The Truth About Cars » High Finance http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Tue, 21 Oct 2014 14:00:13 +0000 en-US hourly 1 http://wordpress.org/?v=4.0 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » High Finance http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com/category/news-blog/high-finance/ GM Slapped With Lawsuits Totalling $10B Over Lost Value Claims http://www.thetruthaboutcars.com/2014/10/gm-slapped-lawsuits-totalling-10b-lost-value-claims/ http://www.thetruthaboutcars.com/2014/10/gm-slapped-lawsuits-totalling-10b-lost-value-claims/#comments Thu, 16 Oct 2014 13:00:37 +0000 http://www.thetruthaboutcars.com/?p=932002 General Motors twice experienced the business end of a leather glove Wednesday, when over 20 million consumers demanded satisfaction via two lawsuits totalling $10 billion in claims over lost resale value as a result of the February 2014 ignition switch recall. Bloomberg reports two class actions would come GM’s way, the larger representing those who […]

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2009 Chevrolet Cobalt Kia Store

General Motors twice experienced the business end of a leather glove Wednesday, when over 20 million consumers demanded satisfaction via two lawsuits totalling $10 billion in claims over lost resale value as a result of the February 2014 ignition switch recall.

Bloomberg reports two class actions would come GM’s way, the larger representing those who bought a GM vehicle between July 2009 and July 2014, whether or not they were still in possession of said vehicle.

The smaller lawsuit, meanwhile represents those who bought vehicles prior to the automaker’s bankruptcy in July 2009, though it may be muted depending on how a bankruptcy judge in New York rules next year regarding whether or not claims for accidents and economic losses made before the bankruptcy would be allowed to move forward.

According to the filing for the larger suit, “New GM’s” claims of being focused on safety and innovation were little more than a mask, resulting in diminished values of all GM-branded vehicles as a result of both the recall and the automaker’s “corporate culture of ignoring and concealing safety defects.”

For its part, GM vowed in an email to “vigorously defend against plaintiffs’ claims that GM vehicles have reduced resale value.”

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Panasonic Investing “Tens Of Billions” Of Yen In Tesla Gigafactory http://www.thetruthaboutcars.com/2014/10/panasonic-investing-tens-billions-yen-tesla-gigafactory/ http://www.thetruthaboutcars.com/2014/10/panasonic-investing-tens-billions-yen-tesla-gigafactory/#comments Mon, 13 Oct 2014 13:00:57 +0000 http://www.thetruthaboutcars.com/?p=930306 Just how much will Panasonic throw down on the table when it comes time to invest in Tesla’s new Gigafactory near Reno, Nev.? According to CEO Kazuhiro Tsuga, “tens of billions” of yen. Reuters reports Tsuga didn’t think the current exchange rate — which knocks his investment quote down to tens, if not hundreds, of […]

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Super GT Panasonic Toyota Prius

Just how much will Panasonic throw down on the table when it comes time to invest in Tesla’s new Gigafactory near Reno, Nev.? According to CEO Kazuhiro Tsuga, “tens of billions” of yen.

Reuters reports Tsuga didn’t think the current exchange rate — which knocks his investment quote down to tens, if not hundreds, of millions of dollars — was “bad,” so long as the exchange remained stable.

As reported earlier this year, Panasonic wants the Gigafactory all to itself, investing in all levels of production at the upcoming plant. The battery producer also agreed to manufacture lithium ion cells for Tesla’s and other manufacturers’ battery packs as part of the overall investment deal.

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NADA, CFPB Fight For Future Of Automotive Financing http://www.thetruthaboutcars.com/2014/10/nada-cfpb-fight-future-automotive-financing/ http://www.thetruthaboutcars.com/2014/10/nada-cfpb-fight-future-automotive-financing/#comments Thu, 09 Oct 2014 10:00:13 +0000 http://www.thetruthaboutcars.com/?p=927882 According to National Automobile Dealers Association chair Forrest McConnell, the United States government’s plan to tighten automotive finance regulations amounts to an attempt by said government “to take away the consumer’s right to get a discount.” Autoblog reports the Consumer Financial Protection Bureau wants to further extend its reach in the industry, arguing that a […]

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car salesman battle brigade

According to National Automobile Dealers Association chair Forrest McConnell, the United States government’s plan to tighten automotive finance regulations amounts to an attempt by said government “to take away the consumer’s right to get a discount.”

Autoblog reports the Consumer Financial Protection Bureau wants to further extend its reach in the industry, arguing that a flat-fee system would provide more transparency and prove beneficial to consumers over the current discretionary interest rate system, which the agency claims can be used to discriminate against certain groups of customers.

McConnell returned fire, proclaiming the CFPB’s reasoning as “flawed,” and that dealers are against discrimination:

Dealers have to discount those rates to be competitive. The current system saves customers money. Period.

At stake are 87.4 million outstanding loans worth over $900 billion as of Q1 2014, 90 percent of which originate from 38 auto finance companies that would fall under the proposed CFPB regulations.

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GM Compensation Claims Total 1130, 24 Death Claims Approved http://www.thetruthaboutcars.com/2014/10/gm-compensation-claims-total-1130-24-death-claims-approved/ http://www.thetruthaboutcars.com/2014/10/gm-compensation-claims-total-1130-24-death-claims-approved/#comments Tue, 07 Oct 2014 14:00:29 +0000 http://www.thetruthaboutcars.com/?p=927457 The compensation fund created by General Motors to pay claims resulting from injuries and deaths linked to a defective ignition switch found in a handful of 2003 through 2007 compact models has approved a total of 24 death claims for payout. According to The Detroit News, the overall number of claims jumped 30 percent last […]

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GM RenCen Garden

The compensation fund created by General Motors to pay claims resulting from injuries and deaths linked to a defective ignition switch found in a handful of 2003 through 2007 compact models has approved a total of 24 death claims for payout.

According to The Detroit News, the overall number of claims jumped 30 percent last week, from 867 to 1,130, while total death claims rose from 153 to 165.

Regarding injury claims, 79 for serious injury and 886 for less-serious injury cases were received, up from 70 and 644 respectively the week previous. The number of approved injury claims still stands at 16.

Finally, around 90 to 100 claims were found not eligible for payouts, while 30 victims and their families received settlement offers from the multi-million dollar fund.

Claims will be accepted until December 31, 2014.

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Buffett Enters Dealership Business With Van Tuyl Group Purchase http://www.thetruthaboutcars.com/2014/10/buffett-enters-dealership-business-van-tuyl-group-purchase/ http://www.thetruthaboutcars.com/2014/10/buffett-enters-dealership-business-van-tuyl-group-purchase/#comments Mon, 06 Oct 2014 12:00:46 +0000 http://www.thetruthaboutcars.com/?p=926441 Warren Buffett — no relation to Jimmy — is a lot of things: investor extraordinaire, railroad magnate, newspaper mogul, hip-hop enthusiast et al. As of last Thursday, however, he picked up a new title: master auto dealer. Bloomberg reports Buffett’s Berkshire Hathaway purchased Arizona-based Van Tuyl Group, the largest privately owned auto dealership group in […]

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Grand Re-Opening Of Jay-Z's 40/40 Club - Inside

Warren Buffett — no relation to Jimmy — is a lot of things: investor extraordinaire, railroad magnate, newspaper mogul, hip-hop enthusiast et al. As of last Thursday, however, he picked up a new title: master auto dealer.

Bloomberg reports Buffett’s Berkshire Hathaway purchased Arizona-based Van Tuyl Group, the largest privately owned auto dealership group in the United States, for an undisclosed sum. Namesake Larry Van Tuyl will continue to run the show, especially with Buffett’s plans to scale operations significantly.

The purchase is a bet on the consolidation of the dealership industry overall, as a handful of groups — like AutoNation, Group 1 and Penske — come into more dealerships; Van Tuyl operates 78 in 10 states, including Arizona, Texas and Nebraska.

Once the paperwork is sorted in Q1 2015, the group will be renamed Berkshire Hathaway Automotive. The group has over $8 billion in revenue.

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State, Federal Authorities Target Subprime Liar Auto Loans http://www.thetruthaboutcars.com/2014/10/state-federal-authorities-target-subprime-liar-auto-loans/ http://www.thetruthaboutcars.com/2014/10/state-federal-authorities-target-subprime-liar-auto-loans/#comments Mon, 06 Oct 2014 10:00:39 +0000 http://www.thetruthaboutcars.com/?p=926369 The same subprime lending practices in the mortgage industry that fueled the run-up toward the Great Recession have found a new market to infect: used-car auto lending. According to The New York Times, state and federal authorities are investigating used-car dealerships who finance subprime consumers by creating liar loans, loans where an applicant’s information is […]

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Ameriquest Mortgage NASCAR Nextel Cup Series Ford Fusion

The same subprime lending practices in the mortgage industry that fueled the run-up toward the Great Recession have found a new market to infect: used-car auto lending.

According to The New York Times, state and federal authorities are investigating used-car dealerships who finance subprime consumers by creating liar loans, loans where an applicant’s information is misrepresented, such as inflating one’s income or falsifying their employment information.

Thus far, the investigations have found hundreds of such loans, including a case in Odessa, Texas where two employees at a dealership created over 300 liar loans; the employees are now serving time in federal prison. Meanwhile, 15 states — including Florida, New York, Alabama, Ohio, Texas and Tennessee — have lawsuits pending against dealerships whose subprime lending tactics have financially damaged borrowers who would have otherwise been passed over.

Liar lending also damages lenders and investors — the latter including public pension funds and insurance companies — who buy the loans from the dealerships who commit to such tactics, eroding confidence in the securities generated by the loans. That said, more lenders are falling head over heels to have more loans in their portfolio — sometimes paying dealers in full immediately for them — fostering the sin that led some mortgage companies to the guillotine years ago.

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Metaxas: License Plate Recognition Can Improve Originations http://www.thetruthaboutcars.com/2014/10/metaxas-license-plate-recognition-can-improve-originations/ http://www.thetruthaboutcars.com/2014/10/metaxas-license-plate-recognition-can-improve-originations/#comments Wed, 01 Oct 2014 13:00:37 +0000 http://www.thetruthaboutcars.com/?p=922465 Aside from GPS-equipped starter interrupt systems, lenders have another tool to repossess a vehicle, with the added benefit of using the data obtained to acquire better contracts: license plate recognition. According to Auto Remarketing, the CEO of Fort Worth, Texas-based Digital Recognition Network, Chris Metaxas, says his company’s LPR technology has found 55 percent of […]

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DRN LPR Guide

Aside from GPS-equipped starter interrupt systems, lenders have another tool to repossess a vehicle, with the added benefit of using the data obtained to acquire better contracts: license plate recognition.

According to Auto Remarketing, the CEO of Fort Worth, Texas-based Digital Recognition Network, Chris Metaxas, says his company’s LPR technology has found 55 percent of their customers’ assets up to 100 miles away from where the paperwork claimed the vehicle would have originally been. As most assets are with the lenders’ customers, any deviation from that is a red flag.

Thus, originators seeking to minimize risk could use LPR data to “determine the truth of a statement someone may make on an application,” in turn enhancing the process so better contracts are entered into a given portfolio:

If you think about what a bank does in translating risk mitigation into their ability to grow their book of business, the loans they write, the policies they write, it is substantial and is exponential. What you lose on the back end is only a fraction of what you write on the front end.

Earlier this year, DRN and another LPR company entered into a lawsuit against Utah governor Gary Herbert and attorney general Sean Reyes over First Amendment issues regarding legislation that prohibited such technology from being used to analyze the image of the license plate in question. The lawsuit is part of an ongoing battle between privacy advocates who claim the private data tied to a plate can have the potential to be abused, and by LPR proponents like DRN who believe license plate numbers contain no such thing, citing the public nature of the plate itself.

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CFPB Brings The Hammer Down On Captives, Dealer Reserve http://www.thetruthaboutcars.com/2014/09/cfpb-brings-hammer-captives-dealer-reserve/ http://www.thetruthaboutcars.com/2014/09/cfpb-brings-hammer-captives-dealer-reserve/#comments Tue, 30 Sep 2014 14:00:47 +0000 http://www.thetruthaboutcars.com/?p=921689 The hammer has fallen on captive automotive lenders, such as GM Financial, Ford Motor Credit and Toyota Financial Services: The Consumer Financial Protection Bureau began officially asserting its authority over them as the feds and the lenders battle over allegations of discrimination in the latter’s loan products. Forbes reports the captives — regulated at the […]

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CFPB - Consumer Financial Protection Bureau Sign

The hammer has fallen on captive automotive lenders, such as GM Financial, Ford Motor Credit and Toyota Financial Services: The Consumer Financial Protection Bureau began officially asserting its authority over them as the feds and the lenders battle over allegations of discrimination in the latter’s loan products.

Forbes reports the captives — regulated at the state level until this month — will be used indirectly by the agency to regulate dealerships as far as financing is concerned; the new-car dealer lobby won exemption from oversight in 2010.

The focus? Dealer reserve. Lenders allow dealers to add a few percentage points to the former’s loan packages as compensation for generating the leads, generally capped between 2 to 3 percentage points by most lenders. However, the allegations claim dealerships use their dealer reserve to charge more on loans made to protected classes, such as women and minorities.

The CFPB plans to address the issue by “pushing lenders to switch to some form of dealership compensation that takes away dealer discretion, such as a fixed, flat rate for every customer.” The agency also suggested lower caps could also do away with the alleged variations in dealer pricing.

For its part, the National Automobile Dealers Association claims competition “keeps rates low,” that dealership compensation is lower than the rate caps suggested, and by moving to a fixed, flat rate with even lower caps, dealers would no longer be able to offer discounts on financing.

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NEVS Lays Off 200 In Reorganization Plan http://www.thetruthaboutcars.com/2014/09/nevs-lays-200-reorganization-plan/ http://www.thetruthaboutcars.com/2014/09/nevs-lays-200-reorganization-plan/#comments Mon, 29 Sep 2014 10:00:21 +0000 http://www.thetruthaboutcars.com/?p=921169 With the Saab name reclaimed by the mothership, a host of financial problems, and no product beyond a 10-year-old platform, what else is left for National Electric Vehicle Sweden to do? If you said, “Tap out,” then you just might see that hand pounding the mat rather quickly. Reuters reports the automaker has laid off […]

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National-Electric-Vehicle-Sweden

With the Saab name reclaimed by the mothership, a host of financial problems, and no product beyond a 10-year-old platform, what else is left for National Electric Vehicle Sweden to do? If you said, “Tap out,” then you just might see that hand pounding the mat rather quickly.

Reuters reports the automaker has laid off 200 workers due to a lack of work as of late, work that likely won’t be coming anytime soon. NEVS says the move was part of its reorganization plan that will be presented at a creditors’ meeting October 8.

Originally, the workers were retained since production ceased in May 2014 in the hope that financing would soon come its way to restart work immediately. The remaining staff will keep the factory in good condition should NEVS secure the needed financing to resume assembly.

At present, the automaker owes kr400 million ($56 million USD) to its creditors, and is allegedly in talks with two unknown firms — speculation says Mahindra is one of them — to gain a financial jumpstart for an electric variant of the 9-3, currently in the prototype phase.

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Lenders Monitor, Control Subprime Nexum Via Connected Vehicle Tech http://www.thetruthaboutcars.com/2014/09/lenders-monitor-control-subprime-nexum-via-connected-vehicle-tech/ http://www.thetruthaboutcars.com/2014/09/lenders-monitor-control-subprime-nexum-via-connected-vehicle-tech/#comments Fri, 26 Sep 2014 14:00:59 +0000 http://www.thetruthaboutcars.com/?p=920098 In a perverse nexus where connected-vehicle technology, privacy and subprime lending intersect, consumers who fall behind on so much as a single payment, or even stray outside a given teritory, may find their vehicles shutdown by their lender from a digital panopticon. The New York Times reports that some subprime borrowers — a group that […]

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Isis Panopticon Album Cover

In a perverse nexus where connected-vehicle technology, privacy and subprime lending intersect, consumers who fall behind on so much as a single payment, or even stray outside a given teritory, may find their vehicles shutdown by their lender from a digital panopticon.

The New York Times reports that some subprime borrowers — a group that made up a quarter of all new car loans in 2013 — must agree to have a GPS-equipped starter interrupt device installed in the vehicle of a given borrower’s choosing. In turn, the lender can keep track of where its property — and the borrower — is at all times, and with a single tap or click, cut all power to the vehicle if a borrower falls behind on payments.

However, some lenders are choosing to act only days after a missed payment — instead of the 30-day grace period before a borrower is considered in-default — no matter where exactly the vehicle is at the moment of shutdown. This has led to situations where a borrower has been stranded in a bad neighborhood, at the stop light, or, in one case, on the freeway.

Further, some loan agreements include so-called “geo-fences”: a maximum range a subprime borrower can travel before the lender, again, shuts down a vehicle and sends a tow truck to recover the asset. The claim is that a borrower who travels further than the fence allows — such as to their place of employment — may not be able to make good on their payments.

The consequences of using the devices have drawn considerable attention from both consumer lawyers and state regulators. The former argue starter interrupt systems give a lender all the more reason to remotely repossess a vehicle if even a payment is missed by a day, violating state laws on the matter as a result. The latter, in turn, is examining the potential safety hazards for the borrower and other motorists if the devices become defective.

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S&P Raises GM Grade Rating, Investors Lower Share Price http://www.thetruthaboutcars.com/2014/09/sp-raises-gm-grade-rating-investors-lower-share-price/ http://www.thetruthaboutcars.com/2014/09/sp-raises-gm-grade-rating-investors-lower-share-price/#comments Fri, 26 Sep 2014 13:00:56 +0000 http://www.thetruthaboutcars.com/?p=920074 Though investors are not happy with General Motors as of late, Standard & Poor’s is, boosting the automaker’s investment-grade rating from BBB- to BB+. Detroit Free Press reports the boost — a year after Moody’s raised GM’s status to investment-grade — reflects the automaker’s return to sustained profitability from strong showings in the United States […]

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GM First Day as a Public Company Celebration

Though investors are not happy with General Motors as of late, Standard & Poor’s is, boosting the automaker’s investment-grade rating from BBB- to BB+.

Detroit Free Press reports the boost — a year after Moody’s raised GM’s status to investment-grade — reflects the automaker’s return to sustained profitability from strong showings in the United States and China. GM’s lending arm, GM Financial, also received an investment-grade rating from S&P.

Alas, investors slapped the automaker with a share price of $32.87 at the closing bell Thursday, the first time shares traded under $33 since April 14. The decline is likely the result of a new round of recalls issued earlier this week, affecting 221,000 Cadillac XTS and Chevrolet Impala models from the 2013 through 2015 model years.

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Fifteen Claimants Receive First Offers From GM Compensation Fund http://www.thetruthaboutcars.com/2014/09/fifteen-claimants-receive-first-offers-gm-compensation-fund/ http://www.thetruthaboutcars.com/2014/09/fifteen-claimants-receive-first-offers-gm-compensation-fund/#comments Fri, 26 Sep 2014 11:00:17 +0000 http://www.thetruthaboutcars.com/?p=920026 The compensation fund established by General Motors and managed by attorney Kenneth Feinberg to pay accident and fatality claims linked to a defective ignition switch in a handful of 2003-2007 models has made its first cash offers to 15 claimants. Reuters reports the offers were made verbally earlier this week, and the claims were a […]

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The compensation fund established by General Motors and managed by attorney Kenneth Feinberg to pay accident and fatality claims linked to a defective ignition switch in a handful of 2003-2007 models has made its first cash offers to 15 claimants.

Reuters reports the offers were made verbally earlier this week, and the claims were a mix of accident and fatality cases.

As far as submissions go, 850 claims — including 150 fatality claims — have been filed since the submission window opened August 1. The window will remain open until the end of this year, while claims will be examined for eligibility through the middle of 2015.

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Privacy Concerns By Auto Lenders Shape SEC Asset-Backed Security Rule http://www.thetruthaboutcars.com/2014/09/privacy-concerns-auto-lenders-shape-sec-asset-backed-security-rule/ http://www.thetruthaboutcars.com/2014/09/privacy-concerns-auto-lenders-shape-sec-asset-backed-security-rule/#comments Thu, 25 Sep 2014 13:00:25 +0000 http://www.thetruthaboutcars.com/?p=918546 It took four years, but the Securities and Exchange Commission has put the final touches on a rule regarding asset-backed securities — including auto loans and leases — and what information is given when a company or investor takes on an ABS. Juan Barnett of DC Car Geek reports the work on the rule began […]

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SEC - Securities and Exchange Commission HQ

It took four years, but the Securities and Exchange Commission has put the final touches on a rule regarding asset-backed securities — including auto loans and leases — and what information is given when a company or investor takes on an ABS.

Juan Barnett of DC Car Geek reports the work on the rule began in 2010, re-proposed with the inclusion of Dodd-Frank Act requirements in 2011, and brought up for consideration again earlier this year. Barnett adds that a total of 240 comments — the majority from financial institutions — were submitted to the SEC in the same period.

As far as the automotive finance industry goes, a consortium dubbed Vehicle ABS Sponsors delivered a 97-page comment in 2012, bringing up numerous concerns about the rule.

One concern in particular focused on privacy issues. Were the then-proposed framework to be enacted, the consortium feared competitors from within and outside the ABS market would use the massive amounts of data collected by its members to upend the industry as a whole:

Ordinarily, we would consider someone appropriating our data to be wrongfully taking our private property and harming us in the marketplace. We think it is highly inappropriate for a government-mandated program to permit, and indeed facilitate, this practice.

Earlier this year, SEC Commissioner Michael Piwowar acknowledged those and similar concerns, suggesting those who do participate in the ABS market “simply follow the statute and require disclosure of asset-level data only if such data is necessary for investors to independently perform due diligence.”

Thanks to a rule modification regarding the sharing of loan-level data, both sides of the ABS game — issuers and investors — can use a private database to talk amongst themselves. Previously, the data would have been made readily available through the SEC’s public database, EDGAR.

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Goldman Sachs: Tesla Needs $6B In Capital To Meet “Disruptive” Growth http://www.thetruthaboutcars.com/2014/09/goldman-sachs-tesla-needs-6b-capital-meet-disruptive-growth/ http://www.thetruthaboutcars.com/2014/09/goldman-sachs-tesla-needs-6b-capital-meet-disruptive-growth/#comments Thu, 25 Sep 2014 10:00:40 +0000 http://www.thetruthaboutcars.com/?p=918314 According to the financial overlords of Goldman Sachs, Tesla would need an $6 billion in capital within the next 11 years should its products become truly disruptive to the automotive industry. Per Bloomberg, Goldman Sachs analyst Patrick Archambault delivered that number to his employer’s clients Wednesday, based on what he believes would be needed should […]

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Tesla HQ

According to the financial overlords of Goldman Sachs, Tesla would need an $6 billion in capital within the next 11 years should its products become truly disruptive to the automotive industry.

Per Bloomberg, Goldman Sachs analyst Patrick Archambault delivered that number to his employer’s clients Wednesday, based on what he believes would be needed should Tesla’s electric lineup prove as popular as the iPhone 6 or Model T. The proclamation knocked the automaker’s shares down 1.7 percent to $259.32 on the trading floor in New York at the final bell.

Though Tesla CEO Elon Musk plans to sell a minimum of 500,000 units per year down the road, Archambault claims the capital needed would push annual production from 1.8 million to 3.2 million units by 2025. Other projects, such as the upcoming Gigafactory battery pack plant in Reno, Nev., would also need some of the projected $6 billion in additional capital. He adds that most of the $6 billion would be distributed from 2017 through 2025.

Meanwhile, Tesla has not given its own forecast for capital spending, according to representative Simon Sproule.

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Hyundai’s Gangnam Style Leads To Partial Strike http://www.thetruthaboutcars.com/2014/09/hyundais-gangnam-style-leads-partial-strike/ http://www.thetruthaboutcars.com/2014/09/hyundais-gangnam-style-leads-partial-strike/#comments Wed, 24 Sep 2014 13:00:33 +0000 http://www.thetruthaboutcars.com/?p=917626 Due to a Gangnam-style real estate deal in the Gangnam district of Seoul, South Korea, workers at Hyundai and Kia have gone on partial strike for the next few days. Bloomberg reports the unions leading the strike will do so through September 26, while wage talks with the parent company are indefinitely postponed. In turn, […]

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PSY's Gangham Style

Due to a Gangnam-style real estate deal in the Gangnam district of Seoul, South Korea, workers at Hyundai and Kia have gone on partial strike for the next few days.

Bloomberg reports the unions leading the strike will do so through September 26, while wage talks with the parent company are indefinitely postponed. In turn, shares in Hyundai fell 2 percent to close at ₩191,500 ($184 USD) on the Korea Exchange, the lowest since May 2013.

The trigger for the strike was ₩10.6 trillion ($10 billion) real estate deal for property in the Gangnam district of the South Korean capital between Hyundai, Kia and affiliate Hyundai Mobis. The unions claim this move as not only proof Hyundai can pay its workers better, including bonuses — which have been mandated by the country’s supreme court to be a part of a worker’s base pay — but that company chair Chung Mong Moo’s management style leaves a lot to be desired.

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Captives To Face CFPB Oversight http://www.thetruthaboutcars.com/2014/09/captives-face-cfpb-oversight/ http://www.thetruthaboutcars.com/2014/09/captives-face-cfpb-oversight/#comments Thu, 18 Sep 2014 18:06:16 +0000 http://www.thetruthaboutcars.com/?p=914466 New rules being announced by the Consumer Financial Protection Bureau would mean that the captive finance arms would be subject to oversight from the CFPB. Automotive News reports that the CFPB will now have jurisdiction over “nonbank lenders” that  “make, acquire, or refinance 10,000 or more loans or leases in a year.” This rule would encompass […]

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cfpb-consumer-financial-protection-bureau

New rules being announced by the Consumer Financial Protection Bureau would mean that the captive finance arms would be subject to oversight from the CFPB.

Automotive News reports that the CFPB will now have jurisdiction over “nonbank lenders” that  “make, acquire, or refinance 10,000 or more loans or leases in a year.” This rule would encompass virtually all captive finance arms, covering a total of 38 lenders that originate roughly 90 percent of nonbank auto loans and leases.

Until now, the CFPB has not defined its cutoff point for overseeing “larger participants”, which largely included financial institutions. But the new definition brings auto maker finance arms under the CFPBs umbrella, something which has been expected for some time.

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Feinberg: 19 Deaths Thus Far Linked To Faulty GM Ignition http://www.thetruthaboutcars.com/2014/09/feinberg-19-deaths-thus-far-linked-faulty-gm-ignition/ http://www.thetruthaboutcars.com/2014/09/feinberg-19-deaths-thus-far-linked-faulty-gm-ignition/#comments Tue, 16 Sep 2014 10:00:57 +0000 http://www.thetruthaboutcars.com/?p=913074 Over a month since the first claims were filed by those affected by a defective General Motors ignition switch originally linked to 31 accidents and 13 deaths, compensation administrator and attorney Kenneth Feinberg has found a total of 19 deaths and 31 eligible claims thus far. CNN Money reports 125 death and 320 accident claims […]

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General Motors headquarters in Detroit, Michigan

Over a month since the first claims were filed by those affected by a defective General Motors ignition switch originally linked to 31 accidents and 13 deaths, compensation administrator and attorney Kenneth Feinberg has found a total of 19 deaths and 31 eligible claims thus far.

CNN Money reports 125 death and 320 accident claims have been submitted since the filing period began August 1 of this year. Out of the filings, 31 claims were found eligible, while most remain under review as of this writing. Additionally, less than 12 claims were denied to date.

Aside from the 19 deaths, Feinberg found four of the accident claimants suffered severe injuries — quadriplegia, serious burns, brain damage et al — in crashes tied to the switch, with another eight reporting less severe injuries.

Finally, the majority of the claims filed were tied to young drivers operating their first car when their injuries or fatalities occurred.

As for why the death toll rose in the compensation program, Feinberg noted that his program’s “proximate cause” standard was “easier to satisfy” from a legal standpoint, whereas the GM engineers who reported on the original 13 linked fatalities were doing so from an engineering point-of-view.

Compensation per claim ranges from $20,000 for less serious injuries, to $1 million plus an estimated future earnings potential and $300,000/surviving spouse/dependent for deaths caused by the switch. Those who accept must forego suing the automaker in exchange.

Feinberg’s office will accept claims until the end of 2014, with all claims reviewed by the middle of next year. Approximately 100 claims are filed each week with the office at present.

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US Treasury Begins Second Divestiture Plan Of Ally Stock http://www.thetruthaboutcars.com/2014/09/us-treasury-begins-second-divestiture-plan-ally-stock/ http://www.thetruthaboutcars.com/2014/09/us-treasury-begins-second-divestiture-plan-ally-stock/#comments Mon, 15 Sep 2014 12:00:51 +0000 http://www.thetruthaboutcars.com/?p=912722 Ally Financial, the lending artist formerly known as GMAC Financial, inches closer to freedom from government ownership as the United States Treasury begins a second trading plan to shed its shares. Automotive News reports the plan would allow the U.S. Treasury “to continue exiting the investment in a manner that balances speed of exit with […]

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Ally at NYSE

Ally Financial, the lending artist formerly known as GMAC Financial, inches closer to freedom from government ownership as the United States Treasury begins a second trading plan to shed its shares.

Automotive News reports the plan would allow the U.S. Treasury “to continue exiting the investment in a manner that balances speed of exit with maximizing the taxpayer’s return,” according to CFO Charmian Uy.

The first plan saw the Treasury sell 8.9 million shares for $218.7 million in ROI for taxpayers, adding to the $18 billion recovered since the department first took majority ownership at the beginning of the Great Recession six years ago.

At the time, $17.2 billion was given to the floundering lender via the Troubled Asset Relief Program to prevent falling into the same abyss that took Lehman Brothers, Washington Mutual and a number of small banks, giving the Treasury 74 percent of the shares then available. Currently, it holds just 13.8 percent — or 66.2 million shares — of Ally common stock, all of which may be sold by the end of 2014.

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Nevada Legislature Deliberates Tesla Tax Package In Special Session http://www.thetruthaboutcars.com/2014/09/nevada-legislature-deliberates-tesla-tax-package-special-session/ http://www.thetruthaboutcars.com/2014/09/nevada-legislature-deliberates-tesla-tax-package-special-session/#comments Thu, 11 Sep 2014 10:00:24 +0000 http://www.thetruthaboutcars.com/?p=910626 Last week, Tesla and Nevada governor Brian Sandoval jointly announced the automaker would be bringing its Gigafactory to Reno. Now, it’s up to both houses of the state’s legislature to pull it all together with a $1.3 billion tax break. Reuters reports the Nevada Legislature gathered in Carson City for a special session at noon […]

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Tahoe Reno Industrial Center

Last week, Tesla and Nevada governor Brian Sandoval jointly announced the automaker would be bringing its Gigafactory to Reno. Now, it’s up to both houses of the state’s legislature to pull it all together with a $1.3 billion tax break.

Reuters reports the Nevada Legislature gathered in Carson City for a special session at noon Wednesday to hammer the details of the package, which Sandoval believes will spur $100 billion worth of economic benefits for his state during the next two decades at an investment payoff of 80:1.

The package would provide the following for Tesla in exchange for hosting the Gigafactory:

  • $725 million in tax exemptions through 2034
  • $300 million in various tax savings through 2024
  • $120 million in tax credits for meeting the state’s investment threshold of $3.5 billion
  • $75 million in tax credits for up to 6,000 jobs created
  • Reduced utility rates

In turn, Tesla will invest over $37 million into Nevada’s education systems during the next five years, and will bring a total of 25,500 jobs to the state, from construction to indirect employment.

As of this writing, both houses are set to return for a second day of deliberation Thursday morning. Until then, this is the tax break bill as established during Wednesday’s session.

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Edmunds: 2014 SAAR May Best 2006 Peak http://www.thetruthaboutcars.com/2014/09/edmunds-2014-saar-may-best-2006-peak/ http://www.thetruthaboutcars.com/2014/09/edmunds-2014-saar-may-best-2006-peak/#comments Wed, 10 Sep 2014 11:00:18 +0000 http://www.thetruthaboutcars.com/?p=910034 The surge in United States auto sales last month could push the final figures to a height not seen since 2006 when January 2015 rolls around. According to Automotive News, Edmunds chief economist Lacey Plache said that though the publication is holding at 16.4 million SAAR (Seasonally Adjusted Annual Rate) for 2014, “there is definite […]

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Couple + Salesman Sign The Contract Of Blood

The surge in United States auto sales last month could push the final figures to a height not seen since 2006 when January 2015 rolls around.

According to Automotive News, Edmunds chief economist Lacey Plache said that though the publication is holding at 16.4 million SAAR (Seasonally Adjusted Annual Rate) for 2014, “there is definite potential for numbers to hit higher than that.”

At present, the SAAR for 2014 is expected to hit 17.5 million, much higher than the previous peak of 16.6 million in 2006. August’s SAAR was fueled by strong Labor Day sales, which may have dinged September’s SAAR as consumers opted to make their purchases before summer drew to a close.

Meanwhile, Plache expects 2015’s SAAR to fall just short of 17 million, fueled by expiring leases. However, she and Edmunds senior analyst Jessica Caldwell warn a rise in interest rates in 2016 may put a drag on sales. Caldwell adds that automakers’ finance wings could counter this “by subsidizing lower rates.”

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Nissan Declined Stake In Aston Martin As Early As 2012 http://www.thetruthaboutcars.com/2014/09/nissan-declined-stake-aston-martin-early-2012/ http://www.thetruthaboutcars.com/2014/09/nissan-declined-stake-aston-martin-early-2012/#comments Tue, 09 Sep 2014 10:00:27 +0000 http://www.thetruthaboutcars.com/?p=909066 Prior to becoming Aston Martin’s new CEO, former Nissan senior exec Andy Palmer proposed to the automaker to buy a stake in AM, only for Nissan to decline. Reuters reports Palmer brought up the issue Renault-Nissan CEO Carlos Ghosn in 2012 and 2013, with one insider claiming the company “looked carefully at the proposal” before […]

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Aston Martin Lagonda Prototype

Prior to becoming Aston Martin’s new CEO, former Nissan senior exec Andy Palmer proposed to the automaker to buy a stake in AM, only for Nissan to decline.

Reuters reports Palmer brought up the issue Renault-Nissan CEO Carlos Ghosn in 2012 and 2013, with one insider claiming the company “looked carefully at the proposal” before rejecting the idea. Said insider declined to explain the proposal or the reasoning behind the rejection, as did a representative for the company.

Meanwhile, Palmer’s new role as AM’s CEO may lead to more cooperation between the premium automaker and Daimler AG, the latter already in possession of a 4 percent stake in the former while also providing engines and electronics to Aston’s offerings. Palmer helped Daimler and Nissan’s Infiniti develop a similar relationship, resulting in a joint-venture on a plant in Mexico, as well as a family of engines to be shared with the Q50 and the Mercedes-Benz C-Class.

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Sandoval, Musk Announce Tesla Gigafactory To Be Built In Nevada http://www.thetruthaboutcars.com/2014/09/sandoval-musk-announce-tesla-gigafactory-built-nevada/ http://www.thetruthaboutcars.com/2014/09/sandoval-musk-announce-tesla-gigafactory-built-nevada/#comments Fri, 05 Sep 2014 14:00:17 +0000 http://www.thetruthaboutcars.com/?p=907097 It’s official: Tesla will build its Gigafactory in Nevada pending legislative approval. KOLO-TV reports the battery factory will bring its 6,500 jobs to Reno, along with $100 billion dollars and up to 22,000 jobs over the next two decades. In turn, Governor Brian Sandoval will ask the state for $1.3 billion in tax breaks and […]

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Elon Musk and Brian Sandoval

It’s official: Tesla will build its Gigafactory in Nevada pending legislative approval.

KOLO-TV reports the battery factory will bring its 6,500 jobs to Reno, along with $100 billion dollars and up to 22,000 jobs over the next two decades.

In turn, Governor Brian Sandoval will ask the state for $1.3 billion in tax breaks and incentives at a special legislative session next Wednesday at the earliest. The package is meant to last for 20 years.

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NEVS Gains Creditor Protection, Loses Saab Name http://www.thetruthaboutcars.com/2014/09/nevs-gains-creditor-protection-loses-saab-name/ http://www.thetruthaboutcars.com/2014/09/nevs-gains-creditor-protection-loses-saab-name/#comments Tue, 02 Sep 2014 13:00:35 +0000 http://www.thetruthaboutcars.com/?p=904905 First, National Electric Vehicle Sweden was going to be taken to district court and forced to file bankruptcy. Then, it was spared. Then, it saw its application for creditor protection denied due to being “vague.” Now? The application has moved forward, but at the price of the Saab name. Autoblog reports NEVS — who owes […]

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saab97

First, National Electric Vehicle Sweden was going to be taken to district court and forced to file bankruptcy. Then, it was spared. Then, it saw its application for creditor protection denied due to being “vague.”

Now? The application has moved forward, but at the price of the Saab name.

Autoblog reports NEVS — who owes over 90 creditors kr400 million ($57.56 million USD) — gained protection from the district court in Vänersborg August 29 while the Chinese-owned company continues negotiates with two unknown companies to obtain more funding.

However, the move by the court allowed SAAB AB — whose Viggens birthed many a 99 Turbo and 900S way back when — to pull the naming rights from NEVS. The latter only bought the beleaguered automaker’s physical assets, and had to seek permission from SAAB to use the brand name. Thus, it may now be finally safe to say, “Rest in peace.”

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North Korea Owes Sweden $428M For 1,000 Volvos Swindled In 1974 http://www.thetruthaboutcars.com/2014/09/north-korea-owes-sweden-428m-1000-volvos-swindled-1974/ http://www.thetruthaboutcars.com/2014/09/north-korea-owes-sweden-428m-1000-volvos-swindled-1974/#comments Tue, 02 Sep 2014 11:00:34 +0000 http://www.thetruthaboutcars.com/?p=904857 Forty years ago, the North Koreans and the Swedes entered into an agreement where the latter’s socialist and industrialist interests aimed to bring recognition to the former’s regime while filling its pockets from the country’s mining industry. Part of this agreement included 1,000 Volvo 144 GLs, which were meant to be paid in copper and […]

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Stolen Volvos in North Korea

Forty years ago, the North Koreans and the Swedes entered into an agreement where the latter’s socialist and industrialist interests aimed to bring recognition to the former’s regime while filling its pockets from the country’s mining industry. Part of this agreement included 1,000 Volvo 144 GLs, which were meant to be paid in copper and zinc.

But that was 40 years ago.

Newsweek reports North Korea, under Kim Il-sung’s regime, ultimately absconded with the Volvos and other Swedish goods during a Swedish-Korean trade fair in Pyongyang, all within the same year the vehicles were delivered.

Since then, the Swedish Export Credits Guarantee Board has calculated the interest owed on the debt linked to those goods. Total debt after inflation plus interest holds at kr3 billion ($428 million USD).

As for the Volvos, they were ordered for taxi service within the North Korean capital. As of 2008, those cars were not only still running, but, according to photographer and entrepreneur Tor Rauden Källstigen, were treated well:

I think I’ve never been inside such an old car even back home in Sweden. This taxi was very well maintained too, close to mint condition it seemed.

Were Il-sung’s grandson and current ruler, Kim Jong-un, to sell the vehicles at current book value, he would net $2.6 million — or 0.6 percent of the debt — for the trouble.

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Wiedeking Ordered To Stand Trial Over Market Manipulation Charges http://www.thetruthaboutcars.com/2014/08/wiedeking-ordered-stand-trial-market-manipulation-charges/ http://www.thetruthaboutcars.com/2014/08/wiedeking-ordered-stand-trial-market-manipulation-charges/#comments Wed, 27 Aug 2014 10:00:37 +0000 http://www.thetruthaboutcars.com/?p=901441 Former Porsche CEO Wendelin Wiedeking may be facing jail time in the future if convicted on charges of market manipulation recently revived by a German court. Bloomberg reports the Stuttgart Higher Regional Court ordered both Wiedeking and former Porsche CFO Holger Haerter to stand trial in criminal court over the charges, linked to the failed […]

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Wendelin-Wiedeking

Former Porsche CEO Wendelin Wiedeking may be facing jail time in the future if convicted on charges of market manipulation recently revived by a German court.

Bloomberg reports the Stuttgart Higher Regional Court ordered both Wiedeking and former Porsche CFO Holger Haerter to stand trial in criminal court over the charges, linked to the failed takeover of Volkswagen AG in October of 2008. The court proclaimed it found “numerous indications” of a possible hidden agenda to increase Porsche’s stake in Volkswagen from 74.1 percent to 75 percent “as they could suggest the opposite evaluation by the lower court.”

Both Porsche and attorneys for the two defendants believe the charges to be without merit, especially as they were overturned in a lower court back in April due to lack of sufficient evidence. The regional court, however, states that as far back as 2006, Wiedeking had plans to take over VW in secret.

In addition to the criminal case, a few civil suits are waiting in the wings in Braunschweig, Stuttgart and Hanover. The plaintiffs — investors who believed Porsche had planned to assimilate VW months before the October 2008 takeover attempt — are seeking over €5 billion ($6.6 billion USD) in damages.

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