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

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

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

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

During his 2008 campaign, Barack Obama made few statements on the subject of transportation. Now that he has taken office, Obama has a lot on his plate besides transportation issues. As such, he’s appointed to Ray LaHood as the Transportation Secretary of the United States to oversee transportation policy decisions. Only problem is, LaHood and his new number two man love speed cameras and toll roads.

LaHood’s number two man, Deputy Secretary John Porcari, will serve as the Transportation Department’s chief operating officer, overseeing day-to-day operations.

Porcari recently headed Maryland’s transportation agency’s push to install speed cameras on every freeway. In April, Porcari was out supporting passage of a legislation allowing speed cameras in “work zones” that have no workers (we really hate those work zones – a lot).

Porcari had set the fine of a speed camera ticket at $2,000; however, the legislatures opted for a significantly reduced fine from Porcari’s original proposal.

Oh and if these two weren’t enough. President Obama has also nominated Victor M. Mendez to be Administrator of Federal Highway Administration. He recently coordinated state agencies and interest groups for the rollout of the state’s freeway speed camera program in Arizona.

Yeah – we’re not a fan of these guys at all.

- By: Kap Shah

Source: TheNewspaper (via TTAC)

As you all know by now, when the ‘New GM’ comes out of bankruptcy court in 60 to 90 days the U.S. government will own 60 percent of the company. The Canadian governments will own 12 percent while the UAW will own 17.5 percent. GM bondholders will take a 10 percent stake.

Speaking earlier today to the media, President Barack Obama said: “We are acting as reluctant shareholders. What we are not doing – what I have no interest in doing – is running GM.”

He said that the New GM will be run by a private board of directors and management team. “They, and not the government, will call the shots and make decision about how to turn this company around. 

“The federal government will refrain from exercising its rights as a shareholder in all but the most fundamental corporate decisions. When a difficult decision has to be made on matters like on where to open a new plant or what type of new car to make; the New GM – not the United States government – will make that decision.

He said that the U.S. government’s main goal is to get GM back on its feet with a hands-off approach and get out quickly.

- By: Omar Rana

As GM’s June 1 deadline winds down, the struggling automaker borrowed another $4 billion from the U.S. Treasury and won a cost-cutting deal from the Canadian Auto Workers (CAW) and United Auto Workers (UAW). However, GM still faces a huge showdown with bondholders, which will most likely drive the automaker towards bankruptcy at the end of the month.

With the new $4 billion borrowed yesterday, the Obama administration has loaned GM a total of $19.4 billion to stay afloat. GM said that it expects that number to rise to $27 billion after June 1.

President Barack Obama said in an interview released today that he is very “confident” that GM would survive after restructuring. Obama did not mention whether GM would be filing for bankruptcy to complete it’s restructuring.

“Ultimately, I think that GM is going to be a strong company and we are going to be pulling out as soon as the economy recovers and they’ve completed their restructuring,” Obama said.

He said that he wanted the government to get out of the auto business as soon as possible.

- By: Omar Rana

Source: Reuters

California, home to Tesla Motors, is stepping up efforts to plan the next stage of clean air standards despite the fact that President Barack Obama announced his new proposal for fuel-economy regulations based on the state’s model.

“California will be immediately getting to work on what the standards should be for beyond 2016,” Mary Nichols, Chairman of the California Air Resources Board, said in an interview Reuters. Nichols said that she expects “a much more stringent standard.”

U.S. Department of Transportation will set a 35.5 mpg fleet average target for 2016 while the EPA will set a fleet goal of tailpipe emissions of 250 grams of carbon per mile traveled by 2016.

The Big 3 U.S. automakers averaged a fuel-economy of 24-25 mpg in 2007.

- By: Kap Shah

Source: Reuters
Photo Credit: Samantha Appleton (Flickr)

While the U.S. government may be well on its way to owning a majority control in General Motors, President Barack Obama still loves his Ford Escape Hybrid. Announcing the new fuel-economy standards today in the Rose Garden of the White House, Obama stepped away from the podium and threw in a little plug for his Escape Hybrid SUV.

“By the way, I just want to mention, I think I still have my Ford parked in Chicago,” Obama said. “It’s a Ford hybrid, it runs great, you guys should take a look.”

FoMoCo’s CEO Alan Mulally pumped his fist in the air as the crowd laughed.

After realizing that there were nine other auto executives behind him, Obama got back on track.

“But there are also some outstanding hybrids and energy-independent cars represented up here, so I didn’t want to just advertise for one,” Obama said.

- By: Omar Rana

Source: Detroit Free Press
Photo Credit: Samantha Appleton

President Barack Obama has announced new fuel-economy regulations in an attempt to reduce greenhouse gas pollution for all new cars and trucks sold in the United States. The standards will cover model years 2012-2016 and call for an average fuel-economy standard of 35.5 mpg by 2016 – an average increase of 8 mpg per vehicle.

The new regulations are projected to save 1.8 billion barrels of oil over the life of the program.

“In the past, an agreement such as this would have been considered impossible,” said President Obama. “That is why this announcement is so important, for it represents not only a change in policy in Washington, but the harbinger of a change in the way business is done in Washington. As a result of this agreement, we will save 1.8 billion barrels of oil over the lifetime of the vehicles sold in the next five years. And at a time of historic crisis in our auto industry, this rule provides the clear certainty that will allow these companies to plan for a future in which they are building the cars of the 21st century.”

“A national policy on fuel economy standards and greenhouse gas emissions is welcomed by the auto manufacturers because it provides regulatory certainty and predictability and includes flexibilities that will significantly reduce the cost of compliance,” said the White House in a statement. 

“The collaboration of federal agencies also allows for clearer rules for all automakers, instead of three standards (DOT, EPA and a state standard).”

Currently, DOT manages fuel-economy while the EPA measures emissions.

- By: Omar Rana

Photo Credit: Lawrence Jackson (Flickr)

Sources say that the Obama administration is ready to unveil a new fuel-efficiency policy that will resolve a dispute between California and the U.S. government over emissions.

The new proposal will run from 2012 to 2015 and will maintain a single national standard for fuel-economy. It will also give automakers flexibility for meeting the new standards.

Sources familiar with the plan say that the strategy calls for raising the fuel-economy standards of cars and trucks to 35 mpg by 2016.

Two months ago, the government said fuel-economy standards for U.S. light vehicles would increase 8 percent to an average of 27.3 mpg by 2011, costing the auto industry $1.45 billion to make the necessary changes.

- By: Omar Rana

Source: Reuters 
Image Credit: Pete Souza

Following the launch of General Motors more aggressive and revised restructuring plan, the White House said today that the government does not want to run the struggling automaker. In its updated restructuring plan, GM said today that it would give the U.S. Treasury 51 percent of the company.

“This administration and this government have no desire to run an auto company on a day-to-day basis,” White House spokesman Robert Gibbs said. “It is not our desire to own or run one of the auto companies.”