AutoGuide News Blog
The AutoGuide News Blog is your source for breaking stories from the auto industry. Delivering news immediately, the AutoGuide Blog is constantly updated with the latest information, photos and video from manufacturers, auto shows, the aftermarket and professional racing.
It was just yesterday when we reported that Saab was seeking government protection against bankruptcy, but now it seems like this step has failed.
A Swedish court has rejected a protection and voluntary reorganization plan, citing that it does not believe any steps the automaker makes will help it to recover.
Saab is “disappointed” with the ruling and is filing an appeal to overturn this decision. If the appeal is rejected also, this would very well be the end for Saab as an auto manufacturer. This would certainly be a very sad end for what was once a thriving company credited for making cars like the 900 Turbo (pictured).
Evidently, the third time wasn’t the charm for Think, the Norwegian manufacturer of small electric vehicles. The company has gone bust for the fourth time in its 20 year history. Think attempted to restructure, but was ultimately not successful.
“We needed some additional funding and although we had interested investors they were not able to come to table quickly enough,” Think spokesman James Andrews said to Automotive News Europe. Think will either be sold or have its assets liquidated.
Production of the Think City, the company’s sole model, was suspended in March. Just 1,043 were sold in 2010. Think was sold by Ford Motor Co in 2003 and has sold ever since. Think operates in North America, but its future is in doubt due to its reliance on the firm’s Norwegian operations.
[Source: Automotive News]
Chrysler filed documents with the Security and Exchange Commission that revealed that parent company Fiat has a one year option to increase its stake in the American automaker to as much as 70 percent.
The increase is contingent on Chrysler repaying its government loans, and the automaker will be issuing new debt in a bid to allow Fiat to up its stake from 30 to 46 percent. Currently, the United States treasury holds an 8.6 percent stake in the company, but that should be reduced by year end, when Fiat begins production of an American made vehicle capable of hitting 40 mpg. The United States government is hoping to fully divest itself from Chrysler as soon as possible.
[Source: Automotive News]
Eccentric British car firm Bristol has run its business unlike any other car company. They have no dealer network, so all the sales are handled by the factory owned store in Kensington, near London, U.K. They also don’t give out cars to journalists for reviews, stating their customers know what they are buying and that the cars speak for themselves.
Well it seems their old-fashioned ways of doing business (not to mention the out-dated technology found in these vehicles) has caught up to them. According to latest reports out of U.K., Bristol cars has gone into administration – a fancy legal term that essentially means they’ve run out of money. A last effort to save the company is being explored at the moment, but it seems the company will end up being reduced to running just the service and parts side of the business. For now, the administrators are confident that a new investor will come and save the company.
For the longest time, Bristol Cars was owned by the eccentric racing driver Tony Crook, who was famous for his arrogance and his lack of interest in modernization of the brand.
Bristol Cars was then sold to Toby Silverton in 2001, who had tried to modernize the brand with cars like the Fighter (pictured above), while retaining their aeronautical roots (they made fighter airplanes that were used in World War Two). Despite being a capable supercar, the Fighter could not shake-off the fact that its V10 engine came from a much cheaper car, the Viper SRT-10.
Will the company be now scooped up by one of the German automotive giants (like pretty much all of the British car industry) or will it be consigned to the history books? Time is running out on this 65-year old brand.
Official Announcement Expected Later Today
General Motors has reached an agreement with the Penske Automotive Group on the sale of its Saturn brand. An official announcement is expected to be made by both parties later today.
The Penske Automotive Group was thought to be one of the front-runners in the bidding war, which also reportedly included Nissan/Renault, Mitsubishi and investment firm Telesto Ventures.
The news comes just days after GM sold off its Hummer brand to Chinese industrial equipment manufacturer Tengzhong.
The Penske Automotive Group is comprised of several key automotive related companies and boasts the second largest dealer network in the U.S., accounting for sales of 171,872 vehicles in 2008.
Penske also distributes the SMART car throughout the United States under a deal with Mercedes parent company Daimler.
As a former race car driver, Roger Penske continues to be involved in motorsports, and currently runs teams in three major racing series: the NASCAR Sprint Cup, the American Le Mans Series (ALMS) and the Indy Racing League (IRL).
The sale of Saturn would leave GM with just the Swedish brand Saab to dispose of. It has been reported that buyers for Saab have been narrowed down to just two: Swedish supercar maker Koenigsegg and the U.S.-based Renco Group.
The news was reported this morning in the New York Times, which also said that after an initial contract with GM runs out, the Penske operated Saturn brand is expected to sell Renault vehicles in the United States. Does this mean North America will finally get cars like the Clio and Megane…. or even the Megane R.S.? (pictured above)
[Source: New York Times]
America's manufacturing engine runs out of gas
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]
Possibility that sporty Renault models could be sold through Saturn dealer network
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.
President Obama is expected to announce tomorrow that Chrysler will in fact file for bankruptcy; according to a report by Bloomberg. The Wall Street Journal, however, says that Obama currently has two speeches drafted for tomorrow’s press conference: one if the struggling automaker files for Chapter 11, and one if it doesn’t.
The Chapter 11 option seems the most likely at this point as it would make the alliance with Fiat a smoother process.
The only way Chrysler will avoid the “B” word is if the companies that it is indebted to agree to accept a cash offer in exchange for that debt. That may sound like a more than fair trade, were it not for the fact that the cash value is just $2 billion, in exchange for $6.9 billion in debt.
While the federal government has made an agreement with the largest lender, other major players, including Oppenheimer Funds, Perella Weinberg Partners and Stairway Capital are holding out. According to David Cole at The Center for Automotive Research in Ann Arbor, MI, if those lenders have insurance policies that cover them completely in the case that Chrysler fails, then it’s in their best interests to see that bankruptcy is the solution.
President Obama, speaking on the topic at a Town Hall meeting in St. Louis today said that if bankruptcy happens it will be “real quick.”
But with billions on the line and numerous big players involved it’s not clear how even the Federal Government could stop the restructuring of Chrysler from taking years in court.
The Washington Post has reported that a Chrysler/Fiat alliance would see Chrysler CEO Bob Nardelli ousted from his current position in favor of an executive from Fiat.
[Source: Automotive News]
Source Interlink, the distribution company and publisher of magazines such as Motor Trend, Automobile and Hot Rod has filed for bankruptcy.
The publishing side of Source is focused almost entirely on the automotive sector with 70 magazines dedicated to covering the automotive and motorcycle industries. With the suffering auto industry (March sales down 37 percent from the same month a year ago) it’s no surprise that Source is hurting. Magazine ad sales were down 20 percent in the first quarter of 2009 compared to a year before.
Source can’t, however, entirely blame the economy. The company hasn’t posted a profit since the second quarter of 2007. Things have been getting progressively worse for Source as well, recently laying off 115 employees and cutting several of its magazines including Sport Compact Car and Modified Luxury & Exotics.
Recently the company also entered into legal action, suing several of its publishing house clients after a strong-arm tactic to raise distribution costs failed. Instead of folding the publishers rejected Source’s offer and stopped shipping magazines (including titles like People and Sports Illustrated) to the distributor.
In retaliation, Source Interlink filed an antitrust suit against the publishers (and several competing distributors) claiming the group tried to force Source out of business. The suit has since been settled, however, the move by Source to sue its clients was seen as a desperate move by a desperate company.