The Truth About Cars » shares The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Mon, 14 Jul 2014 16:00:14 +0000 en-US hourly 1 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 (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 » shares GM Seeks Aid From NASA, Issues New Ignition-Related Recall Fri, 11 Apr 2014 09:00:47 +0000 gm-headquarters-logo-opt

Autoblog reports 2.19 million of the same vehicles under the current General Motors ignition recall are under a new ignition-related recall, as well. The new recall warns of a problem where the key can be removed without the switch moved to the “off” position. According to GM, the automaker is aware of “several hundred” complaints and at least one roll-away accident resulting in injury, and is instructing affected consumers to place their vehicles in park or, in manuals, engage the emergency brake before removing the key from the ignition until repairs are made.

Regarding the original recall, The Detroit News reports has called upon NASA’s Engineering & Safety Center to review whether or not the 2.6 million affected Chevrolets, Pontiacs and Saturns are safe to drive with just the ignition key in position. The agency, which has performed similar reviews in the past, will look over the work performed by the automaker in the latter’s effort to make the affected vehicles safe to drive, as well as review its overall approach to safety concerns.

On the financial front, Automotive News says GM will take a $1.3 billion charge in Q1 2014 for the original recall, 40 percent greater than the $750 million charge originally estimated at the end of last month. The charge — which includes repair costs and loaners for affected owners — comes on the heels of a $400 million charge tied to currency challenges in Venezuela, the total sum of which threatens to knock out most if not all of the automaker’s Q1 2014 earnings set to be announced toward of end of this month.

Meanwhile, The Detroit News reports Michael Carpenter, the CEO of former GM financial arm Ally Financial, says his company will complete its exit from government ownership by Election Day of this year:

The U.S. Treasury is quite happy today. My own view is they will definitely be out before the election and we are close to having Treasury and U.S. government ownership in the rearview mirror.

By the end of trading Thursday, Ally’s IPO netted taxpayers $17.7 billion with a profit of $500 million on the $17.2 billion bailout of the consumer finance company, while the Treasury currently holds 17 percent of its remaining shares after selling 95 million for $25 per share at the opening bell; share price fell 4.4 percent to $23.50 at the closing bell.

In lawsuit news, Automotive News reports GM settled with the families of two Saturn Ion drivers who lost their lives in 2004 when their respective cars’ airbags failed to deploy. The two fatalities were identified by the publication as the earliest of 13 linked to the out-of-spec ignition switch at the root of the current recall crisis. In addition, while one case was settled out-of-court in September of 2007, the second case drew its settlement terms after the automaker filed for bankruptcy in June of 2009, placing the plaintiffs and their lawyer with other unsecured creditors.

The Detroit News reports Cadillac and Buick are at the top of their respective lists for dealer service satisfaction as determined by the J.D. Power & Associates U.S. Customer Service Index Study. Cadillac’s dominance over the luxury brand category comes as former No. 1 Lexus — who held the top spot for five consecutive years — falls to third behind Audi, while Buick leads Volkswagen, GMC, Mini and Chevrolet in the mass-market brand category.

Finally, Autoblog reports the last of eight Corvettes swallowed by the sinkhole that formed inside the National Corvette Museum in Bowling Green, Ky. back in February has been recovered. The 2001 Corvette Mallett Hammer Z06 will need extensive work performed to bring it back to its original state, but not before it joins its brethren in a new exhibit entitled “Great 8″ beginning next week. The exhibit will last until the museum’s 20th anniversary in late August, at which point GM will begin restoration work on the eight Corvettes.

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Treasury Won’t Sell GM Stock, Hopes For Pick-Up Sat, 22 Sep 2012 11:48:08 +0000

Throwing investment advice of eminent experts such as the LA Times editorial board and former GM CEO Ed Whitacre in the wind, the Treasury will not sell its holdings in GM as recommended, but hold on to the stock. Why? For the same reasons that prompt smaller scale investors to hold on: The Treasury “expects the stock to rise in the future due to a roll-out of several new vehicles,” people familiar with Treasury’s thinking told Reuters.The chorus that urged the Treasury to unload GM at a $16 billion loss begun a week ago and grew louder by the day. According to a Wall Street Journal report, GM execs want higher salaries and their corporate jets back, which won’t happen as long as Uncle Sam is breathing down their necks.

Says Reuters:

“One major factor analysts cite that could boost GM shares early next year is the planned rollout of highly profitable large trucks. “

The new trucks generate a profit of $12,000 to $14,000 per vehicle according to analysts. While the Volt won’t save the planet just yet, gas-gobbling BOF Silverados might save the Treasury from a major loss.

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Daimler Is Looking For Love In China Thu, 22 Dec 2011 15:33:21 +0000

Germany’s luxobarge makers aren’t just happy selling their luxobarges to China. Now they want Chinese money straight up. Daimler is flirting with the Chinese sovereign wealth fund China Investment Corporation (CIC), which may want to buy 5 or 10 percent of Daimler.

Sovereign wealth funds invest their money in stocks, where it supposedly yields more than buying T-bills denominated in a devaluing dollar.

According to Germany’s manager magazin, China had shown interest in a piece of Daimler for years, but always had been outbid and outbought by rich sheikhs. In 2009 for instance, the Abu Dhabi sovereign wealth fund Aabar was faster than the Chinese.

Now, Daimler hired an investment bank with the declared goal to get the Chinese on board. Daimler sees bunches of positive aspects to a Chinese engagement. If the Chinese government has money riding on Daimler, it might buy more Benz and less Audi.

Daimler is also interested in intensifying its joint venture with Beijing’s BAIC, and could plow the money right back into that. The Chinese should like that.

Finally, having about 30 percent of the stock in the hands of „friendly“ shareholders would be good insurance against a hostile takeover, the magazine heard in Stuttgart.


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Fiat Wants Larger Share Of Chrysler Pie, Has Difficulties At Home Sat, 27 Mar 2010 11:57:19 +0000

In June 2009, Fiat was handed 20 percent of a washed and rinsed Chrysler for no cash, and despite protests, the deal was rammed through. The UAW was given 55 percent, the U.S. and Canadian governments controlled 8 and 2 percent, respectively. Often overlooked, or forgotten, the deal came with an option for Fiat to raise its stake to 35 and eventually as high as 51 percent if it meets some rather vague financial and developmental goals, hashed out with the U.S. government.

Sergio Marchionne thinks the goals are met. He plans to increase Fiat’s holdings in Chrysler to 35 percent within two years, says Reuters.

“There are three steps of five percent,” Marchionne told a press conference after the group’s shareholder meeting. “We will add 15 percent within 24 months.”

According to Sergio, the launch of the Fiat 500 in the United States in this year suffices as meeting the goals.

As for Fiat’s own outlook, it’s hazy. After a loss in 2009, they want to be “near breakeven” when the end of 2010 comes around, Marchionne said. In other words: They’ll write another loss.

Fiat is dealing with a difficult 2010 at home and in the near abroad. The Italian government scrapped their cash for clunkers program, which was a shot in the arm of domestic Fiat sales. Fiat was very successful in Germany during the Abwrackprämien heydays, but the party is over and sales are down. Marchionne thinks car sales in Europe will contract by 15 percent this year back to 1994 levels, and will take about four years to get back to their pre-crisis glory. Most market observers will not disagree. Some think, Sergio is an optimist.

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