The Truth About Cars » Chapter 11

GM: US Taxpayer-Funded Opel Plans By Christmas

Edward Niedermeyer — Thu, 19 Nov 2009 20:24:14 +0000

Automotive News [sub] reports that GM will rush out its $4.9b restructuring plan for Opel in December, as it seeks to ease worries on the continent about the fate of the troubled division. “Our plan is very similar to Magna’s. I don’t think it’s worse,” GM’s Nick Reilly told reporters near Opel’s largest plant in [...]

Bloom More “Encouraged” By Chrysler Plans Than Most

Edward Niedermeyer — Wed, 18 Nov 2009 18:41:55 +0000

“U.S. encouraged by Fiat plan for Chrysler,” runs Reuters‘ headline, attributed to car czarlet Ron Bloom. After commenting extensively about GM, in which Bloom controls a 60 percent taxpayer stake, he had only this to say about the eight percent government owned Chrysler and its recent plans: We see management with a huge sense of urgency. [...]

Swedish Government: Saab’s Books Were Cooked

Thor Johnsen — Wed, 18 Nov 2009 14:27:05 +0000

Looks like GM may have done some creative accounting after all – at least according to Swedish Government and their consulting firm KPMG. As we’ve reported the last couple of days, Saab’s rescue has been hanging by a thread due to questions around the company’s financial situation prior to the start of the financial crisis. [...]

New GM’s Projected Cash Burn is . . . Unspecified

Robert Farago — Mon, 16 Nov 2009 14:01:56 +0000

There’s a lot of analysis that needs doing re: GM’s first post-C11 financial statement. For now, let’s focus on the only important metric: cash burn. Never mind the headline—using taxpayer money to repay taxpayer money at a relatively paltry rate. How much cash does the nationalized automaker have, how much is it burning and when [...]

Visteon: The Supplier Skeleton In Ford’s Closet

Edward Niedermeyer — Fri, 13 Nov 2009 17:28:20 +0000

There’s no shortage of analysis hailing Ford’s last-man-standing status, but there’s plenty of buried truth that’s not being brought to light. For example, Ford’s version of Delphi, bankrupt spun-off supplier Visteon. The firm’s non-European and Asian operations have been in Chapter 11 bankruptcy since May, and according to Automotive News [sub], it’s running out of [...]

Pay Czar Removes Salary Cap for GM’s New Hires; Who Is GM’s $500k Man?

Robert Farago — Fri, 13 Nov 2009 14:19:18 +0000

Automotive News [sub] reports that President Obama’s Pay Czar has done an about face. Kenneth Feinberg pledged to remove the $500,000 salary cap for NEW executives hired for TARP-recipients—if he’s convinced that a rule-busting pay boost would help the bailout queens return U.S. taxpayer’s money. Feinberg’s climb-down comes just two days after New GM’s federally-appointed [...]

GM’s Monday Earnings Report: Mind The GAAP

Edward Niedermeyer — Thu, 12 Nov 2009 22:18:55 +0000

Were you looking forward to GM’s first post-bankruptcy financial report, set to be released on Monday? We sure were. Right up until we read that the earning statement won’t be compliant with a little something called Generally Accepted Accounting Principles. Automotive News [sub] reports that GM will use so-called “managerial accounting,” (do we have an [...]

GM Chairman Ed Whitacre: Fitting In Already

Robert Farago — Wed, 11 Nov 2009 14:58:21 +0000

GM’s government-appointed Chairman of the Board was out and about last night, speechifying at Texas Lutheran University. Ed Whitacre used the occasion to plea for the “modification” of Pay Czar Kenneth’s Feinberg’s pay caps. To recap the caps, the nationalized automaker’s top 25 executives took a 31 percent hair cut since joining the federal payroll. [...]

Edmunds’ Karl Brauer: May the Best GM Win

Robert Farago — Tue, 10 Nov 2009 22:25:45 +0000

GM CEO Fritz “Transparency” Henderson: We’re Beating Secret Targets

Robert Farago — Thu, 05 Nov 2009 22:36:15 +0000

Transparency. It’s what GM CEO Fritz Henderson promised taxpayers in sworn testimony in front of Congress, post $52 billion bailout (and the rest). As TTAC pointed out previously, bullshit. After not releasing the dead dealer list promised to Senator Jay Rockefeller, the nationalized automaker is now proud to announce that it’s beating its targets—without revealing [...]

Chrysler’s Cash Claim: A Cruel Con?

Robert Farago — Wed, 04 Nov 2009 21:05:21 +0000

Sergio Marchionne stunned the mainstream media—literally—with his revelation that Chrysler has improved its post-C11 cash position from $4 billion to $5.7 billion. “’Some of you have been surmising we’re burning through cash,’ he said in brief remarks opening the company’s presentation of its five-year plan. ‘This is not true.’” Uh, yes, it is. Can you [...]

Opel Workers Set to Strike, Germans Recalling $2.2B Bridge Loan

Robert Farago — Wed, 04 Nov 2009 14:36:11 +0000

GM’s last minute (i.e. post-German election) decision to pull out of a deal to sell its European Opel division to a consortium lead by Canada’s Magna Corporation has left chaos in its wake. The Associated Press reports that Opel workers throughout Europe are planning to strike GM on Thursday, protesting the automaker’s planned “rationalization” of [...]

Jerry York: 2010 GM IPO “The Dumbest Thing in the World”

Robert Farago — Tue, 03 Nov 2009 16:19:22 +0000

You can certainly understand the feds’ desire to make GM’s nationalization look like a temporary measure rather than the economic quagmire that is was, is and will be. But anyone with half a brain knew that the not-so-dynamic duo’s suggestion of a 2010 share offering was about as believable as the idea that the U.S. [...]

$13.6 Billion Remaining in GM’s Bailout Escrow Account

Edward Niedermeyer — Tue, 03 Nov 2009 00:36:19 +0000

\ GM was given its last $30B of taxpayer money as it entered bankruptcy in early June of this year. By the time GM exited Chapter 11 protection on July 10, there was only $16.4B left in its bailout escrow account. According to an 8-K form filed today with the SEC, GM now has only $13.6B [...]

Opel Deal To Close This Week?

Edward Niedermeyer — Tue, 13 Oct 2009 14:24:03 +0000

The Wall Street Journal reports GM could conclude its Opel division sale by as early as Thursday, after Fritz Henderson and German officials both signaled that talks were nearing an end. Magna and its backer Sberbank will put down €500m ($740m) for 55 percent of Opel, while Opel’s labor unions have agreed to €265m worth [...]

Suppliers Still Looking For Bailout

Edward Niedermeyer — Fri, 09 Oct 2009 18:20:13 +0000

“There must be increased access to capital through the entire supply chain — from the largest tier one to the smallest family-owned firm,” Dave Andrea, vice president of industry analysis and economics at the Original Equipment Suppliers Association told the Senate Banking Committee [via The Freep]. “Without assistance this country will needlessly lose manufacturing capacity, [...]

Delphi Exiting Bankruptcy

Edward Niedermeyer — Tue, 06 Oct 2009 21:49:19 +0000

After four years in Chapter 11 protection, GM’s largest supplier Delphi is returning to the land of the living. For now. Along the way, though, Delphi racked up some impressive bills. Automotive News [sub] estimates that GM has spent $12.5b on Delphi during its bankruptcy, and has pledged a further $1b in debt assumption, $2b [...]

GM CFO on the Way Out

Edward Niedermeyer — Wed, 09 Sep 2009 15:29:41 +0000

What a funny coincidence. On the very same day that a government oversight panel rips GM a new one for disappearing billions of taxpayer bucks, the Detroit News brings word that GM’s CFO, Ray Young, will be leaving the company. Young’s departure comes as GM is shaking up its finance department, the division which gave [...]

GM Chairman Scares Execs with Actual Expectations

Edward Niedermeyer — Fri, 04 Sep 2009 19:50:05 +0000

Opel Watch: GM, Germany and the Gordian Knot

Edward Niedermeyer — Thu, 03 Sep 2009 21:52:25 +0000

GM and Opel: What Part of “Nein” Don’t You Understand?

Bertel Schmitt — Sat, 22 Aug 2009 15:02:39 +0000

The board of GM convened on Friday to finally decide Opel’s fate. The board did as expected: It did nothing. They left everybody hanging. The board decided to not decide anything. According to Reuters, the GM board desperately needs critical information from the German government. To wit: What state financing would be available if GM would [...]

Ask the Best and Brightest: Why Are People Still Buying Old GM Stock?

Edward Niedermeyer — Fri, 21 Aug 2009 15:29:41 +0000

The AP [via Google] reports that 13.9m shares of Old GM were traded last Thursday alone, raising the obvious question: why? “There are people who think they are buying the new General Motors. Stop. You’re not. You’re buying the detritus,” says Harlan Platt, a finance professor at Northeastern. And Old GM’s spokesfolks agree. “We’re not [...]

Chrysler Still Owes Axed Dealers

Edward Niedermeyer — Fri, 21 Aug 2009 14:27:00 +0000

At least 20 of the 789 dealers cut by Chrysler during its restructuring are still owed money for vehicles they sold before their wind-down. According to FOX Business News, NADA has been receiving complaints from the dealers. “This situation is unacceptable,” says a NADA spokesman. “The dealers got 26 days notice they would be closing. [...]

Saab’s New Masters Speak

Edward Niedermeyer — Wed, 19 Aug 2009 15:43:36 +0000

Christian von Koenigsegg speaks to Automotorsport Sweden about the future of his new acquisition. Managing Director Jan-Åke Jonsson’s interview can be found here.

Ford CEO Alan Mulally: Love Conquers All

Robert Farago — Tue, 18 Aug 2009 12:02:25 +0000

Ford has roughly $18 billion in the bank. The company’s CEO has slowed The Blue Oval’s cash burn to about a billion a month. If you take away $10 billion—the amount of float needed to keep the lights on—Crazy Henry’s mob has eight months to stop the arterial spray of red ink before contemplating C11 [...]