While President Obama and General Motors CEO Fritz Henderson are both expected to hold press conferences today, officially GM has already filed for Chapter 11 Bankruptcy Protection.

Once the world’s largest automaker and a symbol of the success of free market economics, GM is now a symbol of failure. In the 1950s it employed over 500,000 people and produced more than half of all the vehicles sold in the United States. Now it also holds the dubious title of the world’s third-largest bankruptcy – and the largest bankruptcy for a manufacturing company.

General Motors, backed by yet another government loan from the U.S. Treasury is expected to get the same fast-tracked bankruptcy proceedings as the smaller U.S. automaker Chrysler – which filed for Chapter 11 just one month ago and which already appears to be emerging. Just yesterday a judge approved the sale of Chrysler’s assets to a group comprised of Fiat, the U.S. government and the UAW. The Chrysler Chapter 11 proceedings were seen by many as a practice for the much larger General Motors corporation.

As a part of the Chapter 11 filing GM will receive $30 billion from the Obama administration, giving it a 60 percent stake in the once-great automaker. The Canadian government will take a 12 percent stake by providing an additonal $9.5 billion, while the UAW gets a 17.5 percent share and bondholders get 10 percent.

The Chapter 11 proceedings are expected to take anywhere from 60 to 90 days but the future of General Motors is anything but certain. In the short term the automaker will most likely push ahead, but the big question mark is if it can become financially viable and build cars that people want to buy – something which is further complicated by the government’s involvement.

While the Obama Administration was reluctant to get involved it almost had no choice as without government help both General Motors and Chrysler were doomed to failure – at a time when the U.S. economy already has enough troubles. But now that the government is involved it doesn’t appear to be willing to part with its economic engine. Even when GM and Chrysler emerge from bankruptcy, the government’s Autos Task Force will continue to be involved in the future of both companies.

With a 60 percent stake in General Motors and a political agenda, will the Obama Administration work with GM and Chrysler to ensure both companies build cars people want – or build cars it wants people to want?

Only time will tell.

[Source: Automotive News]

Oddly, it seems as though Saturn is far more interesting and far more loved as the up-for auction arm of a doomed for bankruptcy company than it ever was as regular old car brand. To date the Penske Automotive Group, automaker Nissan/Renault and investment firm Telesto Ventures have all been cited as potential buyers. Now we can add Mitsubishi to that list.

According to a report in the Detroit News the Japanese automaker is in talks with GM to supply its vehicles to the existing Saturn dealership network. The move would see Mitsu expand its number of dealerships in the U.S. by 380 – up from the current 430 dealerships.

The move seems unlikely as Mitsubishi is suffering in the current economic downturn. In April the company sold just 3,919 vehicle in the U.S., down 55.9 percent from the same month in 2008.

Mitsubishi is, however, eager to gain a larger percentage of the U.S. market and until recently was even engaged in talks with Chrysler to bring a small electric car called the Peapod Mobility to the U.S.

The company does appear to be beefing up it’s product line and rebranding its existing products. Company representatives have made it clear that the i MiEV electric micro-car (pictured above) will come to North America and a coupe version of the car has been explored in concept form. Additionally, Mitsu recently launched the Sportback version of the Lancer. As far as rebranding, the company is finally picking up on the success of the Lancer and Evo models and is giving that look to the rest of its line. We’ve already seen it with the 2009 Eclipse and the next generation Outlander promises to have an Evo-style nose.

[Source: Detroit News]

The possibility that Penske Automotive Group may in fact purchase the Saturn brand from General Motors has just increased significantly. Penske has acquired the services of former Chrysler President Tom LaSorda as an adviser on the bid.

Penske is the second largest dealership group in the U.S. and also distributes the SMART brand of cars in the U.S. for Mercedes parent company Daimler.

The Detroit News is reporting that the Penske bid may involve other partners, including Serra Automotive Inc. and the Suburban Collection. Serra Automotive is the 15th largest dealership group in the U.S. with 21 stores in six states. The Suburban Collection is the 13th largest group and boasts 7 Saturn dealerships.

While many of GM’s brands have received little attention from prospective buyers the list of parties interested in Saturn seems to grow daily. Bloomberg is reporting that Canada’s Magna International is interested in Saturn, while other recent reports indicate Renault/Nissan is interested.

Saturn has said it has engaged in talks with the investment firm Telesto Ventures about a possible sale.

Currently GM is eager to part with Saturn as it faces a June 1st restructuring deadline.

[Source: Automotive News]

General Motors will cut 1,124 dealerships loose by October of 2010. The struggling automaker on the verge of bankruptcy sent letters out to the dealerships last week as it searches for ways to reduce it’s current dealer network of 5,969 to just 3,600.

GM says it will not renew dealership agreements with the 1,124 companies when their contract renewal comes up in October of next year.

The dealerships being cut are considered to be poor performers and accounted for just 7 percent of GM’s U.S. sales last year.

Another 470 dealerships are also scheduled to be let go as GM parts with the Hummer, Saab and Saturn brands. An additional 35 stand-alone Pontiac dealerships will also be cut.

Those dealerships not already notified aren’t necessarily safe, however, as the remaining 4,300 stores is still 700 over the 3,600 cap.

The news of GM’s numerous dealership closings came just one day after Chrysler announced it would drop 789 U.S. dealerships.

[Source: Automotive News]

GM Vice Chair Bob Lutz Kisses a Saturn Astra. Recently he kissed-goodbye to all his stock in the company.

In a move that should probably be illegal (but isn’t) six General Motors executives recently sold off all their shares in the company. That’s right, those same guys who helped drive GM into bankruptcy traded in all their stocks when a trading window opened.

The move signifies that GM will most likely file for Chapter 11 and while it does seem unjust that these executives are permitted to jump ship, smart investors will see this as a sign. (You know what they say when the rats start to leave a ship).

GM’s Vice Chairman Bob Lutz (pictured above) sold off all of is 81,360 shares at $1.61 each, cashing in on $130, 969.60. The North American President of GM, Troy Clarke, dumped his 21,380 shares for just $1.45 each for a total of $31,001.

The remaining executives involved in the sell-off were VP Thomas Stephens, as well as Group VPs Gary Cowger, Carl-Peter Forster and Ralph Szygenda.

The move prompted the stocks to continue their slide, dropping 17 cents (or 11 percent) to just $1.44 by days end. In the past year GM’s stock value has declined by 92 percent.

General Motors is facing a June 1st restructuring deadline by the Obama administration or else the federal government will pull the funding plug on the automaker. As it stands a bankruptcy scenario seems unavoidable.

[Source: Bloomberg]

It’s not exactly the sort of news worthy of a celebration, but some cautious optimism is certainly appropriate as word comes that the Pontiac Solstice and Saturn Sky might not suffer the same fate as almost every other fun vehicle under the General Motors umbrella.

Fritz Henderson, GM’s new CEO said that the company would be willing to part with the plant where the two sports cars are assembled. The Wilmington, Del. plant is also the location where GM manufactures the Opel GT – a European version of the car.

“If someone were to approach with a proposal that made good sense for our people, we’d be open to it,” Henderson said.

Both the Solstice and Sky were introduced in 2006 as front-engine, rear-wheel drive roadsters. The models come standard with a 173hp four-cylinder, with a turbocharged 260-hp four-cylinder optional.

General Motors is still intent on selling off the Saturn brand and scuttling the Pontiac nameplate, however, it won’t rule out selling the Wilmington facility as there is likely to be some interest in the niche-market vehicles.

Last year GM moved close to 20,000 units of the two American models, with the Solstice selling 10,739 units and the Sky 9,162 units.

The move is similar to the one made by Chrysler in regards to the Dodge Viper. Chrysler has yet to find a buyer for that iconic nameplate.

[Source: AutoWeek]

General Motors has once again posted a massive quarterly loss, coming up short to the tune of $6 billion for Q1 of ‘09. That is roughly the equivalent of the value of 473,000 Chevy Aveos.

The company burned through $10.2 billion during the period, lowering its cash reserves to $11.6 billion from $14.2 billion at the end of ‘08. The difference was made up by loans from the Federal Government which amounted to $13.2 billion.

General Motors has now posted seven straight quarterly losses and in total has dropped into the red on an annual basis since 2004 – for a staggering total loss of $84 billion. For those keeping score that amounts to a loss roughly equivalent to the value of 1.3 million Escalades.

Naturally, North America accounted for the largest amount of the total loss with $3.2 billion in that region, while the smaller European market still posted a significant decline of $2 billion.

In Asia GM posted a relatively small $21 million loss, compared to a profit of $310 million the year earlier.

The only region to manage a profit was the Latin America, Africa and Middle East region, with $16 million in profits compared to $500 million in profits  in Q1 of ‘08.

The news continued to batter GM’s stock as shares dropped 10.3 percent yesterday to just $1.66. Those numbers are, however, somewhat irrelevant now as GM plans to offer up to 60 billion new shares in a reverse stock split that would help the company pay off its debt. That move would reduce GM’s stock value to less than 2 cents.

The only positive news out of Q1 is that the company’s efforts to reduce production have resulted in a decreased inventory of 105,000 vehicles, for a total of 767,000 vehicles.

Still with a June 1st bankruptcy deadline looming Chapter 11 is looking like a given.

[Source: Automotive News]

The sale of Saturn to Nissan-Renault could see cars like this Mégane Renault Sport roaming U.S. streets.

The rumor mill keeps churning out new and exciting candidates interested in buying GM’s Saturn brand. The most recent speculation is that Nissan/Renault might be interested.

The Wall Street Journal is reporting the Nissan-Renault interest in Saturn, while Bloomberg says that company may team up with the Penske Automotive Group (rumored yesterday to be an interested party) to take over the brand.

With Nissan struggling worldwide the thought of such a buy seems unlikely and yet it may pave the way for Renault to bring its lineup of fuel-efficient compact cars to North America. Currently the Saturn brand has 400 dealerships in the United States and Canada that could be used to distribute Renault products like the Clio and Megane… or even performance versions like the 250hp 2.0-liter turbocharged Mégane R.S. (shown above).

While French vehicle might not normally be attractive to North American consumers, the Renault brand has a strong awareness with younger consumers due to the Gran Turismo video game series.

Under the latest General Motors viability plan, Saturn is scheduled to be sold by the end of the year.Currently GM says that is has several offers, the most recently publicized ones being from Penske Automotive Group and Telesto Ventures, which would transform the Saturn dealership network into a retail chain selling several brands of foreign-made cars.

[Source: AutomotiveNews]

Roger Penske and Daimler Chairman Dr. Dieter Zetsche take a ride in a SMART car. Penske currently distributes SMART cars for Diamler in the U.S. and is rumored to be interested in purchasing Saturn from GM.

A day after General Motors released a vague statement declaring that it is moving to “the next step” in the sale of the Saturn brand it appears as though Roger Penske is one of the interested buyers.

Penske, a former race car driver and now the man at the top of an automotive empire is no stranger to the business, owning numerous dealerships. In fact, Penske’s dealership chain is listed as the second largest in the United States, accounting for 171,872 vehicles sold in the U.S. in 2008.

The Penske dealership network is not immune to the current economic climate, with Q1 profits down roughly 50 percent from the year previous. Still, the company managed a 16.2 million profit.

The Penske Automotive Group even distributes the SMART car for Mercedes/Daimler throughout the United States.

Currently Penske oversees three major racing initiatives in the NASCAR Sprint Cup, the American Le Mans Series (ALMS) and the Indy Racing League (IRL). He is also a well-known supporter of the city of Detroit and the U.S. auto industry, having helped bring the racing back to Detroit’s Belle Isle in recent years as well as assisting in bringing the Superbowl to the struggling city.

The Wall Street Journal cited an unnamed source in regards to Penske’s interest. The individual said that while Penske is interested, no offer has been made.

[Source: Automotive News]

[Photo Credit: TheAutoChanel]

As we reported last week, General Motors has indeed made the decision to kill the Pontiac brand. The news comes as a part of a new viability plan (yes… another one) submitted to the federal government today.

The new plan will see Pontiac eliminated by the end of 2010, but that’s not all… not by a long shot. Also included in the new proposal is a long list of drastic and sweeping changes that General Motors says are much needed in order to stay in business. Among the list of big changes is the fast-track dissolution of Saturn. Originally scheduled to be dismantled by the end of 2010, the plan now states that the niche brand will be eliminated by the end of this year.

Also on the chopping block are half of all current U.S. General Motors dealerships. Not surprisingly, GM’s previous viability plan wasn’t pessimistic enough, calling for 34 percent of the current 6,246 dealerships to close. That number is now a solid 50 percent.

Other major cuts include the closing of three plants and the loss of 7,000 more hourly workers. This would put the number of hourly workers at 40,000 – 7,000 less than the last viability plan said there would be and 21,000 less than there were in 2008.

In total GM will cut 14 models from its lineup, with just 34 different vehicles being offered in 2010.

Most importantly, however, is that General Motors will offer current debt holders stock in order to reduce the company’s debt. But if too few debt holders cash in, then GM will go bankrupt. And that is looking quite likely as GM says it needs approximately 90 percent of its unsecured debt covered or else it believe the U.S. Treasury will not see the company as viable.

General Motors still faces the likelihood of filing for Chapter 11 but in the mean time it will run with its new viability plan and concentrate on its core brands: Chevy, Buick, Cadillac and GMC. With just over a month to go before the Obama Administration’s June 1st deadline, however, nothing is really certain. Maybe there will be another viability plan? Maybe more will be cut…

[Source: Automotive News]