Porsche is not very happy these days! Not long ago they were the only company with 17 percent gross profit on each car they sell but now, thanks to the global economy downturn, they are struggling to keep the factories up and running! let alone paying their big debts. Of course the deal with the gulf state of Qatar seems to be done in a few weeks, but as the sales are dropping constantly, Porsche decided to cut productions at Zuffenhausen plant.

That’s where the 911 is being built! They say it is an strategic move to save money so they can keep the Leipzig factory, in which the Cayenne and Panamera are assembled, running without troubles. So it will result in total halt of production at Zuffenhausen for some days and another round of cutting produciton volume of the 911 around the Christmas.

Speaking of cutting costs, Porsche has previously announced that they have spent a big lump of money on the Panamera platform so they’re gonna make the most of it. Rumors about a coupe and convertible variant of the four-door super saloon and the 928 resurrection based on the Panamera are still on the streets while recent reports are also saying that a high-performance hardened stiffened-up model is also planned (just like what they’ve done to the Cayene GTS) which will be called Panamera GTS. This car is identical to the Panamera Turbo but instead of that fancy air suspension, features an old school steel springs setup.

Porsche executives also seem to be very keen on having a diesel variant of the Panamera as well. They are currently producing a diesel powered Cayenne and thta’s not doing bad, so why not a Panamera diesel! There is no shortage of choices too since VW has some of the finest diesel engines available in V6, V8 and V10 formations.

via Reuters-Autocar

So this is it! Finally General Motors has filed for chapter 11 bankruptcy. But the work has started for a new GM to re-launch in 90 days, which will be smaller and more focused on profitable brands. Also the government of the United States will take 60 percent stakes in the new company. They have also reached an agreement with Magna to save Opel and Vauxhall. Things are starting to get together nicely!

Press Release:

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:
  • $6.7 billion of debt owed to the U.S. Treasury
  • $1.3 billion of debt owed to the Canadian and Ontario governments
  • $2.5 billion of notes issued to the new Voluntary Employee Beneficiary Association (New VEBA)
  • 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, $0.4 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 1^st 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 Independent Directors of GM. GM’s restructuring advisor is AP Services LLP and its financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP.

More information about GM’s chapter 11 cases is available at www.GM.com/restructuring.

Court filings and claims information are available at www.GMcourtdocs.com.

General Motors is currently doing some heavy housekeeping! They are killing brands, laying-off workers, shutting down factories and… even dealers are not safe as GM recently announced that more than a thousands of them will lose franchise. But according to Mike Devereux, President of GM Middle East: “We will not be affected”. Good!

General Motors’ plans to cancel contracts with more than 1,000 dealers in the US will not have any ripple effect on the car giant’s operations in the region, according to a top executive.

“We will not be affected at all,” Mike Devereux, President of GM Middle East, told Emirates Business. “The decision to cancel contracts with 1,100 dealers is limited to the US and is part of the company’s viability plan to ensure long-term profitability and success.

“The plan has four elements. The first is reducing the number of core brands to four – Chevrolet, Cadillac, GMC and Buick. The second is the restructuring of GM’s US dealer network, including the cancellation of some of these.

“The third element is improved capacity utilisation from a plant and people point of view. The last element involves lowering structural costs to reach a break-even point of approximately 10 million cars, the estimated size of the US market this year, down from a 16 to 17 million.”

A spokesman for Gargash Motors, the sole distributor of GM’s Saab brand in the UAE, said he did not believe his company’s operations would be affected by decisions taken in the US.

“GM is reducing its dealers all over the world,” said General Manager Jonathan Greenslade. “However, this is not expected to affect us in any way. We are the only one dealer for Saab in UAE and that leaves no scope of cancellation. The region is still too small for cancellations. However, we may see certain franchises moving to different owners.

“Dealers around the world are seeing falling demand. It’s been terrible for the entire car industry. Sales have gone down 30 to 40 per cent. Financing is difficult to come by these days. As far as the UAE is concerned demand is falling. On a global level there are far too many cars being produced.”

He said nearly 94 million cars could be produced this year – but demand amounted to just 50 million.

“The world can’t absorb so many cars and somebody will have to loose out. We can expect to see a reshuffle of the motor trade, something that happened 10 years back. This will result in one automobile company acquiring brands from other companies.”

Devereux said GM’s performance in the Middle East was better than elsewhere.

“As far as performance is concerned, the global financial crisis is not limited to one country or one industry,” he added. “Obviously it has hit the Middle East. However, the prospects for mid and long-term growth remain very solid here in the region.

“The overall car market was down by 21 per cent in the region GCC, Levant and Iraq in the first quarter of this year. Our sales were down by just 19 per cent, and this means that we outperformed the industry and gained market share.”

The company is still coming up with new models despite the downturn.

“The good news is that our launch plans are on track,” said Devereux. “We have already launched the Chevrolet Traverse and ZR1, the world’s fastest sedan, the Cadillac CTS-V and the GMC Sierra Denali.

“The highly anticipated Camaro and the all-new global compact car from Chevrolet, the Cruze, will both be in the showrooms in early July as 2010 models, while the award-winning Chevrolet Malibu arrives to the showrooms in October. Also in October we launch the all-new GMC Terrain and all-new Cadillac SRX.”

GM announced last Friday that it is going to cancel contracts with 1,100 dealers in the US. The dealers will have until late 2010 to wind down their businesses and notices have been sent to the affected dealers individually.

source: Zawya

The Rap phenomenon Marshal ” Eminem” Mathers will take 200 laid-off autoworkers from Detroit Motor City to the Jimmy Kimmel show this Friday to show his support for his hometown and to raise awareness about how’s life for these guys who were the builders of American auto empire. By the way, his new album, the Relapse, will be out in about a week! Cheers!

From Detroit Free Press:

When Eminem appears on “Jimmy Kimmel Live!” for a rare interview and performance Friday, he’ll have about 200 laid-off autoworkers from the Detroit area in tow. Eminem and Kimmel are flying the unemployed workers to Los Angeles for the show’s taping.

In preparation for next Tuesday’s release of “Relapse,” his first studio album in more than four years, Eminem is in the midst of a media blitz that includes two more appearances on Kimmel’s show, next Tuesday and May 22. A representative for Eminem said the two wanted to show support for the community.

“In all the media coverage Detroit is getting, everyone forgets about the people that have lost their jobs without getting big cash payouts after dedicating themselves to the auto industry,” Eminem told the Free Press through his publicist Monday night. “Jimmy Kimmel and I got to talking, and we wanted to remind everyone that there are real people affected by what’s going on in Detroit, and try to show some of them a good time while we’re at it.”

It was unclear how the unemployed autoworkers were being selected for the performance, but according to the publicist, they are UAW members.

After the Hollywood visit, they will be invited — with a guest — to a secret show in metro Detroit the following week.

via: TTAC

British sports car maker Lotus actually makes more money consulting other companies and refining their models than selling their own cars! but good news is coming out of factory that we are going to see at least two new models, apart from Evora coupe and convertible, in the next few years. There will be a new version of the lovely Elise in 2011 and also the mighty Espirit will be revived for 2012.

According to the insiders, the new Elise will be a development of the current car rather than a totally new model based on the Evora. And that’s good because Elise is known for its agile character and to mix it up with the heavier slower Evora can ruin its reputation. The new Espirit project however, that is still in a cloud of skepticism, because of the financial difficulties and fears that the market won’t embrace a mid-engine British sporty firm enough for Lotus to make some money out of it!

If however it makes it to the production you can expect it to launch after the Evora convertible. That’s 2012. Unlike the Elise , Espirit will share many parts with the Evora, But it will definitely use a V8 engine because it is a Espirit! Lotus has reportedly lowered its expectations for next year’s production, from 8000 to around 5000 units and also some of their contracts have been cancelled due to the credit crunch. What we can do is to keep our fingers crossed for the new cars to come to life!

source: Autocar

Porsche has stopped its efforts to take control of Volkswagen AG and agreed for an in-house merger with them, creating an integrated car manufacturing group in which ten brands will stand below an integrative leading company alongside each other and will be controlled by one single management board.

That doesn’t mean Porsche will control Scania brand for instance! They will only be in charge of their sports cars while VW takes care of Audi, Lamborghini, Bugatti, Bentley, Skoda, Seat, Scania and VW’s family and commercial vehicles. Like so , they can share the resources even further. Some say Porsche still wants to be VW’s major stake holder but because of the ill economy, in other word their 13 billion Euros debt!, they have to be more cooperative!

General Motors has to make sacrifices to stay alive, but some of these sacrifices really hurt! As a part of its restructuring plan, GM announced the death of Pontiac brand and production halt for Saab, Saturn, and Hummer by the end of 2009. Also 21,000 of Pontiac workers will be laid off. GM is revising its viability plan focusing on four brands, Chevrolet, Cadillac, Buick, and GMC. But why Pontiac must be gone?! They should kill GMC instead and nobody would care!

PRESS RELEASE:
GM Accelerates its Reinvention as a Leaner, More Viable Company
Updated Viability Plan Speeds, Deepens Restructuring of U.S. Operations

DETROIT — General Motors (NYSE: GM) today presented an updated Viability Plan that will speed the reinvention of GM’s U.S. operations into a leaner, more customer-focused, and more cost-competitive automaker.

The Viability Plan is included in an exchange offer whereby GM is offering certain bondholders shares of GM common stock and accrued interest in exchange for certain outstanding notes.

Revised Viability Plan goes further and faster

The Viability Plan announced today builds on the February 17 Viability Plan submitted to the U.S.Treasury. http://media.gm.com/servlet/GatewayServlet?target=http://image.emerald.gm.com/gmnews/viewpressreldetail.do?domain=2&docid=52168. The revised Plan accelerates the timeline for a number of important actions and makes deeper cuts in several key areas of GM’s operations, with the objective to make us a leaner, faster, and more customer-focused organization going forward.

Significant changes include:

* A 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.
* A more aggressive restructuring of GM’s U.S. dealer organization to better focus dealer resources for improved sales and customer service.
* Improved U.S. capacity utilization through accelerated idling and closures of powertrain, stamping, and assembly plants.
* Lower structural costs, which GM North America (GMNA) projects will enable it to breakeven (on an adjusted EBIT basis) at a U.S. total industry volume of approximately 10 million vehicles, based on the pricing and share assumptions in the plan. This rate is substantially below the 15 to 17 million annual vehicle sales rates recorded from 1995 through 2007.

“We are taking tough but necessary actions that are critical to GM’s long-term viability,” said Fritz Henderson, GM president and CEO. “Our responsibility is clear – to secure GM’s future – and we intend to succeed. At the same time, we also understand the impact these actions will have on our employees, dealers, unions, suppliers, shareholders, bondholders, and communities, and we will do whatever we can to mitigate the effects on the extended GM team.”

Fewer U.S. brands, nameplates, and dealers

As part of the revised Viability Plan and the need to move faster and further, GM in the U.S. will focus its resources on four core brands, Chevrolet, Cadillac, Buick and GMC. The Pontiac brand will be phased out by the end of 2010. GM will offer a total of 34 nameplates in 2010, a reduction of 29 percent from 48 nameplates in 2008, reflecting both the reduction in brands and continued emphasis on fewer and stronger entries. This four-brand strategy will enable GM to better focus its new product development programs and provide more competitive levels of market support.

The revised plan moves up the resolution of Saab, Saturn, and Hummer to the end of 2009, at the latest. Updates on these brands will be provided as these initiatives progress.

Working with its dealers, GM anticipates reducing its U.S. dealer count from 6,246 in 2008 to 3,605 by the end of 2010, a reduction of 42 percent. This is a further reduction of 500 dealers, and four years sooner, than in the February 17 Plan. The goal is to accomplish this reduction in an orderly, cost-effective, and customer-focused way. This reduction in U.S. dealers will allow for a more competitive dealer network and higher sales effectiveness in all markets. More details on these initiatives will be provided in May.

Sales volume and market share projections

The Viability Plan anticipates improved financial results despite more conservative U.S. sales volume expectations going forward. The lower volume expectations are the result of managing the business with fewer nameplates and dealers, leaner inventories, and reduced market share. To address the inventory issue, GM on April 23 announced U.S. production schedule reductions of approximately 190,000 vehicles during the second and early third quarters of 2009.

The Viability Plan also reduces GM’s market share projections to adjust for the impact of the brand and dealer consolidation, as well as for the short-term impact of speculation regarding a GM bankruptcy. The plan assumes a 19.5 percent share in 2009, with share stabilizing in the 18.4 to 18.9 percent range in subsequent years.

“We have strong new product coming for our four core brands: the Chevrolet Camaro, Equinox, Cruze and Volt; Buick LaCrosse; GMC Terrain; and Cadillac SRX and CTS Sport Wagon and Coupe,” said Henderson. “A tighter focus by GM and its dealers will help give these products the capital investment, marketing and advertising support they need to be truly successful.”

Lower structural costs, lower breakeven point

The Viability Plan also lowers GMNA’s breakeven volume to a U.S. annual industry volume of 10 million total vehicles, based on the pricing and share assumptions in the plan. This lower breakeven point (at an adjusted EBIT level) better positions GM to generate positive cash flow and earn an adequate return on capital over the course of a normal business cycle, a requirement set forth by the U.S. Treasury in its March 30 viability plan assessment.

GM will lower its breakeven point by cutting its structural costs faster and deeper than had previously been planned:

* Manufacturing: Consistent with the mandate to accelerate restructuring, we plan to reduce the total number of assembly, powertrain, and stamping plants in the U.S. from 47 in 2008 to 34 by the end of 2010, a reduction of 28 percent, and to 31 by 2012. This would reflect the acceleration of six plant idling/closures from the February 17 plan, and one additional plant idling. Throughout this transition, GM will continue to implement its flexible global manufacturing strategy (GMS), which allows multiple body styles and architectures to be built in one plant. This enables GM to use its capital more efficiently, increase capacity utilization, and respond more quickly to market shifts.

* Employment: U.S. hourly employment levels are projected to be reduced from about 61,000 in 2008 to 40,000 in 2010, a 34 percent reduction, and level off at about 38,000 starting in 2011. This further planned reduction of an additional 7,000 to 8,000 employees from the February 17 Plan is primarily the result of the previously discussed operational efficiencies, nameplate reductions, and plant closings. GM also anticipates a further decline in salaried and executive employment as it continues to assess its structure and execute the Viability Plan. More details will be announced as soon as they are finalized with the various stakeholders.
* Labor costs: The Viability Plan assumes a reduction of U.S. hourly labor costs from $7.6 billion in 2008 to $5 billion in 2010, a 34 percent reduction. GM will continue to work with its UAW partners to accomplish this through a reduction in total U.S. hourly employment as well as through modifications in the collective bargaining agreement.

As a result of these and other actions, GMNA’s structural costs are projected to decline 25 percent, from $30.8 billion in 2008 to $23.2 billion in 2010, a further decline of $1.8 billion by 2010 versus the February 17 Plan.

Strengthening GM’s balance sheet

Another key element of GM’s restructuring will be taking the necessary actions to strengthen its balance sheet. GM today took an important step in improving its balance sheet by launching a bond exchange offer for approximately $27 billion of its unsecured public debt. If successful, the bond exchange would result in the conversion of a large majority of this debt to equity.

“A stronger balance sheet would free the company to invest in the products and technologies of the future,” Henderson said. “It will also help provide stability and security to our customers, our dealers, our employees, and our suppliers.”

Another important part of improving the balance sheet will be the ongoing discussions with the UAW to modify the terms of the Voluntary Employee Benefit Association (VEBA), and with the U.S. Treasury regarding possible conversion of its debt to equity. The current bond exchange offer is conditioned on the converting to equity of at least 50 percent of GM’s outstanding U.S. Treasury debt at June 1, 2009, and at least 50 percent of GM’s future financial obligations to the new VEBA. GM expects a debt reduction of at least $20 billion between the two actions.

In total, the U.S. Treasury debt conversion, VEBA modification and bond exchange could result in at least $44 billion in debt reduction.

Throughout the Plan, GM will continue to make significant investment in future products and new technologies, with an investment of $5.4 billion in 2009, and investments ranging from $5.3 to $6.7 billion from 2010 to 2014. Very importantly, development and testing of the Chevy Volt extended-range electric car remains on track for start of production by the end of 2010 and arrival in Chevrolet dealer showrooms soon thereafter.

“The Viability Plan reflects the direction of President Obama and the U.S. Treasury that GM should go further and faster on our restructuring,” Henderson said. “We appreciate their support and direction. This stronger, leaner business model will enable GM to keep doing what it does best – provide great new cars, trucks and crossovers to our customers, and continue to develop new advanced propulsion technologies that are vital for our country’s economy and environment.”

# # #

The boss of SAIPA, Iran’s second biggest car maker claims that they’ve been contacted by some ‘ big automakers ‘ from America and they’ve invited them to participate in joint projects! according to an Iranian news agency. He wouldn’t say in which fields they gonna participate! Mehrdad Bazrpash adds that the economic downturn caused even some European car makers to consider selling shares to SAIPA.

You might have never heard of SAIPA, but they are almost as big as their sister company, IKCO which is the largest in middle east. And like IKCO, their profits are always on the rise! Most of their products are copies of old European models, but because they have a monopoly for selling their cars, they always have a healthy financial condition. But American car makers calling for help from SAIPA? We know that Americans are in bad shape, but not that bad to need help from an unknown company in the middle east! I don’t think it’s true, if you know more please let us know!

From Press TV:

The managing director of Iranian carmaker SAIPA has said that ‘big automakers’ in the US have invited his company to participate in joint projects.

Mehrdad Bazrpash also noted that the global economic downturn has prompted some of the European automakers to consider selling shares to SAIPA.

He said that some of the European automakers that are now interested in cooperating with SAIPA did not show any such inclination in the past, ISNA reported.

SAIPA, which was established in 1966, has implemented joint projects with Citroen and Renault of France, Nissan of Japan, and Kia Motors of South Korea.

The US auto making sector has been badly hit by the global economic crisis.

With the rise of global financial turmoil, which was like an Alien attack to be honest!, even the wealthiest markets didn’t remain unharmed. UAE’s car market is the classic point in this matter! Now dealers are teaming up with banks to offer more loans and credits in hope to give sales a boost!

Al-Futtaim Automotive, the UAE’s largest automotive distributor, has signed deals with leading banks in the country to provide new credit facilities to help buyers finance their purchases. Under the new scheme auto loans will be available to customers earning a monthly salary of Dhs4,000 and above, which is well below the typical salary criteria of Dhs10,000. The dealer is also offering zero down payment and interest rates from 5.5%.

source: AMEinfo

The global financial crisis is claiming victims and the latest are bosses of two giant auto makers. Rick Wagoner of General Motors and Christian Streiff of PSA Peugeot Citroen, both got fired!

Wagoner actually has to step down because Obama ordered him to do so! and that’s a good decision by the president, because , to be brutely honest Ricky never made anything better in GM during his administration!they just couldn’t let him blow up the bailout as well. He will be replaced by Fritz Henderson, who was the company’s president and chief operating officer.

On the other side of the ocean, France’s largest car manufacturer Peugeot Citroen kicked out their CEO as well, because of financial turmoil and following consequences  company is facing. Mr.Steriff will be replaced Phillipe Varin, current CEO of Corus group.

And guess why! Yep due to global financial crisis organizers decided not having it at all is better than planning a show against a background of uncertainty. Attending the show will cost every manufacturer at least 5 million quid.

“The manufacturers are all in the process of making redundancies, cutting salaries, cutting working hours and trying to save money. It would have been foolhardy for them to come to us and commit to spending very significant amounts of money at such a time. Unsurprisingly, the people we asked all said they couldn’t commit, so we have cancelled.” said Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders (SMMT) that owns the rights to the event.

Everitt added: “When the economic situation improves we will be back, but the truth is that nobody knows when that will be. If there is an upturn in the next six months as sharp as the downturn has been in the past six months, then 2011 is possible. Realistically, though, it’s a date beyond that.”

source: Autocar

German luxury auto maker BMW reported on Thursday that net profit last year slumped 89.5 percent, after a loss in the fourth quarter, and slashed its dividend by about two thirds.

Net profit for the year dropped to 330 million euros (422 million dollars), compared with analyst forecasts for one billion euros.

The figures caused a shock on the stock market where shares in BMW, which also makes the Rolls Royce and Mini brand cars, fell by about nine percent.

The stock then recovered some of the lost ground to show a loss at mid-day of 3.51 percent to 22.14 euros. The overall DAX index was down 1.89 percent.

The results were hit by charges totaling 2.42 billion euros owing to weakness in the market for second-hand cars, losses on loans made and extra staff costs.

In common with many other leading auto makers, BMW has been hit hard by a slump in consumer spending as a result of the global economic crisis. Sales fell about 18 percent to 12.7 billion euros.

In the fourth quarter, the extra charges caused a loss in terms of earnings before interest and tax of 718 million euros, compared with a profit of 1.3 billion euros in the same period of 2007.

Excluding the effects of exceptional charges, the group would have made an underlying profit in the quarter of 410 million euros, representing a fall of 69 percent.

The group said that it would slash the dividend to 0.30 euros per ordinary share from 1.06 euros in 2007.

The group did not provide any forecasts for this year.

Here it is! Finally there is a picture of one of the most anticipated race cars, the new Audi R15 TDI Le Mans doing some laps at Vallelunga circuit. It replaces the R10 and features a totally new face. The R10 was similar to its predecessor R8 in terms of appearance but the R15 has been radically changed. You couldn’t tell this is an Audi if those four rings were not there!

New looks also assures better aerodynamics and with the revised 5.5 liter V12 diesel engine under the hood it seems to be a wining package like the previous cars and will cause a lot of troubles for Peugeot 908 HDi.

It’s a pity that we are not going to see much of this car in the upcoming season, because Audi, due to financial crisis, will only attend 24H of LeMans and 12H of Sebring, no more ALMS and LEMS races.

It started by Honda pulling out if Formula1 and then Audi left ALMS and it was all because of economy downturn. Now another punch into motor sport’s face, Subaru pulls out of World Rally Championship and Porsche says bye-bye to its ALMS career.

The German sports car maker announced that they won’t compete in the P2 series in American Le mans Series however they keep support for 911s in GT class. So with Audi and Porsche out, the Prototype class in ALMS is almost empty so no wonder if the race go away altogether!

Meanwhile Subaru decided that it should quit Rally racing to save money for the factory as it’s getting hit by the financial crisis. That means only Ford and Peugeot Citroen remain in the action. Such occasions directly translate into the Motorsport loosing spectator and without spectators Racing will die, the bad thing is, we can’t find no one to blame it on to him !

The global economic turmoil finally hit the car maker that was least likely to get hit, Ferrari. Sales have dropped from 600 a month to just 92 last month and also they have shut down Maranello production plant for 20 days over Christmas.

A prestigeous car maker like Ferrari would never have problems in sales since there are always big waiting lists for its productions, but the problem seems to be with the distributors around the world, as their financial health is turning to a bad disease.

Even Ferrari’s boss couldn’t think of such disaster as AUTOCAR reports :

Ferrari will also shut its Maranello production plant for an unprecedented 20 days over Christmas, which sources insist will be to prevent vehicle stockpiles reaching unmanageable levels.

The company won its 16th F1 World Constructor’s Championship last month and still boasts of a two-year waiting list on its high-priced, exclusive road cars, but sources said that troubling stocks have built up at some of its distributors around the world, particularly in the UK.

As recently as the Paris motor show last October, Ferrari chairman Luca di Montezemolo had been speaking of a sales target of 10,000 cars for 2010 which, even with the new Ferrari California on stream early next year, now seems wildly optimistic.

Back then di Montezemolo insisted the financial crisis held no concerns for Ferrari because a reduction in sales would allow it to respond quickly to markets that might have otherwise waited years for cars.

“Of course the economic problems are being considered,” he said. “It depends how long this crisis goes on, if this is close to the end or not. Because we will see a different world out the other side.”

The Ferrari chairman went on castigate the financiers whom he regards as responsible for the economic meltdown.

“It will be a world more close to industry and real numbers and products and not close to speculation,” said di Montezemolo.

“I hope that when it finishes there will be more feet on the ground in the financial world,” he said.

Insiders have confirmed that sales of the V12-powered Ferrari 612 Scaglietti and Ferrari 599 Fiorano have effectively stalled and Ferrari has moved both models into a special customisation program to mask the seriousness of the problem.

Even worse, sales of its smaller, V8-powered Ferrari F430 – the core of the company’s volume and profit, and due to be replaced late in 2009 – plummeted after the official unveiling of Ferrari’s new California in October.

Ferrari has denied that the company has been adversely affected by the credit crunch. The company said that the extended break was merely Ferrari being generous to its employees, even if all contracts were under review.

“We are going to have a meeting with the trade unions this week and we had a meeting with the union last week,” a Ferrari spokesman said.

“We don’t know if there is a figure decided, but we are certainly not taking people on board unless they are crucial.

“What’s being talked about [with the unions] is not renewing the people on one-year contracts, which would be about 300 people, and closely examining the consultancies and advisors and that kind of spending.

“We are just being careful. Nobody knows the future anymore and even having a waiting list like ours doesn’t guarantee anything for your future.”

Ferrari has said that the Christmas break (19 December to 7 January) is a coincidence of dates: “The two weekends have come at the right moment. If we needed to stop production we could have taken the entire week off instead of coming back on the Thursday.”

And, while sources insisted F430 stockpiles were growing and V12 production was at a virtual standstill, Ferrari’s spokesman insisted sales of luxury cars always slowed in the last months of the year.

“The only region where there are stocks is the UK,” he said.

“It’s the market where we have some problems. In the US, nothing much has changed for us apart from a slight braking of sales.”

“For sure, the F430 Spider is not doing very well, because of winter and the California, so there are stocks in some places.”

]]> http://www.motorward.com/2008/12/ferrari-denying-crisis-cuts-10percent-workforce/feed/ 0 http://www.motorward.com/2008/11/uae-auto-market-outlook-good/ http://www.motorward.com/2008/11/uae-auto-market-outlook-good/#comments Thu, 20 Nov 2008 17:07:34 +0000 Arman Barari http://motorward.com/?p=784

As the world financial crisis grows every part of the globe is getting affected, even the wealthiest countries with most stable economies are not safe. UAE’s car market has always been a steady growing market with sales numbers always at peak, but now there are signs that it’s getting slumped. Demand for new cars has fallen down dramatically not only because of financial downturn, but the whole UAE  economy is slowing down as a direct result of oil price drop. And the real estate market, which is the main player in the region’s economy also is sruggling these days, and that has a big effect on every single product in the market. The credit squeeze imposed by banks and job cuts by big companies are other factors to the equation. and add up to that congestion charges and new harder rules for issuing driving licences in the country. Although luxury car market doesn’t seem to be affected much by this situation, but all in all it does not seem to be a reliable market to invest in at least in he upcoming year.

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