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President Obama: (LARRY DOWNING/REUTERS) THE AUTO INDUSTRY BAILOUT U.S. plans $30.1 billion financing for GM bankruptcy White House outlines 'hands off' ownership philosophy David Barkholz

The Obama Administration expects to take General Motors into Chapter 11 bankruptcy Monday and quickly get the carmaker out with $30.1 billion in bankruptcy financing, the White House said in a statement tonight.  story

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GM makes new bondholder offer ahead of bankruptcy

DETROIT (Reuters) -- General Motors and the U.S. Treasury today made an improved equity exchange offer to bondholders with $27 billion in debt intended to pave the way for a quick bankruptcy process for the automaker. Under the proposed deal, which GM said was supported by creditors representing about 20 percent of its debt, bondholders would be offered 10 percent of a reorganized company and given warrants to purchase another 15 percent. In exchange for the improved payout, creditors would agree not to oppose a move to sell GM's profitable assets to a new company funded by the U.S. government in a fast-track bankruptcy process. The exchange offer will be open to bondholders until 5 p.m ET on Saturday The U.S. Treasury would own 72.5 percent of the new GM coming out of a bankruptcy sale process, while a trust affiliated with the United Auto Workers union would own 17.5 percent, GM said in a filing with securities regulators. "The U.S. Treasury proposal announced today provides incentives for GM's unsecured bondholders to support GM's restructuring efforts in the event GM decides to pursue a 363 sale as part of a bankruptcy proceeding," a GM statement said today. "Implementation of this proposal would result in a New GM with a healthy balance sheet, putting the new company on a clear path toward long-term viability and success." ...  story

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NewsOXY 2010 Ford Fusion Hybrid Auto Tax Credit Evolves NewsOXY - Orlando,FL,USA The auto tax credit for the 2010 Ford Fusion Hybrid has decreased since April. Ford Hybrid vehicles still offer tax credits which decrease on Fusion autos ... See all stories on this topic Toyota loses luster with suppliers Survey: Ford has made strides in supplier relations Toyota has been dethroned as the automaker in North America with the best supplier relations in an annual ranking by suppliers. And Ford Motor Co. is getting far better grades. According to a survey released this week by Planning Perspectives Inc. of suburban Detroit, Honda Motor Co. has the best relations with its suppliers. But Honda and No. 2 Toyota Motor Corp. both slid to "adequate," from...  FULL STORY  NEWS ANALYSIS Obama's mpg rules force painful choices for automakers The numbers are eye-popping. The government wants new vehicles sold in the 2016 model year to average 35.5 mpg vs. 25.3 mpg this year. So does this mean that U.S. roads will look like Europe's -- a sea of small and smaller cars with hardly a pickup or SUV in sight? No. The new-vehicle fleet in 2016 will look remarkably similar to today's lineup, with pickups, SUVs and large, medium and...  FULL STORY  Chrysler memo says 789 dealers will close by June 9 Bradford Wernle

Chrysler LLC will eliminate 789 dealers, or 25 percent of its U.S. network, by June 9, according to a memo sent today to retailers in one sales region. Dealers are learning of their fate via UPS letters to be delivered this morning, the memo says. Dealers will get 23 business days for a "court review" of their cases, according to the memo, from a sales manager to district dealers. "All of this information is subject to change," the memo says. Chrysler officials said they could not comment until documents are filed in U.S. Bankruptcy Court. "Chrysler will not be required [per bankruptcy law] to buy back the vehicles or tools and parts from rejected dealers," the memo says. "We will match you with an accepted dealers(s) to buy your parts, tools and vehicles." The memo says Chrysler will send letters to 4 million customers of the rejected dealers after June 9, when the stores are to close. In the memo, Chrysler says that after the closings, 80 percent of its dealers will carry all three brands under one roof, compared with 62 percent currently. Since early 2008, Chrysler has been consolidating its dealer body under Project Genesis, a plan to put the Dodge, Jeep and Chrysler brands under one roof wherever possible. ...  story

GM details plans to wipe out current shareholders

DETROIT (Reuters) -- General Motors on Tuesday detailed plans to all but wipe out the holdings of remaining shareholders by issuing up to 60 billion new shares in a bid to pay off debt to the U.S. government, bondholders and the UAW. The unusual plan, which was detailed in a filing with U.S. securities regulators, would only need the approval of the U.S. Treasury to proceed since the U.S. government would be the majority shareholder of a new GM, the company said. The flood of new stock issuance that could be unleashed has been widely expected by analysts who have long warned that GM's shares could be worthless whether the company restructures out of court or in bankruptcy. The debt-for-equity exchanges detailed in the filing with the Securities and Exchange Commission would leave GM's stock investors with just 1 percent of the equity in a restructured automaker, ending a long run when the Dow component was seen as a bellwether for the strength of the broader U.S. economy. GM shares closed on Tuesday at $1.85 on the New York Stock Exchange. The stock would be worth just over 1 cent if the first phase of GM's restructuring moves forward as described. Once GM has issued new shares to pay off its debt to the U.S. government, bondholders and its major union, it said it would then undertake a 1-for-100 reverse stock split. Such a move would take the nominal value of the stock back to near where it had been before the flood of new shares. But in the process, GM's existing shareholders would see their stake in the 100-year-old automaker all but wiped out. The automaker said it expected to draw another $2.6 billion from the U.S. Treasury before a June 1 deadline set by the Obama administration for it to reach agreements with all of its key stakeholders. That borrowing would take GM's debt to the U.S. government to $18 billion, and the automaker said it expected to have to borrow a total of nearly $27 billion. ...  story

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Penske said to be considering bid for GM's Saturn   Roger Penske: Studying Saturn

Roger Penske is considering a bid for General Motors' Saturn brand, a source familiar with the auto entrepreneur's plans said today. Penske is studying the issue but has made no proposals, said the source, who spoke on condition of anonymity. Penske, whose Penske Automotive Group dealership chain distributes Daimler AG's Smart microcars in the United States, is the second entity known to have an interest in Saturn. In April, an investor group called Telesto Ventures said it wants to acquire Saturn's retail operations and provide dealers with vehicles from GM through 2011. After that, most vehicles would come from overseas manufacturers. The Wall Street Journal reported Penske's interest late yesterday. Penske, 72, is CEO of the suburban Detroit dealership group, which ranks No. 2 behind AutoNation Inc. on the Automotive News list of the top 125 U.S. auto retailers with 2008 new-vehicle sales of 171,872. ...  story

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Chrissie Thompson

Ford, Honda and General Motors posted their smallest sales declines of the year in April, while Nissan and Toyota had their largest as the industry struggled to improve from depressed levels of February and March. Declines of 33 percent at Ford Motor Co. and GM were in line with analysts' forecasts, as was American Honda's drop of 25 percent. Nissan North America's 37.8 percent slide and Toyota Motor Sales U.S.A.'s 41.9 percent tumble were steeper than forecasts. "Reports that the light-vehicle sales rate could reach 10 million units turned out to be somewhat exaggerated," Ford sales analyst George Pipas said today during a conference call. He predicted that April's seasonally adjusted sales rate would be lower than March's. Analysts had forecast a seasonally adjusted rate of 9.8 million vehicles, the same as in January yet still far below the 14.7 million rate of April 2008. Demand fell to 9.1 million units in February, the lowest since December 1981, before increasing to 9.3 million in March. ...  story

Link: Auto Industry News
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