General Motors and Chrysler are in merger talks. This is not a typo. The world may soon become filled with Dodge Volts, Hemi Impalas and Chrysler Yukons according to a Wall Street Journal story.
Cerberus Capital Management owns 80.1 percent of Chrysler as well as 51 percent of GMAC Financial Services. The proposal would have a swap of GM’s remaining 49 percent of GMAC for Cerberus’ stake in Chrysler. The talks have stalled because of the recent turmoil in the financial markets, according to the Journal. Its sources said negotiations could resume if markets stabilize because both GM and Cerberus want to quickly divest the assets under discussion.
Besides solidifying General Motors as the world’s largest automaker and changing Detroit’s "Big Three" into the the "Big Two", if this merger does happen some interesting scenarios could take place. The two brands that AM General spawned (Jeep and Hummer) would now be back together. If rumored negotiations with the Fiat Group to build cars at surplus Chrysler plants continued, then GM and Fiat will be back working closely together again.
General Motors has had a very bad week. It announced at the beginning of the week that it was looking to get $500 million by mortgaging its swanky Renaissance Center headquarters in Detroit to help raise it’s cash. But that’s now a small concern compared to its new problem. Yesterday’s stock firesale on Wall Street sent GM’s share tumbling to $4.76, which is a 31 percent loss in one day. The stock is now at its lowest price since 1950.
All of this sent credit rater Standard & Poor’s to say on Thursday it could cut both GM and Ford’s credit ratings deeper into junk. It said that both automakers had enough liquidity through 2008, "but the accelerating deteriorating industry fundamentals will be a serious challenge to liquidity during 2009."
But the battle is not over. General Motors sees a tough road but won’t go to the extreme of filing for bankruptcy. "Clearly we face unprecedented challenges related to uncertainty in the financial markets globally and weakening economic fundamentals in many key markets," GM said. "But bankruptcy protection is not an option GM is considering. Bankruptcy would not be in the interests of our employees, stockholders, suppliers or customers."
Just remember the infamous saying: “As goes GM, so goes the country.” So let’s all keep fighting.
It was a simple idea, create a system that heats windshield washer fluid to speed up the process of melting snow and ice off windshields. In stepped Microheat with it’s HotShot system. In September though, General Motors was forced to recall about 944,000 vehicles equipped with the HotShot system because of concerns over electrical fires. GM has subsequently stopped using Microheat’s system, forcing Microheat to cease almost all production and close the company doors permanently. Now the fight is going to the lawyers, GM is suing Microheat for the cost of the recall, which is reported to be in the $20 million to $25 million range. But Microheat is pointing out the fact that GM still owes them 3.7 million for parts and tooling.
By November 1, dealers should have the parts to fix the problem, free of charge, by adding a wiring harness with an inline fuse. Vehicles affected are between 2006-2008 model years and include the Buick Lucerne and Enclave, the Cadillac DTS and Escalade, the GMC Yukon, Sierra and Acadia, the Saturn Outlook, the Hummer H2, and the Chevy Silverado, Avalanche, Tahoe, and Suburban.
We first heard rumors about a Volkswagen-based hatchback model from Porsche last year. Since that time we thought (hoped, wished, prayed) that Porsche came to its senses. Why would the company for which there are no substitutes give us a Golf substitute?
Unfortunately the rumors are surfacing again. A top Porsche executive has revealed that a new entry-level model is in the final discussion phases at Porsche’s Stuttgart headquarters. There may still be hope, the new model may not necessarily be a hatchback, but instead a small SUV or sports car. If we get our way, the mystery car will be a production announcement of the rumored new Porsche 914. In fact, the 914 would not be a far stretch considering Porsche can base it off VW’s new mid-engined roadster that is expected at the LA Auto Show.
Now that it has an SUV and a sedan is on the way, will Porsche run further into the mainstream with a hatchback? Whatever the result will be, by the time the car is developed, Porsche will likely be rummaging through its own corporate parts bin to produce the car.
Porsche has been running into problems with its merger with Volkswagen: unions aren’t appeased; Lower Saxony (minority shareholder) doesn’t want the merger; VW staff is reluctant to share technology; etc. So, in true blitzkrieg fashion, Porsche is going to make all those problems insignificant by gaining an absolute majority by November 26. Although there have been no reports of how big Porsche’s stake will be, it takes over 50 percent to get the absolute majority.
Will this make their problems go away? Doubt it. But what it will do is let everyone in Wolfsburg know who’s the boss.
End game?
Now that Audi has a new generation of the A8 on the way, it should be cheaper to pick up an older one. That also leaves cash available to buy a tuning kit for the old version. This may be the reason why RDX Racedesign released its new body kit for the Audi A8 called the D2.
The new kit includes a new front grille, front bumper fitted with LED daytime running lights, new "Turbo-Style” side sills and a new rear bumper with integrated exhaust cutters. In order to complete the body kit a new set of 20 inch alloy wheels were added. Price of the kit: $2856.
If the world is having economic problems, someone should probably tell Audi. While most car makers are showing sales slowdowns, global sales of the quad-ringed cars increased in September by 12.3 percent. Audi specifically saw double-digit growth rates in Europe, Asia/Pacific and even America.
Audi’s September sales were 95,137 vehicles (2007: 84,716), raising its 2008 total to 762,280 units – a total increase of 2.9 percent (2007: 741,106). Audi attributes the success to growth in its high-volume cars such as the A4. Sales of the newly refreshed A4 (sedan and wagon) were up 46 percent in September.
Press release after the jump
>> read
1,100 GM factory workers in Moraine, Ohio will be out of a job on December 23 as plans are announced to close the Moraine Assembly plant early, instead of the original 2010 plan (Happy Holidays to the employees.) The accelerated shutdown plans are part of company wide cost-cutting move as customers move away from sport utility vehicles to smaller vehicles amid high gas prices.
The plant builds the Chevrolet TrailBlazer, GMC Envoy, Isuzu Ascender, and Saab 9-7X. This will mark the end of all four models. With Isuzu pulling out of the U.S. market in January, the death of the Ascender is no surprise. As for Saab’s 9-7X, it is widely expected to be replaced by the superior 2010 9-4X.
General Motors turned down a $56 million tax credit and grant package from the Ohio Department of Development to keep the plant open.
Following the approved $25 billion in loans to help U.S. based auto groups, Europe’s car makers plan to ask the European Commission for a €40 billion ($55.22 billion) loan. European car makers plan to use the loan to aide them toward meeting the 2012 EU mandate that calls for the automakers to lower carbon dioxide emissions. If America will give the money, why can’t the EU? After all, it will be used to accelerate the transition to environmentally friendly cars.
According to a spokesman for the automaker, "All European car makers agree on the [€40 billion] demand." Shocking.
The four door Ferrari concept got some big press from the blogs, but remember, that was a design study created by someone who does not work for the prancing horse. Ferrari is showing that its staying true to its sports car roots, even after Lamborghini announced plans to put into production the Estoque Concept. Ferrari president Luca di Montezemolo spoke to a group of journalists at the Paris Auto Show and said there will be no plans to pollute Ferrari’s lineup with a sedan.
Montezemolo wished his competitors "good luck." He went on to say that as long as he is in charge at Ferrari "we will never do a four-door." He feels that Ferrari’s corporate cousin, Maserati, already covers the market for sporty Italian sedans with the Quattroporte.
He also announced that California is sold out for two years.
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