Dongfeng Motor Group Co., China's third-largest automaker, said it had received proposals from investment banks to buy assets from General Motors as the carmaker tries to generate desperately needed cash, Bloomberg News reported Wednesday.
A spokesman for Dongfeng, which partners in China with Nissan, Honda and PSA Peugeot Citroen, said it had received e-mails and investment materials asking if the company would be interested in buying some of GM's assets. The spokesman, who wouldn't reveal the investment banks it was talking with or the assets offered for purchase, told Bloomberg it hasn't reviewed the materials and has not responded to GM.
A GM spokesman based in Shanghai denied the report, saying there were no grounds to the rumors.
Still, it comes as no surprise that GM would go to foreign companies, especially those in emerging markets like China, to offer its wares. GM has assets to sell and the Chinese have access to cash. And Ford was successful in selling off its distressed assets of Land Rover and Jaguar to India's Tata Motors.
GM has put a number of assets up for sale including Hummer and AC Delco. So far, GM has found no takers. A deal to sell its medium-duty commercial truck business to Navistar fell apart as the economy worsened. Further, in its viability plan submitted to Congress on Tuesday, GM said it was considering "options" for Saab and Saturn as well. Saab could be sold; Saturn likely would be dismantled or its vehicles folded into other GM divisions.
Chinese companies are likely targets as buyers for GM's assets since they have access to capital and ambitious global expansion plans with sites set on North America in particular. A Shanghai analyst told Bloomberg capital for overseas investment is not a problem for Chinese companies, though other possible risks include issues regarding local legal regulations and labor unions.
More than likely, GM also has talked to its own Chinese partner, SAIC Corp., China's largest automaker. SAIC already has expanded into Europe with the purchase of design rights to MG Rover and South Korea with its stake in Ssangyong Motor Co.
And interestingly, the Chinese government in November opened a consulate office in the Detroit suburbs of Troy, Michigan, the home to SAIC's offices.
Showing posts with label generalmotors. Show all posts
Showing posts with label generalmotors. Show all posts
Nov 24, 2008
Gas Prices and Heavy Incentives Keep Car Sales From Sinking Below October's Depths
SANTA MONICA, Calif. -- November car sales improved over October's historic lows thanks to lower gas prices and high incentives.
November new vehicle sales, including fleet and retail sales, are expected to be 850,000 units, a 27.6 percent decrease from November 2007 but showing a 1.9- percent increase from last month, according to Edmunds.com's forecast.
Still, the Seasonally Adjusted Annual Rate (SAAR) for the month is expected to be only about 11.5 million units.
"Sales improved slightly over October thanks to near record high incentives and perhaps a sense of relief that the presidential election is over," observed Jesse Toprak, executive director of Industry Analysis for Edmunds.com. "Also, remarkably low gas prices motivated shoppers to seriously consider the tremendous deals available on SUVs and trucks."
The combined monthly U.S. market share for Chrysler, Ford and General Motors domestic nameplates is estimated to be 47.1 percent in November 2008, down from 51.1 percent in November 2007 and up slightly from 47.0 percent in October.
The domestic automakers are in the midst of scrambling to develop a viability proposal in order to earn government loans, making it more important than ever for them to demonstrate that their products are appealing to the American public.
Company by company, Edmunds.com predicts:
Chrysler will sell 94,000 units in November, down 41.7 percent compared to November 2007 and down 0.3 percent from October. This would result in a new car market share of 11 percent for Chrysler in November, down from 13.7 percent in November 2007 and down from 11.3 percent in October.
Ford will sell 119,000 units in November, down 33.1 percent compared to November 2007 and down 7.8 percent from October. This would result in a new car market share of 14 percent of new car sales in November for Ford, down from 15.1 percent in November 2007 and down from 15.5 percent in October 2008.
General Motors will sell 188,000 units in November, down 28.2 percent compared to November 2007 and up 11.2 percent from October. GM's market share is expected to be 22.1 percent of new vehicle sales in November, down slightly from 22.3 percent in November 2007 and up from 20.3 percent in October.
Honda will sell 88,000 units in November, down 20.6 percent from November 2007 and up 3 percent from October. Honda's market share is expected to be 10.4 percent in November 2008, up from 9.5 percent in November 2007 and up from 10.3 percent in October.
Nissan will sell 57,000 units in November, down 29.3 percent from November 2007 and up 0.2 percent from October. Nissan's market share is expected to be 6.7 percent in November 2008, down from 6.9 percent in November 2007 and down from 6.8 percent in October.
Toyota will sell 150,000 units in November, down 24.2 percent from November 2007 and down 1.7 percent from October. Toyota's market share is expected to be 17.6 percent in November, up from 16.8 percent in November 2007 and down from 18.2 percent in October.
November new vehicle sales, including fleet and retail sales, are expected to be 850,000 units, a 27.6 percent decrease from November 2007 but showing a 1.9- percent increase from last month, according to Edmunds.com's forecast.
Still, the Seasonally Adjusted Annual Rate (SAAR) for the month is expected to be only about 11.5 million units.
"Sales improved slightly over October thanks to near record high incentives and perhaps a sense of relief that the presidential election is over," observed Jesse Toprak, executive director of Industry Analysis for Edmunds.com. "Also, remarkably low gas prices motivated shoppers to seriously consider the tremendous deals available on SUVs and trucks."
The combined monthly U.S. market share for Chrysler, Ford and General Motors domestic nameplates is estimated to be 47.1 percent in November 2008, down from 51.1 percent in November 2007 and up slightly from 47.0 percent in October.
The domestic automakers are in the midst of scrambling to develop a viability proposal in order to earn government loans, making it more important than ever for them to demonstrate that their products are appealing to the American public.
Company by company, Edmunds.com predicts:
Chrysler will sell 94,000 units in November, down 41.7 percent compared to November 2007 and down 0.3 percent from October. This would result in a new car market share of 11 percent for Chrysler in November, down from 13.7 percent in November 2007 and down from 11.3 percent in October.
Ford will sell 119,000 units in November, down 33.1 percent compared to November 2007 and down 7.8 percent from October. This would result in a new car market share of 14 percent of new car sales in November for Ford, down from 15.1 percent in November 2007 and down from 15.5 percent in October 2008.
General Motors will sell 188,000 units in November, down 28.2 percent compared to November 2007 and up 11.2 percent from October. GM's market share is expected to be 22.1 percent of new vehicle sales in November, down slightly from 22.3 percent in November 2007 and up from 20.3 percent in October.
Honda will sell 88,000 units in November, down 20.6 percent from November 2007 and up 3 percent from October. Honda's market share is expected to be 10.4 percent in November 2008, up from 9.5 percent in November 2007 and up from 10.3 percent in October.
Nissan will sell 57,000 units in November, down 29.3 percent from November 2007 and up 0.2 percent from October. Nissan's market share is expected to be 6.7 percent in November 2008, down from 6.9 percent in November 2007 and down from 6.8 percent in October.
Toyota will sell 150,000 units in November, down 24.2 percent from November 2007 and down 1.7 percent from October. Toyota's market share is expected to be 17.6 percent in November, up from 16.8 percent in November 2007 and down from 18.2 percent in October.
| Change from November 2007 | |
| Chrysler | -41.7% |
| Ford | -33.1% |
| GM | -28.2% |
| Honda | -20.6% |
| Nissan | -29.3% |
| Toyota | -24.2% |
| Industry Total | -27.6% |
GM, Tiger Woods Part Ways
General Motors and golfing great Tiger Woods announced Monday they were parting ways.GM's longtime deal with Woods, who served as spokesman for Buick for the past nine years, ends December 31.
For GM, it is a cost-cutting move as it struggles to survive. GM reportedly paid Woods $8 million a year for the endorsement. Woods claims he wants more personal time since he and his wife are expecting a second child in late winter.
"Tiger has been a great friend to GM and a fantastic asset through the years helping to bring consumer awareness to many new GM products," said Mark LaNeve, General Motors North American vice president of Sales, Service and Marketing said in a statement. "In light of the news coming out of Washington, this decision is the result of discussions that started earlier in the year and the timing of this agreement with these other activities is purely coincidental."
Detroit automakers were chastised by Congressmen last week for extravagant spending, in particular for the three executives flying into Washington for hearings on government loans in corporate jets. Meantime, GM has said it ended the lease on two such jets earlier this year and is ending the lease of two more. Ford is considering ending the lease of some corporate jets.
In addition to eliminating some jets from its fleet, GM is scrutinizing every cost for possible cuts.
Photo by GM
Tiger Woods helped introduce the 2008 Buick Enclave..
Nov 21, 2008
Tracking the Bailout: When the Music Stops, Who's Going Bankrupt?
The CEOs of Ford Motor Co., General Motors Corp. and Chrysler LLC loaded up on their much-maligned corporate jets and winged out of Washington, DC, this week with no bailout money - but the assurance of a shaky holiday season.
After Democratic deal-makers conceded this week there would not be sufficient bipartisan support to approve a bill to "repurpose" the existing and already approved $25-billion Department of Energy loan (originally intended to promote the development of fuel-efficient technology and retool factories), the initiative was shelved until a possible vote on Dec. 8.
That promises to be a rocky 17 days for GM and Chrysler, whose bosses insinuate the companies may not have the funds to enable them to see the New Year.
Costly Holding Pattern
Many Congressional members - some of them lame ducks with barely weeks left in office - seemed as concerned about getting home for the Thanksgiving holiday as they did about putting in the heavy lifting required to potentially help resurrect the nation's largest single component of the manufacturing sector.
Others, however, remain either doubtful GM and Chrysler face imminent insolvency or unconvinced one or both companies' slide into bankruptcy (presumably of the Chapter 11 variety) is not the best way to let economic forces take their course.
Congress sent the chastised CEOs back to Detroit with instructions to work up a blueprint to demonstrate a cash infusion will keep them viable long enough to transform their business models into something approaching sustainability.
But at this juncture, even the matter of the few weeks before a potential new vote - a vote with anything but a guarantee of approval - could be too long for at least one of the two industrial giants to wait.
That could be the plan.
Chrysler Without A Chair
Although GM chief executive Rick Wagoner insinuated his company is in desperation mode, it is Chrysler that likely is closer to the brink; CEO Bob Nardelli said the company's cash-in-hand exceeds its monthly expenditures by a mere $1 billion and change. That suggests if Chrysler isn't extended some type of funds, the music stops sometime around the end of December.
Rumors continue to abound that GM, meanwhile, has a plan in place to effectively shut down the company - across the globe - if necessary to reduce expenditures to a level that allow GM to keep its head above water.
Meanwhile, although industry sales have cratered in the latter part of this year, December historically is a comparatively strong month for auto sales. A skeleton-crewed GM, one with dealers continuing to sell vehicles, could temporarily stem the titanic cash burn that has scorched the company's books.
Even without a drastic "winter shutdown," some sources think a parsimony-minded GM could keep going enough, at least, to wait for President-elect Barack Obama's mid-January inauguration and perhaps a change in Congress' - and the public's - mood about assisting the automakers.
Not Enough For Three
Meanwhile, with the auto market not expected to improve and more likely to deteriorate further in 2009 and thus the cash-burn rates presumed to remain consistent (although continuing cost-cutting efforts may reduce expenditures a measurable, if not exactly meaningful, amount), it's not hard to do the math. Even if the hoped-for $25-billion in funds, which is designated to be shared with desperate auto suppliers as well, is approved and made available by sometime early next year, it's not going to be enough to sustain three battered automakers who between them have spent an almost unbelievable $18 billion more than they took in during the last quarter.
At that rate, $25 billion would not take the current Detroit Three to the beginning of a new baseball season.
Forecasting expert IHS Global Insight this week issued a warning that without the bridge loan, the odds that GM and Chrysler both would file bankruptcy early next year are 75 percent.
But the larger question seems to be whether even with the loan, whether it could possibly sustain all three anyway.
While political grandstanding certainly has a role in the current situation, the delays Congress' vacillation impose may be serving a deeper purpose: culling the Detroit Three to just two.
It's long been assumed Chrysler is the weakest of the trio, the least able to pull off a "transformation:" it has no global footprint to speak of; it has the smallest market share; and it has the heaviest ratio of trucks and SUVs in its portfolio, vehicles that do not place the company in good stead either with consumers or politicos scrutinizing the possibilities for a prompt turnaround.
Finally, there is Chrysler's uncomfortable status as a privately held company. Although to now this has not seemed to be an important point, it may emerge as one if push comes to shove next month in Washington.
After Democratic deal-makers conceded this week there would not be sufficient bipartisan support to approve a bill to "repurpose" the existing and already approved $25-billion Department of Energy loan (originally intended to promote the development of fuel-efficient technology and retool factories), the initiative was shelved until a possible vote on Dec. 8.
That promises to be a rocky 17 days for GM and Chrysler, whose bosses insinuate the companies may not have the funds to enable them to see the New Year.
Costly Holding Pattern
Many Congressional members - some of them lame ducks with barely weeks left in office - seemed as concerned about getting home for the Thanksgiving holiday as they did about putting in the heavy lifting required to potentially help resurrect the nation's largest single component of the manufacturing sector.
Others, however, remain either doubtful GM and Chrysler face imminent insolvency or unconvinced one or both companies' slide into bankruptcy (presumably of the Chapter 11 variety) is not the best way to let economic forces take their course.
Congress sent the chastised CEOs back to Detroit with instructions to work up a blueprint to demonstrate a cash infusion will keep them viable long enough to transform their business models into something approaching sustainability.
But at this juncture, even the matter of the few weeks before a potential new vote - a vote with anything but a guarantee of approval - could be too long for at least one of the two industrial giants to wait.
That could be the plan.
Chrysler Without A Chair
Although GM chief executive Rick Wagoner insinuated his company is in desperation mode, it is Chrysler that likely is closer to the brink; CEO Bob Nardelli said the company's cash-in-hand exceeds its monthly expenditures by a mere $1 billion and change. That suggests if Chrysler isn't extended some type of funds, the music stops sometime around the end of December.
Rumors continue to abound that GM, meanwhile, has a plan in place to effectively shut down the company - across the globe - if necessary to reduce expenditures to a level that allow GM to keep its head above water.
Meanwhile, although industry sales have cratered in the latter part of this year, December historically is a comparatively strong month for auto sales. A skeleton-crewed GM, one with dealers continuing to sell vehicles, could temporarily stem the titanic cash burn that has scorched the company's books.
Even without a drastic "winter shutdown," some sources think a parsimony-minded GM could keep going enough, at least, to wait for President-elect Barack Obama's mid-January inauguration and perhaps a change in Congress' - and the public's - mood about assisting the automakers.
Not Enough For Three
Meanwhile, with the auto market not expected to improve and more likely to deteriorate further in 2009 and thus the cash-burn rates presumed to remain consistent (although continuing cost-cutting efforts may reduce expenditures a measurable, if not exactly meaningful, amount), it's not hard to do the math. Even if the hoped-for $25-billion in funds, which is designated to be shared with desperate auto suppliers as well, is approved and made available by sometime early next year, it's not going to be enough to sustain three battered automakers who between them have spent an almost unbelievable $18 billion more than they took in during the last quarter.
At that rate, $25 billion would not take the current Detroit Three to the beginning of a new baseball season.
Forecasting expert IHS Global Insight this week issued a warning that without the bridge loan, the odds that GM and Chrysler both would file bankruptcy early next year are 75 percent.
But the larger question seems to be whether even with the loan, whether it could possibly sustain all three anyway.
While political grandstanding certainly has a role in the current situation, the delays Congress' vacillation impose may be serving a deeper purpose: culling the Detroit Three to just two.
It's long been assumed Chrysler is the weakest of the trio, the least able to pull off a "transformation:" it has no global footprint to speak of; it has the smallest market share; and it has the heaviest ratio of trucks and SUVs in its portfolio, vehicles that do not place the company in good stead either with consumers or politicos scrutinizing the possibilities for a prompt turnaround.
Finally, there is Chrysler's uncomfortable status as a privately held company. Although to now this has not seemed to be an important point, it may emerge as one if push comes to shove next month in Washington.
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