace GM's presence at the awards. Along with a new agency, and an increased marketing budget – and all those SEMA cars – Hyundai's ad buy is another measure of its confidence in the new Genesis and its push to move into premium territory.
posted : 10/15/2008 @7:10:20 PM
GM drops HotShot windshield washer system after expensive recallGeneral Motors has nixed an optional hot-spray windshield washer system called HotShot from all of its cars and trucks after an electrical short in the systems caused the recall of 944,000 vehicles. GM told the National Highway Traffic Safety Administration that a short on the circuit board of the fluid heater could overheat the control-circuit ground wire. The problem has resulted in 34 warranty claims so far and three reports of fires may have been caused by the system. To fix the problem, dealers will add a wiring harness with an inline fuse, and all GM retail outlets should have the required parts to fix the problem free of charge by November 1. Vehicles affected include the Buick Lucerne and Enclave, the Cadillac DTS and Escalade, the GMC Yukon, Sierra and Acadia, the Saturn Outlook, the Hummer H2, and the Chevy Silverado, Avalanche, Tahoe, and Suburban. GM blames the system's suburban Detroit supplier, Microheat, for the problem, and the small company has reportedly shrunk in size in preparation of forever closing its doors. The General wants Microheat to pay for the recall, which is estimated to cost between $20 and $25 million, and the small supplier has countered by reminding the automaker that it's still owed $3.7 million for parts and tooling. The whole affair is a shame, as heated windshield washer fluid is a nice luxury that makes de-icing and de-bugging your windshield a hands-off affair. As far as we know, Microheat is the only supplier offering this technology, so when it goes, so does the option altogether.
posted : 10/13/2008 @11:07:09 PM
No future for the mid-engine Corvette

With GM facing well-publicized challenges -- along with just about everyone else who needs a little thing called money -- certain high-profile and expensive programs are crowding up on the back burner. Even America's sports car, the Corvette, is not exempt, with CAFE regulations clouding the view inside the 'Vette Nation's crystal ball. Motor Trend, commenting on the C7 Corvette's delayed arrival, has said that the new coupe won't appear until the 2014 model year at the earliest. The mid-engined route has also been scrapped, since it would simply cost too much to re-engineer the entire car for the purpose of easier integration of fuel saving tech like cylinder deactivation. That means a six-cylinder is still being talked about -- by GM outsiders only, at this point -- as an option for the C7. If we take the Camaro as an example, that 2014 introduction date could mean late 2012, but that still only gives you four years to mentally prepare for a budget- and economy-minded V6 Corvette. Get cracking.
posted : 10/13/2008 @10:41:06 PM
Buy high, sell low: GM may unload RenCen for the cashOne thing's for sure, General Motors is not very good at playing the real estate market. Last May the world's biggest automaker finally bought its world headquarters in downtown Detroit called the Renaissance Center for the sum of $626 million. It had initially bought into the complex of seven buildings back in 1996 for $75 million, but had continued leasing office space there until the purchase earlier this year. Here we are not five months later after the purchase and GM is reportedly considering selling the RenCen to raise $500 million fast. Rather than selling the RenCen at a loss, the preferred plan reportedly would be to mortgage the property to one or both of Detroit's pension funds to the tune of $500 million, but seeing as they're both already heavily invested in downtown Detroit property, that's not likely to happen. GM's ultimate goal is to quickly raise $5 billion by selling any non-essential assets, including things like the RenCen, HUMMER and its medium-duty truck business. If the RenCen were sold, GM would forego working out of a cardboard box by going back to leasing the office space it's currently using.
posted : 10/13/2008 @10:38:51 PM
Merry Christmas: Envoy, Trailblazer, 9-7X plant closing Dec. 23rdLooks like that Moraine, Ohio plant that was going to be shut down next year is actually going to be shuttered on December 23rd, just in time for Christmas. This is the plant responsible for production of the GMC Envoy, Chevy Trailblazer and Saab 9-7X. The General had already slowed the plant to just one shift as SUV sales, particularly sales of old SUVs like these, continue to tumble, but the plant was expected to remain open until at least early next year. On Friday the remaining 1,100 workers were gathered and told of the revised plan. The closure isn't a total surprise, as General Motors had already announced that the Dayton-suburb plant would be closed so the company could focus more on production of small cars. That initial announcement seemed to indicate a 2010 closure, but the company has continually revised the closing date until this most recent word came. Moraine is one of four GM plants that are going to be shut down. When Janesville, Wis.; Oshawa, Ontario; and Toluca, Mexico join Moraine in closure, a total of 8,350 workers will be looking for new jobs.
posted : 10/13/2008 @9:14:22 PM
2008 Chevy Corvette Z06

I received an Indy 500 poster on my birthday in 1986 that featured a Yellow C4 Corvette pace car leading the pack. My dad hung the poster above my bed, and I can honestly say that I stared at it every night for years. The Corvette was my dream car for my entire childhood, but as an adult I turned my attention to European rides like the Porsche 911 and the Ferrari 360 Modena. When the C6 Corvette hit the scene for the 2005 model year, the Bow Tie brand's halo vehicle again had me pining for some General Motors muscle. GM gave the base Vette the same 400 horsepower as the C5 Z06, and I figured it was all the power I could ever want. That is, until the 2006 Z06 came along. The Z06 was kicking ass on the track and in enthusiast magazines, and it was toppling competition that far exceeded the Corvette's $70,000 price of entry. We never had the Z06 in the Autoblog Garage, so we were more than happy to take it off Chevy's hands for a week. Hit the jump to see if the Z06 met our lofty expectations from childhood.
posted : 10/13/2008 @9:10:56 PM
GMAC dramatically cut back on leases in SeptemberLeasing is down industry-wide by about 50% from 2007 levels, but General Motors' captive credit arm took an even bigger bite out of its vehicle leasing in September. GMAC leased only 2% of all GM products in September, and the decision to do so had everything to do with the recent events of the financial markets. While leasing was down GM-wide in September, GMAC and Chevrolet were hit the hardest. The General's two volume brands accrued only .6% and .7% of its sales through leasing, compared to 11.2% and 13.6% respectively last year. Leasing is virtually non-existent for vehicles with low residuals, and Cadillac, which typically leases over 40% of its vehicles, leased at an 8.4% clip last month. Nobody on Wall St. is purchasing securities right now, giving GMAC very little money to offer leases to its customers. A controlling interest in GMAC was purchased by Cerberus well before the private equity firm took control of Chrysler. Chrysler stopped leasing all together on August 1 in response to the huge losses it took on returned leases of SUVs and trucks. Both GM and GMAC say the break from leasing is only temporary, but with the financial markets still in flux, don't expect this trend to reverse itself any time soon.
posted : 10/13/2008 @8:52:25 PM
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