The Demo Site

One of the reasons automakers build concept vehicles is to gauge the public's reaction to a new design. Apparently, the Kia Soul'ster garnered enough goodwill and interest after its debut at the Detroit Auto Show the Korean automaker is strongly considering putting the canvas-roofed Soul-amino into production. Previously, Kia's Alex Fedorak said the Tonka-mobile was created "in a fashion that was production-capable."
According to Kia-World, though the automaker isn't officially saying the Soul'ster will be mass produced, unnamed Korean magazines are reporting it's looking good and that a decision is on the way in short order. If there's any truth to the rumors, we can expect to see the little subcompact pick'em-up truck on American roads in the second half of 2010. Thanks for the tip, Mike!

GM of Europe announced today that it will continue to operate normally and is not included in the Chap. 11 bankruptcy filing made today by its U.S. parent. It said that it has secured approval for a €1.5 billion bridge financing agreement with the German government based on the partnership with Magna, which will allow for more time to finalize the partnership agreement.

“This has been a very intense and at times difficult negotiation over the past several days,” said GM Europe President, Carl-Peter Forster in a statement. “The process for a future partnership in Adam Opel GmbH has moved a critical step forward with the MOU reached with Magna International, whose leadership has shown strong commitment to this project. With the financing, even with the GM actions in the U.S., we can now confidently say to our employees, customers, suppliers and dealers that it’s business as usual as we go through the process of creating a new, more independent Opel/Vauxhall.”

Under the agreement, Opel/Vauxhall assets have been pooled under Adam Opel GmbH, with a majority of those shares being put into an independent trust.

Volvo announced today that it is teaming up with energy supplier Vattenfall to promote the production of plug-in hybrid Volvo vehicles by 2012.

“We are investing in an industrial joint venture to series-produce plug-in hybrid cars in Sweden in 2012, cars that can be powered by both electricity and diesel,” says Stephen Odell, President and CEO of the Volvo Car Corporation. ”This is an important business development for us and our partnership with Vattenfall allows us to take a giant step toward offering our customers cars with an even smaller environmental footprint.”

Volvo has built three V70 plug-in hybrid prototypes which it will study to gather information, driving habits and various ways for high-speed home charging. The Swedish automaker said that the cars that are planned to go into series production in 2012 will feature a somewhat different technology.

As you all know by now, when the ‘New GM’ comes out of bankruptcy court in 60 to 90 days the U.S. government will own 60 percent of the company. The Canadian governments will own 12 percent while the UAW will own 17.5 percent. GM bondholders will take a 10 percent stake.

Speaking earlier today to the media, President Barack Obama said: “We are acting as reluctant shareholders. What we are not doing - what I have no interest in doing - is running GM.”

He said that the New GM will be run by a private board of directors and management team. “They, and not the government, will call the shots and make decision about how to turn this company around. 

“The federal government will refrain from exercising its rights as a shareholder in all but the most fundamental corporate decisions. When a difficult decision has to be made on matters like on where to open a new plant or what type of new car to make; the New GM - not the United States government - will make that decision.

He said that the U.S. government’s main goal is to get GM back on its feet with a hands-off approach and get out quickly.

As a part of its bankruptcy filing GM will have to publish the list of more than 2,100 dealers it plans on ending its agreement with in October 2010. While that won’t take place until the end of this week, GM today published a details list of all its U.S. plants and facilities closures.

“The manufacturing plan reduces GM’s total number of assembly, powertrain and stamping facilities in the U.S. from 47 in 2008 to 34 by the end of 2010 and 33 by 2012,” GM said in a statement. “These totals reflect GM’s recently announced plans to build a future small car in the U.S. Under this plan, the New GM will achieve full capacity utilization of its assembly operations in 2011, two years ahead of what was scheduled in its Feb. 17 viability plan submission.”

GM’s Service and Parts Operations (SPO) announced today that it will cease operations at three Parts Distribution Centers in Boston; Columbus, Ohio; and Jacksonville, Fla. - by Dec. 31, 2009.

GM is building a ‘New GM,’ which should be completed in 60 to 90 days. In order to enlighten you about what the ‘New GM’ will consist of, GM has launched a new site called ‘GM Reinvention’ (http://www.gmreinvention.com/).

The site features a minute long commercial that highlights GM’s upcoming product line. Along with images of the 2010 Cadillac SRX, 2010 Chevrolet Camaro, 2010 Buick LaCrosse and the 2010 GMC Terrain, you’ll see images of athletes struggling in sports and the American flag.

Can GM finally get it right? This commercial sure gets us excited to see what the Detroit automaker is capable of.

More information about GM’s chap. 11 cases are available at www.GM.com/restructuring.

GM has officially announced that it is filing for Chapter 11 bankruptcy protection and hopes to create “a leaner, stronger ‘New GM’ positioned for a profitable, self-sustaining and competitive future.” Pending approval from the U.S. Bankruptcy Court, the New GM is expected to launch in about 60 to 90 days.

“Under its plan, GM will sell substantially all of its global assets to the New GM,” GM said in a statement. “To implement the sale agreement, GM and three domestic subsidiaries have filed voluntary petitions for relief under chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York, and the sale is subject to the approval of the Court.”

While GM hangs out in bankruptcy court, it has asked the court to approve a number of steps that will allow it to have warranty, service and customer support continue uninterrupted, backed by the U.S. and Canadian governments; have essential suppliers to be paid in the normal course; and have employees to be paid in the normal course.

So what is this ‘New GM’ going to be like? GM says that the New GM will execute the key elements of its April 27 viability plan. It will continue to focus on four core brands in the U.S. including Chevrolet, Cadillac, Buick and GMC; it will close the competitive gap in worker labor costs compared to its rivals; it will cut its U.S. total industry volume to 10 million vehicles by reducing production and closing plants; it will further cut costs by reducing its salaried employment in North America from 35,100 to 27,200; operate with approximately 3,600 dealers in the U.S.; and of course, increase investment in increasing fuel-economy and green, energy-saving technologies.

GM made it a point to note that none of its operations outside of the U.S. are included in the U.S. court filings. It said “all business operations are continuing without interruption in its Europe; Latin America, Africa and the Middle East; and Asia Pacific regions.”

More information about GM’s chap. 11 cases are available at www.GM.com/restructuring. Court filings and claims information are available at www.GMcourtdocs.com.

You can read the whole press release below for more info the New GM - including its capital structure.

Press Release:

GM ANNOUNCES AGREEMENT WITH U.S. TREASURY AND CANADIAN GOVERNMENTS PROVIDING FAST TRACK TO COMPETITIVE FUTURE FOR ‘NEW GM’

NEW GM, BUILT FROM COMPANY’S STRONGEST OPERATIONS, EXPECTED TO LAUNCH IN 60-90 DAYS UNDER NEW OWNERSHIP

GM FILES VOLUNTARY CHAPTER 11 TO IMPLEMENT ‘363′ SALE AGREEMENT

GM IS OPEN FOR BUSINESS IN THE U.S. AND WORLDWIDE, HONORING ALL CUSTOMER COMMITMENTS

* Warranty, service and customer support continue uninterrupted, backed by the U.S. and Canadian governments
* Essential suppliers to be paid in the normal course
* Employees to be paid in the normal course
* Operations outside U.S. not included in court filing

DETROIT, June 1, 2009 - General Motors Corp. (NYSE: GM) today announced that it has reached agreements with the U.S. Treasury and the governments of Canada and Ontario to accelerate its reinvention and create a leaner, stronger “New GM” positioned for a profitable, self-sustaining and competitive future.

Pending approvals, the New GM is expected to launch in about 60 to 90 days as a separate and independent company from the current GM (”GM”), with two distinct advantages: it will be built from only GM’s best brands and operations, and it will be supported by a stronger balance sheet due to a significantly lower debt burden and operating cost structure than before. The New GM will incorporate the terms of GM’s recent agreements with the United Auto Workers (UAW) and Canadian Auto Workers (CAW) unions and will be led by GM’s current management team.

The New GM will execute the key elements of its April 27 viability plan, along with additional initiatives, to achieve winning financial results by putting customers first, concentrating on adding to the company’s line of award-winning cars and trucks through four core brands and continuing to invest in green, energy-saving technologies.

Under its plan, GM will sell substantially all of its global assets to the New GM. To implement the sale agreement, GM and three domestic subsidiaries have filed voluntary petitions for relief under chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York, and the sale is subject to the approval of the Court. Because GM’s sale of assets to the New GM already has the support of the U.S. Treasury, the UAW and a substantial portion of GM’s unsecured bondholders, GM expects the sale to be approved and consummated expeditiously.

GM has asked the Court to approve a number of steps to protect current and new GM customers, ensure that its operations will continue uninterrupted during the court-supervised process, and provide for a smooth transition to the New GM.

* GM dealers will continue to service GM vehicles and honor GM warranties, and U.S. and Canadian government guarantees of manufacturers’ warranties are designed to reassure consumers.

* GM will use its cash-on-hand and a new Debtor-in-Possession (DIP) financing of approximately $33 billion to: ensure an uninterrupted supply of goods and services and provide for other cash requirements prior to closing of the asset sale; fund liabilities to secured lenders; and provide contingency funding to handle any potential unexpected needs. Furthermore, in conjunction with the sale, the U.S. Treasury and the Canadian and Ontario governments will provide funds to administer the wind down of the remaining assets and the closing of the chapter 11 cases.

* GM employees worldwide will become part of the New GM.

“Today marks a defining moment in the reinvention of GM as a leaner, more customer-focused, and more cost-competitive company that, above all, can quickly generate winning bottom line results,” said Fritz Henderson, GM president and CEO. “The economic crisis has caused enormous disruption in the auto industry, but with it has come the opportunity for us to reinvent our business. We are going to do it once and do it right. The court-supervised process we are pursuing provides us with powerful tools to accelerate and complete our reinvention, as well as strong safeguards for our customers and our business. We are focused on the job at hand, for the benefit of our customers, employees, dealers, suppliers, retirees, taxpayers, investors and other stakeholders.

“We recognize the sacrifices that so many have been asked to make as we have worked to reinvent GM and the automobile,” said Henderson. “GM deeply appreciates the support and the demonstration of confidence in our future by President Obama, the Presidential Task Force on Autos, the Canadian and Ontario governments, American and Canadian taxpayers, the unsecured bondholders who are supporting the proposed sale transaction, the UAW and CAW and their leadership, and the men and women of GM, including our retirees. You have enabled us to carry out this vital transformation for the good of GM, our customers and the economy, and we are working to validate your trust each day.

“From day one, the New GM will be well-positioned to capitalize on the award-winning vehicles we have developed and launched during the past few years, and on our investments in exciting new technologies like the Chevy Volt, so that we can build and return value to our customers and to the millions who will have a stake in our success. The New GM will play a critical role in the future of the automobile, and assure that the U.S. has a strong stake in this rapidly changing global manufacturing industry,” Henderson said.

Business operations continue globally without interruption

GM’s North American manufacturing operations continues to monitor production output to make sure it aligns with market demand, and currently intends to ramp up manufacturing operations as market demand improves during the latter half of the year.

None of GM’s operations outside of the U.S. are included in the U.S. court filings or court-supervised process, and these filings have no direct legal impact on GM’s plans and operations outside the U.S. GM confirmed that all business operations are continuing without interruption in its Europe; Latin America, Africa and the Middle East; and Asia Pacific regions.

“Worldwide, GM dealers are open for business, offering competitive financing options on our award-winning vehicles, continuing to honor our industry-leading warranty coverage, and providing outstanding service,” said Henderson. “Furthermore, the U.S. Treasury and the Canadian governments have issued a strong vote of confidence by backing GM’s vehicle warranties.”

GM has filed various “first day” motions with the Court to ensure the company’s continued ability to conduct normal business operations. Upon Court approval, GM will be expressly authorized, among other things, to:

* Honor all obligations to customers and continue customer programs, including warranties, without interruption

* Respect our operating and financing agreements with GMAC, supporting continued wholesale financing for dealers and retail financing for customers

* Pay dealers’ open accounts and continue warranty and incentive programs

* Pay essential suppliers and logistics providers for goods and services provided before and after the company’s court filings

* Continue pay and benefits for employees and retirees; however, the amount of non-qualified pension for some executive retirees may be affected.

The New GM

GM’s agreements with the U.S. Treasury, the Canadian and Ontario governments and the UAW and CAW, in addition to the support of a substantial portion of GM’s unsecured bondholders, will enable the New GM to be a leaner, faster and more customer-focused enterprise, consistent with the vision, goals and plans of GM’s enhanced operating plan announced April 27.

The New GM will:

* Focus on four core brands in the U.S. - Chevrolet, Cadillac, Buick and GMC - with fewer nameplates and a more competitive level of marketing support per brand

* Effectively close the competitive gap in active worker labor costs compared with transplant auto manufacturers

* More efficiently utilize U.S. capacity while increasing over time the percentage of U.S. sales manufactured domestically

* Feature lower structural costs enabling its North American region to break even (on an adjusted EBIT basis) at a U.S. total industry volume of approximately 10 million vehicles. This rate is substantially below the 15 to 17 million annual vehicle sales rates recorded from 1995 through 2007

* Achieve its lower structural costs in part by further reducing 2009 salaried employment in North America from its year-end total of 35,100 to approximately 27,200, and continuing to improve its balance sheet by reducing retiree benefits for salaried retirees and non-UAW hourly retirees

* Provide a higher level of customer service through a more focused U.S. network of approximately 3,600 dealers

* Continue and increase its investment and leadership in fuel economy and advanced propulsion technologies

Capital Structure of the New GM

A critical element of GM’s reinvention is to achieve a significantly stronger and healthier balance sheet. On March 31, 2009, GM reported consolidated debt of $54.4 billion, along with additional liabilities, including an estimated $20 billion obligation to the UAW VEBA.

Under GM’s agreements with the U.S. Treasury, the Canadian and Ontario governments, and the UAW and CAW, and with the support of a substantial portion of GM’s unsecured bondholders, upon closing of GM’s sale of assets to the New GM, the New GM’s capital structure will be comprised of:

* Approximately $17 billion in total consolidated debt, including:
o $6.7 billion of debt owed to the U.S. Treasury
o $1.3 billion of debt owed to the Canadian and Ontario governments
o $2.5 billion of notes issued to the new Voluntary Employee Beneficiary Association (New VEBA)
o Approximately $6.8 billion of other, primarily international debt, but excluding Europe

* $9 billion of perpetual preferred stock with a 9 percent annual dividend, payable quarterly in cash, $2.1 billion of which will be issued to the U.S. Treasury, tiny_XX.4 billion of which will be issued to the Canadian and Ontario governments and $6.5 billion of which will be issued to the New VEBA

* Common equity, 60.8 percent of which will be owned by the U.S. Treasury, 11.7 percent of which will be owned by the Canadian and Ontario governments, 17.5 percent of which will be owned by the New VEBA, and 10 percent of which has been reserved for GM for the benefit of the unsecured bondholders and other unsecured creditors of GM

* Warrants granted to the New VEBA to acquire newly issued shares in the New GM equal to 2.5 percent of its outstanding common equity

* Warrants granted to GM at closing to acquire newly issued shares in the New GM equal to 15 percent of its outstanding common equity, with various exercise prices and expirations

Other than the $8 billion of debt owed to the U.S. Treasury and the Canadian and Ontario governments by the New GM, all amounts owed by GM or the New GM to the U.S. Treasury and Canadian and Ontario governments would be equitized in exchange for the New GM securities described above, and no other debt will be owed by GM to the U.S. Treasury and the Canadian and Ontario governments.

GM Europe Restructuring

GM announced separately today, GM Europe has an agreement for €1.5 billion of bridge financing from the German government and a Memorandum of Understanding to partner with Magna International Inc. Under the agreement, the Opel/Vauxhall assets have been pooled under Adam Opel GmbH, with the majority of the shares of Adam Opel GmbH being put into an independent trust (the balance to remain with General Motors), while final negotiations with Magna proceed. Negotiations to close the agreement should take several weeks. Additional details will be available athttp://media.gm.com/eur/gm/en/.

New products and technologies on track

The New GM, with its strong financial base and best-in-class dealer network, will support a portfolio of award-winning vehicles, including the Chevy Malibu (2008 North American Car of the Year and J.D. Power and Associates’ segment leader in its 2008 Initial Quality Survey), Cadillac CTS (Motor Trend Car of the Year) and its Buick brand (tied for 1st place in J.D. Power and Associates’ 2009 Vehicle Dependability Study). The New GM will have a number of key vehicle launches in 2009 and 2010, including:

* Chevrolet Camaro, a dramatic, moderately priced sport coupe with highway fuel economy of up to 29 mpg
* An all-new Buick LaCrosse premium midsize sedan
* The luxury midsize Cadillac SRX crossover and CTS Sport Wagon
* The Chevy Equinox and GMC Terrain, midsize crossovers with class-leading highway fuel economy of 32 mpg
* The Chevy Cruze, GM’s new global compact car
* The revolutionary Chevy Volt, an extended-range electric vehicle that can travel up to 40 miles on battery power alone with the extended-range capability of more than 300 total miles.

“Our products are our future, and our lineup of new cars and crossovers are a great foundation for success,” said Henderson. “The New GM is here to stay, and our brands position us to compete well in profitable segments with vehicles that are second-to-none.”

GM also reaffirmed its commitment to improve the fuel efficiency of its vehicle fleet, meet or exceed new federal fuel economy and emissions regulations, and push ahead with advanced propulsion technology. GM will launch the Chevrolet Volt extended range electric vehicle in 2010, expects to have 14 hybrid models in production by 2012, and will have 65 percent of vehicles alternative-fuel capable by 2014.

“The New GM will become a long-term global leader in the development of fuel-efficient and advanced-technology vehicles,” said Henderson. “In doing so, the New GM will contribute to the development of advanced engineering and manufacturing capabilities in the United States, which are critical to the future of the U.S. economy.”

GM’s primary bankruptcy counsel is Weil, Gotshal & Manges LLP. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsels. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM’s restructuring advisor is AP Services LLP and its financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP.

The marque's faithful (read: the obscenely wealthy) have been waiting a long time for a convertible Bugatti. The last time a roadster rolled out of Molsheim was in the company's heyday before WWII, and despite our teenage fantasies, no roofless EB110 ever materialized from the Romano Artioli era. But after over a half century's wait, Bugatti has officially returned to the world of open-air motoring.
The most exclusive of exclusive automakers came to Pebble Beach last year with the Veyron Grand Sport, and auctioned off the first example for a whopping $2.19 million. Now the targa-topped Veyron is officially beginning its production run, with deliveries to commence in July. If you're one of those who's been waiting for the opportunity, good economy or bad, you'd better act quickly: Bugatti is only making 150 examples of the world's fastest roadster, with the first 50 units going to existing Veyron owners. Asking price, before the inevitable succession of special editions, is nearly $2 million, which ought to make your eyes water even more than the air kissing your face at 224 mph. Check out the details in the press release after the jump and the fresh crop of high-res images added to the gallery below.

To the roll call of auto industry titans that have gone or are going bankrupt -- Visteon, Chrysler, GM, Saab, Karmann, ASC, Source Interlink -- we can now add Tier 1 supplier Metaldyne, which filed for bankruptcy for its American operations. Metaldyne makes metal bits for car and truck chassis and NVH components.
The company has been restructuring its costs over the past year and a half, shedding $100 million in expenditures and reducing its debt. Still, as of the filing it had debt of $600 million on $2008 sales of $1.57 billion. Metaldyne's parent company, Asahi Tech Corp in Japan, helped the company lower its debt by about $400 million but has now walked away from further financial support.
There are two private equity firms interested in the company: Carlyle Group, which is looking to buy some of Metaldyne's chassis business, and RHJI, which is already a majority shareholder in Metaldyne's parent, Asahi. RHJI would throw about $100 million at the company and inject additional cash to run the business short term, as well as take on additional liabilities. Until (and if ever) a buyer is decided, Metaldyne is running on $18.5 million in debtor-in-possession financing from Deutsche Bank and customer funding.

General Motors' bankruptcy endgame appears to be at hand, with word coming out that the automaker will indeed file for Chapter 11 protection early on Monday morning, which in turn is expected to trigger $30.1 billion in U.S. government loans. That funding will arrive on the heels of the $19.4 billion GM has already received since late last year, and Canada is expected to chip in an additional $9.5 billion. In exchange for that $30.1 billion in financing, Capitol Hill will receive a 60% share of GM, while Canada's investment will reportedly net it a 12% stake.
In related news, Automotive News is reporting that GM will appoint Al Koch to a newly created chief restructuring officer post. Koch, a corporate turnaround expert, has already been working with GM since January through his advisory firm, AlixPartners LLP. According to AN, Koch will oversee "bad" GM - that is, the liquidation of assets deemed to be dead weight in the drive to a leaner, more competitive GM (think: Hummer, Saturn, Saab, etc.). Recently minted GM CEO, Fritz Henderson, will continue to lead the corporation and, of course, all warranties will continue to be honored.
As part of the Chapter 11 bankruptcy proceedings, GM will see its stock-trading ticker removed from the Dow and S&P 500 on Monday, with those who have still been stubbornly holding on to stocks effectively losing everything.
President Obama will address the nation on GM's historic bankruptcy beginning at 11:55 a.m. EDT, with Fritz Henderson slated to address media members at around 12:15 p.m. in New York.

Over the last several years, and until General Motors' finances dictated that the Saturn brand had to be dispensed with entirely, it had become the North American outlet for Opel vehicles. Aside from the Outlook, all of Saturn's current models are based on their Opel equivalents. The most recent speculation about Saturn's fate had the dealer network being taken over by Roger Penske with a future vehicle supply coming from Renault via its South Korean subsidiary.
With this weekend's agreement in principle that supplier Magna International would take over control Opel, those speculative plans could be about to change. Magna chairman Frank Stronach told the Globe and Mail he wants to see Opel vehicles built in Canada. While Penske -- or any other Saturn suitor -- might have preferred to source future vehicles from Opel, getting them from Europe would prohibitively expensive with a weak dollar. However, if vehicles are sourced from a Canadian facility, it could become a viable prospect. The problem is Magna doesn't have a car assembly plant in Canada, but several Canadian plants are either scheduled to close or are without future product commitments, so Magna could end up buying a factory like the Oshawa truck plant from GM or even Chrysler.

Late Sunday night, U.S. bankruptcy Judge Arthur Gonzalez approved the sale of Chrysler's remaining good assets to a group that includes the UAW VEBA health care trust, Fiat, and the U.S. and Canadian governments. The union will get a 68% stake, Fiat gets 20% and the governments split the rest. Gonzalez over-ruled virtually all objections to the deal on the grounds that the best chance of preserving any value in the assets was to move ahead with the sale. The only other viable alternative was liquidation, which would likely only bring a small fraction of the potential value in keeping the company alive.
Gonzalez cited the public interest as one of the reasons to move ahead with the sale. Because the billions of dollars in loans from the two governments, keeping the company alive it was decided that this course of action was the best opportunity for some repayment. Senior lenders will receive $2 billion, or about .29 cents on the dollar of the debt currently owed by Chrysler. Some 90 percent of the company's senior lenders were reportedly in support of the deal.
The "new" Chrysler will henceforth be known as Chrysler Group LLC.
[Source: Reuters]