General Motors Bankrupt! U.S. Government Expected To Take A 60 Percent Ownership Stake

BREAKING NEWS! BREAKING NEWS!

As expected GM filed for federal bankruptcy protection today, in what most analyst agree will be an organized structured bankruptcy process. The federal government is to take a 60 percent ownership stake while the Canadian Government takes a 12.5 percent stake, the UAW has a 17.5 percent stake and bondholders will have a 10 percent ownership stake.

What should be the largest industrial bankruptcy in U.S. history should pave the way for a new GM if the Obama administration plan moves through federal court smoothly as expected.

A Chief Restructuring Officer has been appointed, Al Koch Managing Director of AlixPartners, who steered Kmart through it's Chapter 11 reorganization. Mr. Koch is expected to be the point person in dismantling the "Old" GM (parts, assets, etc.) into the "New" GM, he is also expected to steer the management team assembled to close the "Old" GM when the company emerges from bankruptcy.

The bankruptcy will effect many constituents, including auto warranties (the federal government is currently backing the warranties), retirees pensions, auto suppliers, auto dealerships, shareholders (expect nothing), employee 401k plans and others.

The company should emerge much leaner which should include Chevrolet, Buick, Cadillac and GMC, the companies other brands are expected to be sold off and if buyers can't be found they will be shuttered.

Once the icon of American Industry and the world, GM is far from it's glory days, can it survive and thrive once again, I believe it will, to survive in this current economic crisis, it had to become smaller and leaner and this bankruptcy filing was the only way to get all of it's stakeholders to agree on the restructuring necessary, which includes the Federal government assistance. It would have never survived without the U.S. Government intervening on it's behalf and many more companies would have been brought down with it, including Ford Motor Company.

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That Car Guy

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A Nebraska Auto Dealer Faces Vehicle Theft Charges...

Nebraska auto dealer Allen Patch, the owner of a Ford Lincoln Mercury dealer and Toyota dealership in Scotts Bluff, Nebraska faces felony theft charges for the theft of 81 new vehicles from his own dealership and two of his employees .

As reported by Automotive News, the dealer used fake cashier's checks to pay a vehicle transport company to haul 9 auto carriers late at night on 3/9/09 said John Childress, chief deputy attorney in Scotts Bluff County.

Employees arrived the next day to find the dealership virtually empty of new vehicles and are shocked by the situation, especially with the management missing. The pieces are starting to fall into place as many of the employees started noticing that the owners of the store started requesting temporary titles for the vehicles that were transported away.

The FBI is reporting that some vehicles have been recovered and have been turning up in several places such as Utah, Las Vegas and 7 vehicles at Bargain Buggy's outside Salt Lake City.

Allen Patch the owner of the dealership and Rachel Falt the Controller, were arrested on Wednesday 3/11/09 and Rick Covello the General Manager turned himself in on 3/12/09.

With many businesses struggling, I hope that this is not what many business people would turned to to resolve financial pressures. There are alternatives to resolve your financial hardship including bankruptcy. The Florida Auto Dealers Association is hosting seminars on bankruptcy protection for it's members as many dealers and other businesses are facing mounting pressure because of not having access to credit to operate their businesses.

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That Car Guy

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Auditors Have Raised "Substantial Doubt That General Motors Can Continue To Operate...

BREAKING NEWS! BREAKING NEWS!

The auditors (Deloitte & Touche LLP) for General Motors Corporation has raised 'substantial doubt" that the automaker can continue to operate given the economic and sales climate facing the auto industry. It's reports indicate that it may have to seek bankruptcy protection if it is unable to fully execute a tremendous restructuring of it's debt and finances.

GM communicate the results of the audit to the Securities and Exchange Commission today. The report said "The corporation's recurring losses from operations, stockholders' deficit, and inability to generate sufficient cash flow to meet its obligations and sustain its operations raise substantial doubt about its ability to continue as a going concern."

This will no doubt be a substantial blow to its stakeholders, dealers and customers and comes in the midst of ever growing government bailouts and request for more money from the U.S. Government. The automaker has already received more than $13.4 Billion dollars in federal money and is asking for another $16.6 Billion to keep its doors open.

I have voiced strong opinion that GM as a going concern will have to sell off divisions and completely reinvent itself, Change its focus and culture, similar to what GE did a couple of decades ago. The company will be forced, against much opposition to produce and manufacture its vehicles in other parts of the world, Mexico, India, China and other areas to be shipped back for sale. The cost of labor in those markets are substantially lower and the company made huge economic mistakes beginning with exporting manufacturing to Mexico and Canada but under increase pressure for price concessions in manufacturing and an already eroded base of customers it is forced too.

The economic model that GM enjoyed throughout the history of the company was substantially diminished when the company did not examine the true economic impact of displacing whole communities and families who were building, supplying and purchasing there products.

The simple math that was examined was that they would save X amount of dollars with reduced labor cost, simple savings. However the Micro and Macro Economic impact was far more substantial, with entire communities dependent and loyal to the brands, those loyal, beholden legions of buyers were left to make new choices and develop new loyalties and in most cases those folks became bitter and punished GM with there purchasing decisions.

As market share eroded and quality issues became the focus, the brands started losing luster and customers. This will be the greatest lesson in modern business history on how a brand could be destroyed internally with bad decisions. But, it does have a chance to remake itself, just not in it's current incarnation, it will have to be a trimmed down version of itself that will have a chance to improve and grow from its past.

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That Car Guy

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Have We Found A Better Place?

Project Better Place has been hard at work developing a variant on the Electric Vehicle Vehicle debate. Project Better Place, founder and Chief Executive Shai Agassi, indicates that the company is set to launch it's swappable-battery electric car program in 2010.

Project Better Place has designed a radically different "infrastructure" for purchasing and driving there vehicles, a system in which the company would install charging and battery swap stations. At the swapping stations drivers would be able to put in fully rechargeable lithium ion batteries in the same amount of time that it would take to fill up a gasoline powered vehicle.

But that's not all folks, Project Better Place business model revolutionizes the concept of purchasing a vehicle from Project Better Place, with Project Better Place you pay much like you do when utilizing a cell phone. From the Better Place Website: "Think of it like this: we pay mobile providers for minute-by-minute access to cell towers connected together in cellular networks. Truth is, we pay comparatively little - or next to nothing - for the phones themselves. After all, what you're really buying is air time, not a box with buttons. The same model works for transportation. Just replace the phone with an electric car, replace the cell towers with battery recharge stations, and replace the cellular networks with an electric grid. Now you're buying miles, not minutes."

The drivers of there vehicles would be paying for access to a network of charging spots and conveniently located battery exchange stations powered by renewable energy. Drivers would pay for the miles that they drive and would be made to be more affordable, even free in some markets, this would be accomplished by financial and environmental incentives to add drivers into the network. Project Better Place would operate the electric recharge grid that brings everything together.

The project is getting major backing from the Israeli government and has a alliance with Renault-Nissan that is developing the vehicle and the battery system and will invest $500 Million to $1 Billion dollars in the project over the next couple of years. The initiative has also raised another $200 Million in venture backing and has begun work on recharging networks in Israeli and Denmark. In addition Australia, Canada, California and Hawaii have committed to developing the infrastructure necessary to have the network available for consumers in those area's (Note to Better Place, on your website you indicate that California and Hawaii are countries, they are not, merely states within the USA).

I find that the effort is revolutionary, it will be interesting to follow the progress of this noble effort, some in the business and auto community are not giving the project much hope, however I am going to step back and examine the business model. If the company can sustain itself and find enough customers it may get some legs provided that the cost to operate does not shut out large numbers of consumers. I have not been able to find information to make an appropriate judgement until I can review those reports I will reserve judgement on it's success or failure.

I will say this, you will certainly have a lot of people thinking particularly if you can lower or meet the needs and demands of hungry consumers to go green and sustain a business model that does not require large chunks of up front money to spend on automobiles. I have a lot of questions that I want answered and I will report back when fully researched.

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That Car Guy

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MELTDOWN IN MOTOR CITY...

I invite everyone to tune in this Friday 3/6/09 at 2pm on National Radio Program WAMS as I discuss The Meltdown in Motor City: It May Be Too Late To Turn Detroit Around.

When: Friday 3/6/09 2pm

Where: Tune into WAMS Radio on www.blogtalkradio.com

Direct link: http://www.blogtalkradio.com/WAMS/2009/03/06/The-US-auto-meltdown-and-what-happens-next-this-Friday-on-WAMS

What: You can join in on the discussion and participate with questions by using the link provided or calling in at (718) 506-1944.

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That Car Guy

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Auto Dealerships Need Floorplan Assistance And Access To Credit If they Are Expected To Survive...

The retail auto industry is in the worst financial crisis in its history and the future doesn't look very promising for most auto dealers. In the early 1900's, auto dealers came to the rescue of the auto manufacturers with loans and the ability to purchase more inventory to meet the needs of the fledgling auto industry. That was when local banks and other financial sources could step and assist because of the character and contributions that the local businessman contributed, loans were based on character and importance to the community. The days have changed and have they, auto dealers are in the fight of there life to find adequate sources to fund the purchase of vehicles needed for there businesses.

Dealers have been besieged with letters changing terms of there floor plan agreements and as NADA (National Auto Dealer Association) is putting it, there is a massive pullback from captive lenders, regional banks and others who specialize in lending to auto dealers. The pullback is not subjective as dealers with excellent repayment histories and have great collateral are seeing these lenders making demands that may not be met by the auto dealers.

NADA has taken the case to the Federal Government to intervene on the dealers behalf as it sees a potential for massive closing on the near horizon. They are requesting the government provide a commitment of $1 trillion dollars to increase the issuance and sale of securitized loans for buyers and dealer inventory to stem the tide of dealership closings because of the credit crisis.

The issue stands out because if not the potential for thousands of jobs lost of dealership employees, suppliers and other associated businesses could result in a deepening recession.

With banks continuing to receive aid and it not being circulated through loans and other instruments is confounding, what is the purpose of the banks receiving aid if they will not lend to businesses and individuals. At some point the public has to cry out and tell the government to stop as it really is a waste of taxpayers dollars since they are the ones footing the bill and these funds are not benefiting them or the economy. We are only preserving jobs for the bank executives and other bank employees with these funds and if it is meant to stimulate the economy then lets get the money circulating instead of providing the banks more funds so they can purchase other banks, that truly is a waste of taxpayer money.

The outlook for many dealers remains weak as the lenders are making it very difficult to operate with tight credit restrictions coupled with the already difficult retail marketplace.

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That Car Guy

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SAAB Is The First In A Line Of Manufacturers Who Will Be Forced To Seek Bankruptcy or Reorganization...

BREAKING NEWS! BREAKING NEWS! BREAKING NEWS!

What is sure to be a musical chair game of Auto Manufacturers worldwide who will be seeking bankruptcy protection, Saab the company owned by General Motors has filed for reorganization and bankruptcy protection from the Swedish court system.

Saab is seeking $1 Billion ($793 million euros) from General Motors to become self-financing as it goes through the process of breaking away from General Motors and become a "independent business entity". As it will concentrate its production, it's designing and engineering in Sweden.

GM has been asking the Swedish government for $600 Million Dollars to provide Saab a healthy balance sheet so that it can seek additional outside funding. GM said it would only provide Saab funding to support liquidity not to further support additional projected losses.

Expect Saab to be the first in a line of other automakers and brands to find protection from creditors as the credit crisis worsens. If large, medium and small businesses can't get access to loans for development, inventory and financing of thier products then the only way this mess is going is down, that's why I couldn't support the bailout for the banks and finance companies from the beginning of the meltdown.

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That Car Guy

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General Motors And Chrysler Are Back To Begging For More Money...

BREAKING NEWS! BREAKING NEWS!

The Big 3 Automakers were back begging for more bailout money from the U.S. Government and filing restructuring plans to support there efforts. Ford it should be noted has not requested any funds to survive, although it says it would need funds if GM or Chrysler should fail.

General Motors has requested $16.6 Billion dollars and Chrysler has submitted a plan calling for $5 Billion dollars and indicate that thousands more jobs will be lost there hands are out.

Chrysler projects the U.S. auto market will sell only 10.1 million vehicles the lowest output in 40 years, which is less than the 11.1 million units that it predicted when they received there first loan from the Treasury. This lower forecast is in line with the reason why they have increased the amount of additional funds that they indicated is need to keep the automaker afloat.

Chrysler also announced that it will eliminate the Chrysler Aspen, Dodge Durango and PT Cruiser models from its line up. In addition it announced that the company will comply with the Federal Governments guidelines in reducing executive compensation and stated that it had eliminated company matching employee 401(k) plans and many other cost cuts.

Chrysler further made proposals to sell over $300 million dollars in "non earning assets" in 2009 and states that it will begin paying back the loan beginning in 2012. The proposal was contained in 199 pages that it submitted to the Treasury and included what the company would due should it face bankruptcy.

General Motors, Ford and Chrysler as indicated by the release of a statement from the UAW union has reached tentative agreements on making changes to the 2007 labor contracts. The UAW also stated that ongoing talks are still going regarding funding retiree health care obligations that the union has agreed that it would take over next year.

General Motors is in desperate need of $16.6 Billion dollars and may need upwards of $30 Billion dollars in government loans as it submitted its restructuring plans to the Treasury Today (2/17/09). The plan includes eliminating 47,000 jobs and closing 5 more U.S. factories. The company is also planning on eliminating or selling its Saturn, Hummer and Saab brands.

Commentary: I see a future in which the U.S. will not be manufacturing any or very very few so-called American brands here in the states, the cost to manufacture vehicles with labor cost and other monetary factors make the cost to high and you can't build a business case to support it, when the U.S. is competing with other countries who's labor cost are considerably less than the U.S.. Any business model that makes since has many factors to consider and importing these vehicles from countries that have lower labor cost and are emerging as industrial centers will become standard within the next 6-10 years.

I will report on the GM plan as I research the plan more thoroughly.

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That Car Guy

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There Back! The United States senate voted to make Auto Loan Interest and Sales Tax Deductible on Income Taxes...

BREAKING NEWS! BREAKING NEWS!

The United States Senate voted today to allow automotive loan interest and sales taxes on vehicle purchases deductible on federal income taxes, a move that has not been around since 1986. The proposal that has been pushed forward by the National Automobile dealers Association (NADA) was added to an economic stimulus bill that had been under major debate in the Senate, the final vote tally was 71-26.

This provision that was not in the original version passed in the House bill, that version had more than $800 Billion Dollar package of spending increases and tax cuts.

A conference committee still has to decide whether the provision stays or goes, the bill is a top priority of President Obama's stimulus package. The bill if passed by the House and the Senate will allow deductions on interest and taxes on auto loans for the first time since 1986.

The NADA states that the measure will provide consumers to save on average $1500.00 on a $25,000.00 vehicle.

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That Car Guy

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Think Automotive Has Halted Production As They Seek Capital... Could They Be In Trouble Without The Norwegian Government's Assistance...

BREAKING NEWS! BREAKING NEWS! BREAKING NEWS!

Think Global a Norwegian automotive company who was looking to begin selling vehicles in the United States in 2009-2010 has halted production as announced by CEO Richard Canny. Richard Canny has described the company as in "urgent financial distress". The announcement has set back the company which is considering bankruptcy if the Norwegian government does not step up to assist the ailing company.

The Think City all electric plug in type vehicle has long been anticipated and was in production when the decision to stop production lines was made recently. The company has been hit hard by the world economic crisis and it's supplier's have been increasingly been more demanding and the company has found it difficult to meet short term working capital demands.

A series of press conferences have been lined up to discuss the companies future, I will keep you posted as I have been anticipating this vehicle for quite some time now.

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That Car Guy

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Finally a Lifeline... A Federal Bailout for General Motors and Chrysler, They Get $17.4 Billion Dollars...

BREAKING NEWS! BREAING NEWS! BREAKING NEWS!

We knew it was coming the lifeline that GM and Chrysler so desperately needed along with the supply chain and the rest of our nations economy. Now I am not endorsing the move although with what happened in the financial industry it was necessary, when the Federal Government bailed out that sector, which started this slippery slope that we are now on.

I will always contend that when Treasury Secretary Paulson pitched the idea that the world was collapsing, I found it unsettling and upon further dissection you find that the very nature of bailing out the financial sector has created an enormous economic vacuum. The only people that will come out ahead is the financial institutions that got us primarily in this mess, it doesn't make since. We rewarded horrible ethics and accounting by the institutions in which businesses and consumers rely on and in turn they are not recirculating taxpayer money back into the system and no one is holding them accountable, that was one of the very reason for the bailout to get money flowing back into the system, yet these institutions are buying other banks and not helping the American public. I have written before that we did not need a bailout to make these acquisitions happen, a free market would have corrected the mess, there is precedent, the weak get gobbled up by the strong, their would have been structured bankruptcies people would have still made their payments and the economy would rebound.

But what President Bush and Secretary Paulson did was bail out their buddies on Wall Street to save their fortunes and their jobs, how else can you explain the lack of accountability, lack of a plan and lack of oversight. The financial industry gets access to $700 Billion dollars and no one stops to say, aren't these the guys who got our country into this mess why are they still guiding the ship.

They are demanding more from the automakers who actually make products, that creates jobs, who's products recirculate and get sold again to employ even more people than the financial services industry. Our government is almost in attack mode against labor and the wages and benefits paid to these workers, yet no one blinks an eye at the outrages compensation packages and bonuses paid to Wall Street types over the years. Have you seen what a typical Wall Street broker makes and the yearly bonuses paid to them in comparison to the rest of the nation's wage earners, it's almost obscene, working with other peoples money. Now I don't begrudge someone from earning a bunch of money, I am merely framing the context of what we have been hearing from some folks in Congress and our Senate over the last few weeks.

They are making the claim that the compensation of labor is out of line and did not make the same comparison to Wall Street, let's be fair about an assessment of wages. If Wall Street and bankers can't figure out how to make money with other peoples money and access to the Treasury Department, they do not need to be running these companies period, particularly now that they are exposed to the over hyped balance sheets and numerous ethics violations. The very nature of paying these outlandish salaries and bonuses on fictitious balance sheets is criminal in my mind, particularly when companies and individuals entrusted there hard earned money to these financial institutions that charge them for using there money.

So GM and Chrysler got a short term lifeline and that should last until March 2009, when a formal plan is expected to outline their future plans to turn these companies around. As expected Ford Motor Company did not participate in any immediate funds and is not expected to need any in the next few months, however as they have said that if GM or Chrysler fails they would most certainly need an infusion of cash.

General Motors received $9.4 billion and Chrysler $4 Billion Dollars, the government is calling for massive restructuring among labor, dealers among other measures it also includes the appointment of a Car Czar , which is expected to be Secretary Paulson (the absolute wrong choice), President elect Obama will have the opportunity to make his choice while the administrations transitions.

While under the current collapse of the economic framework of the Worlds economy, the decision to provide loans to the auto industry is merited, it is of my strong opinion that much of the future impact could have been softened if free market forces would have been exercised and allowed to work.

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That Car Guy

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Application for TARP Capitol Purchase Program... It takes more documents to get a mortgage...

I read recently that the application to get TARP Funds (Bailout Money) was only two (2) pages long, I did not believe the story. I said to myself surely the ability to get millions and in some case billions of dollars would require more information than what it would take for a consumer to get a home mortgage, it is taxpayers dollars after all.

I have done a little research, it was real easy, google is a wonderful research tool and sure enough I discovered that the entire application is six (6) pages long, the first four (4) pages are guidelines and the final two (2) pages the application with the first page only asking for name of the institution and contact names.

Ok, my first question is and what you won't find on the document, why do you need the money and my second question, how are you going to pay it back. Seriously, not one of those two questions are on the document, if I walked into my local bank branch and asked for a loan, the first question they ask is, what do you need the loan for.

I could go on, but this bailout is the most ridiculous plan in the history of free markets. Starting with the bailout of AIG, we were fed a story that said the banking system would collapse, the only thing that would have happened is that a lot of bankers and financiers would have lost their jobs and investments and another savvy investor would have scooped up the pieces after the collapse at bargain basement prices. Their is precedent and a structured dismantling would have provided enough free cash flows for the remaining entities.

President Bush and Secretary Paulson provided their pals the biggest safety net ever to Wall Street and will take taxpayers at least a decade to get a return if ever, I am sure the way these quick funds have been released their is no guarantees or measures to track the money or reporting back to the treasury on how the money is being spent as it surely is not benefiting the very taxpayers who have provided the funds.

Here is the link to the application below:

http://www.ustreas.gov/press/releases/reports/applicationguidelines.pdf

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That Car Guy

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Money As Debt...

I thought I would share this video before I begin a regular dialogue about the current financial crisis that is gripping the world economy. It should assist in understanding the banking and financial institutions that we are all indebted too.

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That Car Guy

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Hirsh: Make Big Banks Pay for Financial Crash | Newsweek Voices - Michael Hirsh | Newsweek.com

Hirsh: Make Big Banks Pay for Financial Crash Newsweek Voices - Michael Hirsh Newsweek.com

Check out this link...

Interesting report from Michael Hirsh

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General Motors is returning 2 leased jets... Announcement came after congressional scrutiny of the executives mode of travel...

BREAKING NEWS! BREAKING NEWS! BREAKING NEWS!

General Motors has just announced that it is returning two leased jets, after Congressional members criticised there high end travel arrangement to Washington DC this week. As executives of the Big 3 (GM, Ford and Chrysler) approached the U.S Government for a Federal Bailout Loan/Aid, after the session with Congress the executives have been hit hard with a wave of negative publicity.

As many taxpayers have put plainly, it just didn't send the right message as there companies are on the brink of Bankruptcy.

GM spokesperson Tom Wilkinson made a statement today that GM has made a decision to return two more of the companies seven leased jets it had at the beginning of the year, because of a "aggressive cut back in travel". Mr. Wilkinson said that the decision to return the leased jets was made before the congressional hearing and that the company returned two other jets in September.

It should be noted that the top executives at GM and Ford are required by their companies to fly private aircraft for security reason, according to it's filings with the Security and Exchange Commission. Cerberus the company that owns Chrysler, since it is private does not have to disclose it's requirements.

All of this begs to question the grasp that Mr. Wagoner has on the company, if a decision had been made to cut back why not state that at the hearing and lesson some of the negative face that was sure to be painted when the question was asked. If the decision had been made on effectively cutting more than half of your corporate jet fleet, that sends a clear message that the company is making changes.


Ford has not made a statement regarding any cutbacks in the use of it's corporate jets. It should be noted that Mark Fields, President of Ford North America, relinquished his use of a corporate jet nearly two years ago as criticism mounted when Ford was making huge cutbacks and losing billions of dollars.

I said it once and I will say it again, next time Mr. Wagoner, Mr, Mulally and Mr. Nardelli, fly into Virginia or Maryland and drive in or drive from New York or Detroit with a caravan of your latest products and future products with your business plan in hand demonstrating your commitment to be good stewards of the taxpayers money.

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That Car Guy

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The Big 3 flew to meet congress with there hands out on there private jets... Can someone use some PR (Public Relations) about now...

Lets be fair for one minute, the executives that run General Motors, Ford and Chrysler have very busy schedules and time is money in the world of big business. To fly commercial to Washington from Detroit and New York (where GM and Chrysler hang out) on there private corporate jets saves them time most certainly, have you seen the lines at JFK and Laguardia in the morning.

But as I have said for years, the PR machines for these companies is atrocious, starting with the notion that they do not make fuel efficient vehicles, that the quality of the vehicles are poor and the list goes on. The facts are they make more fuel efficient vehicles than the imports especially GM, the quality is on par if not better in many categories (does anyone check the recalls for Toyota and Nissan with NHTSA), these types of misstatements, myths and public opinion should have been dealt with long before this latest fiasco.

Who runs the PR machines for these people! GM produces a Internet commercial to address the misinformation that is circulating about it's need for money, yet the same advertising or PR firm can't say hey let's show up in Washington DC driving our new technology, can anyone say Chevy VOLT.

How about Ford or Chrysler's' Public Relations staff saying let's roll out the full array of our vehicles and demonstrate that we are innovative and have vehicles that will meet the needs of the driving population now and into the future including electric and hybrid, it could have been the biggest publicity campaign they could have waged in years probably ever.

Can you imagine a parade of vehicles headed to the steps of Congress, that's PR bigger than the L.A., New York and Detroit auto Shows combined, the whole world would have been watching and the parade would have been the lead story on every major network and hometown paper in the world.

So fly into Virginia or Maryland or from New York (even better) and drive to Washington DC next time, Mr. Wagoner, Mr. Mulally and Mr. Nardelli. I guarantee that you'll get some favorable press that will save your tales from the Chapter 11 heap.

Oh, and another thing, you guys showed up without a business plan on how you were going to use the money, you expect more from a mid-level manager or your dealer network. What would you expect congress to do except send you back home and come back when you are better prepared and can demonstrate that you guys will be good stewards of the taxpayers money.

So here you go guys I have served up the greatest event that you could ever do for your image and assistance in making a powerful statement to Congress and to the taxpayers. Drive your full fleet of vehicles, which includes your new technologies and make an event of it.

And another thing, get rid of your PR firms and get a group that can reshape your images.

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That Car Guy

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GM has decided to delay incentive payments to it's dealer body... Read the letter that Mark Laneve GM's Vice President sent out to dealers...

BREAKING NEWS! BREAKING NEWS! BREAKING NEWS!

Here is a copy of the letter that GM's Mark LaNeve, Vice President of North America, sent to the General Motors dealer body explaining why they are delaying dealer incentive payments to them.

We are reaching the tip of the iceberg, if GM cannot find some free cash flow, they will not make it till the end of the year. The company is just burning up to much cash coupled with the worsening economy, it isn't nimble enough to make adjustments as retail sales worsen.

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That Car Guy

HERE IS THE LETTER:

GM LETTER TO DEALERS
To All Dealers:
I am writing to you to update you on changes we are going to implement with regard to the incentive payment schedule.
As I discussed in the IDL last week, one of the biggest issues facing General Motors is our liquidity. That is the cash we have on hand to pay for our regular operating expenses.
In this cash crunch, we have examined every aspect of our business in an effort to improve cash flow, including our relationships with all of our key stakeholders, like suppliers, agencies, employees and dealers. In this regard, we are implementing minor changes to incentive payment timing. So, what does this mean for you? Basically we are delaying the payment of the incentives by two weeks. Here is the new schedule that will be in effect until further notice:
· Incentive applications previously scheduled to be paid on November 28th and December 4th will be delayed to December 11th and December 18th respectively. Please see the attached payment schedule.
· Weekly incentive payments will continue thereafter reflecting one week of dealer application activity. On average, payments will be made approximately 2 - 3 weeks after a valid dealer application has been processed by GM. Effectively this is a 2 week delay from the current schedule.
· As a result of this retiming you will not receive any incentive payments on November 28th and December 4th.
This liquidity crisis has an obvious effect on all of us. As you are aware we are asking the federal government for some temporary relief. I need your continued help in talking to Congress. There are three things you need to ask your congressional delegation for:
· First, ask the government officials to approve a new $25 billion loan package to help us deal with our current liquidity crisis.
· Second, while the rules for the distinctly separate and already approved $25 billion loan package for investments in technology and enhanced fuel efficiency have been issued, we'd like to see that program move as fast as possible, so we need to encourage the government to minimize red tape and act on loan applications as quickly as they can.
· Third, the automotive industry needs some additional government support to stimulate retail sales, like making interest on car loans tax deductible, etc.
We've set up a website that will assist you in making your voice heard in Congress and to help spread the message. Please visit www.gmfactsandfiction.com. If you have not already done so, please call and e-mail your congressional representative.
This is a critical time for our industry, your dealership, and General Motors. Please continue to do what you do best, selling vehicles one customer at a time. Please make every effort to integrate your promotions with the recently announced Red Tag sales event.
Together we can work through this crisis. As always, thank you for all of your hard work and effort.
Good Selling.
Mark R. LaNeve
GMNA Vice President NA Vehicle Sales, Service & Marketing

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How lenders are responding to delinquent auto loans... The repo man is giving you a little more time...

Banks and Finance companies are rethinking their repossession strategy, the current financial crisis and lower wholesale values have prompted them to wait a little longer to pick up your ride.

As reported by MSNBC.com

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That Car Guy

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