In an SEC filing today, GMAC Financial Services warns that it may back away from its bank holding company status application, due to its inability to refinance some $38b in debt. That bank holding company status would make GMAC eligible for TARP funds, but without a federal rescue many see GMAC heading for bankruptcy court says Automotive News [sub]. Including GMAC. The Cerberus-owned finance firm warned that if it doesn’t receive holding company status by December 31, “it would have a near-term material adverse effect on GMAC’s business, results of operations and financial position.” Meaning it will be forced to sell of more assets (with no buyers lining up) and miss 2009 debt payments. To meet the Fed’s requirement, GMAC said it needs about 75 percent participation in its debt-swap offer. So far, participation is just over 20 percent. The good news? If you’ve got $20b or so rattling around and you want in, GMAC has extended its debt-swap deadline until December 12. Deep Throat breaks down the bad news thusly: “GM would have to write down its investment in GMAC likely to zero. The big problem is the floorplan issue for dealers. There are few replacement lenders right now, and those that will step up will offer harsher terms, curtailments, etc. That means less ability for GM to stockpile cars at dealer lots. OTOH, it’s possible that other captives, like Toyota’s finance arm, could seize an opportunity to play… especially if a GM dealer is also a Toyota dealer. But again, terms will be critical, and depends how much exposure these guys want and how much capacity they have. What’s interesting is that the bonds trade high with only 10-15% discounts from par. This is due to the recovery from finance assets being much better than from manufacturing assets.”
Category: News Blog
Yes, yes, The Heritage Foundation. Right wing whack jobs. But TTAC is open to arguments from all ends of the political spectrum, from Prius-driving socialists to S65 AMG-driving free marketeers (I’m looking at you Shoes). As always, you’re free to make of this what you will. “The Detroit automakers explain in their SEC filings that their benefit expenses are for current workers, not former employees. This is because they follow generally accepted accounting principles in preparing these estimates. If the figures did include current retiree benefits, the average hourly amount would be much higher than they actually report. UAW employees earn far more than most Americans do.” So, now how much do they pay? “Chart 1 shows the average hourly compensation for UAW workers and the average compensation for all private sector workers. These figures are based upon calculations by the Detroit automakers themselves as published in SEC filings, their annual reports, and other materials. According to briefing materials prepared by General Motors, “The total of both cash compensation and benefits provided to GM hourly workers in 2006 amounted to approximately $73.26 per active hour worked.”
Bloomberg reports that Tesla Motors’ self-appointed CEO Elon Musk is threatening to not build its [theoretical] $57,499 four-door electric vehicle at a $250m San Jose factory if Uncle Sugar doesn’t fork-over $350m from the soon-to-be-depleted (or not) U.S. Department of Energy $25b loan program. This must please CA officials no end, as they risked the wrath of the entire Golden State business community by extending “special” tax credits galore to Tesla to “convince” the EV maker to locate production of their [theoretical] WhiteElephant sedan in The People’s Republic of California. (Hey! Didn’t New Mexico do the same thing? With the same result?) “We can’t move forward with that without a major amount of capital,” Musk told Bloomies. “If we don’t get any government funding then what we need to do is we need to wait until the capital markets recover, which could be a year or two years from now.” Or, in Tesla’s case, never. Hang on; $350m? Wasn’t that $400m the last time we looked?
| Date: | 12/10/2008 | Ref. number: | Leadership Messages / Leadership Messages / Corporate-Global / Corporate-Global / G_0000017224 |
| Subject: | Call-To-Action: Please Contact Your Senators in the Next Few Hours | ||
|
Dear GM Dealership Employees: We are at a critical juncture in our efforts to get Congress and the current administration to provide federal loans to domestic auto manufacturers to help bridge our nation’s economic crisis. Your support in the form of phone calls is urgently needed in the next few hours as a number of Republican Senators are threatening to block the vote on the Auto Rescue Bill recently announced. If you are located in the states listed below, please contact your legislators by calling 866 874-9356 and remind them that dealership employees in their districts are counting on them for their support and leadership. Additionally, please share the hotline number with family, friends, business partners or other contacts in these states and ask them to call their Members of Congress immediately. Talking points and other materials to assist these calls can be found at www.gmfactsandfiction.com. Your efforts to call legislators have been crucial in getting us to this point. Please urge everyone you know in these key states to place their phone calls in the next few hours and remind legislators that their vote is about the survival of America’s auto industry and they will be held accountable for job losses in their states. |
The story of Ford hawking Volvo to China is getting curiouser and curiouser. That story appeared first in China’s respected National Business Daily. Then, via TTAC, it hit the fan, the wires, and the MSM. The story made the rounds from Forbes to the Chicago Tribune, even the DetNews headlined: “Ford partner in China considering buying Volvo.” Ford’s partner in China is Changan. The codependent joint venture produces Volvo cars for the Chinese markets. Buying the Volvo brand outright would enable Changan to enter the lucrative export market with an established brand at a competitive price point. And now, the denials.
Today, Gasgoo reads the Wall Street Journal Asia. To everybody’s surprise, the WSJA found “a person familiar with the matter.” The familiar person says that Ford and Changan have not talked about a sale of Volvo. WSJA’s deep throat comes up with a rather flimsy story: According to Mr. Mole, Ford execs had met Changan execs simply to inform them “as a courtesy” that Ford was looking for a Volvo buyer. As in “We just happened to be in Chongqing, so we thought, we come by, say hello, and by the way, we are looking for a buyer for Volvo. Know anyone who might be interested?” A search of the WSJ database comes up empty. Strange. It’ll get stranger …
German VeeDub dealers want Wolfsburg bail-out: Most of VW’s dealers in Germany are in dire straits. They are looking to Wolfsburg for financial help. “Others can ask for government help, we need the help of Volkswagen and the Volkswagen Bank,” said Michael Lamlé, head of the VW/Audi dealer council to Automobnilwoche (sub.)
Stimulus, Russian style: To protect the nascent Russian car production, and to lure/blackmail more manufacturers into building in Russia, the country has raised its import duty on new cars to 30 percent, reports Automobilwoche (sub.)
Chinese VW workers get German Christmas holidays: Volkswagen’s two joint ventures in China are planning to give their workers 15 working days of vacation from mid-December until the beginning of January, Gasgoo reports. SAIC will make approximately 20,000 units less. VW’s second venture FAW-VW has similar plans. VW has already sold 931,000 cars in China through to the beginning of December this year and is determined to hit the 1m mark.
Most of the attention drawn to Rod R. Blagojevich’s arrest has focused on the Illinois Governor’s attempt to sell the Barack Obama’s U.S. Senate seat. Also according to the indictment, on October 6, a wealthy contractor for the the giovernor’s “Tomorrow’s Transportation Today” promised to make a $500k donation to the Friends of Blagojevich campaign account. Nine days later, the governor announced the $1.8b program. It’s centerpiece: the addition of High Occupancy Toll (HOT) lanes to the Illinois Tollway. “I could have made a larger announcement but wanted to see how they perform by the end of the year,” Blagojevich said in private conversation. “If they don’t perform, fuck ’em.”
Before you delve into the fact and substance of this “new deal” for Detroit, note: Senate Republicans are threatening to torpedo this boat before it leaves harbor. The Detroit News reports “Some Republicans remain strongly against the idea of bailing out Detroit automakers. Sen. John Ensign, R-Nev., told CNBC on Tuesday he was considering trying to thwart a vote. “I think that not only myself, but several of us will be looking at possibly blocking this package,” Ensign said. White House chief of staff Josh Bolten plans to attend a Senate Republican lunch today to try and win over skeptical lawmakers. Democrats need 15 to 20 Republican votes to reach 60 in the Senate — the hurdle to end debate and proceed to a vote.” OK, the new “key provision:” the automakers must prove that they’re doing the right things to a car czar by March 31. Otherwise, it’s C11 for you bub. Oh wait, sorry. The czar has the power to grant a one month extension. And he or she could call back the loans at any time. And he or she must approve all transactions over $100m (up from a paltry $25m). Gentlemen, meet the new boss. Is there more? What do you think?
Bloomberg reports that Fed Chairman Ben Bernanke has ruled out any Fed loan to automakers. In a letter to Senate Banking Committee chair Chris Dodd, Bernanke questions whether automakers have “unencumbered assets of sufficient amount and quality” to qualify even for emergency aid. “Even if the companies have sufficient collateral,” continues Bernanke, “lending to an auto manufacturing company would represent a marked departure from that policy, and would take us into distinctly new realms of policymaking. In particular, it would raise the question as to whether the Federal Reserve should be involved in industrial policy, which has traditionally been outside the range of our responsibilities.” Bernanke identifies the “critical unknown” in the automakers’ plans as “their ability to develop and produce vehicles that the public wants to buy.” Even more tellingly, Bernanke says the Fed is “not able to verify” the assesments that GM and Chrysler can even survive on the $14b the say they need. Congress should consider a “range of possible policy actions” besides direct aid, including a government-assisted “orderly bankruptcy reorganization” according to the letter. While we scurry around looking for a full copy of this letter, consider this Bloomberg article titled “Democrats Tone Down Prediction of Automaker Bailout Approval.” It looks like we may have just taken another turn on this crazy roller-coaster ride, away from consensus on a $15b plan.
I neither know nor care if these images were accidentally or intentionally leaked. That’s just how the internet works. In any case, these are official shots of the next generation E-Class sedan. I’m a big fan of the C-Class and its design, but the S-Class is not exactly stunning in my eyes. This E not surprisingly falls somewhere in the middle. I think the taillights look pretty Lexus.
Update: Looks like the originator of the pics (besides Mercedes, of course) was Autoscoops.eu
She beckoned me. She betrayed me. Like a transvestite with a svelte smooth body, exposed by ungodly rough stubble underneath her lip. The 1990 Mercury Sable had a perfect silhouette that was maligned by two hundred parking lot dings and scratches on her lower front bumper. An older lady had given her some brutal blows to that lower psyche of hers over the years and now it was my turn at the wheel… so to speak. Little did I know that this first encounter would be just the beginning of The Crying Game. This particular example of a Mercury Sable was as unique as it was dichotomous. 47,000 original miles in 18 years. But a base model with a fecal brown exterior. The equally repugnant plaid brown interior did the vehicle no favors. But Hell. For $600 I’d just be willing to cover her up in a paper bag and drive her around town for a while.
With Bob Lutz pounding the media pavement for his credibility-challenged boss, it was only a matter of time before someone really hit the Maximum-quote jackpot. Chalk up a doozy for CNN, who snagged Lutz for its “American Morning” show, and got an interview which proves why Lutz was being kept away from bailout talk in the first place. The honesty flowed like single-malt in a boardroom from the very first question. When asked what GM would do with the $15b to ensure its survival, Lutz hedges, answering “this is simply a bridge loan which will get us into the next administration, where we hope we can do something more fundamental. Because the main problem is the lack of liquidity and the lack of revenue flowing in as we’re facing absolutely the lowest, lowest car market in history, and it’s not just the domestics.” AM anchor John Roberts, smelling blood in the water, presses Lutz. “You don’t see Toyota and Honda coming to the government for a handout. But based on what you said there — that this is just the beginning — you’re going to need more money next year?” To which Lutz replies “I think that’s a reasonable assumption.” Reasonable, eh? Read More >
It’s a strange world. In the past, when China’s economy was down, most of the world (at least silently) cheered. Now, as China’s growth slows, the world gets worried. Suddenly, it’s news when China’s auto sales fall 10 percent in November. Suddenly, the world gets alarmed when for next year, growth rates of only 5 percent are being projected. Yet, China may be out of the slump much faster than many think, or some still silently hope.
Business Week predicts that in the second quarter of 2009, “the benefits of China’s massive $582 billion stimulus package could start to flow through, and the economy could kick into a higher gear once again.” The signs are everywhere, says Business Week.
Read More >
Recent Comments