GM Financial Subpoenaed By DOJ In Subprime Lending Review
While the parent company goes through the federal ringer over product safety, GM Financial is under the gun after receiving a subpoena from the U.S. Department of Justice regarding potential deceptive practices in subprime lending.
Federal Highway Safety Grants Go Mostly Unclaimed Over Stringent Qualifications
Aside from funding issues with the U.S. Highway Trust Fund, state governments are having a difficult time applying — and receiving — federal grants to make their part of the system safer.
Equifax: Auto Lending At Record Highs, Delinquencies At Record Lows
Six years after the dark days of the Great Recession, automotive lending is back on the rise, while delinquencies on those loans remain grounded.
Latest GM Recall Woes Hurt Q2 Results
In today’s General Motors digest: The automaker takes it on the chin in its quarterly report; the analysts have their say; GM Korea could allow its workers to build the next Cruze if only they would put down the picket signs; 45 attorney generals are investigating the February 2014 recall; and CEO Mary Barra will be the keynote speaker for a connected-vehicle forum.
The New York Times Shines A Light On Subprime
The issue of subprime car loans, specifically loans with exorbitant interest rates for used cars, has filtered into the New York Times, with the paper’s Dealbook section running an investigation into the practice.
Oil Booms Slowed Down By Weakening Roads
For the past few years, the oil booms in North Dakota and southern Texas have brought in a lot of money wherever oil could be drawn out. At the same time, the booms have taken their toll on amenities and infrastructure, the latter now the cause of slowing the boom down.
Obama Talks Connected Vehicles, Highway Funding
Amid touring the Turner-Fairbank Highway Research Center in McLean, Va. and having a go at a driving simulator based upon a Saturn SL, President Barack Obama talked about connected vehicles and increasing highway funding before reporters in attendance Tuesday.
Buy-Here, Pay-Here Dealers Face Stiff Competition From New-Car Dealers' Cheap Credit
Buy-here, pay-here lots, traditionally the place to find a vehicle with little, bad or no credit, are facing some stiff competition as of late from new-car dealers offering cheap financing.
Feinberg Plan To Be Funded Out-Of-Pocket By GM
Kenneth Feinberg’s victim compensation plan for those severely affected by the ignition switch linked to 13 fatalities, 54 accidents and a recall of 2.6 million vehicles will not be funded by liability insurance, according to General Motors director of financial communications David Roman.
AlixPartners: 2014 May Be The Peak Of U.S. Auto Sales
The good news? Automakers are enjoying a sales boom in the United States the likes of which haven’t been seen since the Great Recession brought the hammer down, with June 2014 sales alone surpassing those in July of 2006. Should the boom continue, 2014 will close as the industry’s best year in a long time, with over 16 million vehicles sold when the calendar ticks over to 2015.
The bad news? This year may be the last year U.S. sales ever climb this high.
Fiat Sets Date Of Shareholder Meeting For August 1
Own any shares in Fiat S.p.A.? The automaker just announced it will hold its next general assembly of all shareholders August 1, where the topic of discussion will be the approval of the merger of Fiat with Chrysler Group to become Fiat Chrysler Automobiles N.V.
OCC Warns Of Auto Lending Risk
The Office of the Comptroller of the Currency, a government entity that regulates and supervises banks, is sounding the alarm regarding risks related to auto loans.
Chevrolet Offers 14.7% APR Financing To "Well Qualified" Corvette Buyers
While perusing Chevy’s website to see if there is any color of the 2014 Corvette that actually makes the car look halfway decent, I came across the financing offer pictured above. And, no, I did not enter any personal info that would lead GM’s captive Ally Financial (or whoever the hell GMAC is now) to deem me only eligible for such a high interest rate. Just what is going on here?
GM Ignition Issues Pile Up From Within, Abroad
In today’s General Motors digest: An ignition-related issue is quietly fixed years before the February 2014 recall; a Chinese supplier is blamed for defective switches recalled in June; Ally prepares to take flight from the Beltway; and Mark Reuss helps bring back a Corvette stolen 33 years ago.
Tesla Is World's Most Important Auto Maker, Says Tesla Debt Underwriter
A recent research note from Morgan Stanley dubbed Tesla the “world’s most important auto maker”, on account of its innovation in the area of electric vehicles, autonomous cars and connectivity. Could there be another reason for such enthusiasm?
Captives Dominating Auto Financing As Banks Resort To Risky Loans
OEM captive financing arms are increasing their share of new car loans, with banks resorting to underwriting riskier loans in the used car market and to less credit-worthy buyers.
Bipartisan Senate Bill To Raise Fuel Taxes For The First Time Since 1993
For over two decades, the federal fuel tax has held at 18.4 cents for gasoline and 24.4 cents for diesel per gallon sold. A bipartisan bill working through the United States Senate could soon change this, especially as the nation’s Highway Trust Fund — used for funding infrastructure projects — comes closer to running dry by August of this year.
Opel Reaches Severance Deal With Bochum Workers
General Motors subsidiary Opel has come to terms on a severance package for workers at its Bochum factory, set to close this year as part of the company’s restructuring plan.
AAA: 51 Percent Surveyed Willing To Pay For Better Roads
As those inside the Beltway debate how best to fund their responsibility for the nation’s transportation infrastructure, a AAA study finds most Americans would pay more taxes for better roads.
Moody's: Underwriting Standards, Borrower Credit Declining
The global outlook for Auto Back Securities (ABS) is steady – except in North America, where underwriting standards and borrower credit are slipping.
Loan Terms, Monthly Payments Hit Record Highs In 2014
The easy-credit train keeps on rolling in the auto world, with credit rating agency Experian reporting new records in key auto finance metrics.
GM Korea Faces Critical Wage Negotiations Amid Rising Won, Labor Costs
With labor costs set to rise in South Korea, wage negotiations between management and employees inside GM Korea may be “the most critical negotiation” the subsidiary has ever faced.
S&P Delivers Junk Status On Tesla
Though still riding high all over equity markets, Tesla’s debt offerings took a severe hit in status when Standard & Poor’s bestowed a rating of junk status due to increased possibility of default by the EV automaker.
FTC Launches Investigation Into Deceptive Marketing Of Biweekly Payments
The Federal Trade Commission is launching an investigation into biweekly payments sold as a product by dealership finance departments on the basis that consumers may not be getting their money’s worth with such payments.
Toyota Turns Away From Batteries, Toward Fuel Cells
After 20 years of pursuing a battery-powered future, Toyota has decided to take a different course powered by hydrogen.
Analysis: Toyota Could Bring $7.2 Billion To Texas Over Next Decade
Toyota’s big move from California to Texas may also bring a big return for Plano, Texas over the next decade, to the tune of $7.2 billion of economic activity.
Foxx, Obama Administration Urge Congress To Act On Funding Highway Trust
With 112,000 infrastructure projects and 700,000 jobs at stake, the Obama administration and Secretary of Transportation Anthony Foxx are both urging Congress find a way to provide funding to the United States Highway Trust Fund before the well goes dry as early as August.
Chrysler Capital Waxes, Ally Wanes On Q1 2014 Auto Financing Originations
Doing business with Chrysler proved to be a boom for Santander Consumer USA’s Chrysler Capital during Q1 2014, while former lending partner Ally Financial experienced a painful bust on its Pentastar originations.
No Credit Score? Show Your Cable Bill, Get Approved
New technology is allowing buyers with no credit score – due to a lack of credit history or a personal bankruptcy – to get vehicle financing via examination of documents like the payment history of their cable or cell phone bill.
Nokia Enters Connected Vehicle Fight With $100M Investment Fund
Having moved its smartphone business to Microsoft, Nokia’s next project is a $100 million investment fund for companies specializing in smart cars.
Tesla-Toyota Battery Deal For RAV4 EV Concluding By Year-End
Tesla’s deal with Toyota to supply the automaker with battery packs and motors for the latter’s RAV4 EV will come to a close by the end of 2014 at the same time the electric crossover is expected to cease production.
Marchionne's Grand Vision For FCA Faces Hard Financial Road To Success
Though Fiat Chrysler Automobiles CEO Sergio Marchionne’s five-year plan announced this week may be ambitious, analysts are raising questions about how the plan will be funded — and how much will be needed — if it is to be successful, let alone live up to Marchionne’s vision.
University of Michigan, Industry Partners Team Up For New Technology Testing Facility
The University of Michigan’s Mobility Transformation Center and its partners will soon break ground on a $6.4 million facility meant to test connected and autonomous vehicles in a simulacrum of an everyday urban environment.
Stuttgart Prosecutors Call For Appeal In Wiedeking Market Manipulation Ruling
Two weeks after the Stuttgart Regional Court threw-out charges of market manipulation levied at former Porsche CEO Wendelin Wiedeking in December of 2012, prosecutors have called for an appeal of said ruling.
TrueCar IPO Pricing, Valuation Revealed
Automotive pricing site TrueCar has revealed its IPO price will be set between $12 and $14, bringing the company a valuation of around $1 billion should the price-per-share lean closer toward the top end.
Former Hyundai NA CEO Krafcik Now TrueCar President
TrueCar founder Scott Painter and former Hyundai North America CEO John Krafcik both announced that Krafcik is now president of the online automotive shopping company.
China Auto Market Pulled By Weakening Economy, Purchasing Restrictions
A weakening local economy and increasing purchasing restrictions could put a hamper on automotive sales in China according to the analysts at LMC Automotive.
Japanese Auto Market Takes Sales Hit As Consumption Tax Increases
The Japanese auto market took a hit in sales last month, falling 5.5 percent to 345,226 units as an increased consumption tax of 8 percent took hold in a sign of a slow year in sales.
Walmart Unveils Online One-Stop Auto Insurance Venture
Walmart is the home of low prices on many, many things, from clothes and groceries, to televisions and tires. The retailer also offers a number of financial services, such as prepaid debit cards and money transfers. And of course, they’re even experimenting with heavy-duty truck design for better fuel economy.
As of this week, though, Walmart shoppers can add one more item to their list: Auto insurance.
U.S. Treasury Loses $11.2 Billion In Accounting Of GM Bailout
Detroit Free Press reports the U.S. Treasury lost $11.2 billion in taxpayer money from the rescue of General Motors back in 2008, up from the $10.3 billion estimated after the agency sold its remaining shares back in early December 2013. Part of the final figure came as a write-off of an $826 million “administrative claim,” which was found in a report by the Office of the Special Inspector General for the Troubled Asset Relief Program. The overall figure pales in comparison to the $50.2 billion given by both Bush and Obama administrations between 2008 and 2009 to GM as the automaker struggled through its financial crisis at the onset of the Great Recession.
Obama Administration Delivers $302 Billion Transportation Funding Proposal Before Congress
A $302 billion, four-year plan to fund the U.S. Highway Trust Fund — and, in turn, any road and transit projects on the table during the period — was brought before Congress by the Obama administration through the U.S. Department of Transportation.
Foxx Pushes NHTSA $300 Million Maximum Fine Hike Before Congress
As part of a $302 billion, four-year plan to fund both infrastructure and highway funding, U.S. Transportation Secretary asked Congress to allow the National Highway Traffic Safety Administration to boost its maximum fine from the current $35 million levy to $300 million.
Senators Want NHTSA To Force GM To Park Recalled Vehicles
Automotive News reports General Motors’ top lawyer, Michael Millikin, is co-leading the internal investigation with former U.S. attorney Anton Valukas into the events that led to the February 2014 recall crisis that befell the automaker. The former U.S. assistant attorney joined GM in 1977, switching from battling drug lords to corporate traitors, such as the two-pronged litigation against both Volkswagen and former GM purchasing chief J. Ignacio Lopez when it was found Lopez had stolen various confidential documents upon his departure in 1993; the case was settled in 1997.
As for his current case, Millikin and his legal department found themselves under the gun earlier this month before Congress, with legislatures asking how much was known by them regarding the various lawsuits linked to the ongoing recall. GM stated its lawyer learned of the issue at the end of January 2014.
VW, UAW Consider Options Surrounding Chattanooga Plant
After backing out from its appeal over results of the February 2014 organization election at Volkswagen’s Chattanooga, Tenn. plant, the United Auto Workers is considering options to organize the plant, just as Volkswagen itself is considering several options outside of Tennessee for its new SUV.
GM Pulls Small Q1 2014 Profit, Barra One Of Time's 100 Most Influential People
Reuters reports General Motors announced in its regulatory filing Thursday that it was under the microscope of five different government agencies related to its numerous recalls as of late. Aside from investigations by the U.S. Attorney’s Office for the Southern District of New York, the National Highway Traffic Safety Administration, and both houses of Congress, the automaker revealed the Securities and Exchange Commission and an unnamed state attorney general’s office were conducting their own probes. The filing also acknowledged GM was under the gun of 55 pending class action lawsuits in the U.S., and five of the same in Canada. GM said they were working with all of the investigations, though the automaker did not say what the SEC was looking for in its probe.
Recalls Hammer GM Brand, Q1 2014 Profits
Autoblog reports the first several thousand kits meant for repairing a handful of General Motors vehicles affected by the February 2014 ignition switch recall have been shipped off to dealers. In addition, 1.4 million recall letters have been mailed out to affected consumers of 2003 – 2007 vehicles; 2008 – 2011 affected owners will receive their letters in the coming weeks. The letters inform consumers to schedule the repair with their dealer, which GM claims will take 90 minutes to complete. Until the repair occurs, the automaker instructs all consumers to have nothing more than the key itself prior to insertion, and to be sure their transmissions and switches are set in place before removing the key.
Dodd-Frank Act Used In NY State Subprime Lender Lawsuit
The Dodd-Frank Act, created in the wake of the Great Recession as means to curb the practices by financial corporations that led to the Great Recession in the first place, is now being used to go after an automotive lending company in New York for stealing from its customers.
Automakers, Dealers Prepare For 2016 Off-Lease Market Flood
Currently, around 2.13 million cars will come off-lease by the end of 2014, up from 1.7 million last year. By 2016 and beyond, however, over 3 million vehicles annually will turn up on many a CPO and used car lot, replacing a long drought with an El Niño-esque flooding of the U.S. used car market.
Ally IPO Brings New Subprime Lending Options To The Table
With Ally Financial’s IPO now making the rounds on the New York Stock Exchange, the former financing arm of General Motors has its eyes on taking more of the subprime market, a move benefiting dealers once the last ties to the U.S. federal government have been severed and sold to the stock market.
AutoNation Parts Ways With Third-Party Lead Providers, Pursues Own Online Project
In its pursuit of establishing an online store where shoppers can do (almost) everything related to the car-buying experience, AutoNation Inc. announced last week it would no longer use third-party lead providers, focusing instead on its own online plans.
Dealers Still Waiting For Replacements, DeGiorgio Linked To Original Design And Upgrade
Automotive News reports dealers are still waiting for the ignition switches meant to replace the out-of-spec switch at the center of the ongoing recall crisis at General Motors. The switch was to have arrived at dealerships beginning this week, yet most dealers are in a “holding pattern” on deliveries. Once the parts do arrive, service bays will begin work on affected customer vehicles immediately before turning toward the used lot, where vehicles under the recall are currently parked until the customer vehicles are fixed.
GM Seeks Aid From NASA, Issues New Ignition-Related Recall
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.
GM Fined $28k By NHTSA, Places 2 Engineers On Paid Leave
Associated Press reports General Motors has placed two engineers on paid leave as “an interim step” in the investigation conducted by former U.S. attorney Anton Valukas. Spokesman Greg Martin declined to name the two engineers in question.
More Trade-Ins Pulled Underwater As Negative Equity Level Rises
As more consumers trade-in their old vehicles for a newer model, a growing number of consumers are owing more on their trade-in than their vehicle’s actual worth.
Off-Lease Consumers Add Fuel To New-Vehicle Demand
New-vehicle sales are on the rise due not only to demand originally held back by the Great Recession, but by consumers coming off of their leases for their next latest and greatest.
GM Invests $449M Into Next-Gen Volt Production
General Motors announced Tuesday that it would invest $449 million into the two plants responsible for assembling the Chevrolet Volt in preparation for the next generation of the plug-in hybrid’s arrival in 2016.
GM Dealers Deal With Part Backlog, CEO Asked To Back Rental Car Bill
Automotive News reports the repairs of some 2.6 million vehicles affected by the 2014 General Motors ignition switch recall will be delayed by one week as the needed part slowly enters into the automaker’s dealership network. Though most dealers thought they would be receiving the part Monday, GM spokesman Kevin Kelly insisted the part was set to arrive sometime during “the week of April 7”:
We plan to send letters this week informing affected customers that parts are arriving at dealerships and to schedule a service appointment with their dealer. Repairs are likely to begin to follow soon after the customer letter mailing.
Until then, dealerships may face service backlogs, especially with affected vehicles already on the lot that cannot be sold until they are repaired, which can only happen once customer vehicles go through the 30-minute swap. On the other hand, while dealers have noticed some frustration from their customers, the majority of their base was found to be patient with the status of the repair plan.
Ally Financial Files IPO, US Treasury Sells More Shares
Three years in the making, Ally Financial — formerly GMAC — has filed for an IPO that could net as much as $2.7 billion for the United States Treasury.
NADA, House Committee Press CFPB On Lending Rules
Uncertainty on auto lending rules resulting from the Consumer Financial Protection Bureau’s methodology behind consent orders issued to lenders found overcharging or otherwise misleading minority borrowers has prompted calls from the National Automobile Dealers Association and the House Financial Services Committee for a detailed explanation from the bureau on said methodology.
Akerson Named Vice Chairman Of Carlyle Group Board Of Directors
Former General Motors CEO Dan Akerson has been named Vice Chairman to the private-equity firm Carlyle Group’s board of directors, where he will act as special adviser to the firm’s investment teams, managment and the board itself.
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