Results tagged “gm”

Flush with socialist bailout money, General Motors is now trying to destroy the oil industry with a car that will get 230 miles per gallon in city driving! GM calls it the Chevy Volt and classifies it as an "extended-range vehicle" powered by an electric motor and a battery pack with a 40-mile range. (After that, a small internal combustion engine takes over to generate electricity for a total range of 300 miles.) Toyota’s Prius, the most fuel-efficient hybrid sold in the U.S., gets 48 miles per gallon and looks like a Hummer 3 by comparison. GM CEO Fritz Henderson promises that at the U.S. average cost of electricity (approximately 11 cents per kWh), a typical Volt driver would pay about $2.75 for electricity to travel 100 miles, or less than 3 cents per mile. Of course, big oil still has some time to assassinate Henderson and burn down GM's R&D labs—the first-generation Volt is expected to cost about $40,000, which most consumers might not swallow even if gasoline returns to $4 per gallon. And the E.P.A. still has run its own tests to confirm GM's assertions, but the company says Volt is on schedule to reach showrooms late next year. But whatever happened to the P.U.M.A.!?

General Motors, an "icon of American business," has filed for Chapter 11 bankruptcy this morning at US Bankrutpcy Court in New York's Southern District. The NY Times reports, "The company was forced into the filing by President Obama, who is betting that by temporarily nationalizing the onetime icon of American capitalism, he can save at least a diminished automaker that is competitive."

According to the NY Times, "The Treasury Department is directing General Motors to lay the groundwork for a bankruptcy filing by a June 1 deadline, despite G.M.’s public contention that it could still reorganize outside court." President Obama's auto task force, which is continuing talks with GM, wants to make sure a "bankruptcy filing is ready should the company" in case they cannot work out a deal with bondholders to "exchange roughly $28 billion in debt into equity in G.M. and with the United Automobile Workers union, which has balked at granting concessions without sacrifices from bondholders." The Times reports that one idea is to create a company that buys the "good assets" of a bankrupt GM, which lost nearly $31 billion last year (and received $13.4 billion in federal aid), while the "bad assets" are liquidated. This news is currently dragging Dow futures down.

Unlike lucky Carrie Melago at the Daily News, we did not have the opportunity to test-drive the P.U.M.A.—a new battery-powered prototype from Segway and GM—but this HD video is the next best thing. Watch in wonder as the bespectacled white guy cruises through Brooklyn Heights at top speeds of 35 m.p.h., then, through the magic of Hollywood, winds up by the Flatiron building with a gal pal! Too bad there's no footage of his death-defying P.U.M.A. ride over the Manhattan Bridge.

President Barack Obama suggested that "controlled bankruptcy" might be how automakers GM and Chrysler are saved. The Wall Street Journal explains the government could "divide their 'good' and 'bad' assets" and then "bankruptcy [would] purge their biggest problems." Chrsyler was given 30 days to try to restructure on its own, while GM was given 60 days; Obama said, "It will require unions and workers who have already made painful concessions to make even more. It will require creditors to recognize that they cannot hold out for the prospect of endless government bailouts." GM would prefer to avoid bankruptcy, but said it "will take whatever steps are necessary to successfully restructure the company, which could include a court-supervised process." A Times editorial says Obama's auto team's plan seems like "the best shot we have at obtaining a viable auto industry." And the Detroit Free-Press looks at why Ford execs are smiling.

In a move that "caught Detroit and Washington by surprise," the Obama administration asked GM CEO Rick Wagoner to resign. Edmunds.com CEO Jeremy Anwyl tells Bloomberg News, "The bailout loans aren’t hugely popular and that’s creating an issue for Obama. One way to make the loans more palatable is to be able to say the person responsible is no longer with GM." GM, which had losses of nearly $31 billion last year, received $13.4 billion last year and wants another $16.6 billion. Chrysler, which hopes for another $5 billion of aid, was told it must complete an alliance with Italian automaker Fiat in the next 30 days. The Wall Street Journal explains, "After over a month of analysis, the administration's auto task force determined that neither company had put forward viable plans to restructure and survive." With this news, stock futures have fallen over worries about auto industry bankruptcies.

The Treasury Department is increasing its aid to the automobile industry by throwing an extra $6 billion to the already-promised $17.4 billion. The additional funding is, per Politico, "chiefly to help the financial arm of General Motors Corp.": "Treasury will purchase $5 billion in senior preferred equity from GMAC LLC, and up to $1 billion more will be lent to GM itself so the automaker can participate in a rights offering at GMAC, which has wanted to reorganize itself as a bank holding company." The NY Times, which calls GMAC a "crucial source of automobile sales financing," adds that the company's transformation into a bank holding company allows it "borrow money at low rates" from the Fed. The hope is that GM's auto sales can be spurred, but one investment manager told Bloomberg News, "Philosophically, I'm not very happy about the fact that the government has to save an auto-finance company because management ran it into the ground."

of cash left to keep operating. However, it's now a "race against the clock," because it appears it may fall short of the 60 votes needed to pass it as Senate Republicans have voiced opposition to the plan (they think the "Car Czar," appointed to oversee the plan, doesn't have enough authority). Rep. John Dingell (D-Michigan) said, "Without this bridge, we’re going to fall into the biggest calamity this country has known since the Great Depression. A terrible disaster looms."

General Motors released its third quarter results and announced it lost $4.2 billion. The NY Times says the automaker is "closer to running out of cash," as GM said, "G.M.’s estimated liquidity during the remainder of 2008 will approach the minimal level necessary to operate its business.” GM has suspended merger talks with Chrysler and will concentrate on ways to stop the bleeding, like cutting white-collar jobs and other restructuring. The Big Three automakers--GM, Ford, and Chrysler--and the United Auto Workers union are hoping the federal government will help bail out the auto industry. In other auto-related news, gas prices are down in the region.