**GM preparing for bankruptcy**

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http://news.theage.com.au/breaking-n...0624-yzw7.html

GM looks to banks to finance subprimes
June 24, 2010

AP

General Motors Co is looking to boost auto sales by lining up banks and other financial institutions to make loans and lease deals for buyers with poor credit.

The talks lessen the likelihood of GM trying to buy the auto finance business from Ally Financial Inc, its main lender. They also make it less likely that GM would start its own auto financing unit.

GM considered both options earlier in the year because Ally was reluctant to fund loan and lease deals to buyers with subprime credit. About 16 per cent of loans for new cars and trucks went to subprime buyers in the fourth quarter of last year, but because of Ally's reluctance to lend to them, GM was unable to tap that market.

Subprime buyers are customers with credit scores below 620 on a 300-to-850-point scale.

"We are developing relationships with other financial sources on a selective basis for specialised financing needs, such as leasing and subprime financing." GM spokeswoman Renee Rashid-Merem said on Wednesday.

GM continues to work with Ally, which used to be GMAC Financial Services, and it already has relationships with many banks and credit unions, Rashid-Merem said.

The automaker's sales are up about 15 per cent through the first five months of the year, but they trail the increase for the overall US industry by more than 2 per cent. Crosstown rival Ford Motor Co has seen its sales rise 30 per cent compared with the first five months of last year.

Mark Reuss, GM's North American president, said in an interview last month that GM would like to tap into the subprime credit market to help lift sales. He said GM gets only 1 per cent of its sales from subprime buyers, while Honda Motor Co gets about 20 per cent because it has better access to lending.

© 2010 AP

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http://news.theage.com.au/breaking-n...723-10ocr.html

GM to pay $A3.9b for auto financer July 23, 2010 - 4:19PM
.AP

General Motors Co. will buy AmeriCredit Corp. for $US3.5 billion ($A3.93 billion), a deal that allows the automaker to expand loans to customers with poor credit and offer more leases, key areas where GM must grow to accelerate its car sales.

But the acquisition, announced Thursday, also means that GM, which is 61 percent owned by the US government, is getting back into the business of making risky loans. AmeriCredit is an independent auto financing company that already works with about 4,000 GM dealers.

GM executives have said for months that they were missing sales opportunities due to lack of credit for lease deals and financing for subprime buyers, those with credit scores below 620 on a 300-to-850-point scale. About 40 percent of US customers have below prime credit scores, said Chris Liddell, GM's chief financial officer.

"Clearly there's an opportunity to bring more people into our showrooms and help them with finance," he said.

Liddell said that customers could now expect more lease deals from GM. Only 7 percent of its sales are from leases, compared with 21 percent for the industry, he said. Only 4 percent of GM's sales come from subprime buyers, which the company hopes to expand with its AmeriCredit acquisition.

"If you just had a modest increase from 4 to 5 per cent, that's a significant number in its own right," Liddell told reporters.

GM sold just over 1 million vehicles in the US during the first half of the year.

The Detroit automaker will pay $US3.5 billion ($A3.93 billion) in cash to buy all of the Ft. Worth, Texas-based AmeriCredit's shares at a price of $US24.50 ($A27.48) each - a 24 per cent premium over Wednesday's close.

The deal allows the auto financing company to expand into more GM dealers, while continuing to offer financing to the more than 11,000 dealers it already has relationships with.

GM has had a financial relationship with AmeriCredit for years, and it was formalised in September of 2009. AmeriCredit now gets about one-third of its business from financing new and used GM vehicles, GM said.

AmeriCredit, which was founded in 1992, has about 800,000 customers and $US9 billion ($A10.09 billion) worth of auto loans on its books.

GM expects the deal to close in the fourth quarter. It said it advised the US Treasury Department of the acquisition but government approval was not required.

The automaker says that its partner Ally Financial - formerly known as GMAC Financial Services Inc - will continue to finance GM's dealer inventory and make loans to buyers with good credit.

GM says it is not considering a purchase of Ally's auto financing unit. GM sold controlling interest in GMAC in 2006. The company eventually had to be bailed out by the US government because of problems with its home mortgage loan unit.

Liddell said the acquisition is a helpful, but not essential for GM's planned public stock offering. The company plans to sell stock to the public, perhaps in the fourth quarter. The sale would help the government get rid of at least part of its ownership stake in the company.

"I'll describe it as another useful building block in the foundation for the IPO," Liddell said.

© 2010 AP

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http://www.autoblog.com/2010/07/22/g...lion-breaking/

BREAKING: GM to buy AmeriCredit Corp for $3.5B

by Zach Bowman (RSS feed) on Jul 22nd 2010 at 10:56AM

General Motors has just announced its intent to acquire AmeriCredit Corp. According to the automaker, the move should give dealers an added finance option when it comes to putting car shoppers into a new vehicle. Since GM and GMAC parted ways back in 2006, buyers looking to purchase a car or truck from The General have faced tougher financing terms than in the past. Supposedly, the new deal with AmeriCredit will provide new opportunities for sub-prime borrowers. The total cost of the deal? A cool $3.5 billion in straight cash.

GM says that putting AmeriCredit under its wing is the next logical step in moving toward an IPO, and most analysts seem to agree. The carmaker had been criticized for not having an in-house financing arm in the past, but the new move should afford the company and its dealership network an added level of financing flexibility. It should also allow GM to return to leasing in a big way. The two companies have been working together extensively in recent months, and GM says that over 4,000 of its dealerships already have relationships with the lender.

The purchase has already been approved by the boards of both GM and AmeriCredit, and pending approval from the lender's stockholders, The General will purchase the finance company for $24.50 per share. As of writing, the company's stock is currently trading at $24.07 – up $4.36 on news of the purchase. Hit the jump for the GM press release. Thanks for the tips, Jeff and Sea Urchin!

[Sources: General Motors, TickerSpy]

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http://www.autoblog.com/2010/07/24/g...st-ipo-filing/

GM shooting for mid-August IPO filing?

by Chris Shunk (RSS feed) on Jul 24th 2010 at 11:09AM

A year ago, General Motors needed a $50 billion U.S. government bailout to stave off liquidation. One year later, the Detroit-based automaker is on the precipice of filing for one of the largest initial public offerings in American history. Automotive News quotes unnamed sources who claim GM will file with the Securities and Exchange Commission by August 16. These anonymous sources reportedly added that the goal is to complete the company's IPO before the November elections - unsurprising when you consider the highly-political nature of The General's current status (the federal government holds a 60.8% stake in the automaker).

Assuming GM files by August 16 as AN's sources allege, the move would come just days after the company's second-quarter earnings announcement. If that's indeed the case, we think GM plans to announce a sizable profit for the quarter that ended on June 30. After all, there's nothing more unattractive to investors than a fresh batch of red ink on the ledger.

[Source: Automotive News sub. req.]

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http://www.autoblog.com/2010/07/25/d...-deal-with-al/

Despite agreement with AmeriCredit, GM said to keep deal with Ally

by Zach Bowman (RSS feed) on Jul 25th 2010 at 12:32PM

General Motors may be in the process of acquiring AmeriCredit as a step toward securing a captive in-house financing operation, but the company says it will continue to nurture its relationship with Ally. As you may recall, Ally (formerly GMAC) has financed dealer floor plans for years, and GM says that it will continue to rely on its former financing arm for that very reason. While AmeriCredit has been able to weather the rise and fall of consumer confidence with nary a scratch, the company doesn't boast same level of assets as other lenders. Note also that AmeriCredit has next to no experience financing dealer floor plans, and it's easy to see the holes in GM's financing strategy.

Ally seems happy to fill in those bald spots. According to Automotive News, the company provided financing for around a third of all GM vehicles sold at retail during in the first quarter of 2010 and 90 percent of The General's vehicles in inventory. That leaves AmeriCredit to take care of subprime borrowers and leasing duties. Consider the two the dynamic duo of GM financing.

[Source: Automotive News]

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http://theage.drive.com.au/motor-new...728-10uuv.html

GM takes on subprime car loans July 28, 2010 - 9:56AM

General Motors is getting into the subprime lending business. And that means taxpayers are, too.

But these car loans aren't as risky as you might think.

GM, majority owned by taxpayers, is buying a company that makes car loans to shoppers with poor credit. Unlike home loans, though, the risk in subprime auto lending is relatively low and may reward GM. The company hopes to boost sales by making loans and leases to buyers that it must now turn away for lack of financing.

GM will pay $US3.5 billion ($A3.88 billion) in cash for AmeriCredit Inc., a Fort Worth-based company with 800,000 customers and a $US9 billion ($A9.98 billion) portfolio of subprime auto loans. GM's purchase will be made out of its $30 billion ($A33.25 billion) cash stockpile, one that is funded in part by the government.

AmeriCredit had already been helping GM with subprime loans, which now amount to 4 percent of the car company's sales. GM Chief Financial Officer Chris Liddell expects that to grow by a percent or two, a significant number considering that GM is on pace to sell over 2 million cars and trucks in the U.S. this year.

About 40 percent of U.S. customers have below prime credit scores, Liddell said. "Clearly there's an opportunity to bring more people into our showrooms and help them with finance."

Dealers and GM executives have complained for months that they're losing business because many customers can't get loans or leases.

Historically, the loan approval rate for borrowers with poor credit - those with scores below 620 - ran about 60 percent. Now, it's running at 9 per cent.

"(GM) absolutely needed to add this segment of the market to meet the needs of the customers coming into our dealerships," Mike Jackson, CEO of AutoNation Inc., the largest auto dealer chain in the U.S., said after the deal was announced on Thursday.

Customers with poor credit couldn't get an in-house loan from a GM dealer and faced additional hurdles to secure financing from an outside bank. Although access will improve, ultimately loans may not become easier to obtain because AmeriCredit will likely stand by its current lending criteria, said Melinda Zabritski, director of Automotive Credit at Experian, a credit reporting agency.

Toyota and Ford have their own finance companies, which enable them to offer sweeter deals. GM lost its ability to finance cars at cheaper interest rates when it sold control of its finance arm four years ago.

Auto lending, compared with other consumer loans, is fairly low risk. Banks or finance companies can repossess cars if owners stop paying. Drivers who fall behind on bills tend to pay their car payments ahead of other debt because they need transportation to get to work.

Fewer borrowers are falling behind on their car loans than a year ago, according to Experian. The 30-day delinquency rate hasn't changed dramatically in the last year, and currently remains below 3 per cent for all auto loans. Auto repossessions for banks remain low at less than 1 per cent of loans.

Under the deal, GM will pay $US24.50 ($A27.16) for each share of AmeriCredit, a 24 percent premium over Wednesday's closing price. Investors were happy with the deal, pushing up shares of AmeriCredit by more than 21 percent, to $23.91 on Thursday.

The sale, subject to AmeriCredit shareholder approval, is expected to close in the fourth quarter.

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http://www.autoblog.com/2010/08/04/g...terim-chairma/

GM board member Kresa retiring, led automaker as interim chairman last year

by Zach Bowman (RSS feed) on Aug 4th 2010 at 6:01PM

General Motors board member Kent Kresa has reached the ripe old age of 72, and as such, he is no longer eligible for re-election to the company's controlling body.

Kresa originally came to GM after retiring from Northrop Grumman Corp. where he helped lead the aviation giant through troubled waters of its own. Kresa joined 'old GM' in 2003 and served on the board until the company's bankruptcy in 2009. You might best recall that Kresa stepped into the chairman slot left vacant when former CEO Rick Wagoner left the company just prior to The General entering into Chapter 11. When 'new GM' formed its board, the executive was there to lend his experience in leading a company through difficult financial decisions.

Kresa was also instrumental in bringing in a wide array of new talent onto the GM board, including the company's 13th board member, Cynthia Tulles. Don't expect Kresa to be spending his days playing shuffleboard, though. He also serves on a number of other corporate boards, including Fluor Corp in Irving, Texas and MannKind Corp in Valencia, California. Hit the jump for the GM press release.

[Sources: General Motors, The Detroit News]

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http://www.autoblog.com/2010/08/05/r...ly-7-000-jobs/

Report: Post-bankruptcy GM has added nearly 7,000 jobs

by Zach Bowman (RSS feed) on Aug 5th 2010 at 4:32PM

The Detroit Free Press is reporting that General Motors has added a total of 6,900 jobs since the automaker emerged from bankruptcy in 2009. The news came out of a radio interview with Steve Girsky, GM vice president. Girsky said that a portion of that figure is made up of workers who were originally laid off as part of the restructuring process and then later recalled as manufacturing picked back up. Of the nearly 7,000 jobs, 1,100 are situated in Michigan. GM has recently increased its workforce at its Delta Township and Brownstown Township facilities, amongst others.

The company has also hired around 2,800 workers at its Canadian operations as well. GM is set to release its financial statement for the most recent business quarter later this month, and Girsky says that the numbers continue to demonstrate a company on the mend. Last quarter, the company posted a $865 million profit.

While the addition of nearly 7,000 jobs is a good milestone for GM, it's important to bear in mind that the figure marks a little more than a sixth of the workers laid off during restructuring.

[Source: The Detroit Free Press | Image: Bill Pugliano/Getty]

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http://www.autoblog.com/2010/08/06/g...work-upgrades/

GM confirms smaller dealer network, upgrades in the works

by Sam Abuelsamid (RSS feed) on Aug 6th 2010 at 6:59PM

In the months leading up to its 2009 bankruptcy filing, General Motors attempted to shut down about one third of its 6,049 dealers that were operating at the time. However, some 1,176 of the 2,046 stores slated for closure weren't ready to quit just yet and filed arbitration claims to try and stay in business. GM has now completed the arbitration process, with 702 dealers reconfirmed to remain in business. For those keeping track, this will leave GM with about 4,500 stores as of the end of this year.

Of the remaining dealers, many will be getting upgrades to their showrooms and service departments in the hopes of being more appealing to customers. Service departments are getting waiting rooms with power outlets for phones and laptop computers as well as free WiFi so customers can get some work done (or play on Facebook) while they wait.

Storefronts are also getting an update and new signage to give them a more modern and consistent look. By the end of this year, about 1,300 dealers will have been upgraded. Now GM just needs to get the brand new Chevy Cruze and Buick Regal into those refreshed showrooms so that customers have something up-to-date to buy.

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http://www.autoblog.com/2010/08/06/r...re-company-in/

Report: Whitacre says GM anticipates offering entire company in IPO

by Sam Abuelsamid (RSS feed) on Aug 6th 2010 at 4:59PM

At this point, the only thing we know for sure about the General Motors initial public offering is that it will happen... eventually. With the United States government holding a 61-percent equity stake in the automaker, the political pressure is huge to make a stock sale occur sooner rather than later.

However, until GM CEO Ed Whitacre spoke at the Management Briefing Seminars in Traverse City, MI this week, the presumption was that only about one-third of the company's stock would be offered up in the IPO. Whitacre, however, seems to be indicating that the entire company would be offered up in a single sale. The rationale for doing the stock sale in stages would be to maximize the return on the government's investment. A single sale might result in a lower per-share price and lower overall return. By selling a smaller stake and then timing further sales with a hopefully rising stock price, the return could be improved.

Following Whitacre's comments, other GM representatives told CNBC that the final decision would be made by the current shareholders, the U.S. and Canadian governments, the UAW health care trust and former bondholders.

[Source: CNBC]

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http://www.autoblog.com/2010/08/07/r...ttle-lexus-ls/

Rumormill: GM mulling Zeta-based Buick flagship?

by Zach Bowman (RSS feed) on Aug 7th 2010 at 2:25PM

We can quit wondering where General Motors is heading with Buick. Maybe. If rumors dusting up from GM Inside News are to be believed, company leadership has the Tri-Shield's sights trained solidly on Lexus. We all know that the 2010 Buick LaCrosse was positioned as the answer to the Lexus ES 350, but supposedly, GM is aiming even higher and cooking up a Zeta-based sedan to go head-to-head with the Lexus LS. If you believe the hype, design work has already been given the go-ahead, but production ihas yet to receive an official OK from up top. Details are predictably scarce, but GM Inside News claims that the styling is sharp as can be.

Interestingly enough, the Zeta platform that would provide the basis for the rumored big Buick isn't exactly the same as the one underpinning the mega-Holdens prowling Australia (or the Caprice soon to be cruising your local donut shop, or the Buick Park Avenue that's already sold in China). Instead, GMI says that the luxe Buick will be built upon something called the Premium Zeta Platform, and that the oft-rumored Cadillac flagship will use the same bones. Sounds great, but until we hear something official from The General, we won't start holding our collective breath.

[Source: GM Inside News]

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From http://workshop.search-autoparts.com...idgetId=345091

So what’s going to get customers to GM showrooms? Well, they’re not going to give their vehicles away but they are doing the next best thing – it is offering a “money-back guarantee.” The program, which starts today and runs through November 30th, offers customers the option of returning new 2009 and 2010 vehicles within 60 days of the purchase of a vehicle. There are other minor stipulations but, in essence, this is the best car deal for customer protection since the Lemon Law was passed.

The official ad campaign kicked off yesterday with newly government appointed Chairman of the Board, Edward Whitacre, making the pitch in a pretty slick TV ad. Basically, he admits he had doubts about GM’s products before he took job just like many consumers did/do. But now that he’s on board, he has seen how good GM’s products are and GM is confident enough that consumers will agree. Whitacre comes across as being believable, although somewhat aloof - not so much in what he says but just in his mannerisms. Unfortunately, he’s no Lee Iacocca and is not scheduled to do any more ads. As you’ll recall, the affable Iacocca exuded confidence and single-handily saved Chrysler in the late ’70s with his exclamatory challenge, “If you can buy a better car, then buy it.”

Many will say that GM’s offer is an act of desperation. When you consider that GM’s U.S. sales are down 35 percent through August, it would be hard to argue that point. However, the harsh reality is that GM probably doesn’t have a choice at this point. It needs to make up ground as fast as it can. While GM has been languishing, rival Ford U.S. sales are up 15 percent over last year.



Having rented several GM cars over the past few years, I have no doubt that GM is building some of the best cars in the world. If people buy them, they will be pleased. However, the elephant in the room that GM can no longer ignore is how their dealers handle customers – from the time they step onto their lots to how they are treated in the service department after buying a GM product. This problem is not unique to GM or even just the other domestic automakers, but it is critical for GM to address it now with force.



In addition to the money-back guarantee, GM should be blitzing the airwaves, Internet and print media with customer-satisfaction guarantees. Of course, that can only happen when it can truly offer those kinds of guarantees...

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http://www.autoblog.com/2010/08/10/r...-bankruptcy-r/

Report: Fleet sales are behind GM and Chrysler post-bankruptcy resurgence

by Chris Shunk (RSS feed) on Aug 10th 2010 at 8:58AM

Before General Motors and Chrysler entered bankruptcy, the predominant fear was customers wouldn't purchase vehicles from a bankrupt automaker. Those fears turned out to be more or less unfounded, as the market share of the fallen two didn't fluctuate all that much during court proceedings, and both companies have seen sales increases the following year. Automotive News reports that while GM's sales are up 13 percent and Chrysler up 11 percent, the majority of those increases have come courtesy of fleet sales.

The General's fleet sales are reportedly up 53 percent to 400,000 units while Chrysler is up 40 percent to 242,000. GM does point out that its retail sales are up by one percent after the automaker cut four brands from its portfolio, while Chrysler isn't breaking down sales.

GM and Chrysler aren't the only automakers padding sales figures with fleets. So far in 2010, 35 percent of Ford's sales come from bulk buyers, more than the 31 percent at GM, but still less than the 39 percent at Chrysler. But to Ford's credit less, than half of those sales come from rental outfits, where discounts are deeper than they are with government and commercial fleets. Both GM and Chrysler are reportedly pushing two-thirds of its fleet vehicles to rental companies. The only other automakers to top 10 percent in fleet sales are Hyundai (16 percent) and Nissan (15 percent).

So do all these fleet sales spell trouble for GM and Chrysler? Not likely. Retail sales have remained relatively flat over the last year while fleet sales are up across most automakers. Detroit automakers also see higher fleet sales because each produces a large amount of heavy duty trucks and vans, while the overseas competition doesn't compete in those segments. All three Detroit automakers foresee a drop in fleet sales for the rest of 2010, with Chrysler and GM projecting about 25 percent of its sales going to fleets for the year while Ford is shooting for 30 percent.

[Source: Automotive News - sub. req. | Image: Chris Hondros/Getty Images]

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G.M are selling cars on E bay ...

Copied ...
Any of you reading my blog on a regular basis know I have some doubts about GM offering its products on eBay. To me, this strategy lessens the value of their cars. As I have said before, why would anybody buy a used car off eBay let alone a new one? Marketing new cars via eBay is more of an act of desperation than confidence. It should be GM’s plan to get people into their showrooms so that people can see the quality of GM cars. That can’t be done over the Internet and browsing eBay can’t do it either. Granted, there will be some people for whatever reason – from being too busy to just being plain lazy – will buy a Buick off eBay and never give it a second thought. More than likely, I think those folks will be dyed in the wool GM people.

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http://www.caradvice.com.au/77916/ge...n-september-1/

General Motors CEO Edward Whitacre to resign on September 1
By Brett Davis | August 13th, 2010 Leave a Comment

For the fourth time in the past 18 months, a General Motors CEO has decided to quit. Edward Whitacre announced yesterday he will resign as CEO of the company as of September 1, 2010.



Mr Whitacre said during a recent conference, “It was obvious that I was not going to be at GM for the long haul”. Mr Whitacre says that his business was to help the company recover from the financial hardship of the GFC and says he is happy he has done that. “We have put a strong foundation in place, so I am very comfortable with my timing,” Mr Whitacre added.

Mr Whitacre will remain as chairman of the board though until the end of the year.

To take Mr Whitacre’s place will be 61-year-old Dan Akerson, who’s been with GM since July 2009. He has a long history of company leading within the telecommunications industry – CEO of Nextel Communications Inc. from 1996 until 1999 and CEO of XO Communications from 1999 until 2003 – and plans to help GM continue on its path of recovery.

Mr Akerson said,

“There are remarkable opportunities ahead for the new GM, and I am honored to lead the company through this next chapter. Ed Whitacre established a foundation upon which we will continue building a great automobile company.”

Mr Akerson will commence as CEO on September 1.

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Akerson to lead GM into new era

http://www.goauto.com.au/mellor/mell...25777E000F10C4

GM names former telco exec Dan Akerson as CEO as Q2 profit climbs and IPO looms
13 August 2010
By TERRY MARTIN
GENERAL Motors has named former telecommunications executive Dan Akerson as its incoming chief executive, announcing overnight that Edward Whitacre would step down from the position at the US auto giant on September 1 after eight months in the chair.

The surprise announcement came as GM posted its second consecutive quarterly profit after a string of losses since 2007, and as the company, which is 61 per cent owned by the US government, prepares to launch a public share float.

Mr Akerson, 61, has served on the GM board since July last year and will become GM’s fourth chief executive in just 18 months.

Mr Whitacre, 68, replaced former CEO Fritz Henderson – who also lasted only eight months in the job, having succeeded Rick Wagoner – on December 1, and will also step down as chairman (a position he has held since June 2009), by the end of the year.

Mr Akerson will become the new chairman at that point.

Mr Whitacre said in a conference call that the GM board was aware that he did not consider his role as a long-term placement.

“It was obvious that I was not going to be at GM for the long haul,” he said. “We have put a strong foundation in place, so I am very comfortable with my timing.

“My goal in coming to General Motors was to help restore profitability, build a strong market position and position this iconic company for success. We are clearly on that path.”

Lead director on the GM board, Pat Russo, said: “Ed Whitacre was exactly what this company needed, at exactly the right time. He simplified the organisation, reshaped the company’s vision, put the right people in place and brought renewed energy and optimism to GM.

“Dan Akerson has been actively engaged in, and supportive of, the key decisions and changes made at the new GM. He brings broad business experience, decisive leadership, and continuity to this role.”

As well as serving on the GM board, Mr Akerson has been managing director of private equity firm The Carlyle Group, in charge of global buyouts. He is also a former chairman and CEO of XO Communications (1999-2003) and Nextel Communications (1996-1999).

In a statement, Mr Akerson said: “There are remarkable opportunities ahead for the new GM, and I am honoured to lead the company through this next chapter. Ed Whitacre established a foundation upon which we will continue building a great automobile company.”

In a conference call, Mr Akerson said later that there were “remarkable opportunities ahead for the new GM”.

“We still have important work ahead of us,” he said. “But I am confident that we are building the foundation for GM’s long-term success.”

Analysts believe the move was orchestrated to provide clarity on GM’s leadership as it prepares for a public share float, with overseas reports indicating that the company is seeking to raise $US12-16 billion in an initial public offering (IPO).

This would make it the second largest IPO in US history, behind Visa’s $19.7b initial offering in March 2008, and should enable GM to reduce the federal government to minority ownership. Last July, the Obama administration bailed out the bankrupt company to the tune of $US50 billion.

GM also reported overnight its second quarter 2010 financial results, which included revenue of $US33.2 billion ($A37b) and net income of $US1.3 billion ($A1.4b). Q2 earnings for the period before interest and tax (EBIT) were $2.0 billion ($A2.2).

GM North America recorded earnings of $US1.6b, up from $1.2b in the first quarter, while GM Europe had a loss before interest and taxes of $US200 million, an improvement of $US300m from Q1.

GM International Operations, which includes Asia and Australia, posted EBIT of $US700m, down from $US1.2 billion in Q1.

Included in GM’s financial results was a gain of $US123 million as a result of the sale of Saab to Spyker Cars.

Chief financial officer Chris Liddell, the former Microsoft CFO who was appointed to the top financial role at GM last December, said he was “pleased with our progress”.

“We have delivered strong product, maintained cost discipline, progressed strategic initiatives such as restructuring Europe and acquiring AmeriCredit, and delivered two consecutive quarters of profitability and positive cash flow,” he said.

Mr Whitacre added: “Results like these make it clear that the new GM is on the right track with good momentum behind us and a bright future ahead of us.

“And also it gives me a lot of confidence to begin transitioning in new leadership at General Motors.”

[R-Design]

This may not belong in here, but it's interesting none the less:

Originally Posted by By BRENT SNAVELY

GM might have earned $1.3 billion during the April-June period, but that’s half as much as crosstown rival Ford Motor, which may have more than three times as much debt but also has a longer track record as a profitable automaker.

As GM reports continued momentum in its turnaround, it’s important to keep its mind the long, painful roads both took to improve.

Since 2005, Ford and GM closed plants, eliminated or sold brands and reduced dealerships.

While GM restructured with federal assistance, and now has the U.S. Treasury as a 61% owner, Ford took out a $23 billion loan in 2006, giving it the cash cushion necessary to be the only domestic automaker to survive 2009 without filing for bankruptcy.

Now, both are profitable again for the first time since 2007. But Ford is widely regarded as further along in its recovery.

But there are significant differences.

Ford’s management team has been relatively stable since President and CEO Alan Mulally joined in September 2006.

GM, meanwhile, will get its fourth new CEO since March 2009 in September.

“Ford was going though a very rough time a few years ago….and has had some time to get their house in order,” said Rebecca Lindland, director of IHS Automotive. “But GM is catching up quickly.”

Here’s a snapshot of how the Detroit automakers are performing:
Second-quarter net income
GM: $1.3 billion (Year-to-date: $2.5 billion)
Ford: $2.6 billion (Year-to-date: $4.7 billion)
Profitability track record
GM: Has reported two consecutive profitable quarters
Ford: Has reported five consecutive profitable quarters
Dealers
GM expects to have 4,500 dealerships by Nov. 1. GM had about 6,049 before its bankruptcy.
Ford, which began the year with 3,550 Ford, Lincoln and Mercury dealers, is in the process of winding down its Mercury division. Many of Ford’s 276 stand-alone Lincoln Mercury dealers will find it difficult to survive without Mercury.
Cash
GM ended the second quarter with $32.5 billion in cash on hand after generating $2.8 billion in cash during the quarter.
Ford ended the same period with $21.9 billion of cash on hand after generating $2.6 billion.
Debt
Excluding pension obligations, GM exited bankruptcy last year with $17 billion in debt and finished the second quarter with $8.16 billion in debt.
Ford reduced its total debt by $7 billion during last quarter, saving $470 million in annual interest payments and reducing its debt to $27.3 billion.
Products
GM has a stable of crossovers, including the GMC Acadia, Buick Enclave and Chevrolet Traverse, that are gaining market share. This year, it’s also launching the heavy duty Chevrolet Silverado pickup, Chevrolet Cruze compact car and the Chevrolet Volt plug-in car.
Ford, meanwhile, is bringing to market a Ford Fiesta subcompact car, an all-new Ford Explorer SUV and an all-new Ford Focus compact car.
Employment
GM and Ford are adding jobs for the first time in years.
GM’s total U.S. employment grew from 77,000 at the end of 2009 to 79,000 as of June 30.
Ford’s North American work force grew to 72,000, up 2,000 from March 31 — the company’s first quarterly employment increase since 2005.

http://www.freep.com/article/2010081...rofits-compare

[vztrt]

http://www.autoblog.com/2010/08/12/g...econd-quarter/

General Motors reports $1.3 billion profit in second quarter

by Sam Abuelsamid (RSS feed) on Aug 12th 2010 at 10:27AM

General Motors reported its second straight quarter of profitability this morning, something it hasn't done in many years. In fact, the first half of 2010 has been the automaker's best since 2004. In the April–June quarter, GM earned net profits of $1.3 billion on revenues of $33.2 billion. That works out to a fairly healthy $2.55 per share in earnings and follows up the first quarter nicely when the company earned $31.5 billion in revenue and $865 million in net profit. GM also managed to add $2.8 billion in cash to its coffers during the quarter, bringing its account balance up to $32.5 billion.

Overall, the General earned $2.0 billion before interest and taxes (EBIT), up from $1.8 billion in the first quarter. Accounting for most of that was the automaker's North American operations, which earned $1.6 billion before interest and taxes. GM Europe lost $0.2 billion before interest and taxes, but that's an improvement over the $500 million loss in the first three months of the year. Finally, GM's International Operations added $0.7 billion in earning before interest and taxes.

Credit for GM's performance goes to the recovering automotive market in the U.S. that has kept GM plants busy building popular models like the Chevrolet Equinox, GMC Terrain and Cadillac SRX triplets, as well as the international success of the Chevrolet Cruze and Buick's continued popularity in China.

The good financial news for GM has signaled to many analysts that the companies march towards an initial public offering (IPO) of its stock may start as soon as tomorrow with the filing of what's called an S-1 document with the Securities and Exchange Commission. Not many details are known about the filing, but the sale of GM stock to the public will likely be one of the largest IPOs in U.S. history and help reduce, if not totally eliminate, the U.S. government's 60-percent stake in the automaker.

[Source: General Motors, Automotive News - sub. req. | Image: Dave Chidley, AP Photo/The Canadian Press]

[vztrt]

http://theage.drive.com.au/motor-new...813-12263.html

GM profits move past $US1 billion
August 13, 2010 - 11:02AM



General Motors said its profits hit $US1.3 billion in the second quarter, as the car firm prepared to break free of US government ownership.

General Motors said on Thursday its profits hit $US1.3 billion ($A1.4 billion) in the second quarter, as the car company prepared to break free of US government ownership by relisting on the stock exchange.

"I am pleased with our progress on achieving our business objectives," said chief financial officer Chris Liddell, announcing the second consecutive quarter of growth.

The company erased a loss of $US13 billion ($A14.54 billion) in the same period last year, as sales and revenues increased.

The firm saw stronger sales in North America in the quarter, even as sales in Europe floundered and market share around the world sank.

GM captured 15.4 per cent of the US market for cars versus 17.5 per cent in the second quarter of last year, but elsewhere faired poorly.

GM's executives have said that a public offering will come soon, a process that will help the US government unwind its majority stake in the firm.

The US Treasury Department still owns 61 per cent of GM, which received $US50 billion ($A55.93 billion) of US government financing for its bankruptcy restructuring that led to mass layoffs, plant closures and billions of dollars in debt wiped out.

GM's drive for an IPO will be boosted by news that the firm's revenues swelled to $US33 billion ($A36.91 billion) in the second quarter, a third more than the same period last year.

GM as well as its US competitors Ford and Chrysler were hard hit by the recession which struck the United States in December 2007, caused by a home mortgage meltdown.

Of the so-called Detroit Three car makers, Ford was the only one to avoid bankruptcy, managing to stay afloat thanks to massive loans it had obtained prior to the credit crunch and because it moved more quickly to revitalise its product portfolio.

[vztrt]

http://www.caradvice.com.au/77991/ge...proaching-ipo/

General Motors posts $US1.3B Q2 profit, approaching IPO
By Tim Beissmann | August 13th, 2010



General Motors has posted its best first half-year since 2004, today announcing a net profit of $US1.3 billion ($1.4 billion) for the April-June quarter.

The positive result stemmed from second-quarter revenues of $US33.2 billion ($36.8 billion), which backed up similar first-quarter figures of $US865 million net profit and $US31.5 billion revenues.

Compared to the depths of bankruptcy last year when it recorded a $US12.9 billion ($14.3 billion) loss in the corresponding quarter, GM is now headed towards what some analysts are predicting will be the second-largest initial public offering (IPO) in US history.

GM is looking to shake the “Government Motors” tag by raising between $US12 billion and $US16 billion in the IPO, with an S-1 document expected to be filed within days. The US Government currently holds a 61 percent share of GM.

Overall, GM earned $US2 billion ($2.2 billion) before interest and tax in the second quarter. North America accounted for $US1.6 billion of that figure, while GM Europe lost $US200 million. Before interest and tax earnings from GM’s International Operations were down $US500 million from the first quarter, but still around $US700 million in the black.

The profit and revenue gains were largely due to increased productivity and output, with GM producing 731,000 vehicles in North America in the second quarter, up 85 percent compared with 2009.

GM is also performing strongly in China where it is the second-highest-selling brand behind Volkswagen. Sales increased almost 50 percent in the first half of 2010 to 1.2 million vehicles.

[Sprint XR8]

GM Board Pushed Whitacre Out For IPO.

By Edward Niedermeyer on August 13, 2010
From the moment GM’s Chairman Ed Whitacre took over for Fritz Henderson as CEO, many wondered how long the 68-year-old Texan would stick around. Apparently GM’s board was not immune from such uncertainty either, as Bloomberg reports that it gave Whitacre an ultimatum: commit to the long haul or get out now. According to reports, several Wall Street banks asked Whitacre whether he would be leading GM long-term during pre-IPO meetings. Whitacre didn’t answer at the time, but the pressure from Wall Street clearly pressed the board’s hand. Since Whitacre ultimately didn’t want to stick around for an extended term (posibly due to the Treasury’s unwillingness to dump all of its stock during GM’s IPO), the board picked Dan Akerson to take over. But how will an unexpected handoff to an unknown executive with no industry experience affect GM’s IPO?

Industry watchers are already giving the leadership changeover a failing grade. Jeffrey Sonnenfeld, associate dean of the Yale School of Management and head of the Chief Executive Leadership Institute tells Bloomberg that

This is not a planned succession as it’s being spun. This is not the way it’s done with an IPO. The IPO should be delayed until GM gives the full story behind the leadership change.

There are also concerns from the businesses that rely on GM. After Ed Whitacre axed a number of established GM executives (including his CEO predecessor Fritz Henderson), Whitacre was the one consistent figure in GM… with his departure, at least one supplier company executive is worried, saying

I thought what they needed right now was stability at the executive level. From our perspective, hopefully it’s the same, the overall structure doesn’t change.

But once again, the government has stayed hands-off on the decision despite the fact that it could severely hurt investor optimism going into the IPO. Treasury was reportedly informed of leadership change on August 10 (the day the decision was made) but had no input in the decision. Like the decision to leave the Volt in place, the government was so anxious to not be perceived as meddling in GM’s day-to-day decisions that it allowed a questionable bit of strategy to play out. Less intervention is good, but with tens of billions of taxpayer dollars riding on the IPO, tolerating GM’s decision to put an unproven leader in the saddle shows perhaps too much respect for GM’s corporate culture.

And the cultural impacts of Akerson’s appointment might well be his most lasting impact. After all, the board clearly feels confident enough in GM’s position to allow an unknown quantity to take over. This sense of satisfaction with GM’s curent position belies the overseas chaos, unfunded pension obligations, and troubled new product plans that GM must vigorously address over the next three years. For a company with a long history of cultural complacency, the fact that GM is trying to brush these inescapable challenges under the rug until after the IPO, while promoting an untested place-holder CEO, is highly troubling.

But, according to the Freep, Akerson is what the board thinks Wall Street wants in a GM executive: a Wall Street guy lots of Wall Street connections. This indicates that Akerson might merely be a placeholder as well, shepherding GM through an IPO until either Mark Reuss or Chris Liddell is ready to take over. Another theory is that Chinese firms or private equity might want to make a play for GM, and Akerson’s corporate buyout experience will help ease such a a deal along. But one thing is for certain: few observers expect Akerson to lead GM into a long period of innovation and change. The real question is whether he’ll have the confidence and authority to prevent complacency from once again infecting GM’s corporate culture.

http://www.thetruthaboutcars.com/gm-...e-out-for-ipo/

[R-Design]

Originally Posted by Edward Niedermeyer

Another theory is that Chinese firms or private equity might want to make a play for GM, and Akerson’s corporate buyout experience will help ease such a a deal along.

Oh dear, what's worse being owned by the US Government or a foreign Company? I'm feeling another massive fail in the making.

Maybe they should just sell out to the Koreans and be done with it?

[vztrt]

GM set to go public

http://www.goauto.com.au/mellor/mell...2577840008EC54

US treasury in line to recoup billions of dollars as GM lodges share offer

19 August 2010

By RON HAMMERTON

GENERAL Motors has taken another step towards repaying United States taxpayers for the $US50 billion ($A55.7b) bailout that saved America’s biggest car-maker from extinction last year, filing papers for an initial public offering (IPO) of shares on the New York and Toronto stock exchanges.

The sale is likely to be one of the biggest IPOs in corporate history, taking advantage of GM’s return to profitability with successive quarterly profits this year.

Although the exact timing and number of shares to be offered in the widely anticipated move have not been made public by GM, US reports suggest the company hopes to recoup between $US12 billion ($A13.3b) and $US16 billion before the end of the year.

GM said in a statement that the offering of common stock would come from “certain stockholders” that almost certainly include the US treasury, which owns 61 per cent of ‘New GM’ – nicknamed Government Motors – created out of the ashes of the company’s chapter 11 bankruptcy reorganisation in 2009.

Washington reports suggest the US government, facing mid-term Congressional elections in November, is looking to cut its shareholding to less than 50 per cent and generate some good economic news to aid the Democrat cause.

Other major shareholders involved in the IPO might include the Canadian and Ontario governments, union pension funds and bond holders, all of whom emerged with a stake in GM in the post-chapter 11 carve up.

A consortium of 11 of the world’s biggest banks, including several major US banks that had near-death experiences themselves in the global financial crisis, have been appointed to handle the offer.

Morgan Stanley and JP Morgan are handling initial arrangements, including the preliminary prospectus that contains a warning that, while GM expects its share of global motor vehicle market to grow from 11.9 per cent this year to 12.4 per cent by 2014, "there is no assurance that this recovery in vehicle sales will continue or spread across all our markets”.

The prospectus says risks include weak sales, under-funded pensions and the success of its restructuring efforts in Europe.

The company also said it did not intend to pay dividends on the listed stock, indicating that it still needs all the cash flow it can lay its hands on to rebuild the company with new models and a streamlined administration and sales network.

An inexperienced executive management team was also listed as a risk factor. Just last week, GM appointed former telecommunications executive Dan Akerson as chief executive, replacing stand-in CEO and chairman Ed Whitacre, himself a former telecommunications executive.

Appointed by the Obama administration to guide GM out of bankruptcy, Mr Whitacre shook up the executive ranks by appointing new blood such as GM Holden chairman and managing director Mark Reuss to the vital role of GM North America president.

The emphasis has been on shortening communication lines, quick decision making and slicing the bureaucratic red tape that weighed on the monolithic corporation.

The company has pledged to cut the fuel consumption of its cars and plug holes in its model range as it tries to reinvigorate the US public’s affection for ‘The General’.

Nineteen new models have been slated for release by 2012 under the four remaining GM ‘core’ brands – Chevrolet, Cadillac, Buick and GMC. Pontiac, Saturn and Hummer have all been terminated.

The new models will include the plug-in range-extender Volt hybrid which is expected to be launched with great fanfare around the time the shares will go on offer.

Papers for the GM IPO formally lodged with the US Securities and Exchange Commission (SEC) indicate that GM will offer preferred stock as well as common stock when the shares go on sale. Funds from the preferred stock will go back to the company for “general corporate purposes”.

The statement says the number of securities would be determined by “market conditions and other factors at the time of the offering”.

“The number of shares to be offered and the price range for the offering have not yet been determined,” the statement said.

[vztrt]

http://www.autoblog.com/2010/08/18/b...files-for-ipo/

BREAKING: General Motors files for IPO

by Jeremy Korzeniewski (RSS feed) on Aug 18th 2010 at 4:15PM


General Motors, the largest automaker based in the United States, has officially filed paperwork with the Securities and Exchange Commission for an Initial Public Offering.

By offering preferred stock along with its IPO, GM is looking to allow the U.S. Treasury (and by extension, American taxpayers) the chance to reduce its stake in the automaker as much as possible. Unlike common stock, preferred stock carries both debt and equity, is rated by the world's credit rating companies and typically has priority over common stock in the event that the company goes into bankruptcy.

According to Bloomberg, the U.S. Treasury intends to sell a fifth of its 304 million common shares as part of the IPO, which will make the government a minority shareholder.

If GM raises the expected $16 billion in its IPO, it will rank as the second-largest in U.S. history behind Visa's $19.7 billion in 2008. The offering will be led by Morgan Stanley, JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. Official GM fine print is available after the jump.

[Sources: General Motors, Bloomberg | Image: Associated Press/Paul Sancya]

[vztrt]

http://news.theage.com.au/breaking-n...819-12rzg.html

GM files for landmark public share offering
August 19, 2010 - 8:59PM

US auto giant GM, which was forced to declare bankruptcy and rely on taxpayer funds to stay afloat, has taken a first step away from government ownership, filing for a sale of its shares to the public.

The announcement late Wednesday signaled a remarkable turnaround for the Big Three US auto manufacturer, which pulled back from the brink of collapse only after massive infusions of taxpayer money.

GM did not disclose the number of stocks that will be offered, or the price range, but the sale is expected to raise between 12 and 16 billion US dollars.

That could make the firm's initial public offering (IPO) one of the world's largest, and second in the United States only to credit card giant Visa's March 2008 sale which raised more than 19 billion US dollars.

The move could prove a boon for President Barack Obama in November's congressional elections, providing hard evidence to voters that his economic policies helped pull the country out of its worst economic crisis in decades.

Senator Carl Levin of Michigan, a Democrat, called it "another important step in GM's rebound and in the recovery of the domestic auto industry.

"A successful IPO will be even more evidence that the steps the government took in 2008 and 2009 were good for workers, good for Michigan and good for the nation," he said.

In the filing with the US Securities and Exchange Commission, GM said it planned to apply for listings on the New York and Toronto stock exchanges.

"The amount of securities offered will be determined by market conditions and other factors at the time of the offering," GM said.

The stock sale is expected to take place late this year and the company -- which was part of the prestigious Dow Jones Industrial Index from 1925 to 2008 -- will retrieve its old trading ticker symbol of GM.

The US Treasury Department said separately it "will retain the right, at all times, to decide whether and at what level to participate in the offering."

The IPO filing came nearly a week after the company announced a 1.3 billion dollar quarterly profit, a second consecutive quarter of positive earnings.

Company executives have said for several months they were planning to re-float GM, as the biggest US automaker sought to repay its debt to the government, which bailed it out from bankruptcy during the financial crisis.

An IPO will allow the Treasury to begin offloading the 61 percent stake it acquired in last year's 50 billion dollar bailout of the Detroit-based carmaker.

GM said the public share offering would include preferred shares as well as common stock.

But the Treasury pointed out the offering would not include 2.1 billion US dollars in preferred GM shares that it owned, which are in addition to the common shares representing the 61 percent stake.

Founded in 1908, GM sold more vehicles than any other automaker from 1931 until 2008, when it was overtaken by Japan's Toyota.

The largest of the Detroit Three automakers, GM saw its US market share fall from a peak of 54 percent in 1954 to 19.6 percent in 2009.

The bailout led to restructuring, mass layoffs and plant closures, but ultimately brought GM to stability and profit.

For Obama, the IPO filing could fit neatly into a campaign to persuade voters that massive government spending kept US firms and the economy alive.

The timing "suits the government and it suits GM," according to Kenneth Elias, a partner at auto sector analysts Maryann Keller & Associates.

But others warned GM's announcement had been "rushed," and cautioned an undersubscribed offering could hurt Obama.

GM chief executive Ed Whitacre, picked by the Obama administration to lead the troubled company through reform, announced last Thursday he was stepping down next month, naming board member Dan Akerson as his successor.

The surprise announcement was seen as another sign of GM's desire to free itself from government control.

© 2010 AFP

[vztrt]

http://www.autoblog.com/2010/08/20/r...ors-to-gm-ipo/

Report: Bill Ford admits Blue Oval may lose investors to GM IPO, seems unconcerned

by Zach Bowman (RSS feed) on Aug 20th 2010 at 5:29PM

Bill Ford, executive officer for Ford Motor Co., seems to be taking a fairly realistic stance when it comes to arch-rival General Motors releasing its IPO. While speaking at the kickoff of this weekend's Woodward Dream Cruise, Ford said that he was certain that some of his company's investors would likely move to GM, but he isn't entirely concerned. Even though Ford stock has slid off from its 52-week high of $14.57 recently, the company's executive officer said that he doesn't spend his time fretting over stock prices, preferring instead to worry about steering the company in the best direction possible.

This week, GM filed paperwork to issue an IPO, thought to be one of the largest offerings in America's history. Until then, Ford had enjoyed the privilege of being the only publicly-traded domestic auto manufacturer after both GM and Chrysler filed bankruptcy in 2009. With a new kid on the block, odds are some money is bound to move toward The General and away from FoMoCo.

[Source: Bloomberg, The Detroit Free Press | Image: Scott Olson/Getty Images]

[vztrt]

http://www.autoblog.com/2010/08/22/g...ng-controls-i/

GM to Investors: Internal financial reporting controls are ineffective

by Jonathon Ramsey (RSS feed) on Aug 22nd 2010 at 4:33PM

Now that General Motors has submitted the necessary paperwork for its IPO to the SEC, Forbes read through the entire 734 page filing and found this curious tidbit: "We have determined that our disclosure controls and procedures and our internal control over financial reporting are currently not effective." And yes, that means exactly what you think it means.

In case you think it's only cautious puffery, the document goes on to say, "Until we have been able to test the operating effectiveness of remediated internal controls and ensure the effectiveness of our disclosure controls and procedures, any material weaknesses may materially adversely affect our ability to report accurately our financial condition and results of operations in the future in a timely and reliable manner."

And there's more, but the gist is that GM wants you to know that it might have to shuffle some of its past numbers at some future date. The problem seems to go back to early last year, when new accounting procedures were put in place to please the SEC. The General's trip to Narnia bankruptcy and back, however, prevented it from fully vetting those procedures, so it can't be 100% certain that they're 100% accurate. It could actually just be caution on GM's part, but nevertheless, some funny things are happening on the way to this IPO...

[Source: Forbes]

[Jason[98.EL]]

Originally Posted by vztrt

http://www.autoblog.com/2010/08/22/g...ng-controls-i/

very interesting artical

I would think that they might get into a bit of doggy doo doo over that one

or i could be reading to much into it

could only hope that people see what they are saying and act accordingly

[vztrt]

Originally Posted by Jason[98.EL]

very interesting artical

I would think that they might get into a bit of doggy doo doo over that one

or i could be reading to much into it

Bit hard to get in trouble when they were told to do it by a government body.

[Jason[98.EL]]

Originally Posted by vztrt

Bit hard to get in trouble when they were told to do it by a government body.

may well have been but the gov agency could also state that they knew nothing about it we are talking gove denial here