The Demo Site

Jim Fouts, Warren Mayor, hand delivered a letter to General Motors’ CEO Fritz Henderson offering the company long-term tax incentives to move its headquarters from the Renaissance Center in Detroit to the GM Tech Center in Warren.

Fouts’ six-page letter proposes a 30-year personal property tax-break, the longest tax-break ever offered in the state and three times longer than Warren has ever proposed. He said the GM could save tens of millions of dollars as it looks to cut costs.

“I present this to you not as a choice between Detroit and Warren, but as a matter of GM moving forward and surviving,” Fouts’ letter said. “Restructuring implies cost-cutting, and this proposal is a prime example of cutting costs through consolidation.” 

The proposal said that the move would require no new construction and that Warren’s Downtown Development Authority would contribute funds to help with the move.

He said that GM’s Tech Center in Warren could easily accommodate the 4,300 employees working at its downtown Renaissance Center headquarters.

Source: Detroit News

Chrysler’s CEO Bob Nardelli said today that he expects the sale of the automaker’s assets to a new company to be completed by Friday. He said that regulatory approvals will be finalized and he will step down as the company’s CEO.

Nardelli said that he plans on returning to his former post at Cerberus Capital Management on Monday morning. Nardelli, who worked for Cerberus until July 2007, was asked to run Chrysler in August 2007.

He went onto explain that Chrysler’s financial troubles started late last year and put the company in a ”situation of not having enough liquidity to keep the doors open.”

He wrapped up his hearing saying that he favored keeping Chrysler independent, as opposed to the partnership with Fiat SpA.

Fiat will take a 35 percent share in Chrysler and will change the name of the new company to Chrysler Group LLC.

Source: Detroit News

Bob Lutz, who has retired from his vice chairman position at General Motors, said that the new GM that comes out of the “cleansing” of the radical restructuring will be “smaller and leaner but a powerhouse” that is very profitable.

As for GM going into bankruptcy, Lutz said: ”We intend to get in and out very soon. The U.S. government wants its money back, and our plan is to pay it back as quickly as possible. The U.S. government doesn’t want to own auto companies.”

Separately, Lutz said that he envisions the Obama administration’s auto task force to become a permanent entity in the government, exercising ”benevolent oversight” of the auto industry.

“I fully expect and I hope that it will be replaced with some sort of permanent structure that facilitates the continuation of this dialogue,” Lutz said in his speech today to the Automotive Press Association.

Source: AutoObserver

Jaguar has just launched a high-performance Police vehicle based on the XF Diesel S model.

“Police forces are looking for vehicles that represent value for money, have good environmental credentials and deliver the power and performance required of a pursuit vehicle,” said Geoff Cousins, UK Managing Director for Jaguar Cars.

The first ever Police-spec XF is currently being evaluated by Police forces across the UK. Power comes from the 3.0L Diesel S engine making 275-hp with a parallel sequential turbocharger system. 0 to 60 mph comes in 5.9 seconds and fuel-economy figures are estimated at 42 mpg (35 mpg in U.S. terms).

The Jaguar XF Diesel S is on sale now with prices starting at £36,900.

GM had offered bondholders a 10 percent stake in the restructured company to reduce its $27 billion debt and avoid going into bankruptcy court. However, yesterday GM failed to gain the near 90 percent of bondholder support to accept a debt-for-equity swap. Sources say that GM is now planning to file for Chapter 11 bankruptcy by June 1.

According to a report by the New York Times, the U.S. Treasury will have to inject an additional $50 billion to get GM through Chapter 11. It has already loan more than $20 billion to the struggling automaker. In return for its ‘investment,’ the U.S. Treasury Department will receive about 70 percent of the restructured GM.

Meanwhile, the UAW will get up to 20 percent through its retiree health care fund and bondholders will get the remaining share. GM shareholders will eventually be  wiped out.

Source: New York Times

General Motors is one step closer to filing for the largest bankruptcy ever for a U.S. industrial company after bond exchange offers failed. On the other hand, the sale of GM’s European brand Opel isn’t going so well either as German officials ended talks earlier today without reaching a deal.

The bidding war for Opel had narrowed down to a two-way race between Fiat SpA and Magna International. German officials were unable to reach a deal after 12 hours of talks stretching well into Thursday morning.

Ministers said that talks ended since the German government is unable to provide temporary financing if GM files for bankruptcy is the United States. Reports yesterday said that Fiat and Magna needed to improve their offers and assume greater risk by making commitments to reserve jobs and plants.

“We have made demands on the U.S. Treasury and expect answers by Friday and we will need these answers in order to agree a plan,” said Economy Minister Karl-Theodor zu Guttenberg. “We don’t have the security yet that we need to commit to bridge financing today.”

Source: Reuters

Ed Montgomery, known as President Barack Obama’s ‘car czar’ was in Detroit yesterday to answer questions of some 100 state, local and county leaders on how to get a piece of the $76.7 million in energy and conservation dollars set aside for Michigan in the stimulus package.

Gov. Jennifer Granholm said that the need for help “cannot be overstated” as GM heads towards a possible bankruptcy by the end of the month.

Rather than focusing on energy efficiency and conservation block grant funds, Granholm said that the more immediate issue is the next 60 to 90 days. 

“We are in the next week going to see some massive change in our economy. Whatever happens in the next week, we know that things are going to go dark for a while,” Granholm said. “The urgency cannot be overstated. We need to provide the suppliers a means to get through” the next two to three months.

Granholm said that GM and its suppliers will be strong even if they are forced into bankruptcy. She said that as Michigan moves toward a ‘green economy, having access to funds is extremely important.’

Source: Detroit News