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.
Top 10 Automotive Stories of 2012
With a heavy heart the staff of AutoGuide.com say goodbye to 2012, along with its triumphs and tragedies. We await the New Year with open arms, and welcome its promise of a better world.
According to the Chinese zodiac, 2012 was a year of the dragon, and it proved to be the stuff of legend, but thankfully it wasn’t a fire-breather. The Mayans were flat-out wrong; their doomsday prophecy was about as accurate as Bernie Madoff’s promise of a sound investment opportunity.
Still, the year brought other significant stories. Scientists at the Large Hadron Collider in Switzerland discovered a subatomic particle consistent with the legendary Higgs boson. Astronaut Neil Armstrong, the first person to walk on the moon, passed away, and in a brutal political battle Barack Obama won a second term as president of the United States.
Of course the automotive industry made its share of headlines throughout the year. Here’s a rundown of the Top 10 stories from the past 12 months.
For many car enthusiasts, reports of Bristol Motor Cars filing for Chapter 11 earliar this year was very sad news indeed. Now its time for fans of this British marque to rejoice as the company has just been saved and brought back to life.
The new owners are Kamkorp Autokraft, a Swiss company that is part of the Frazer-Nash group.
Frazer-Nash had in recent years shown an all-electric sportscar called the Namir. Could the next Bristol models get motivation from green energy!
“Over the next few months we will start to reveal the details of our plans to combine Bristol Cars’ tradition and iconic marque with Frazer-Nash’s pioneering technology to showcase our cutting-edge electric and range-extended powertrains,” said William Chia, the group’s director of operations.
Chia also assured current Bristol owners that service and parts for their existing cars will not be disrupted and they are committed to fulfilling their needs. No word yet of the fate of Bristol workers who were let go when the company went into administration.
NJMP is one of the newest tracks in America, having opened its doors back in 2008. It currently has two road courses and a professional karting track. Future plans included adding a tri-oval and an off-road track.
Sadly it looks like those expansion plans might not get to mature, unless someone can step in to buy this facility and run it properly.
It’s not only the track that is suffering, as the real-estate market in Millville, NJ has been hit hard by the recession and many surrounding projects have been scrapped.
[Source: Axis of Oversteer]
Late Sunday a judge approved the sale of GM’s assets to a group comprised of the U.S. government, the UAW and the Canadian and Ontario governments under the name NGMCO, Inc. The decision will see GM exit bankruptcy court quickly with the ‘New GM’ assets going to NGMCO, while the ‘Old GM’ assets will be sold off to the highest bidder.
Judge Robert Gerber then placed a stay on the proceedings to for four days to hear objections or appeals, but as most of those have already been dealt with, GM is expected to reemerge as a new government-owner company by Thursday.
In a statement Judge Robert Gerber said that he would, “prevent the death of the patient on the operating table.”
Gerber pointed out the seriousness of the matter and the alternative, stating that, “The only alternative to an immediate sale is liquidation – a disastrous result for GM’s creditors, its employees, the suppliers who depend on GM for their own existence, and the communities in which GM operates.”
The New GM will be majority owned by the U.S. government with a 60 percent stake in the automaker. The UAW will get 17.5 percent, while the Canadian and Ontario governments will get 12 percent.
In response to the news GM’s CEO Fritz Henderson released a statement saying that, “A healthy domestic auto industry remains vital to the global economy and we deeply appreciate the support the U.S., Canadian and Ontario governments and taxpayers have given GM, and the sacrifices that have been made by so many. This has been an especially challenging period, and we’ve had to make very difficult decisions to address some of the issues that have plagued our business for decades. Now it’s our responsibility to fix this business and place the company on a clear path to success without delay.”
The Obama Administration’s auto task force has said that sale of GM back to the private sector could begin as early as next year.
[Source: Automotive News]
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]
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.
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]