In the politically and emotionally charged discussion whether Chinese interests will buy a chunk of GM in their IPO, one decision appears imminent: Will SAIC, GM’s joint venture partner in China, take the bite or eschew the lure? India’s Economic Times, always with a wary eye on happenings on the other side of the Himalaya, says that “top Chinese automaker SAIC Motor is close to making a decision on whether to buy a stake in its long-time partner General Motors as the US auto firm goes public.” (Read More…)

The recently-debuted Chevrolet Volt ads are built around the same basic assumption that drove the design of the Volt’s extended-range electric (EREV) drivetrain: Americans will not tolerate running out of vehicle range. So severe will be America’s Range Anxiety®, GM is guessing, that its electric vehicle (EV) consumers would be happy to lose some electric range and pay a significant price premium compared to the pure-electric competition in order to fill up on gas when they forget to plug in. But while we wait for this psychological insight to prove true across the broader market, recent news seems to show that GM has forgotten about another beloved American freedom: the freedom of choice. For example, the choice to buy a GM-made “pure” EV. To find that kind of freedom you have to go to China…

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Er, not here… you have to go over to retailroadshow.com for the non-embeddable presentation pitching investors on the new General Motors. But since retailroadshow doesn’t have a comments section, make sure to surf back to TTAC when you’re done taking in the pitch. Meanwhile, consider this: Saudi Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud, a major investor in Citi, EuroDisney, The Four Seasons, AOL, Apple, News Corp, and more has said his investment firm would look “very seriously” at buying into GM’s IPO. Oh yes, and the White House has reiterated its confidence that all the money it invested in GM’s bailout would be repaid. Even though GM pushed against the higher IPO price ($30/share) requested by Treasury, which would have slowed future appreciation of the stock, but would have given the government a higher initial payback. Also, it seems that UBS has been dropped as an underwriter of the IPO after one of its large-cap, non-automotive analysts sent an email that disclosed information restricted by the SEC.

With GM’s IPO officially launched, we thought we’d send ChartOTD diving inside GM’s sales performance this year. The graph above shows GM’s top nameplates by volume for the January-October 2010 period, compared to the same ten months of 2009. All of GM’s top-ten volume vehicles are doing better than they did last year, but these are not in fact GM’s fastest-growing nameplates. For that graph and more, hit the jump…

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With its IPO hitting markets, GM has released limited preliminary results that show the firm earned $1.9b to $2.1b in the third quarter of this year. That performance outstripped Ford’s $1.73b Q3 profit, and GM’s $36b in revenue also beat Ford’s $29b figure for the same quarter. GM also announced that it expects to generate positive EBIT in the fourth quarter, although it warned that its Q4 results would not be as strong as the previous three quarters in which GM claims to have earned $4b to $4.2b in net income attributable to shareholders. The projection of weaker Q4 results proves that political considerations weren’t the only factor pushing for an immediate post-election IPO. One note of warning, however: GM has not released complete data on its results, meaning we haven’t seen the impact of GM’s recent debt-cutting moves on cashflow. On the other hand, with a $5b revolving line of credit secured and profits rolling in, GM isn’t likely to be facing liquidity problems in the immediate short term. We’ll wait for full results before we pass final judgment, however.

As Automotive News [sub] reports, GM has gone ahead and finalized the 500 dealer cuts that made up its bankruptcy-bailout-era dealer cull, despite resistance from some 22 members of the US House of Representatives. And despite the congressional pressure, a damning SIGTARP report, and an ongoing criminal investigation, GM hasn’t changed its tune about cutting dealers, telling AN [sub] that delaying dealer cuts

would only divert our collective attention at a critical time and would ignore the independent decisions of arbitrators and individual settlement agreements between GM and its dealers

Meanwhile, just what affect has the dealer cull had on surviving dealerships? Are they thriving? Well, not exactly…
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Well, there’s nothing quite like being wrong, is there? Exactly a week ago I registered my (somewhat hesitant) support for Chevy’s new tagline, “Chevy Runs Deep,” and though I still believe that the tagline itself is better than anything else GM’s marketers have dreamed up in a while, I probably should have waited for the brand’s ads to come up out before weighing in. After all, any good (or good enough) idea is only as good as its execution… and these ads really don’t seem to move the game past some of Chevrolet’s previous cornball ad efforts. The main ad in the series (above) is as bland as an Impala’s interior, and does nothing to inspire respect for Chevy in contemporary (read: post-bailout) terms. Can “the strength of the nation” be found in every Chevrolet? If so, does that strength refer to something other than the government money that kept Chevrolet from the scrapheap of history? Instead of inspiring a bold approach, it seems that the “Don’t call it Chevy” moment simply pushed Chevy’s advertising back into gauzy pseudo-patriotism of its recent past. But don’t take it from me… hit the jump for a sampling of the latest Chevy Runs Deep ads.
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Reuters has followed up its look inside the Government’s involvement in GM with a breaking report on the specifics of The General’s IPO. According to Reuters sources, the IPO will include 365 million common shares for $26 to $29 each, for a total of between $9.5b and $10b. The Treasury is expected to sell between $1.5b and $2b of its 61 percent stake in GM, likely to “four or five sovereign wealth funds,” bringing its stake down to 43.3 percent. The Canadian and Ontario governments are expected to sell down their stake from 11.7 percent to 9.6 percent, while the UAW VEBA trust-owned stake is likely to to drop from 17.5 percent to 15 percent. A Reuters source concludes that

The IPO would likely value the entire company at close to $60 billion, below the $67 billion needed if U.S. taxpayers are to break even on the common stock held by the Treasury

The WSJ adds

At the midpoint of the proposed price range, GM’s stock outstanding, including warrants, would be worth about $50 billion, roughly the same level as Ford Motor Co. The IPO’s underwriters are hoping to sell at the top end of the range, and for the stock to rise 20% or more when trading begins. At that level, GM could be worth $60 billion or more.

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Ever since it became clear that the government would rescue General Motors and Chrysler, the Treasury Department has made it clear that it would stay out of “day to day” decision making at the rescued automakers. Allowing the rescued firms to operate independently was a political calculation based on the desire to keep politics from affecting sales at the two rescued automakers, but according to a Reuters special report, Treasury has not been able to keep its hands completely out of important decisions concerning the future of the two firms. Particularly in terms of setting up GM’s Initial Public Offering, Reuters found that the Treasury made important decisions affecting

its speed and size, the fees paid to the bankers and the potential involvement of offshore investors

Though this has kept the IPO out of election season and all of its potential for political problems, there is some downside to the Treasury’s involvement, particularly because it will not be exiting its equity position in GM until about 18 months after the IPO. As a result, analysts predict problems securing investors in a firm that may still be subject to ongoing government control. Morningstar’s David Whiston tells Reuters

I’m sure that there will be some institutional investors, and even some individual investors, that it scares away

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After spending years wandering the gray shadows that divide this life from the next, the undead brand Pontiac will be placed in its final resting place sometime tomorrow. Scientists at TTAC’s paranormal automotive brand research lab are still working to determine exactly when Pontiac slipped from relevance into the nightmare world of zombie-dom, but Pontiac has been living on borrowed time since being officially marked for death a year and a half ago. As of the end of October there were still 125 Pontiacs on dealer lots around the country, but dealer agreements covering the brand expire on Halloween, making the day of the dead the last day to buy a car from America’s biggest zombie brand. And what better way to celebrate Pontiac’s decades-long waking nightmare than by buying a G6 on the spookiest day of the year? Meanwhile, as Bob Lutz, Lee Iacocca, and Zombie Bunkie Knudsen converge on Oakland County to commit their faithful brand to the cold earth, let’s take one more moment to remember the brand that died too long before anyone noticed. Are your memories of Pontiac fond recollections of the brand’s vital youth, or spooky tales from its long, shambling un-death? Finally, will Pontiac actually stay dead this time?

We’ve known that the Cadillac Escalade was America’s most-stolen vehicle, but we never asked why. The answer: GM didn’t put steering locks on a number of Escalade and other GMT9000 Ute model years, and shifters on these models are easily pushed out of “Park.” These weaknesses (and their ineffective fixes) allow thieves to push Tahoes, Denalis and Escalades to a safe spot where parts stripping can be done in a matter of minutes. And as the report details, Onstar is rarely effective at stopping quick snatch-and-strip-style thefts, because the damage is typically already done by the time vehicles are reported stolen. Hats off to WXYZ TV for looking past the statistics and finding the truth behind the Escaladae’s stealability. GM is reportedly working on a new steering column replacement for these vehicles.

News that the government will sell only $6b-$8b worth of its GM equity has been joined by an even more surprising GM IPO announcement: GM will buy the Treasury’s entire $2.1b holding of preferred stock in the initial offering. GM has not announced how much it will pay for the stake, and the Detroit News reports that it’s not yet clear if GM will also buy some $400m in preferred stock held by the Canadian and Ontario governments. We’re also getting word via Twitter that GM will put $4b in cash and $2b worth of its stock into its overdrawn UAW pension fund, as well as making a $2.8b payment to the UAW VEBA account. With a $5b line of credit secured, GM says these and other steps will reduce its debt by $11b over an unspecified timeline. And speaking to Reuters, GM CEO Dan Akerson made it clear what the point of these moves are:

It’s up to people like you and me, the burden we share, that we deliver on the promise and return the investment to the American taxpayers. We are going to do our level best to make that happen, and we will only do that by expanding our industrial base and entering new markets and being a better competitor.

Of course, we’ll have to see what value The General places on the preferred stock to know how seriously Akerson should be taken. After all, talk is cheap and money isn’t. [UPDATE: It appears that GM will buy the preferred stock for $25.50 each, essentially giving the Government its book value of $2.14b]

The recent bailout of America’s auto industry began with approval of so-called “Section 136” loans to help automakers retool factories for higher-efficiency automobiles. Ford, Nissan, Tesla and Fisker have already received their portions of the Department of Energy  loans, but GM and Chrysler have had their payouts delayed due to the program’s strict “viability” requirements. But now Reuters reports that Chrysler’s request for $10b in low-cost government retooling loans is nearing approval. It’s not clear how much of that $10b will be approved, but according to Pentastar spokesfolks

Our application covers a wide variety of technologies including electric vehicles, (gasoline/electric) hybrids and advanced gasoline engine technology

Chrysler still owes some $5.7b to the US Treasury, and the cost of servicing that debt (interest on ChryCo’s existing government debt ranges from 7.22 to 14.33 percent) is considered a major reason for Chrysler’s second-quarter loss this year. GM is also seeking over $10b in 136 loans, but with only $16.5b remaining in the $25b 136 fund, either Chrysler or GM will have to receive less than their entire request. GM’s request will reportedly be approved sometime after Chryslers.

The new CR reliability reports are out, along with their projected reliability for 2011-model-year automobiles. Some of the results won’t be news to most of you: the Big Three from Japan are all near the top, Ford’s ahead of the other domestics, and the Koreans are climbing the charts.

If, on the other hand, you’re choosing between a Porsche and an Audi, you might want to take a moment to hear CR’s opinions…

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I had the pleasure of spending part of a dinner at last week’s Volt press launch chatting with GM’s marketing honcho Joel Ewanick, better known for his work as “marketer of the year” at Hyundai. Ewanick’s a confident, engaging guy, and when the “Don’t Call It Chevy” mini-embroglio came up over desert, his eyes took on a mischievous twinkle. As other GM communications and PR staff recounted their stories of the 24-hour madness that followed the release of a memo which indicated that the term “Chevy” was no longer a welcome marketing feature, it became clear that neither Ewanick nor any of his staff had any regrets about accidentally launching a full-blown public debate over the value of the term Chevy. The very debate, it seems, reconnected the brand that had tried everything marketing-wise with its hidden core: consumers care enough about Chevrolet to have a popular and affectionate nickname for it. And what started as an unnecessary PR blunder seems to have given birth to Chevrolet’s newest marketing tagline: Chevy Runs Deep. Or, as Chevy’s ad man Jeff Goodby puts it

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