The Obama administration wants General Motors to expedite their IPO as the government had wanted to “err on the side of getting out (of their investment) a little faster”. “Private markets would like to see us exit this investment, and I think they will be more comfortable if we’re on a sustained path out the door than if they think we’re going to try to market time it to maximize return,” Ron Bloom, head of U.S. government’s autos task force told Reuters.

GM is expected to provide a ‘fresh start’ accounting of the company’s assets and liabilities, a necessary step toward an IPO, by March. CEO Fritz Henderson has said that the IPO could come as early as the second half of 2010, while Bloom would be happy to see it offered in Q4 2010.

The U.S. government intends to shed all of its stake in GM and the 8% stake it acquired in Chrysler Group LLC.

- By: Stephen Calogera

Source: Reuters

President Barack Obama’s trip to Asia included a massive motorcade in Beijing said to be 71 vehicles long. While touring the Great Wall and Forbidden City, Obama said that General Motors “can learn from their operations” in China “in terms of increasing sales back in the United States.”

Obama was reported to be speaking with Shanghai Communist Party secretary Yu Zhengsheng on what Yu called the “fantastic performance” by General Motors in China.

GM and its Chinese partners sold more than 1.5 million units and saw the company’s sales increase 60 percent in the first 10 months of 2009. In October, General Motors more than doubled its sales in China to 166,911 vehicles. According to the China Association of Automobile Manufacturers, a total of 946,000 were sold in October.

- By: Omar Rana

Source: Inside Line

Kenneth Feinberg, the Obama administration pay czar, said that he is concerned that the pay cuts ordered for bailed out companies could be troublesome for them when they try to retain or hire new talent. He said that the administration would consider offers to hire new executives at competitive industry rates.

Last month, Feinberg, ordered a cut in executive salaries at the seven firms that have received taxpayer bailouts. The cut included an average 50 percent cut in pay and bonuses for executives at General Motors, GMAC Financial Services, Chrysler Group LLC and Chrysler Financial.

“I’m always concerned that the companies thrive and they keep the personnel they need to stay in business. That’s a major concern,” Feinberg said. ”If General Motors or any other company wants to bring someone in laterally — laterally — and competitive pay packages require that lateral hires get certain competitive pay, what have you, we’re perfectly willing to examine that.”

GM Chairman Edward Whitacre recently urged the Obama administration to give the Detroit automaker less restrictive pay caps, saying that it is getting difficult for the company to hire new employees.

- By: Stephen Calogera

Source: Reuters

An armored Chevrolet Suburban and a limousine belonging to Vice President Biden’s fleet, hit and killed a pedestrian just over the D.C. border in Maryland. The two vehicles were on their way to Andrews Air Force Base to a secure storage location when the incident took place.

According to the Washington Post, the man was crossing an intersection on Maryland’s Suitland Parkway at 2:27 a.m. under rainy conditions.

The two vehicles were being driven by trained employees who have taken a “protective operator’s driving course,” the report said. U.S. Park Police are currently investigating the accident.

- By: Kap Shah

Source: Inside Line

While the White House won’t guarantee that General Motors and Chrysler Group LLC will repay the full $62 billion they received in government bailouts, it said today that taxpayers will at least get “some” of the money back. The Government Accountability Report released Monday said that automakers are “unlikely” to repay all of the government loans.

“I think the American people will see some of that money returned,” White House spokesman Robert Gibbs told reporters but declined to say give specifics. “I’m not the car czar.”

Former car czar Steve Rattner said that taxpayers have lost roughly $25 billion on their investment in GM, and there’s no hope of getting the first $4 billion loaned to Chrysler.

The GAO cited the U.S. Treasury Department’s internal analyses that GM and Chrysler’s market capitalizations, when they offer an IPO, are unlikely to be enough to be repaid.

- By: Stephen Calogera

Source: Detroit News

General Motors Company CEO Fritz Henderson has repeatedly  said that the Detroit automaker is aiming for an initial public offering as early as next year. However, the Government Accountability Office (GAO) said Monday that 2010 might be too soon to execute such a stock offering.

The GAO said that the Obama administration should establish a more detailed guideline for how it plans to sell its stake in GM and Chrysler and may consider more options such as private sales.

“Two of the experts we spoke with said GM might not be ready for a successful IPO by 2010, because it may be too early for the company to have demonstrated sufficient progress to attract investor interest, and two other experts noted that 2010 would be the earliest possible time for an IPO,” the GAO said.

GAO said that it may be too early to tell whether there has been significant structural changes at GM and Chrysler due to low sales and the economic environment.

General Motors has said that the final say in launching an IPO rests with the company’s owners, including the U.S. government.

- By: Stephen Calogera

Source: Free Press

Automotive site Edmunds.com is being criticized by the White House for its harsh analysis of the impact of “Cash for Clunkers.” It said that the site’s analysis was “faulty” and “implausible.” Edmunds.com’s CEO Jeremy Anwyl shot back that the White House was “shooting the messenger.”

Edmunds, which has been known to be pessimistic about the program’s impact, recently said that many of the vehicles would have been bought anyway and said that the U.S. taxpayers spent about $24,000 for each sale.

“Simply put, they’ve misrepresented the facts, and the White House is completely justified in calling them out on it,” said Mike Jackson, CEO of AutoNation. “It would appear that their political views have tainted their usual rigorous approach to research.”

A total of 690,000 vehicles were sold during the $3 billion Cash for Clunkers program that offered consumers up to $4,500 in rebates towards the purchase of a new car.

- By: Stephen Calogera

Source: Detroit News

Late last week, the Obama Administration ordered seven companies who received a significant amount of federal loan to cut the salaries of their top-level executives by an average of 90 percent and cut total compensation (including cash, stock and perks) by half.

General Motors CEO Fritz Henderson was amongst the many executives who saw government-imposed cuts in his own salary. Speaking to the press today between meetings with lawmakers on Capitol Hill, Henderson said that the cuts were “fair” and “thoughtful.” He said that the changes were “tough, but the situation is tough.”

Fritz’s salary was cut by 25 percent bringing his annual salary to $950,000 a year. Before the cuts, Henderson’s yearly salary came in at $1.3 million.

The cuts are being overseen by Obama’s pay czar, Kenneth Feinberg.

- By: Omar Rana

Source: Free Press

G.W. Bush has stated his concern about the American government being involved in the private sector, lending particular mention to the auto and financial industries to an association of Montreal business people, Bloomberg reports.

Bush said in his speech that government “has got to get out of the private sector, and therefore I hope our government gets out of the autos and the financials in which they have a stake,” according to Bloomberg.

A quarterly audit said yesterday that American taxpayers are ‘extremely unlikely’ to earn any return at all on the government investments in the private sector.  TARP watchdog Neil Barofsky told Congress that the chances of recouping bailout money “is far from certain.”

“I don’t believe government can lead us out of the mess we are in,” Bush said. “The private sector is the only engine for economic growth.”

- By: Stephen Calogera

Source: Bloomberg

Congress has passed a bill that will make fuel-efficient three-wheeled vehicles eligible for federal funding and is headed to the White House for President Barack Obama’s signature. The funding will be available to automakers and their suppliers.

The bill, which will open Department of Energy funding to companies like Aptera Motors, was passed by the Senate yesterday as a part of the energy appropriations bill after being approved by the House, report Automotive News.

“This is a huge win for scientific innovation and the environment,” said Rep. Brian Bilbray, R-Calif., a co-sponsor of the original bill. “We need more innovation and less regulation when it comes to promoting new ways to save energy while saving money at the pump.”

General Motors has openly criticized the bill saying that the Energy Department’s Advanced Technology Vehicles Manufacturing Incentive Program should be available only to large automakers that mass produce cars and technology that will help save large amounts of gasoline.

GM has applied for $10 billion in Department of Energy funding.

- By: Stephen Calogera

U.S. Secretary of Energy Steven Chu is known for his tendency to speak plainly and bluntly, especially with regards to alternative energy vehicles and his support of electric and hydrogen vehicles.

Now, Biofuels Digest reports that at a recent meeting exploring alternative fuels, Chu said, “If it were up to me, I would put every cent into electric cars.”

Chu’s comments come amidst numerous DOE loans made to companies indicating intent to produce electric vehicles, and major Senate support behind hydrogen power, indicating the federal government has a future interest in both technologies.

- By: Stephen Calogera

Source: Biofuels Digest (via AutoBlogGreen)
Image Source: Flickr – Pete Souza

At the end of the two-day summit held by the Department of Transportation to crack down on distracted driving, President Barack Obama signed an executive order banning federal workers from texting while driving government vehicles. The White House said that the ban also applies to privately owned vehicles if the employee is on official government business.

The president’s order encourage federal contractors and others doing business with the U.S. government to enforce their own ban on texting while driving on the job, the White House said.

“This order sends a very clear signal to the American public that distracted driving is dangerous and unacceptable,” Transportation Secretary Ray LaHood said. “It shows that the federal government is leading by example.”

The Transportation Department officials plan to seek a federal ban for truck and interstate bus drivers on text messaging and using cell phones while on the job.

What are your thoughts? Do you think the United States government should legally ban texting while driving? Cast your vote in the poll below.

- By: Omar Rana

Source: Detroit News
Photo Credit: Pete Souza – Flickr

President Barack Obama’s administration has paid a total of $2.5 billion of the $2.9 billion claimed by dealers during the Cash for Clunkers incentive and his hoping to pay the rest by the end of the month.

“All dealers will be paid by or before the end of September, probably before,” Transportation Secretary Ray LaHood said. “We’re down to the last applications that are deficient.”

The $2.5 billion figure indicates a doubling of payments in just six days. As of Sept. 10, the government had paid dealers $1.22 million, reports Automotive News.

LaHood has set a deadline of Sept. 30 to pay all of the claims made by dealerships. He said that he doubled to 5,000 employees to process dealer submissions.

- By: Stephen Calogera

During his visit to General Motors Company’s Lordstown Assembly plant yesterday, President Barack Obama told about 2,200 workers that GM’s survival was essential to the U.S. economy.

“I didn’t run for President to manage auto companies. It wasn’t something on my to-do list,” Obama said. “But in the midst of a deep recession and financial crisis, the collapse of the auto industry would have caused enormous damage to our economy. So we intervened for one simple and compelling reason: your survival and the success of our economy depended on it.”

He went on to defend the $50 billion investment his administration made in GM.

“Our belief was that if GM retooled and reinvented itself for the 21st century, it would be good for American workers, good for American manufacturing, and good for America’s economy,” Obama said. “I’m pleased to report that’s exactly what’s begun to happen at this plant and at others.”

He said that he wouldn’t stop working until all Americans could find a job. “As long as you’ve still got an ounce of fight left in you, I’ll have a ton of fight left in me,” Obama said.

- By: Stephen Calogera

Source: Detroit News

President Barack Obama today visited GM’s Lordstown, Ohio assembly plant to announce new gasoline mileage and greenhouse-gas pollution standards for new vehicles for the 2012 to 2015 model years. The move will lead to Obama’s previously announced requirement of 35.5 mpg by 2016.

The Transportation Department and the EPA said that the proposal calls for fuel-economy to increase by almost 5 percent a year starting with an average of 27.3 mpg for 2011 model year vehicles. The program is estimated to save some 1.8 billion gallons of U.S. oil consumption over the lifetime of vehicles made from 2012 to 2016, reports Automotive News.

“This action will give our auto companies some long overdue clarity, stability and predictability,” Obama said. “For too long, our auto companies faced uncertain and conflicting fuel-economy standards. That made it difficult for you to plan down the road.”

The 1,227 page proposal said that the average car buyer would save more than $3,000 in fuel-costs over the life of a 2016 vehicle. The proposal would affect cars, SUVs, minivans and pickups.

- By: Stephen Calogera

Image Source: Chuck Kennedy (Flickr)

President Barack Obama plans to make a speech at GM’s assembly plant in Lordstown, Ohio next week. While the White House won’t confirm the visit yet, officials said that the president is planning a trip as a part of a Midwest visit to talk about jobs and the economy.

Sources said that the president plans to highlight the fact that GM is recalling 1,050 workers next month to return to work at its Lordstown assembly plant.

The visit will be the first U.S. auto plant visit by Obama as president and the first since both GM and Chrysler emerged from bankruptcy.

It was reported earlier this morning that the U.S. government is unlikely to recover the billion of dollars that it invested in GM and Chrysler. The government has invested $74 billion of taxpayer money in the nation’s auto industry.

- By: Omar Rana

Source: Detroit News

A new report by the Congressional Oversight Panel, which oversees federal bailout programs, may end up surprising you. According to the report the government is very unlikely to get back all the billions of dollars that it invested in General Motors and Chrysler. It said that GM’s stock would have to “reach unprecedented heights” for the company to pay back the $50 billion, while the $5.4 billion portion of the $10.5 billion owed by Chrysler is “highly unlikely” to be repaid.

The report asked that the U.S. Treasury Department act with more transparency and provide a legal analysis justifying the use of financial rescue funds for GM and Chrysler. It said that the government has invested $74 billion of taxpayer money in the nation’s auto industry, including $12.5 billion into GMAC and $3.5 billion into auto suppliers.

The panel also said that the government may have avoided economic catastrophe by rescuing the auto industry, which represents about 6.5 percent of manufacturing jobs in the United Sates.

GM released a statement last night saying: ”We are confident that we will repay our nation’s support because we are a company with less debt, a stronger balance sheet, a winning product portfolio and the right size to match today’s market realities.”

Have your say in the comments section below.

- By: Omar Rana

Source: Washington Post (via MSNBC)

Cash-for-clunkers has triggered what the White House says could be the biggest two-month spike in auto sales on record. A preliminary analysis submitted to Congress puts GDP estimates at 0.3 to 0.4 percentage points higher at annual rate when compared to what it would have been without the program, reports Automotive News.

This increase “will be sustained in the fourth quarter” because of increased auto production to replace dealer inventory, the White House said.

The need for dealers to replace inventory will stimulate the long-term economy, as 42,000 jobs are expected to be generated during the second half of 2009. Both GM and FoMoCo have announced plans for increased production during the second half of the year to replenish inventory depleted by clunkers.

The White House also predicts long term environmental benefits, as there will be more cars on the road with better emissions output ratings. The average fuel-economy of a new vehicle purchased was 24.9 mpg – a 58 percent improvement.

-By: Stephen Calogera

Image Source: Pete Souza