(Source: Jalopnik, Wired, Autoblog, Detroit News)

GM chair fears deal can’t be reached: Kent Kresa, interim chairman of General Motors Corp., is not optimistic money-saving concessions can be reached with bondholders and the United Auto Workers to avoid bankruptcy before a June 1 deadline. “I’m hopeful we can get there,” Kresa told The Detroit News today. “Everybody understands we would be in a much better situation if we can resolve this among all the players without going through bankruptcy.” GM is trying to restructure about $28 billion in unsecured debt held by GM’s bondholders and $20 billion in obligations to the United Auto Workers. The federal government also may agree to swap some of its $13.4 billion in General Motors Corp. debt for new equity in the company in a move to help boost GM’s balance sheet.

GM chairman looking to turn over half of board of trustees by June? According to the Detroit Free Press, General Motors interim chairman, Kent Kresa, has been asked by president Obama’s administration to replenish the automaker’s board with fresh blood. Kresa said that while the board did achieve “historic things” recently, like renegotiating the UAW pay scale, he also said that the board didn’t fully comprehend the magnitude of the downturn. 

 GM Says Volt Won’t ‘Pay the Rent’ : General Motors won’t make money on its electric car for quite awhile. That’s to be expected, and it should be supported. The Obama administration doesn’t understand that.

GM, Task Force preparing for “surgical” bankruptcy: According to a lengthy report by the New York Times, the Treasury Department is directing General Motors to begin work on a bankruptcy filing by June 1. Based on sources close to the talks who were unable to officially discuss the process, the report outlines the “fast ‘surgical’ bankruptcy” of the automaker if GM is unable to reach an agreeme…

GM‘s new offer for bondholders may contain no cash, just equity: …GM, Earnings/FinancialsGM’s most recent offer to its bondholders offered a little bit of cash and a little bit of equity. GM CEO Fritz Henderson’s example was that a holder of $1,000 in bonds would end up with $333 and a some equity. After conferring with the Auto Task Force, however, that offer was deemed excessive in light of GM‘s situation so…

(Source: Jalopnik,  Freep & World Car Fans)

Looks like American automakers have found at least one more buyer for their vehicles. The U.S. government is planning on the purchase of $285 million worth of fleet vehicles that get better gas mileage than the current fleet. Under the plan, the General Services Administration will purchase more than 17,500 vehicles as a part of their existing deals with Chrysler, Ford, and General Motors.

U.S. President Barack Obama, and his administration, have said the purchases will take place by 1 June. Although it is unclear what will happen to the older fleet vehicles being replaced, many will likely be sold at government auctions.

The purchase is hardly a surprise. In the much talked about stimulus package approved by Congress, $300 million was included for the automotive purchase. This is not a gigantic purchase in the grand scheme of things, as the Big Three sold a combined total of 380,000 vehicles for March 2009. Still, the move may help to bolster confidence in the sector, while even a marginal increase in revenue would be welcomed by the automakers.

More than 14% of the vehicles will be hybrid sedans. 2,500 orders for the vehicles, which will likely include the Chevy Malibu, Ford Hybrid Fusion, and Saturn Aura, will be placed by the end of next week.

Image: Jalopnik

If nothing else, the move underscores the administration’s willingness to put its money where its mouth is: Last week, Obama sent GM and Chrysler back to the drawing board, saying they needed more aggressive restructuring plans if they were to get more government loans to survive. 

But he also promised this big government buy of fuel-efficient vehicles and created a special office to help communities in Michigan and elsewhere struggling with the downturn in the industry. In a prepared statement released today along with details of the planned purchases, Obama said, “The problems that caused this economic crisis weren’t created in a day and it will take time and hard work to get our economy back on track. But I am 100% committed to a strong American auto industry, and we will stand with America’s auto workers and their families during these difficult times.”

The Project P.U.M.A. prototype on 18th Street in Manhattan.

 (Source: Wheels Blog – New York Times)

When General Motors unveiled Project P.U.M.A. in New York on Tuesday (with partner Segway), it was showing not so much a vehicle as a vision for a new transportation system. And that’s high risk, high reward, because as much as new concepts are needed, they’re excruciatingly hard to actually put in place. Our highways are haunted with unfulfilled visions, from electric station-cars to statewide hydrogen-refueling networks.

 

For David J. Friedman, research director for the clean vehicles program at the Union of Concerned Scientists, the P.U.M.A. has possibilities, though what he called “the massive monitoring and managing of traffic to minimize congestion and maximize road usage” has been tried before; the general category is called Intelligent Transportation Systems. G.M. experimented with hands-free Buicks on automated highways in 1997, but the efforts were thwarted by high costs and driver confusion.

“We need to design our cities around something other than two- or three-ton vehicles,” said Mr. Friedman. “The data suggests that by 2030 half of the built environment in the U.S. will be new. What if we designed new suburban towns with integrated shopping so you could walk, bike or use a P.U.M.A. to get around, with conventional vehicles only for longer trips?”

 

(Source: Jalopnik)

P.U.M.A delivers 35 mile range, 35 MPH top speed, all on 35 cents of electricity 

GM and Segway have teamed up before the New York Auto Show on what they’re calling the PUMA project. The prototype vehicle was exclusively unveiled today on the Today Show. It’s no April Fool’s joke.  PUMA stands for Personal Urban Mobility and Accessibility and the prototype running around outside NBC’s Today Show this morning is an experimental prototype of a vehicle Larry Burns, GM’s vice president of research and development, and strategic planning, claims we’ll see a roadable version by January.

Jalopnik’s review of the PUMA after taking it for a spin goes like this:  

The first impression is of how small and simple the PUMA is. There’s barely room for two full-sized adults to sit side-by-side within its roll cage and inside, under the rough plexi windshield there’s only one control: the aircraft-like yoke.

((Source: Jalopnik)

(Source:  Howard Wial, The Brookings Institution)

(Source: Autoblog & GM)

General Motors has announced a new incentive program that it hopes will encourage people to enter the car buying market again. Called GM Total Confidence, the program has four prongs that includes Payment Protection if you lose your job, equity assistance if you trade in your vehicle later for another one from GM, one year of OnStar and the automaker’s 5-year/100,000-mile powertrain warranty. We’re already familiar with the last two components of GM’s Total Confidence program, so let’s focus on the first two. 

GM’s payment protection program is much like Hyundai’s Assurance Program in that the automaker will cover your payments in the event that you lose your job. GM’s program covers you for 24 months and will make up to nine payments valued at up to $500/month. According to GM, if you qualify for state unemployment benefits, you’ll qualify for the payment protection to kick in. 

The last element of GM’s Total Confidence incentive program is equity assistance, or what GM calls Vehicle Value Protection. This part of the program will cover the difference between what you owe on your vehicle and its NADA Clean Retail Value when you trade it in for another GM vehicle. The idea is to wipe out any negative equity caused by vehicle depreciation when you move on to your next car. 

The following is an exceprt from GM’s Press Release:

 
• Protects your Paycheck: ‘Payment Protection*’ provides up to nine months of payments on vehicle loans or leases ($500 max/month) if you lose your job for economic reasons. When looking for a job, you need a vehicle more than ever. ‘Payment Protection’ helps you get back on your feet.
• Protects your Investment: Once you are halfway through your finance contract, the customer qualifies for ‘Vehicle Value Protection.*’ This helps protect customers against uncertainty in the future used car market. For example, on a 60-month contract, you become eligible after the 30^th month. Much as we’ve seen home prices decline in this tough market – and homeowners may owe more than the current resale value of their house – ‘Vehicle Value Protection’ provides peace-of-mind for customers when they want to go purchase another GM vehicle.
• Protects your Vehicle: GM’s 5 year/100,000 mile transferable powertrain limited warranty (whichever comes first) plus roadside assistance and courtesy transportation. GM protects your vehicle with the best coverage in the business – so you don’t have to worry. With the high quality of GM vehicles today, offering the best coverage only makes sense. See your dealer for warranty details.
• Protects your Family: One Year OnStar ‘Safety and Security’ Package. Knowing that OnStar is there if you should ever need them really makes a difference. With Automatic Crash Response, OnStar’s cutting-edge technology that protects your family when they travel. Visit onstar.com for more details.

The “GM Total Confidence” plan is available for vehicles purchased April 1 through April 30, 2009. For more information, please visit gmconfidence.com.

(Source: Autoblog; Photo: Benjamin Davidson@ Flickr)

Not surprisingly, officials from the Canadian and Ontario governments have followed the U.S. government’s leadby officially rejecting the restructuring plans of General Motors and Chrysler. The Canadian officials said the automakers’ current plans do not go far enough and will not be certified as they are. In fact, they’re basically copying and pasting the new deal for automakers announced by the U.S. government today, saying that GM has 60 days to redo its plan while receiving a portion of the C$3 billion it requested and Chrysler has 30 days to finalize its partnership with Fiat while receiving C$250 million of the C$1 billion it requested.  Click here read more.

Mr. & Mrs. Wagoner- R.I.P (Relaxing in Propsperity)

(Source: ABC News)

(Relaxing in Prosperity)R.I.P Rick Wagoner – Gets $20Mil for losing tens of billions of dollars and tanking stock price from $60 (June 2000) to $1.27 (March 2009)

Rick Wagoner will leave his post as CEO of bailed-out General Motors with a $20 million retirement package, the company’s financial filings show.

Although the Treasury Department has barred GM from paying severance toWagoner or any other senior executive, Wagoner is eligible to collect millions in retirement benefits from his former employer, according to the documents reviewed by ABC News.

The Obama administration asked for Wagoner to resign Sunday, as part of its restructuring of the auto industry. President Obama said this morning that forcing Wagoner out indicated it was a time for new leadership. 

Under Wagoner’s leadership, GM lost tens of billions of dollars, took billions in taxpayer-financed aid, and announced plans to cut 47,000 employees by the end of 2009.

Click here to read the entire article.  For those interested in reading Wagoner’s farewell e-mail, please visit The Truth About Cars.  

For those who care to know, here is what GM’s Executive Officer Severance Policy  looks like (Thanks, an0nymous poster @EVcast): 

General Motors executive officers are generally at-will employees who serve at the discretion of the Board. In early 2005, GM adopted a policy applicable to executive officers requiring stockholder approval of any severance benefits if: 
• The executive’s employment was terminated prior to retirement; and 
• The present value of the proposed severance benefits would exceed 2.99 times the sum of the executive’s annual base salary and target annual incentive. 

Note: TransportGooru wonders if this culture of execessively compensating under-performing, over-paid must-be-retired executives will ever come to an end?   If Mr. Wagoner has any iota of ethics that his alma mater (Harvard Business School) tries to inculcate in its wards, he must politely decline and walk away without taking a penny from this $20mil payout.

 (Source: Jalopnik)