Tag Archive | "General Motors Co."

GM to Keep 900 More Dealerships than Planned

GM North America President Mark Reuss has told The Associated Press that the automaker should wind up with about 5,000 dealers in July. That’s the end of a process that allows dealers to appeal GM’s decision.

The company originally planned to have only 4,100 dealers across the country.

The decision reflects a shift in strategy from GM’s previous regime and could save thousands of jobs.

GM wants to avoid the expense and time of the closures. Reuss and other new leaders at the company also feel shedding dealers isn’t critical for GM to achieve profitability.

GM won’t estimate how many jobs the decision will save, but an auto industry trade group says about 50 people work at an average new-car dealership.

GM and Chrysler announced plans to shed nearly 2,800 dealers last year as part of their bankruptcy reorganizations.

Both companies said their U.S. sales didn’t justify so many dealers, and that closing some would make the remaining ones more profitable and allow them to invest in nicer facilities, advertising and training.

GM had around 6,000 U.S. dealers when it went into bankruptcy protection, while Chrysler had 3,800.

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GM Sets Up Venture-Capital Unit

General Motors Co. has created a venture-capital subsidiary designed to help the company “identify and develop innovative technologies,” The Wall Street Journal reported.

General Motors Ventures LLC will be led by Jon Lauckner, who was GM’s vice president of global product planning, effective July 1. The endeavor was funded with an initial $100 million investment. It is currently “exploring equity investments in a number of auto-related technologies and business models,” GM said.

“We are constantly looking for ways to deliver the best technology for our customers,” said Stephen J. Girsky, vice chairman, corporate strategy and new business development. “Our goal is to nurture these innovative technologies to help bring them to market, and to ensure our customers have access to the best technology available.”

GM, one of the automakers slammed by the recession, has seen recent signs of strength. The company last month reported income of $865 million in the first three months of the year and generated $1 billion in cash. The results, which came 10 months after GM’s exit from bankruptcy, surpassed expectations on Wall Street, making a profitable 2010 seem less out of reach.

It said earlier this week that domestic sales of its four continuing brands jumped 32 percent in May on continued strengthened demand for crossovers and cars.

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Chrysler Sales up 33% for May; Ford, GM Rise 23%, 16.6%

Chrysler Group LLC, Ford Motor Co. and General Motors Co. posted double-digit sales increases last month thanks to new vehicles and strong fleet sales, The Detroit News reported.

Chrysler led Detroit’s Big Three automakers with a 33 percent increase compared to a year ago, when it was in bankruptcy. Ford sales rose 23 percent, and GM’s rose 16.6 percent.

Excluding castoff brands Pontiac, Hummer and Saturn, sales of Chevrolet, Buick, GMC and Cadillac vehicles rose almost 32 percent compared to May 2009.

Last month, GM sold 223,822 vehicles and posted the fifth consecutive month of double-digit sales gains for the four core brands.

Ford, meanwhile, sold 192,253 vehicles last month, and the Dearborn automaker marked the sixth consecutive month of at least a 20 percent sales gain.

Toyota Motor Corp. reported a 6.7 percent rise in May sales to 162,813 vehicles. The Toyota division posted a 3.6 percent sales increase to 140,597 cars and light trucks, while premium Lexus sales jumped 31.3 percent to 22,216 vehicles.

Nissan Motor Co. sold 83,764 vehicles last month, a 24.1 percent increase, while Honda Motor Co.’s sales rose 19.1 percent to 117,173 vehicles.

Hyundai Motor Co. reported a 33 percent sales jump to 49,045 vehicles in May, bolstered by strong demand for the new Sonata and Tucson models.

Chrysler sold 104,819 vehicles, the first time the Auburn Hills automaker has crossed the 100,000 mark since March 2009.

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Treasury Said to Pick Lead Bank for GM IPO as Soon as Next Week

The U.S. Treasury and General Motors Co. may choose a lead underwriter for the automaker’s initial public offering as soon as next week, two people familiar with the matter told Bloomberg News.

GM, 61 percent owned by the U.S., must decide soon on an underwriter in order to sell shares publicly by the fourth quarter, said the people, who asked not to be identified revealing private information. The Treasury, which helped pay for the automaker’s restructuring last year, probably will have more say than the automaker in the selection, the people said.

CEO Ed Whitacre, appointed chairman when GM emerged from bankruptcy in July, has said the automaker may sell shares to the public as early as this year. GM needs to begin shortly to sell stock before the Nov. 2 congressional elections, said Joe Phillippi, president of AutoTrends Consulting in Short Hills, New Jersey.

“If they want to get it done in the fourth quarter, they have to start now,” he said yesterday in an interview. “This isn’t some little tech company. It’s a big story. This will be a global road show.”

Randy Arickx, a GM spokesman, said yesterday that he wasn’t aware of any imminent decision. Andrew Williams, a spokesman at the Treasury Department, didn’t return telephone calls or an e- mail request seeking comment yesterday before the Memorial Day holiday weekend.

GM and Treasury officials met with senior executives from Goldman Sachs Group Inc., Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and Morgan Stanley this month in Washington about hiring a lead underwriter, said one of the people.

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GM Tells Union It Won't Pay Workers to Leave

General Motors Co. has told the United Auto Workers it will no longer pay union employees to leave the company, a reversal for an auto maker that has spent billions of dollars over the years coaxing workers to quit, reported The Wall Street Journal.

The UAW has been pressing GM to consider another round of buyouts and retirement incentives similar to programs that ushered out 66,000 hourly workers since 2006. But in a recent meeting with union-local leaders, top UAW officials said GM has indicated it has no intention of extending such a program, according to several officials who attended.

Union concessions made in recent years along with GM’s improving sales mean the company no longer needs early-retirement programs and buyout incentives to cut costs.

The change puts the union in the unusual position of trying to convince the company to clear out more workers. If GM doesn’t thin its ranks, scores of veteran factory workers in the next few years will find themselves without jobs or unemployment benefits.

Laid-off factory workers once could remain on GM’s payroll for years receiving almost full pay and benefits, but now they can remain on the rolls no longer than two years before their company-paid unemployement benefits run out. The change came from a deal GM struck with the union last year before entering bankruptcy protection.

The agreement also gives GM more flexibilty to move workers around the country to fill openings as they arise, reducing the need to the company to hire new employees.

At the same time, a leaner GM, after years of shutting factories, is racing to add capacity to meet growing demand for some of its vehicles. Hundreds of workers back are back on the job as the company has added shifts and overtime at several North American factories.

A UAW spokesperson couldn’t be immediately reached for comment.

GM spokeswoman Kim Carpenter said that rather than launching a new buyout program, GM will use flexibility allowed under its UAW contract to adjust manpower up and down. In addition to being able to move workers more freely from plant to plant, GM can hire temporary labor to meet short-term needs.

In the 10 months since GM emerged from its government-financed bankruptcy, the car maker says it has restored or created 9,100 jobs and invested $2.3 billion in U.S. and Canadian factories.

GM has around 5,000 laid-off workers receiving benefits. Along with the cost of those workers, GM also has been unable hire new workers at a lower wage agreed to by the UAW because the laid-off veterans have first dibs on any new jobs, and they would return at the higher pay scale.

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GM Posts $865 Million Net Income in Push for Offering

General Motors Co. reported first-quarter net income of $865 million, helped by higher production and smaller discounts, as the maker of the GMC Terrain and the Chevrolet Equinox works toward an initial public offering, Bloomberg reported.

Operating profit was $1.2 billion in the first three months of the year, and the company generated $1 billion in free cash flow, Detroit-based GM said in a statement. Revenue rose 40 percent from the same period a year earlier to $31.5 billion.

CEO Ed Whitacre has said reporting a profit is a necessary milestone as the biggest U.S. automaker seeks freedom from government ownership. GM, which emerged from bankruptcy protection in July, is considering a return to the auto-lending business to make its offering more appealing to investors, people familiar with the plans said last week.

“The unfortunate process of bankruptcy is yielding positive results,” Rebecca Lindland, an analyst at IHS Global Insight in Lexington, Mass., said in an interview. “It certainly keeps them on track for an IPO.”

GM North America and the company’s international operations each had profits before interest and taxes of $1.2 billion, while the automaker had a $500 million loss in Europe.

GM’s 8.375 percent bonds due in July 2033 rose 2.125 cents to 37 cents on the dollar at 10:24 a.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The debt was issued by predecessor General Motors Corp. and will convert into equity in the new GM.

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