Tag Archive | "GM"

GM Moves on with In-car Facebook App

DETROIT — General Motors Co. still plans to roll out its new OnStar feature that allows drivers to listen to Facebook messages and update their status, despite pointed criticism from Transportation Secretary Ray LaHood.

OnStar President Chris Preuss said the company is confident in the safety of the feature after conducting driving tests and has no plans to drop it, The Detroit News reported. The application can also be extended to other social networking sites like Twitter.

“Not only is it safe — all things relative in the vehicle — it’s actually a benign activity,” Preuss said.

Preuss’ comments were GM’s first public response to LaHood’s concerns. LaHood has criticized automakers in recent weeks for not doing more to combat distracted driving. Last week, LaHood specifically knocked the idea of letting drivers have audio access to social media sites like Facebook, telling Bloomberg News that it’s “the biggest distraction of all.”

“We must all go further,” LaHood told reporters last month. “We’ve seen news stories about carmakers adding technologies in vehicles that let drivers update Facebook, surf the Web, or do any number of other things instead of driving safely.”

GM hasn’t yet offered the new feature to all of OnStar’s 5.5 million subscribers. The hands-free feature is being tested mainly by GM employees and some customers who have 2008 or newer GM models.

Ford Motor Co. has no plans to allow users of its popular Sync system to listen to Facebook updates or allow them to update their status, company spokesman Alan Hall said.

Ford does plan to allow users tohave Twitter messages read to them via Sync by year’s end, starting with the Ford Fiesta. But users won’t be allowed to post Twitter messages verbally.Syncalready allows users to have their text messages read aloud, make voice-activated calls and respond to text messages by choosing from pre-assigned responses, such as “yes,” “no” or “I love you.”

“We know people want to stay connected in their vehicles, so Ford is continuing to deliver that connectivity for them responsibly and safely,” said Susan Cischke, Ford’s group vice president of sustainability, environment and safety engineering.

“Our Sync research backs up what most of us instinctively know — that it is better while driving to place a call using a voice interface than dialing manually, because you can keep your hands on the wheel and eyes on the road,” she added.

GM, in its safety testing, has found that the number of airbag deployments was lower during the activation of hands-free calls than during other types of driving, Preuss said.

“We don’t know why that is, and we need to study it,” he said. “Are we trying to solve problems and, if so, can technology play that role? Shouldn’t data guide us on where that’s going?”

Preuss said the feature has been demonstrated to the National Highway Traffic Safety Administration.

Transportation Department spokeswoman Olivia Alair declined to comment.

LaHood has said he wants to crack down on some of these features in new vehicles.

“Features that pull drivers’ hands, eyes and attention away from the road are distractions, period,” LaHood said. “So I’m going to meet with and work with the auto companies to develop new safety guidelines for technology in vehicles. Together, let’s put safety before entertainment.”

LaHood plans to meet with automakers to press the issue of in-vehicle distractions.

The Alliance of Automobile Manufacturers, which represents Detroit’s Big Three automakers, Toyota Motor Corp. and seven others, said automakers are already acting responsibly.

Automakers support “in-vehicle technology functions in a way that allows drivers to still focus on the road,” said Wade Newton, an alliance spokesman.

Policymakers, he said, must balance “two things: the fact that we know drivers will do certain things while driving and how technology can make it safer. And it will involve education, appropriate laws and highly visible enforcement so the driving public understands how important it is to focus on the road.”

When asked this week whether he is considering endorsing a ban on all in-car cell phone use, LaHood didn’t directly answer. He said his focus is to prod the 20 remaining states that haven’t banned texting behind the wheel to do so, and to convince Congress to pass a comprehensive distracted driving law.

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GM to Set Aside 5% of IPO Offering

DETROIT – General Motors Co. has asked banks underwriting its initial public stock offering to set aside 5 percent of common stock shares for sale to more than 600,000 U.S. and Canadian workers, retirees and dealers, according to a Securities and Exchange Commission filing Thursday. These potential shareholders will have an opportunity to purchase shares directly during the IPO, an offering typically reserved for people with brokerage firms.

GM notified workers, retirees and dealers this week that they must preregister with the company’s direct share program to be eligible to buy IPO shares. Each must buy at least $1,000 in GM stock.

In its SEC filing Thursday, the Detroit-based automaker set the percentage — 5 percent — allocated to this group.

Buyers must register by mail by Tuesday, or online by Oct. 22. Those who don’t register won’t be able to buy shares at the guaranteed IPO price.

GM has about 79,000 U.S. and Canadian employees and 517,000 retirees and surviving spouses. The Detroit automaker will have 4,500 U.S. dealers at the end of 2010.

The automaker also disclosed Thursday that a conflict of interest exists between Citigroup Inc. and the U.S. Treasury Department, which owns a 61 percent stake in GM, as well as 12.4 percent in common shares of Citigroup. The conflict, while not unusual on Wall Street when investment banks are tapped to underwrite IPOs, requires Citigroup to ask its clients first before making sales to their discretionary accounts.

Such conflicts of interest aren’t likely to bar Citigroup from participating in the IPO as long as GM has another independent underwriter participating, said Matt Therian, a research analyst at Renaissance Capital, which tracks IPOs.

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GM on Track for Mid-November IPO

NEW YORK – General Motors Co. is on track to move ahead with its initial public offering during the week of Nov. 15 after a recent round of meetings with sovereign wealth funds, sources with knowledge of preparation for the deal said.

The GM IPO has been closely watched both because of its expected scale and because of the involvement of the U.S. government, which is looking to the landmark stock offering to reduce its nearly 61 percent stake in the automaker, reported Reuters.

Bankers representing GM met with sovereign wealth funds in Asia and the Middle East over the past two weeks to make the case that the automaker has emerged from its 2009 bankruptcy as a leaner and more nimble competitor, two of the sources said.

Singapore-based GIC and Temasek Holdings, Kuwait Investment Authority, Qatar Investment Authority and the Abu Dhabi Investment Authority were all approached as part of those meetings, one of the sources said.

At the same time, analysts from the 10 underwriter banks involved in the GM IPO began a series of meetings last week aimed at reaching a consensus on the market value the top U.S. automaker, two of the sources said.

After analysts come to consensus on that valuation, GM will offer investors a discount of 20 percent from that level in pricing shares for the IPO, three sources said.

That margin of discount is part of a standard practice in IPOs to reward investors for taking a risk on a new issue.

GM needs to have a market valuation of about $67 billion if U.S. taxpayers are to break even on the common stock the U.S. Treasury holds.

The U.S. Treasury is expected to be the major seller of common stock in the GM IPO and is prepared to take a loss on the initial sale of stock, sources have said.

The governments of Canada and Ontario will likely follow the lead of the U.S. government as sellers, two sources said. As part of the GM bailout, Canada offered the automaker funding and took a stake of 11.7 percent in return.

It remains unclear if a trust fund affiliated with the United Auto Workers union will sell part of its stake in the IPO. The union trust, which was established to pay for retiree healthcare costs, holds 17.5 percent of GM.

The UAW trust fund – known as the union’s VEBA – has been weighing whether it would be better served by waiting to sell stock in GM at subsequent offerings that could come at a higher price, one person with knowledge of the deliberations said.

The GM IPO is expected to price on Nov. 17 with the debut on Nov. 18, three of the sources said.

People involved in the deal have said shares would likely price between $20 and $25 after a stock split by the automaker. On Wednesday, GM Chairman Ed Whitacre also said he thought that was a likely range for the IPO price.

“I can’t say how much we’ll sell, but I can say we’ll have a successful IPO sometime in November,” Whitacre said. “It’s going to work, and it was absolutely the right thing to save this company.

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GM Gets Same Credit Rating as Ford from Moody’s

DETROIT – General Motors Co. was given the same credit rating by Moody’s Investors Service as Ford Motor Co., citing the largest U.S. automaker’s low costs and position in the global vehicle market, reported Bloomberg.

GM was rated Ba2, the second level below investment grade, with a stable outlook, New York-based Moody’s said today in a statement. The firm rates an anticipated GM secured credit facility as Baa3, the lowest investment-grade level. GM hasn’t publicly disclosed the facility’s terms.

“GM has the potential to become a more formidable player in the global automotive arena,” J. Bruce Clark, a Moody’s senior vice president, wrote today in the statement. Clark cited GM’s position in North America, Asia and Latin America, and said GM would have “one of the more balanced global footprints in the industry” if it fixes the unprofitable European business.

Moody’s raised Ford’s rating by two levels to Ba2 on Oct. 8, saying the automaker’s operating performance “significantly exceeded” expectations. The upgrade to Ford’s corporate family rating was the fifth by Moody’s in 13 months.

GM, 61 percent owned by the U.S. Treasury Department, needs to trim its $26 billion unfunded pension liability to “contend with the industry’s ongoing cyclicality,” Clark wrote today. The company’s restructuring of its European operations will take “at least another year,” Moody’s said.

S&P rating

Standard & Poor’s gave GM a BB- rating on Oct. 7, one level higher than Ford’s B+, because of its improved balance sheet and prospects for generating cash from operations in markets such as China and Brazil.

GM lowered its funded debt to about $8 billion from about $50 billion as part of its bankruptcy last year, Moody’s said today. The company is planning an initial public offering to reduce government stakes.

Fitch Ratings gave GM a BB- rating on Oct. 6, the same as Ford’s. GM and the U.S. Treasury aim to hold an $8 billion to $10 billion IPO in November, two people familiar with the plans said last month.

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