GM pays back government loans in full

Here's a bit of good news....
Kansas City, Kansas – General Motors has made its final payment of US$5.8 billion to the U.S. Treasury and Export Development Canada, paying back its government loans in full and ahead of schedule. The payment includes $4.7 billion to the U.S. Treasury, and $1.1 billion to Export Development Canada.

The announcement was made by GM chairman and CEO Ed Whitacre at a ceremony in Fairfax, Kansas to announce an investment of $257 million in Fairfax and Detroit Hamtramck assembly centres. The investment will prepare Fairfax to build the next-generation Chevrolet Malibu and make Detroit Hamtramck a second source for the model. Fairfax currently builds the current Malibu and the Buick LaCrosse.

As part of the launch of the new GM, the U.S., Canadian and Ontario governments provided loans of $8.4 billion and took equity stakes in the new company. The latest payment completes the payback of the loans.

“GM’s ability to pay back the loans ahead of schedule is a sign that our plan is working, and that we are on the right track,” Whitacre said. “It is also an important first step toward allowing our stockholders to reduce their equity investments in GM. We still have much hard work ahead of us, but we are making progress toward our vision of designing, building and selling the world’s best vehicles. We appreciate the support the taxpayers have given GM, and our new great products are tangible results of that support.”

Source;
http://www.canadiandriver.com/2010/04/21/gm-pays-back-government-loans-in-full.htm

GM, Chrysler to get additional short-term aid

David Shepardson / Detroit News Washington Bureau
WASHINGTON -- President Barack Obama will provide General Motors Corp. with short-term "working capital" as it conducts additional restructuring, while providing short-term aid to Chrysler LLC as it works to complete a tie-up with Fiat SpA.

Obama told four key Michigan members of Congress during a Sunday night conference call that he would grant unspecified additional aid to GM for 60 days and Chrysler for 30 days, according to a person familiar with the call.

Obama said GM Chief Operating Officer Fritz Henderson would take over the automaker on an interim basis and that no management changes at Chrysler were forthcoming.

The White House demanded and received GM Chairman and CEO Rick Wagoner's resignation as part of the aid request.

The call included Sen. Carl Levin, D-Detroit, and Sen. Debbie Stabenow, D-Lansing as well as Rep. Sander Levin, D-Royal Oak, and Rep. John Dingell, D-Dearborn.

UPDATE: Early reports indicate that Chrysler will receive $6 billion in federal aid and over the course of the 30 days, Chrysler will likely give up a 35% stake to Fiat.

Source (via autoblog.com);
http://www.detnews.com/article/20090329/AUTO01/903290337/1148/rss25

Chrysler threatens to pull out of Canada

Updated: Wed Mar. 11 2009 10:50:07 PM
ctvtoronto.ca

Chrysler LLC says it may no longer be able to operate in Canada unless Ottawa loans the company billions of dollars and workers agree to massive wage cuts.

Chrysler president and vice chairman Tom LaSorda told MPs Wednesday the company is seeking US$2.3 billion from the Canadian government -- roughly a quarter of what it's asking from the White House.

He also said Canada's tax agency must agree to not demand more cash or collateral in a tax fight with the company. The Canada Revenue Agency is withholding $300 million in tax rebated and has put a $500-million lien on Chrysler's Brampton plant.

"The current success and long-term viability of Chrysler's manufacturing operations in Canada is very much dependent on (those) three critical factors," he told a committee hearing.

"Chrysler LLC cannot afford to manufacture products in a jurisdiction that in uncompetitive relative to other automotive jurisdictions."

New Democrat MP Joe Coartin, a member of the parliamentary committee that heard LaSorda's comments, dismissed them as little more than posturing.

"The bottom line is that Chrysler does not function in the United States without Canada," he said.

Chrysler Canada and its parent company, Chrysler LLC, have had their sales hammered by the economic downturn. Its sales were down 27 per cent in February compared to last year and it has asked Ottawa for a $1 billion in emergency loans as it works on its restructuring plan.

LaSorda said his company's labour costs are $70 an hour in wages and benefits for both current workers and retirees. He says it needs to be cut by $20 to be competitive.

Just last week, Chrysler announced it would be cutting 1,200 jobs in Windsor, Ont., by eliminating the third shift at its minivan assembly plant.

The Windsor plant produces the Chrysler Town & Country and Dodge Grand Caravan minivans and has about 4,450 hourly workers. It is the company's only supplier on minivans as two other minivan plants have been shut down in the U.S.

LaSorda said that the company could move the Windsor plant to either of the other sites they previously shut down.

The Dodge Grand Caravan was Canada's No. 3 best selling vehicle in February.

Analysts say Chrysler is teetering on the edge of bankruptcy. On top of the most recent job cut announcements, it has slashed about 32,000 jobs to staunch the financial bleeding, and has cut production levels by 30 per cent.

With a report by CTV's Graham Richardson in Ottawa




Source (with a Video Feed);


http://toronto.ctv.ca/servlet/an/local/CTVNews/20090311/chrysler_caw_090311/20090311?hub=Toronto

Detroit 3 health crucial for Japan carmakers-lobby

TOKYO, Feb 19 (Reuters) - A healthy U.S. auto industry is vital for a sound U.S. economy and by extension for Japanese carmakers, a Tokyo-based auto lobby said, giving a tacit nod to the latest request for federal aid from ailing rivals in Detroit.

General Motors Corp and Chrysler this week sought nearly $22 billion in additional U.S. government loans on top of the $17.4 billion in loans they have so far received to survive as car sales plummet around the world.

"The auto industry -- the Big Three -- plays an important role in the U.S. economy," Satoshi Aoki, chairman of the Japan Automobile Manufacturers Association, told a news conference.
"The latest (aid request) is quite substantial but we hope it will lead to the health of the U.S. auto industry," he said.

The United States is the single-biggest and traditionally most profitable market for Japan's top three automakers, Toyota Motor Corp, Honda Motor Co and Nissan Motor Co.

Aoki, also chairman of Honda, said the U.S. market appeared headed for a weaker year than the sales of 12.5 million vehicles he had forecast for 2009 at the end of last year.

"We are still anticipating an improvement in the latter half of the year driven by economic stimulus steps under the new Obama administration, and we hope total demand will come in just below 12 million units."

Most industry forecasts are lower, with 11.5 million at the higher end. The U.S. market totalled 13.2 million vehicles in 2008, down 18 percent from 2007.

Many governments have announced various forms of aid to the struggling auto industry, which has been hit by a simultaneous slide in demand globally. Among them, France has pledged loans of 3 billion euros ($3.77 billion) each to its two local carmakers while Britain has said it would guarantee up to 2.3 billion pounds ($3.28 billion) of loans to the industry.

Japan has been conspicuously absent from that growing list. Aoki said the auto lobby has made no request for specific aid even as many members brace for their worst annual financial results in years.
"The auto industry requires a lot of capital for research and development of advanced safety and environmental technologies, but basically it's up to each company to raise funds in the market or use its own cash reserves," Aoki said.

"But right now market conditions are tough and abnormal, and we only hope that the government will take steps to bring the market closer to normal levels," he said.

Responding to such concerns, the Bank of Japan on Thursday extended its commercial paper buying scheme and pledged to boost supply of low-cost funds as it battles a credit crunch that is pushing the world's second-biggest economy deeper into recession. ($1=.7949 Euro; $1=.7007 Pound) (Editing by Michael Watson)

Source;
http://uk.reuters.com/article/governmentFilingsNews/idUKT867220090219?sp=true