"CHANGE" - GM Launches Chevrolet Aveo Output at RUSSIAN GAZ Plant.

"CHANGE" - GM Launches Chevrolet Aveo Output at RUSSIAN GAZ Plant.(RN).NIZHNY NOVGOROD – Russian vehicle maker GAZ Group has launched assembly of Chevrolet Aveo sedans at its Nizhny Novgorod plant under an agreement with US car giant General Motors, GAZ said on Tuesday.
“We are now producing 48 cars a day. By April, we should be already producing 150 cars a day,” GAZ CEO Bo Andersson said at the launch ceremony.
GAZ said it will also start assembling Chevrolet Aveo hatchbacks by late March, and hopes to produce about 30,000 Aveo cars annually for the Russian market.
Joint investment in that project will total $29 million, including $19 million from GM and $10 million from GAZ. The vehicles will be built from components made in South Korea, but GM intends to increase the share of locally-made content.
The GAZ facility is Europe’s sole production site for the Chevrolet Aveo.
Chevrolet is General Motors' largest global brand with annual sales of about 4 million vehicles in more than 130 countries. It is the fourth-biggest global car brand in terms of sales and also one of the fastest growing brands in the world, according to GM’s website.
Chevrolet car sales in Russia rose 18 percent in 2012 to 205,000 vehicles, making Russia GM's fourth largest market by sales.Hmmmm.....Obama: "All the Choices We've Made Have Been the Right Ones"Read the full story here.

PS: GM closing assembly lines in Canada.

U.S. Taxpayers Likely to Lose Billions of Dollars on GM Bailout.

U.S. Taxpayers Likely to Lose Billions of Dollars on GM Bailout.(DN).The Obama administration said Wednesday it will sell 200 million shares — or 40 percent of its remaining stake in General Motors Co. — back to the automaker and announced plans to completely exit the Detroit automaker by March 2014.
The Detroit automaker said it will purchase 200 million shares of GM stock held by Treasury for $5.5 billion — or $27.50 per share — nearly $2 above the stock’s closing price on Tuesday.
GM shares jumped sharply on the news and were up 7.5 percent to $27.36, or $1.90, early afternoon in very heavy trading.
The exit timetable signals the end of one of the most extraordinary government interventions in the U.S. economy in history — the rescue and partial nationalization of two U.S. automakers and their finance arms supported by two U.S. presidents.
Still, taxpayers will almost certainly lose billions of dollars in the $49.5 billion GM bailout – and the government would need to sell its remaining shares for about $70 each to break even. If the government sold the rest of its stock at current prices, taxpayers would lose more than $13 billion. But profits from the bank and AIG bailouts will largely offset the auto bailout losses.
David Whiston, a senior equity analyst for Morningstar, said he was surprised the government didn't wait for a $33 a share price, but said investors likely were expecting an announcement following the quick AIG sale.
The Canadian federal and Ontario governments — which gave GM a separate $10 billion bailout — still hold about 9 percent of GM's shares. Canadian officials said in Toronto they have no immediate plans to sell.
The Treasury has said it expects to lose $24.3 billion on the $85 billion auto bailout.
Treasury also holds a 74 percent stake in Ally Financial Inc., the Detroit-based auto lender, as part of a $17.2 billion bailout.
Last year, the government exited Chrysler Group LLC and booked a $1.3 billion loss on its $12.5 billion bailout.Hmmmm.....Obama: "All the Choices We've Made Have Been the Right Ones" Read the full story here.

If the Auto Bailout Was a Success, I’d Hate to See What a Failure Looks Like.

If the Auto Bailout Was a Success, I’d Hate to See What a Failure Looks Like.(Cato).By Daniel J. Mitchell
Sometimes it’s no fun to be an economist. Or, to be more specific, it’s rather frustrating to understand Bastiat’s insight about the “seen” and the “unseen” and to always be asking “at what cost?” and “to what effect?” when politicians make inane statements.
The GM bailout is a good example. Politicians want us to believe that it was a success because the company is still in business. Heck, the Vice President’s favorite campaign statement is that “Osama bin Laden is dead and General Motors is alive”
But if you’re the type of person who recognizes t.he importance of tradeoffs and incentives, then it’s easy to see how a political success can be an economic failure. Which is the message of this new video from the Center for Freedom and Prosperity Foundation.

This is music to my ears. I’ve been saying for years that any company can be kept afloat indefinitely with taxpayers subsidies. So if that’s the definition of success, we can party until we hit the fiscal brick wall. But that wall won’t feel good, as we can see from the fiscal chaos in Greece and other European welfare states.
But this issue involves more than just inefficient subsidies. I’m also concerned about the corruption that inevitably exists when cronyism replaces capitalism.
It’s quite likely, after all, that GM is spending lots of money on the Chevy Volt because of pressure from Washington rather than demand from consumers. And when you have a car company executive endorsing higher gas taxes, it’s reasonable to think that he’s currying favor with the political masters in DC rather than looking out for the best interests of drivers.
The GM bailout may be a win-win situation for politicians and lobbyists, but it’s a lose-lose proposition for taxpayers and the economy.
P.S. If you want some auto bailout humor, here’s a spoof on the Chevy Volt, an advertisement for the new GM Obummer, a couple of good political cartoons, and a very funny video on the Pelosi GTxi SS/RT.Read the full story here.

The World From Berlin 'Electric Cars Are Far Too Expensive'

The World From Berlin 'Electric Cars Are Far Too Expensive'.(Spiegel).The electric car fits neatly into the German government's plan to leave the dirty world of fossil fuels behind it by mid-century. Just over a year ago, Chancellor Angela Merkel set the bold goal of increasing the number of electric cars in the country to 1 million by 2020. But today there are only 4,600 of them driving on German roads, a mere 0.01 percent of all registered cars, despite years of research. So much for a high-voltage success story. German drivers don't want electric cars, and it's not hard to understand why not. Part of the problem is that most e-cars can't travel further than 100 kilometers (62 miles) before needing a recharge.
Prices, too, can run as much as €10,000 ($13,000) higher for an e-car than one with a traditional internal combustion engine. On Monday, Merkel hosted a meeting with the heads of Germany's major automobile manufacturers, including BMW, VW, Porsche and Daimler, to talk about e-cars. She admitted that, as of today, it "wouldn't be easy" to meet the government's goal and that 600,000 electric cars by 2020 is more likely. The chancellor noted that as the technology advances, those numbers might quickly change for the better.

The country has already pumped €500 million in state aid into the promotion of electromobility as part of its fiscal stimulus measures during the global economic crisis. By 2013, Berlin is expected to provide an additional billion euros in funding for research and development projects. However, the chancellor has refused to offer incentives or tax breaks to consumers to fuel spending on e-cars, saying it won't happen during the current government's term. With fiscal belt-tightening and the euro bailout, there's greater competition today for funding. Meanwhile, Merkel's transportation minister, Peter Ramsauer, and Economics Minister Philipp Rösler have refused to back buyer incentive programs, arguing that road repair and construction should be given a priority.
Of the CEOs who came to the Chancellery, Daimler CEO Dieter Zetsche was the only one to turn up in an electric car. Was it symbolic of the lack of enthusiasm German carmakers have for battery-operated vehicles? Zetsche told German public broadcaster ZDF that Berlin should be happy if it succeeds in getting 500,000 to 600,000 e-cars on the road by the end of the decade. Like other auto sector executives, he is also calling for purchasing incentives like those sponsored by the French and American governments.Read the full story here.

Obama Didn’t Save the Auto Industry: He Took Away 2,200 Dealerships and 120,000 Jobs.

Obama Didn’t Save the Auto Industry: He Took Away 2,200 Dealerships and 120,000 Jobs.(LC).As a Catholic who works in the trade association profession in the auto industry it was unsettling to hear President Obama claim that he saved the auto industry. President Obama closed over 2,200 auto dealerships, which caused the losses of decades old family-owned businesses and over 120,000 jobs they provided. The closures were allowed to happen under the false notion that auto dealerships were an expense on their auto maker. The President ignored the fact that auto dealers are not an expense to automakers. Auto makers own none of what you see at auto dealerships. Auto dealers own all their property; the cars and trucks, parts, buildings, land, signs, everything. The dealerships pay their employee’s salaries and millions of dollars in taxes to state and local governments. The manufacturer has nothing to do with any of these things.

Facts:

• President Obama purposefully and unjustly took away 2,200 self-sufficient, family owned businesses under the false premise that they were an expense on their auto manufacturer. He deliberately put these people in debt with no way to recover. Auto dealers still cannot sell their closed properties.

• President Obama’s decision to close dealerships cost 120,000 persons their jobs and livelihood.

• The President’s action defrauded auto dealers of their property rights and their employees of their wages.

The President’s actions against auto dealers violated the Catholic social teaching principles of social justice and the common good by removing owners rights to their property and defrauding workers of their wages. His actions (he calls it “shared sacrifice”) were an example of collectivism, centralized planning and socialism. All of these ideas are rejected by America and all are rejected by Catholic teaching in regard to the commandment, “thou shall not steal.”
Many people have forgotten what damage President Obama did to the auto industry and the auto dealer and their employees. Please remind them.
Peter L. Hodges Sr.

"Government Motors" - Pentagon Buying Chevy Volts to ‘Green Up’ Military.

"Government Motors" - Pentagon Buying Chevy Volts to ‘ Screw Green Up’ Military.(FB). BY: Bill McMorris. The Pentagon is buying Chevrolet Volts to help “green up” the military—while propping up sales of the bailed-out automaker’s most politicized car. The Department of Defense began purchasing the struggling luxury electric car, which retails at $40,000, this summer as part of its goal to purchase 1,500 such green vehicles.
The Marine Corps Air Station in Miramar, Calif. purchased its first two Volts in July, and 18 more vehicles will come shortly to Joint Base Andrews in Maryland, where Air Force One is based, according to military magazine Stars and Stripes.
The Obama administration championed the production of the Volt. Along with the president’s pledge this year to “buy one and drive it myself … five years from now when I’m not president anymore,” the government offers a $7,500 tax break to encourage sales. Such perks, however, have failed to drive consumers to GM car lots. The vehicle has been forced to suspend production twice this year after the Volt failed to gain a foothold in the marketplace. GM is now offering the vehicle for as low as $169 per month, a financing deal that is generally reserved for $15,000 cars—a price so low that GM is reportedly losing nearly $50,000 per vehicle. The struggling automaker will again suspend production later this month after only 2,500 Volts drove off the lots last month.Hmmmm......"You Will Obey and Drive Electric Cars"........Why does the name Stalin come to my mind?Read the full story here.

"ObamaNomics" - GM is still losing as much as $49,000 on each Volt it builds.

"ObamaNomics" - GM is still losing as much as $49,000 on each Volt it builds.(Reuters).

“Nearly two years after the introduction of the path-breaking plug-in hybrid, GM is still losing as much as $49,000 on each Volt it builds, according to estimates provided to Reuters by industry analysts and manufacturing experts.” 

Cheap Volt lease offers meant to drive more customers to Chevy showrooms this summer may have pushed that loss even higher. There are some Americans paying just $5,050 to drive around for two years in a vehicle that cost as much as $89,000 to produce.
And while the loss per vehicle will shrink as more are built and sold, GM is still years away from making money on the Volt, which will soon face new competitors from Ford, Honda and others. GM's basic problem is that "the Volt is over-engineered and over-priced," said Dennis Virag, president of the Michigan-based Automotive Consulting Group. GM's quandary is how to increase sales volume so that it can spread its estimated $1.2-billion investment in the Volt over more vehicles while reducing manufacturing and component costs - which will be difficult to bring down until sales increase. But the Volt's steep $39,995 base price and its complex technology — the car uses expensive lithium-polymer batteries, sophisticated electronics and an electric motor combined with a gasoline engine — have kept many prospective buyers away from Chevy showrooms.
GM acknowledges the Volt continues to lose money, and suggests it might not reach break even until the next-generation model is launched in about three years. "It's true, we're not making money yet" on the Volt, said Doug Parks, GM's vice president of global product programs and the former Volt development chief, in an interview. The car "eventually will make money. As the volume comes up and we get into the Gen 2 car, we're going to turn (the losses) around," Parks said. "I don't see how General Motors will ever get its money back on that vehicle," countered Sandy Munro, president of Michigan-based Munro & Associates, which performs detailed tear-down analyses of vehicles and components for global manufacturers and the U.S. government. It currently costs GM "at least" $75,000 to build the Volt, including development costs, Munro said. That's nearly twice the base price of the Volt before a $7,500 federal tax credit provided as part of President Barack Obama's green energy policy. Other estimates range from $76,000 to $88,000, according to four industry consultants contacted by Reuters. The consultants' companies all have performed work for GM and are familiar with the Volt's development and production. They requested anonymity because of the sensitive nature of their auto industry ties. The independent cost estimates obtained by Reuters factor in GM's initial investment in development of the Volt and its key components, as well as new tooling for battery, stamping, assembly and supplier plants — a price tag that totals "a little over" $1 billion, Parks said. Independent estimates put it at $1.2 billion, a figure that does not include sales, marketing and related corporate costs. Hmmm......Obama: "All the Choices We've Made Have Been the Right Ones" Read the full story here.

New Auto Efficiency Regs: Special Interests Win, Consumers Lose.....How many Jobs will be lost in the Sector?

New Auto Efficiency Regs: Special Interests Win, Consumers Lose.....How many Jobs will be lost in the Sector?(Heritage).The federal government finalized new automobile efficiency rules today for cars and light trucks for model years 2017–2025. The rules require an average fuel economy of 54.5 miles per gallon (mpg) in 2025. Proponents of the rule advertise the more stringent mpg standard as a win for producers, consumers, and environmentalists. The fact is that top-down fuel efficiency standards are unnecessary and have numerous unintended consequences. The Administration is saying that the new standards will save consumers money, reduce emissions, reduce oil consumption, and create jobs.
But will consumers actually save money? It depends on whom you talk to. The government acknowledges that increased fuel efficiency standards will increase the upfront cost of a vehicle but that these higher prices will be offset by savings on gasoline.
Generally, these cost savings assume that the buyer keeps the vehicle for its entire lifespan, which usually doesn’t happen. Further, consumers tend to drive new, fuel-efficient vehicles more, which reduces the estimated price, oil, and emissions savings. These advertised savings also assume that the government’s increased price tag estimate for new vehicles is accurate. Automotive systems engineers argue that it’s not—the real price is much higher. Robert Bienenfeld, senior manager for environment and energy strategy at American Honda Motor Company, emphasized, “There is concern that if there is too much cost associated with it, we’re going to be hurting demand. It’s a challenge. You can get too far ahead. You can make too big of a leap and go for a higher fuel economy that maybe the market won’t bear.” Higher prices reduce demand and force people to hold onto their older vehicles longer. Reduced demand means fewer cars produced, which means automakers have to shed jobs. 

STUDY: 56 MPG Standard by MY2025 to Cost 220,000 jobs - 62 mpg could put almost 300,000 out of work. FENTON, MI (July 7, 2011)—A white paper from the Michigan-based Defour Group finds that a significant number of auto sector jobs would be lost if the federal government’s proposed fuel economy mandates for Model Year (MY) 2017-2025 vehicles were implemented. Federal regulators, currently meeting with automakers behind closed doors, are considering increasing the standards to as high as 56 mpg to 62 mpg over that time period. Dean Drake, the paper’s author, confirmed a U.S. Energy Information Administration estimate that automakers would sell 2.4 million (approximately 14 percent) fewer new vehicles if standards are set to hit 62 mpg by 2025.
“Clearly, sales losses of this magnitude could be expected to lead to job losses in the industry,” Drake said. Drake bases the study’s job loss numbers on the National Highway Transportation Safety Administration (NHTSA) analysis of the 2012-2016 MY CAFE standard that said that one job would be lost by the OEMs and their suppliers for every 11.3 new vehicle sales which fail to sell.
The study also calculates dealerships job losses as a result of fewer new car and truck purchases. “These projected job losses will NOT be offset by the development of new technologies creating so called ‘green jobs’ as many contend,” Drake added. “The advanced technology vehicles such as electrics will only make up a small part of the new vehicle fleet. Plus there is no guarantee that these new jobs would stay in the United States.”
Even though President Obama stressed that he had “no intention” of running General Motors when he bailed out the company, these new fuel standards effectively foist a management decision on all automakers.Read the full story here.

GM to suspend Chevy Volt production, retooling for Impala.

GM to suspend Chevy Volt production, retooling for Impala.(UST). General Motors is halting, for a month, the manufacture of its well-known Chevrolet Volt extended-range electric car.
Automotive News, citing unnamed sources, reports the Detroit-Hamtramck plant will suspend production from Sept. 17 until Oct. 15.
Leaders of the UAW told the plant's 1,500 union workers about the scheduled downtime last week, the source said.
It would be the second interruption in production for the Volt, which can go 38 miles on battery power before needing a recharge from its gasoline engine. GM late Monday disputed published reports that the move is because of slow Volt sales. GM sold 10,666 Volts through July, way up from the 2,870 sold during the same period a year earlier.
"We are not idling the plant due to poor Volt sales. We're gearing up for production of the new Impala," Chevy spokesman David Darovitz said in an email. Hmmmm.........Obama: "All the Choices We've Made Have Been the Right Ones".Read the full story here.

The Dream :"We need More Gov Bailout" - The Reality :"General Motors Is Headed For Bankruptcy -- Again".

The Dream :"We need More Gov Bailout" - The Reality :"General Motors Is Headed For Bankruptcy -- Again".(Forbes).President Obama is proud of his bailout of General Motors. That’s good, because, if he wins a second term, he is probably going to have to bail GM out again. The company is once again losing market share, and it seems unable to develop products that are truly competitive in the U.S. market.

Right now, the federal government owns 500,000,000 shares of GM, or about 26% of the company. It would need to get about $53.00/share for these to break even on the bailout, but the stock closed at only $20.21/share on Tuesday. 

This left the government holding $10.1 billion worth of stock, and sitting on an unrealized loss of $16.4 billion.Right now, the government’s GM stock is worth about 39% less than it was on November 17, 2010, when the company went public at $33.00/share. However, during the intervening time, the Dow Jones Industrial Average has risen by almost 20%, so GM shares have lost 49% of their value relative to the Dow.
It’s doubtful that the Obama administration would attempt to sell off the government’s massive position in GM while the stock price is falling. It would be too embarrassing politically. Accordingly, if GM shares continue to decline, it is likely that Obama would ride the stock down to zero.GM is unlikely to hit the wall before the election, but, given current trends, the company could easily do so again before the end of a second Obama term.Hmmm.......Obama: "All the Choices We've Made Have Been the Right Ones"Read the full story here.

"We need more Government Bailouts" - Taxpayer loss on auto bailout revised upward to $25b!

"We need more Government Bailouts" - Taxpayer loss on auto bailout revised upward to $25b!(DN).Washington -The Treasury Department says in a new report the government expects to lose more than $25 billion on the $85 billion auto bailout. That’s 15 percent higher than its previous forecast.
In a monthly report sent to Congress on Friday, the Obama administration boosted its forecast of expected losses by more than $3.3 billion to almost $25.1 billion, up from $21.7 billion in the last quarterly update.
The report may still underestimate the losses. The report covers predicted losses through May 31, when GM’s stock price was $22.20 a share.
On Monday, GM stock was trading down 6 cents, or 0.2 percent, to $20.49. At that price, the government would lose another $850 million on its GM bailout.
The government still holds 500 million shares of GM stock and needs to sell them for about $53 each to recover its entire $49.5 billion bailout.Hmmm.....Obama: "All the Choices We've Made Have Been the Right Ones".Read the full story here.

Auto Bailout Czar: We Did It All for the Unions.

Auto Bailout Czar: We Did It All for the Unions.(NLPCS).The Detroit Free Press reports that the House committee holding hearings on the auto bailout process wants clarification from former head of President Obama's Auto Task Force, Ron Bloom, regarding testimony he gave about a statement he allegedly made at a 2009 celebratory dinner. According to a news article written at the time and fellow ex-car czar, Steve Rattner, Bloom stated that he "did this all for the unions." Bloom denied making the statement while under oath. The congressional panel isn't buying it and has written a letter to Bloom requesting that he amend his testimony.
Given Bloom's union background and the UAW favoritism displayed throughout the General Motors and Chrysler bailout process, the admission that the bailouts were done to benefit the unions should not come as a surprise. For many of us, that has been obvious for quite some time. Bloom was once the special assistant to the president of the United Steelworkers Union where he negotiated on behalf of unions. The fact that Obama chose a car czar that had union loyalties is very telling. The so-called "sacrifices" made by the UAW during the auto bailout process pale in comparison to those made by other classes of creditors, including GM bondholders who were shut out of negotiations for the most part. Accident victims and asbestos victims had their claims subordinated to the politically powerful UAW as well, and taxpayers are footing the bill. I have yet to see where the UAW has sacrificed much. Reduced wages for new UAW members only apply after laid off senior members with full pay are rehired Part of Bloom's defense of comments like the one about him doing it all for the unions is that he made the statements jokingly. Bloom's strange sense of humor may get some laughs from those that have benefited from the unprecedented government actions. Maybe the UAW, bankruptcy attorneys and investment bankers are yucking it up, but taxpayers and other classes that were discriminated against are not laughing. The American people deserve to know the truth about how the bailouts benefited cronies of the Obama administration like the UAW as others paid the price.Read the full story here.

A number of hedge funds and other shareholders filed a Class Action Lawsuit against General Motors

A number of hedge funds and other shareholders filed a Class Action Lawsuit against General Motors.(MP).A number of hedge funds and other holders of shares in General Motors have filed a class action lawsuit alleging that GM is channel stuffing in order to inflate its sales numbers. This has been long discussed and finally some action. If you think the economy is so robust, what is robust is how much manipulation is going on.
 Quote: --------------------------------------------------------------------------------

1. This is a securities class action on behalf of all purchasers of the common stock of GM pursuant in or traceable to the Company's November 18, 2010 initial public offering (the "MO" or the "Offering") pursuant to the Securities Act of 1933 (the "Securities Act").

2. Defendants made materially false and misleading statements, and failed to make subsequent disclosures to make the earlier statements not misleading, related to GM having strong inventory controls in place at the time of the IPO.

3. In connection with the IPO, and in order to assuage concerns that GM was predicting revenue based on production rather than actual sales, GM falsely assured investors that it was actively managing its production by monitoring its dealer inventory levels. Additionally, GM assured investors that in 2011 it would improve inventory management, which would improve average transaction price.

4. These statements were false when made. In July 2011, reports began to surface that GM had engaged in an extraordinary inventory build-up. In particular, an article published by Bloomberg on July 5, 2011 revealed that GM may have been unloading excessive inventory on dealers, a practice known as channel stuffing, in order to create the false impression that GM was recovering and sales and revenues were rising. The Bloomberg article stated that GM's truck inventory swelled to 122 days worth of average sales whereas, by comparison, GM's less profitable car inventory was limited to 60 to 70 days of average sales, Ford was maintaining only a 79 day inventory on comparable trucks, and GM's truck inventory during the years 2002-2010 had similarly averaged only 78 days of average sales. By November 2011, GM dealer inventories were 30% higher than they were on September 30, 2010 (the end of the last full quarter before the November 18, 2010 IPO) and 62% higher than they were at the end of2009.

5. During the three months following the Bloomberg article, GM's share price fell from more than $31.00 to below $20.00, far below the IPO price of $33.00, and continues to trade around $20.00 today.

6. Plaintiff is asserting non-fraud prospectus liability claims under Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 on behalf of purchasers of GM stock in or traceable to the November 18, 2010 IPO.

Hmmmm..........Obama Pushes False GM Success Story: "As part of a credit agreement with Treasury, $16.4 billion in TARP funds were placed in an escrow account that GM could access only with Treasury's permission." As it turns out, GM got Treasury's OK to "repay" more than $6.7 billion "using a portion of the escrow account that had been funded with TARP funds." So GM is merely paying the government back with government money, not money GM is earning selling cars, as the administration has claimed.............."Yes We Can?"Read the full story here.