Earlier this week General Motors produced its last Pontiac for the U.S. market, ending the brand’s 82 year run. The final vehicle to roll off the assembly line at 12:45 p.m. on Wednesday, November 25th at the Orion Township plant was a rather unspectacular white G6 sedan which is scheduled to be sold to a fleet. It’s hardly the sort of send-off one might expect for a brand that has produced such memorable legends as the GTO and Firebird.

There was no pomp and circumstance as the last 100 vehicles rolled off the line and no GM executive was on hand.

The Pontiac brand was highlighted for elimination on April 27, as a part of General Motors’ viability plan. GM agreed to kill-off Pontiac and try and find buyers for Saab, Saturn and Hummer in exchange for a bailout by the U.S. and Canadian governments. To date, both the Saab and Saturn deals have fallen through, leading to the scheduled elimination of Saturn with the same fate likely for Saab. The sale of Hummer to Chinese heavy machinery company Sichuan Tengzhon is still pending.

Watching the Pontiac brand come to an end isn’t an unfamiliar event for may of the plant workers, as many of them were building Oldsmobiles when GM decided to retire than brand in 2000. For workers there is a glimmer of hope as GM has announced that in 18 months it will begin producing a new small car at the same facility.

In the mean time, the plant will stay open as it wraps up final production of the Pontiac G3 Wave, which is sold in Canada.

Since the brand’s inception in 1926 it is estimated to have sold as many as 41 million cars.

[Source: TheDetroitNews]

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]

Less than a day after the UAW, Chrysler and Fiat agreed upon the terms of a contract that would keep the struggling U.S. automaker afloat, details of the agreement have surfaced in which the union will take a controlling share in Chrysler.

At first it seemed almost too good to be true that all sides had reached an agreement without the need for decreased wages. Instead the agreement stipulated that Chrysler would significantly reduce its participation in the employee retirement program.

The agreement came just days after a similar agreement had been reach between Chrysler Canada and the Canadian Auto Workers union – an agreement that was ratified the same day Chrysler and the UAW put together the current proposal.

Now word has leaked that in exchange for Chrysler’s reduced payments to the company’s retirement plan, the company had to essentially hand itself over to the union. In total, the UAW will get a 55 percent stake in the planed Chrysler-Fiat partnership, with Fiat initially taking a 20 percent share, with up to 35 percent ownership possible if certain conditions are met. 

The agreement now has to go before Chrysler’s 26,000 workers, with voting on Wednesday in order to ratify the agreement ahead of the government’s end-of-month bankruptcy deadline. If the deal is reached and Fiat signs on, the Federal Treasury will provide Chrysler (or should we say the UAW) with $6 billion to keep the automaker afloat.

Meanwhile, one other major player (which has been incredibly quiet during this ordeal) has agreed to remove itself from the situation. Daimler will shed its 20 percent stake in Chrysler and rethink ever working with a U.S. automaker again.

[Source: Automotive News]

Photo Courtesy whitehouse.gov

While President Barak Obama’s press conference on what his administration is doing to solve the crisis in the U.S. auto industry focused mostly on helping out General Motors and Chrysler, he did give brief mention of a few initiatives aimed at jump-starting car sales at the consumer level.

Two main programs were discussed, including a scrappage program and tax deductions.

President Obama said that he will be looking into ways to see if there is any money to set aside in a fund to create a scrappage plan. While no specifics were given as to the details of the plan, usually these programs give consumers a significant rebate on the purchase of a new car when they trade in or “scrap” their old car. Often cars must be close to 10 years of age to qualify.

A similar program was launched in Germany several months ago with resounding success, boosting car sales by 21 percent in February over the previous period a year earlier. President Obama said that such a plan in the United States could increase car sales by as much as 100,000 units in 2009.

It is not clear if the scrappage plan would apply to just GM and Chrysler products, or to any vehicle manufactured within the United States, or to any vehicle at all.

The second incentive would allow for tax paid on a new car to be deducted from one’s income tax. This program is further developed as President Obama said his administration has already begun working with the IRS. A specific time frame has also been given that would seen the tax deduction apply to any vehicle purchased between February 16th and December 31st of this year.

The scrappage plan, once it goes into effect, would be retroactive as of today.

General Motors CEO Rick Wagoner will be stepping down as the head of the deeply troubled American auto giant by the end of the month – this according to several reports including CNBC and GMInsideNews.

Wagoner apparently did not come to the decision on his own and while he was not “forced” he was apparently asked to abdicate the General Motors throne by senior White House officials. GM’s Vice President, Fritz Henderson is expected to take over the helm of the company (We don’t envy him).

Wagoner took up the position of CFO at GM in 1992, becoming executive vice president in 1994. In 2000 he continued to move up the corporate ladder, taking a new position as president and chief operating officer, adding chairman to that long list of titles in 2003.

During Wagoner’s reign, GM’s shares have taken a catastrophic hit, dropping from a high of $60 to a low of $1.27 – a loss of roughly 98 percent.

[Source: GMinsideNews]

According to the reliable folks over at GMInsideNews, on Monday the Obama Administration will announce a bankruptcy deadline for both General Motors and Chrysler. 

It has been rumored that the government will release more details about its aid for the U.S. auto industry on Monday, but now it appears the announcement will include this strong-arm measure by the feds. The “brankruptcy deadline” will be a specific date by which both companies will have to have their finances in order. For General Motors this means a date by which it will have its ongoing issues with the United Auto Workers and bondholders resolved. If the companies cannot comply with the request of the Auto Task Force it will force both U.S. auto giants into a “pre-packaged” Chapter 11 bankruptcy filing.

[Source: GMInsideNews]

Ford Canada is asking the Canadian government to put in place a vehicle scrappage plan like the one currently in effect in Germany.

Ford Canada CEO David Mondragon told a parliamentary committee that Ford isn’t looking for a bailout and instead suggested a plan that would include $350 million ($270 million U.S.) for a scrappage plan. The way the plan would work would be for the government to give cash incentives for people who trade in their old cars and purchase new ones.

Mondragon’s suggested solution would include an incentive value of $3,500 ($2,700 U.S.), for consumers to use against the price of a new car when they traded in their old one. The deal would apply to any car 11-years-old or older.

With 35 percent of cars on Canadian roads over 11-years-old, this could account for as many as 100,000 car sales.

In Germany, the rule applies to cars 9-years-old or older and so far has been a resounding success. While February sales in the U.S. continued to tumble, car sales in Germany for the month were actually up  21 percent over the same period the year before.

[Source: The Globe and Mail]

General Motors has announced that it is putting a hold on a plan to bring a new 4.5-liter V8 diesel engine to market. The new engine would have been used in the light-duty Silverado and Sierra pickup trucks and estimates have it rated at anywhere from the mid-20s to the high-20s in miles per gallon. This would even be a significant improvement over GM’s current Silverado and Sierra hybrids, which get 21 mpg city and 22 highway.

The move is just one of many tough choices GM has had to make to cut costs ahead of a U.S. government decision to see if the struggling automaker will get an additional $16.6 billion in bailout funds.

What makes this pill even harder to swallow is that the new engine is just a year away from being ready for production – which would take place at GM’s Tonawanda, N.Y. plant.

As for the engine itself, it has a unique cylinder head design that eliminates intake and exhaust manifolds. The lightweight block also has “advanced castings” for the crankshaft-bearing journals and oil system.

GM secured several new patents in the design of the 4.5-liter diesel engine and it apparently is both as smooth and as quiet as a gasoline engine. With most of the ground-work already complete, General Motors has stated that it would be willing to work with another company on bringing the new diesel V8 to market if there were any reasonable offers.

[Source: AutoNews]

General Motors has just announced that it’s European operations, including brands Opel and Vauxhall will split-off from GM.

The deal would see anywhere from 25 to 50 percent of of GM Europe sold off to private investors, however, GM would continue to hold a majority stake in the company. (Call us crazy, but who would want to invest in a company that was still controlled by the same people who drove it into the ground)?

The news comes a day after thousands of Opel workers in the city of Ruesselsheim protested and asked that Opel split off from GM after 80 years of ownership by the U.S. company.

GM Europe is asking for $4.18 billion from European governments in loans to facilitate its restructuring efforts that would see the company profitable by 2011.

The German government, however, isn’t jumping at the chance. Economy Minister Karl-Theodor zu Guttenberg asked that GM first take very other measure possible before the German government would even consider a bailout. Zu Guttenberg even hinted that were the German government to get involved it would most likely like a say in where the money goes and what the restructuring plan would look like. GM Europe, after all, has plants in Germany, Belgium and the U.K.

[Source: AutoNews]

General Motors has just released its fourth quarter “earnings” and they are anything but. GM posted a net loss of $9.6 billion, with an operating loss of $5.9 billion.

The loss is the sixth consecutive quarterly loss by the struggling automaker, and is considerably worse than the $1.5 billion the company lost in Q4 last year.

GM has a cash reserve of $14 billion, including the $4 billion it has already received from the U.S. Treasury, however, at the current rate of loss all those fund will be depleted by Q4 of 2009. It goes without saying then that the additional $16.6 billion GM has requested is much needed to keep the company afloat.

GM posted loss in all four of its sales regions with the largest loss in North America, which accounts for $2.1 billion of the $5.9 billion deficit. GM Europe posted a $956 million loss (four times as bad as the Q4 loss in ‘07), while GM Asia Pacific declined by $879 million and the remaining Latin America, Africa and Middle East regions lost $154 million – down from an actual revenue the year before.

CEO Rick Wagoner had this to say: “2008 was an extremely difficult year for the U.S. and global auto markets. We expected these challenging conditions will continue through 2009, and so we are accelerating our restructuring actions.”

Wagoner will meet with Obama’s task force,  headed by U.S. Treasury Secretary Timothy Geithner and White House economic adviser Larry Summers, later today.

Over the past year General Motors has seen its stock value decrease by 89 percent.

[Source: AutoNews]