Tag Archives: GM

GM Invests In Michigan Plants

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GM hopes to capitalize on consumers growing trust in American fuel efficient cars by investing $257 million in Kansas and Michigan plants. GM CEO Ed Whitacre announced that $136 million would go to the Fairfax plant as the Malibu’s main production facility, and another $100 million would expand production at the Detroit facility.

The factory investments in Kansas and Michigan won’t create new jobs, but will preserve jobs at both plants. The Kansas plant, which employs 3,869 workers, builds the midsize Buick LaCrosse luxury sedan. The Detroit-Hamtramck plant, which has 1,048 employees, now builds the Cadillac DTS and Buick Lucerne and is gearing up to make the Chevrolet Volt rechargeable electric car.

Ed Whitacre appearance at the company’s Fairfax Assembly Plant was filled with even more good news as he formally announced the automaker’s early payback of $8.1 billion in government loans to the U.S. and Canada. The government payments came five years ahead of schedule, a sign that the automaker is on its way toward reducing government ownership of the company.

GM Dealerships To Stay Open

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Last year General Motors announced that they would be closing dealerships due to the low demand for cars and trucks. Many dealerships argued the decision saying the auto maker did not offer enough details explaining how they decided which ones would be closed. Complaints to congress lead to a bill giving dealerships a chance to dispute their closure depending on their past success. This week GM announced that it will be reinstating more than half of the dealerships that disputed the closures. GM executives said that more than 600 dealerships out of the 1,100 seeking to stay open with GM will receive letters giving them the option to remain with the auto maker.

Below is GM’s statement regarding the dealer arbitration:

General Motors is taking a major step toward its goal of creating positive, lasting relationships with its dealers.

GM carefully reviewed each of the approximately 1,100 dealer reinstatement claims that were filed with the American Arbitration Association. We conducted these individual reviews, keeping in mind our goal of moving quickly and effectively to complete the overall arbitration process, and determined that we would send more than 600 Letters of Intent to the involved dealers. The Letter of Intent contains our usual core business criteria. This action will allow these dealers to conduct normal dealership operations as soon as they comply with the terms of the Letter of Intent.

“We are eager to restore relationships with our dealers, and get back to doing what we do best – selling cars and taking care of customers,” said Mark Reuss, president, GM North America. “The arbitration process creates uncertainty in the market. We believe issuing these Letters of Intent is good for our customers, our dealers and GM.”

GM Power Steering Recall

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General Motors announced Monday that they will be recalling 1.3 million Chevrolet and Pontiac Compact cars for power steering problems. The National Highway Traffic Safety Administration (NHTSA) began an investigation into the problem on Jan. 27 after getting 1,100 complaints of cars loosing power steering assist. The complaints included 14 crashes and one injury.

The auto maker said the vehicles are still safe to drive and never totally lose their steering, but consumers will notice harder steering when traveling under 15 mph. Shutting the vehicle off and then restarting will usually restore the power steering. The auto maker will start with older models first because the problem usually takes 20,000 to 30,000 miles of driving for the condition to develop.

The recall covers:

  • 2005 to 2010 Chevrolet Cobalts
  • 2007 to 2010 Pontiac G5s
  • 2005 and 2006 Pontiac Pursuits
  • 2005 and 2006 Pontiac G4s

CTS Corporation Supplies Toyota Pedals

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In the auto industry, it is expensive for each auto manufacturer to design and build every component for their vehicles. As a result, they go to automotive suppliers who build OEM parts that are bought by many different auto manufacturers. The gas pedal assembly at the center of Toyota’s stop sale and recall are one of these OEM parts. It was designed and built by a company called the CTS Corporation. They are a leading designer and manufacturer of electronic components and sensors and a provider of electronics manufacturing services in the automotive, communications, medical, defense, aerospace, industrial and computer markets. CTS manufactures products in North America, Europe and Asia. They also sell assemblies to Honda, Ford, GM and Chrysler.

Honda spokeswoman, Christina Ra reassured their customers by saying, “We use the same supplier for a small number of vehicles sold in the U.S. We do not use the same components as are involved in our competitor’s recall. We directly confirmed with CTS that it is not the same component.”

Ford, also a CTS pedal customer, has halted production in China of its Transit Classic diesel van, which is the only Ford product to use a CTS pedal assembly. The van is sold only in China. “Ford has its own unique design and engineering for its accelerator pedals globally,” Said Deep, a Ford spokesman. “In a review, we determined that none of our other vehicles worldwide use the CTS pedal.” ” 1,663 Transit Classic vans with the CTS pedal had been produced, and the company was investigating how many had reached customers. “We are constantly monitoring performance, and we have not seen any design issue related to unintended acceleration in Ford vehicles,” Mr. Deep said.

Alan Adler, a spokesman for G.M., said that the automaker has “no direct contractual supplier relationship” with CTS, though he said the company could be supplying components through other suppliers.

Chrysler said the pedals CTS makes for the company are different from Toyota’s. “Accelerator pedals produced by CTS Automotive for Chrysler Group LLC vehicles are a different specification and design and are manufactured using different production tooling and materials than the pedals produced for Toyota,”

You can CLICK HERE to view CTS Corporations press release of the Toyota accelerator pedal recall.

Auto Industry Aids Haiti Victims

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Even with all the turmoil and uncertainty in today’s auto industry, auto makers and a large financial institution banded together in an effort to send funds to the earthquake relief efforts in Haiti.

GM gave $100,000 and provided direct online access to the red cross so its employees could make personal contributions as well. “As one of the world’s largest car companies, doing our part to contribute aid to Haiti is not about business but our obligation to our fellow man,” explained GM chairman and chief executive officer Ed Whitacre. “There is remarkable compassion among GM employees, and I know that same spirit will make a difference in helping the Haiti relief effort.”

Toyota Motor North America Inc. is donating $500,000 to the American Red Cross, Save the Children and Doctors Without Borders. “Save the Children and Doctors Without Borders have been working in Haiti for a long time”, says Michael Rouse, vice president of philanthropy and community affairs at Toyota Motor Sales U.S.A. Inc.

In addition, Toyota North America, Toyota Motor Sales, Toyota Financial Services and Toyota Motor Engineering & Manufacturing North America will match employee contributions and provide four-wheel-drive Tundras and Tacomas to the Red Cross.

Nissan donated $30,000 in cash to the Red Cross and plans to provide more than $100,000 for the Haitian earthquake relief effort. The automaker will match the first $25,000 in employee donations, for a combined contribution of up to $50,000. They will also give $52,000 to Habitat for Humanity International to construct 13 houses in Haiti as rebuilding programs get under way.

Ford’s Ford Fund & Community Services said it will match all individual employee contributions up to $50,000, which will be donated to the American Red Cross. It also is working with Behrmann Motors, a Ford dealership in Port-au-Prince, Haiti, to identify critical needs on the ground.

Eaton, an engine parts supplier, pledged $100,000 to the Red Cross fund. Eaton also will match employees’ donations to the United Way Worldwide Disaster Fund that supports long-term recovery efforts such as financial and health-related challenges.

Bank of America executives donated $1 million with half of that sum going to the American Red Cross. The remaining $500,000 will go toward the long-term recovery efforts to restore basic medical services and fund the rebuilding of homes, schools and other structures critical to the affected communities. Bank of America also plans to match donations made by its employees.

Saab-To Sell Or Not To Sell!

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As General Motors Co. continues to close down the Saab division of their company, starting with replacing their entire board, they are still putting pressure on bidders to make better offers.

This comes after negotiations between G.M. and the high-end Swedish automaker Koenigsegg failed. Beijing Automotive was one of Koenigsegg’s backers in the earlier Saab procurement plan, potentially contributing $200 million to $300 million toward the deal. Saab’s engineering expertise has always been admired by the Chinese automaker. Saab did come to an agreement with Beijing Automotive Industry Holdings to sell the rights to powertrain and tooling technology for some of their older models. Saab will also help Beijing Auto build its own car brands, using the Saab technology.

GM executives said on Monday that none of the bids received are meeting the financial requirement for a deal and said they were moving ahead with plans to close Saab. Saab spokes woman Gunilla Gustavs added today: “There is still the possibility that the negotiations on the bids will result in a decision to sell Saab in its entirety.” Luxembourg based investment firm Genii Capital and Dutch luxury carmaker Spyker Cars and a group of Swedish investors are expected to make better offers for Saab.

Chrysler to Challenge Legislation

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Complaints made to Congress from GM and Chrysler dealerships has led to a House approved $1.1 trillion spending bill. This bill will give dealerships a chance to dispute their closure depending on their past success. G.M. and Chrysler proposed their own review processes last week in an effort to keep Congress from getting involved, but their proposal was rejected.

Today, Chrysler came back challenging the decision, calling it ‘unconstitutional legislation’. Sergio Marchionne (CEO of the Fiat and Chrysler Group LLC and Chairman of the European Automobile Manufacturers Association) said that restoring large numbers of dealerships could cause havoc within Chrysler. “We are in a completely different position than G.M.” he said. G.M. has about $42 billion in cash in September, paying back $6.7 is easier than it would be for us.” Mr.. Marchionne also said G.M. was more focused on repaying the loans because the government owns 60% as opposed to 10% of Chrysler. Chrysler’s majority shareholder is the United Automobile Workers union’s retiree health care trust.

Chrysler is planning to make investments that would provide jobs and other economic benefits. Building a fuel-efficient engine with Fiat technology in the United States is one of three goals that each allow Fiat to gain an additional 5 percent of Chrysler.

Management Changes at G.M. Hope to Repay U.S. By End of 2012

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Ed Whitacre has only been chief executive of G.M. for a short time but it is evident that he is serious about the companies mission to build and sell the world’s best cars and trucks. Whitacre says he wants to give people more responsibility as well as hold them accountable. Some of his changes are: Mark Reuss, president of North American operations; Susan E. Docherty, G.M.’s vice president for sales and marketing and Nick Reilly president of GM Europe.

Mr. Whitacre and his revamped management team must prove that they can spend taxpayers dollars productively on new cars, trucks and crossover vehicles. The bankruptcy process, which forced the government to step in and lend it a total of $50 billion to survive, removed most of G.M.’s crushing debt load and long-term obligations to its retirees. It also allowed G.M. $42.6 billion in cash reserves which will be put towards designing, building and selling the world’s best vehicles. With these ‘hit’ vehicles, G.M. hopes to become profitable, and once stabilized will be back on the public stock offering. Mr. Reuss said going public and repaying the government are “at the very top of our desires of what this company will look like next year.”

One of the vehicles pushed by G.M. is the Volt. It’s development time has been reduced by seven months which could have us seeing it on roads and early as November of 2010. Another model they hope will be a hit is a small, rear-wheel drive luxury car for the Cadillac division which they hope will compete head-on with the German car maker’s 3-series sedan. Mark Reuss hopes the car would prove that a Cadillac can be every bit as exciting as the best that BMW has to offer.