David Kirkpatrick

March 28, 2010

Believe it or not, Volvo is now a Chinese company

Filed under: Business — Tags: , , , , — David Kirkpatrick @ 5:07 pm

Sands of time, twists of the wheel, etc. etc. …

From the link:

China’s Zhejiang Geely Holding Group Co. bought Volvo cars from Ford Motor Co. on Sunday for $1.8 billion, a landmark agreement designed to elevate the Chinese company’s profile onto the global automotive stage.

Geely’s acquisition of Volvo offers the latest illustration of how China’s economic rise is reshaping large swaths of global business, as its huge market and increasingly powerful companies play a growing role in industries from cars to natural resources to telecommunications equipment. The Volvo deal, which comes after China surpassed the U.S. last year as the biggest auto market, puts a Chinese company for the first time in charge of a major global car brand.

February 5, 2010

First they took the auto industry jobs …

… now they’re stealing childhood dreams.

Seriously though, the idea of highly functional humanoid robotics is a great idea for space travel. Of course Ellen Ripley might disagree.

Via KurzweilAI.net:

NASA, GM team up to build robotic astronauts
Computerworld, Feb. 4, 2010

NASA and General Motors (GM) are developing humanoid robots that can work side-by-side with humans to help astronauts during dangerous mission and to help GM build cars and automotive plants.

Robonaut 2, aka R2, is designed to be a “faster, more dexterous and more technologically advanced” robot than Robonaut 1, using its hands to manipulate small parts, while also having exceptional strength.

Video
Read Original Article>>

October 23, 2009

TARP recipients to get White House mandated pay cut

I’m no fan of the government telling a business how much it’s going to pay executives, but you have to say the major TARP recipients brought this on themselves. After the forced bailout (most of these players had no choice but to go along with the bailout) the situation became no longer business as usual. Somehow that point was lost on the C-level at Citigroup, BoA, GM, Chrysler, GMAC, Chrysler Financial, and especially AIG. The end result? The pay packages of 175 top executives are going to start seeing much lighter pay checks.

Cue an entire chorus of nanoscale violins.

From the link:

The Obama administration will soon order the nation’s biggest bailed-out companies to drastically cut the pay packages of 175 top executives, a senior administration official confirmed to CNN Wednesday.

Kenneth Feinberg, who was named the White House’s pay czar in June, will demand that each of the seven largest bailout recipients lower the total compensation for their top 25 highest paid employees by 50%, on average, the official told CNN.

And here’s the big number:

Under the plan, which is expected to be officially released by the Treasury Department next week, annual salaries for executives at those seven firms are expected to fall 90%, on average, the official said.

October 8, 2009

Thursday video fun — Nissan’s “Land Glider” concept car

Filed under: Business, et.al., Media, Science — Tags: , , , , — David Kirkpatrick @ 2:57 pm

As you can see the “Land Glider” tilts when cornering creating the sensation of gliding rather than driving on pavement.

(Hat tip: KurzweilAI.net)

July 10, 2009

GM exits bankruptcy

Filed under: Business — Tags: , , — David Kirkpatrick @ 5:04 pm

I did plenty of blogging on GM before it finally faced reality and declared bankruptcy. It’s only fitting to add one more post to the group on the automaker quickly exiting the legal process.

From the second link:

A new General Motors emerged from bankruptcy protection on Friday — far more quickly than most industry-watchers had expected — as a leaner automaker pledging to win back American consumers and pay back taxpayers.A whirlwind 40-day bankruptcy for GM concluded with the closing of a deal that sold key operations to a new company that is majority-owned by the U.S. Treasury.

The closing documents were signed early Friday by representatives of the government and GM executives at the law firm of Weil, Gotshal & Manges, GM’s bankruptcy counsel.

June 2, 2009

GM’s bankruptcy and Ford

To anyone who’s been paying attention General Motors’ bankruptcy comes as no no surprise, but the repercussions are still a mystery. Cato’s Daniel Ikenson brings up a very salient point — now that the government is the de facto owner of GM what’s going to happen to Ford.

Of the big three Ford has remained in a fairly strong position in a very weak industry. Most importantly it hasn’t been forced to take federal bailout money. Ikenson wonders if the fed may not put a thumb on the scales a little to help its latest property, namely GM, out a bit.

From Cato Today:

BANKRUPTCY FOR GM – FORD NEXT?

General Motors on Monday filed for bankruptcy protection, even after $19.4 billion in federal bailout money. Cato scholar Daniel Ikenson has long suggested bankruptcy as the best course for GM, and now worriesabout Ford’s future: “The government has a 60 percent stake in GM. Who’s going to want to own Ford stock—and therefore, will Ford be able to raise capital—when the U.S. government has an incentive to tip the balance in GM’s favor wherever it can?”
Full statement from Ikenson
– “An Overdue Reckoning in the Auto Sector,” by Daniel Ikenson
– “Don’t Bail Out the Big Three,” by Daniel Ikenson
– “GM’s Last Capitalist Act: Filing for Bankruptcy Protection,” by Daniel Ikenson

May 31, 2009

GM going Chapter 11

Filed under: Business — Tags: , , , , — David Kirkpatrick @ 6:59 pm

Tomorrow morning.

May 26, 2009

GM’s bankruptcy …

Filed under: Business — Tags: , , , — David Kirkpatrick @ 3:47 pm

is immanent.

From the link:

General Motors Corp has failed to persuade enough bondholders to accept a debt-for-equity swap, setting the stage for the largest-ever U.S. industrial bankruptcy within days.The event marks a critical disappointment for GM, the largest U.S. automaker and once considered the bellwether of U.S. manufacturing. A popular ad for the automaker once stated that “What’s good for General Motors, is good for the USA.”

“I would say this is a sound rejection of an unsuitable offer,” said Pete Hastings, a credit analyst at Morgan Keegan who has followed GM. “I have been saying for some time that this thing was dead on arrival and we were just waiting for the doctor to pronounce it dead. Now that’s happened.”

The largest U.S. automaker had so far failed to gain anywhere near the 90 percent of bondholder support desired to stave off bankruptcy, two sources familiar with the discussions told Reuters on Tuesday. Bondholders have until midnight to make their final decision on the tender.

May 15, 2009

Car companies dumping dealerships

Filed under: Business — Tags: , , , , — David Kirkpatrick @ 11:49 am

In a very necessary move from both General Motors and Chrysler — they each have many, many more dealerships than the Japanese manufacturers — the number of dealerships out there is being cut. The exact numbers differ depending on the source, but in the near future there will be fewer GM and Chrysler lots out there.

From the link:

The next auto businesses on the chopping block will be 2,600 General Motors dealerships.GM Chief Executive Fritz Henderson said Monday that the company would by the end of the week start notifying dealerships it wants to eliminate over the course of the next year. The company said last month that it planned to eventually eliminate 42% of its 6,250 dealer locations, which employ more than 300,000 workers among them.

On Thursday, Chrysler LLC’s announced that it is dropping nearly 800 Chrysler, Dodge and Jeep dealers, or about a quarter of its network, as part of its bankruptcy restructuring.

GM (GM, Fortune 500) is not yet in bankruptcy court, although Henderson has said such a filing is “probable.” The company has until the end of the month to win agreement from creditors, unions and dealerships on a turnaround plan or the Treasury Department, which has been bankrolling GM’s ongoing losses, has said it will force the company to file for bankruptcy.

May 11, 2009

GM closer to Chapter 11

Filed under: Business — Tags: , , , , — David Kirkpatrick @ 3:06 pm

Looks like General Motors will be declaring bankruptcy at some point. Despite all the noise to the contrary, this is — and has been for a while — the only real solution to what is going on in the Rust Belt. If done correctly GM will reemerge much leaner and ready to do business in today’s world. It’s been playing by its own unsustainable rules since the 80s.

From the link:

To remake itself outside of court, GM must persuade bondholders to swap $27 billion in debt for 10 percent of its risky stock. On top of that, the automaker must work out deals with its union, announce factory closures, cut or sell brands and force hundreds of dealers out of business — all in three weeks.

“I just don’t see how it’s possible, given all of the pieces,” said Stephen J. Lubben, a professor at Seton Hall University School of Law who specializes in bankruptcy.

GM, which is living on $15.4 billion in federal aid, faces a June 1 government deadline to complete its restructuring plan. If it can’t finish in time, the company will follow Detroit competitor Chrysler LLC into bankruptcy protection.

Although company executives said last week they would still prefer to restructure out of court, experts say all GM is doing now is lining up majorities of stakeholders to make its court-supervised reorganization move more quickly.

“If we need to pursue bankruptcy, we will make sure that we do it in an expeditious fashion. The exact strategies I’m not getting into today, but we’ll be ready to go if that’s required,” CEO Fritz Henderson said last week.

April 29, 2009

Chrysler to file Chapter 11

Filed under: Business — Tags: , , , — David Kirkpatrick @ 11:12 pm

It’s not totally done, but looks immanent. So Chrysler wins the dubious distinction of being the first of the big three to declare bankruptcy.

From the link:

Last-minute efforts by the Treasury Department to win over recalcitrant Chrysler debtholders failed Wednesday night, setting up a near-certain bankruptcy filing by the American automaker, according to people briefed on the talks.

Barring an agreement, which looked increasingly difficult, Chrysler was expected to seek Chapter 11 protection on Thursday, most likely in New York, these people said.

Update 4/30/09 — It’s done. More on the filing here and here.

April 27, 2009

GM employee stock fund dumps GM stock

Filed under: Business — Tags: , , , — David Kirkpatrick @ 3:11 pm

GM is officially swirling the drain at this point.

From the link:

The manager of General Motors’ employee stock fund has sold off all remaining shares of the troubled auto maker, which is closing plants and slashing costs in a bid to avoid bankruptcy.

General Motors revealed in a regulatory filing late Friday that its employee stock-purchase plan has unloaded all shares of the company in favor of short-term and money market investments. The plan’s financial manager, State Street Bank and Trust Co., said it began selling off shares of the Detroit automaker in late March “due to the economic climate and the circumstances surrounding GM’s business.” GM disclosed the development in a filing with the Securities and Exchange Commission.

February 4, 2009

January auto sales down almost 40%

Filed under: Business — Tags: , , , , , , — David Kirkpatrick @ 1:43 pm

Couldn’t have anything to do with the fact banks aren’t giving out auto loans for the most part could it?

From the link:

Auto sales tumbled 38% in January, plunging even more than expected to their worst levels since 1982 as a pullback in purchases by rental car companies became the latest problem for the troubled industry.General Motors (GM, Fortune 500) reported that its sales plunged 49% from a year ago. Ford Motor (F, Fortune 500) said sales fell 39% at its Ford, Lincoln and Mercury brands, and 40% overall when including sales at Volvo, which Ford is trying to sell. Chrysler LLC reported a 55% drop in sales.

But it wasn’t just the U.S. automakers reporting sharply lower sales. Toyota Motor (TM) reported a 32% decrease in its U.S. sales, while sales at Honda Motor (HMC) tumbled 28%. Nissan (NSANY) sales fell 30%.

January 6, 2009

Toyota turns the lights off for 11 days

Filed under: Business — Tags: , , , , , — David Kirkpatrick @ 2:00 pm

GM and Chrysler may have shut factories down this month to save money and prep for an uncertain future. Toyota has followed-suit because of slumping sales.

The credit crunch hit automakers hard, and now that hard times are settling in it’s an easy bet the market for new cars will become very soft. Not many people are going to trade-in a working car, and less likely still, a paid-off car under this economic climate.

From the link:

Toyota Motor Corp (7203.T) is to halt production at its Japanese plants for 11 days in February and March as a sharp slide in U.S. sales has left dealers’ lots full of unsold cars.

A 37 percent slump in December sales in Toyota’s biggest market was its sharpest fall in more than a quarter of a century and worse than declines at struggling U.S. rivals General Motors (GM.N) and Ford Motor (F.N).

“I never expected the crisis to spread this fast and leave this deep a scar,” Toyota President Katsuaki Watanabe told reporters at a Tokyo event hosted by Japan‘s top business lobbies.

Toyota had already announced a three-day production halt for this month at its 12 directly operated Japanese plants — four car assembly plants and eight for engines, transmissions and other components.

A sweeping suspension of domestic production is almost unprecedented. In 1993, Toyota halted output for one day as a strong yen hammered sales.

Japanese-built cars make up around 40 percent of Toyota’s sales in the United States, where foreign-made cars and trucks have been piling up at ports and dealers’ yards.

December 23, 2008

If the UAW won’t deal let the Puny Two crater

Filed under: Business — Tags: , , , , , — David Kirkpatrick @ 2:55 pm

The US auto industry has a lot of problems and the UAW is right up there.

A line in the sand? More like an unemployment line.

From the link:

If General Motors (GM) and Chrysler executives want federal loans beyond the initial $17.4 billion provided by President Bush and the Treasury Dept. on Dec. 19, they will need to wring concessions from the United Auto Workers. And that means dealing with Ron Gettelfinger.

As became clear in mid-December, Gettelfinger, the 64-year-old union president, is no pushover. With the fate of an industry hanging in the balance, he refused to back down when Senator Bob Corker (R-Tenn.) demanded that the UAW commit to cutting wages to secure a bailout of Detroit’s Big Three. Gettelfinger’s stance—critics call it intransigence—pushed a government rescue to the brink until the Bush Administration stepped in.

But even after the Administration released funds for GM and Chrysler, Gettelfinger bristled at the labor concessions that Treasury is insisting on. In response to the Administration’s demands for wage and benefits cuts, he said: “We are disappointed that he [Bush] has added unfair conditions singling out workers.” Gettlefinger even said he would go to the Obama Administration—which promises to be more labor-friendly—to work out a deal.

December 22, 2008

The Rust Belt isn’t the only source of auto pain

Filed under: Business — Tags: , , , — David Kirkpatrick @ 1:50 pm

Toyota is expecting it’s first loss ever. Ever.

From the link:

Toyota Motor Corp forecast a first-ever annual operating loss, blaming a relentless sales slide and a crippling rise in the yen in what it said was an emergency unprecedented in its 70-year history.

Toyota, the world’s biggest automaker, had been expected to issue its second profit warning in less than seven weeks after domestic rival Honda Motor Co also cut its outlook again last week, but the downward revision was bigger than predicted.

“This is very, very, very bad,” said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments. “There’s a chance they could fall into the red in the next business year as well.

“This is also not just a problem for Toyota. What is good for Toyota is good for the Japanese economy.”

Is the auto bailout throwing good money after bad?

Filed under: Business, Politics — Tags: , , , , , — David Kirkpatrick @ 1:29 pm

Probably.

From the link:

General Motors and Chrysler LLC are finally getting the money they need to avoid an imminent collapse. But will the bailout actually get them back on the road to profits?

The $13.4 billion in federal loans announced by President Bush Friday morning should be enough to get the automakers through the next few months. Then the fate of Detroit will become a problem for President-elect Obama and the newly-elected, much more Democratic Congress to tackle.

But this lifeline won’t solve the immediate problems dogging the entire U.S. auto industry. Tight credit and a weakening U.S. economy have left industrywide auto sales at their weakest point in 26 years.

Chrysler’s North American production is essentially shutting down for at least a month at the end of the day Friday due to weak demand for its vehicles. The North American assembly lines at GM (GM, Fortune 500) will be closed for the entire month of January.

Ford Motor (F, Fortune 500), which benefits from having more cash on hand than its U.S. rivals, only looks good by comparison. It is keeping 10 of its 15 assembly lines idle one week longer than the normal holiday shutdown.

December 19, 2008

Picking Paulson’s brain

Filed under: Business, Politics — Tags: , , , , , — David Kirkpatrick @ 12:50 pm

I’d guess it’s a pretty scattered and frightening place at the moment. BusinessWeek interviewed him, and his main points were an “orderly” bankruptcy for troubled automakers might be the best outcome and he now favors oversight of hedge funds and “any institution whose failure could jeopardize the financial system.”

From the link:

Paulson was interviewed by BusinessWeekEditor-in-Chief Stephen Adler as part of the 10-year-old Captains of Industry series, which features leading newsmakers.

Among other points, Paulson said:

• An economic downturn remains much more of a risk than inflation from the money that’s now flooding the system. “That’ll be a high-class problem when we can start worrying about growth and inflation again,” Paulson said, adding: “The real cost would be to not do enough and then have the economy go into a free fall.”

• Banks that took U.S. funding should lend more, but he defended the Treasury’s emphasis on getting them money right away without strings. “Our first priority was always, and we were clear from the day we went to Congress, to prevent the collapse of the financial system.” He said, “There was literally a wave, just a string of financial institution failures or near-failures.” Paulson added: “They need to lend more. We don’t want them hoarding, we want them lending.” However, he also said, “It is not in my judgment practical or prudent to have government…saying ‘Make this loan, don’t make this loan.'”

• He defended the amount of disclosure by Treasury on the Troubled Asset Relief Program, or TARP. Paulson said, “We have been moving with lightning speed,” and added, “We’re building this organization as we’re going.”

• “The No. 1 thing we need to do is stem the housing correction.”

• The government lacked the authority to prevent the failure of Lehman Brothers, the investment bank that went under in September. But he said that Lehman’s failure was “in my judgment a symptom, not a cause” of the financial turmoil.

• President Bush “is very current and he’s on top of everything we’ve done.” He said, “I know that’s not conventional wisdom among some people but it’s absolutely true.”

• China and the U.S. should be good partners. “We won’t always have the same view, but engagement in my view is exceptionally important.”

Adler’s final question to Paulson was what advice he would give his successor, Timothy Geithner, who is now president of the Federal Reserve Bank of New York. Paulson said Geithner doesn’t need his advice, but added, “It’s important when you’re going through a time like this to define your job expansively.”

December 18, 2008

Chrysler stops all production

Filed under: Business — Tags: , , , , , , — David Kirkpatrick @ 1:19 pm

Hot on the heels of GM’s decision to “temporarily” shut down 20 plants, Chrysler announces a similar plan. Of course not to be outdone by GM, the automaker is going to stop all production for at least an entire month starting this week.

If these Puny Two are playing chicken with legislators who have yet to vote in an auto industry bailout package, I’d say that game might be deadly. Congress wants to bail the auto makers out, but the public is sick of this corporate socialism. The votes may just not be there because incumbents fear retaliation at the ballot box for a “yea” bailout vote.

From the link:

Chrysler is the third of the Big Three automakers to suspend operations for January. Last week, General Motors announced it was idling 30% of its North American manufacturing capacity during the first quarter of 2009 in response to deteriorating market conditions. That move will take 250,000 vehicles out of production. On Wednesday, a Ford spokeswoman confirmed for CNN that the automaker is adding a week to its normal two-week seasonal shutdown at a number of its plants.

Chrysler would not say how many fewer vehicles would be produced because of this shutdown. A total of 46,000 employees will be affected. They will be paid during the time off through a combination of state unemployment benefits and Chrysler contributions, but they will not receive the full amount of their working pay, a Chrysler spokesman said.

December 12, 2008

Is Ford the Big One?

Filed under: Business, Politics — Tags: , , , , , , — David Kirkpatrick @ 1:26 pm

The Rust Belt bailout failed in the Senate. Looks like the union scuttled the deal. General Motors and Chrysler are prepping for bankruptcy.

From the link:

Last-ditch efforts to forge an agreement to rescue the U.S. automakers fell apart late Thursday, Dec. 11, when union officials refused fast and deep cuts in worker pay. The collapse created the real possibility that General Motors (GM) and Chrysler will face bankruptcy in a matter of weeks, unless the Treasury Dept. acts to prevent it.

Senate Minority Leader Mitch McConnell (R-Ky.) said on the Senate floor Thursday night that a refusal of the United Auto Workers, headed by Ron Gettelfinger, to agree to lower wages and benefits at parity with workers at Toyota (TM) and Honda (HMC) in the U.S. by a date certain in 2009 was the last sticking point preventing Republicans from supporting the bill.

December 9, 2008

Inside dope on Detroit’s bailout …

Filed under: Business, Politics — Tags: , , , , , — David Kirkpatrick @ 12:56 am

… from Jonathan Cohn at the New Republic’s “The Plank” blog.

Here’s his scoop and take:

By late Monday night, a rescue for the nation’s ailing automakers was looking a lot more likely. Democratic House leaders released the draft of a new plan and White House officials, though raising some objections, indicated that agreement on a package was close. Senate Democrats remained nervous that they might not yet have the votes in their chamber, where it would take 60 votes to break a Republican filibuster. But Wall Street signalled its optimism by jumping on stocks for Ford (up 24 percent) and General Motors (up 21 percent).

I had a chance read through a draft of the proposal and then talk it over with a few people involved with the discussions. There’s still a fair amount of confusion out there–apologies if anything I am about to say turns out to be inaccurate–but the essential elements seem to be pretty straightforward.

The government will make up to $15 billion in loans available to the industry right away–enough, presumably, to keep Chrysler and General Motors from shutting their doors in the next few months. (Ford, which is in better shape financially, may not need loans at all.) By March 31, the companies would have to submit detailed restructuring plans that follow up on the outlines their executives offered in their testimony last week.

If they met that deadline and provided satisfactory plans, they could perhaps get more loans as necessary–although it’s not clear (to me or to my sources) whether that would require Congress to authorize the money. If the companies failed to submit satisfactory plans, then they couldn’t get more money and would have to pay back what they could, a move that would presumably trigger bankruptcy.

And who would decide whether the plans were “satisfactory?” Ah, that’s where it gets interesting. The Democrats had originally proposed to create an oversight board, perhaps composed of officials from various cabinet agencies including Commerce and Energy. The Bush Administration preferred to appoint a single overseer–that is, an auto “czar.”

November 24, 2008

GM contemplates bankruptcy

Filed under: Business — Tags: , , , , — David Kirkpatrick @ 5:27 pm

After the beg-a-thon failed — in no small part because of the idiotic use of private corporate jets to get to DC — it looks like General Motors may be about to face the music.

From the link:

The board of directors of embattled U.S. automaker General Motors Corp is considering “all options” including bankruptcy, according to a report on the Wall Street Journal‘s website late on Friday.

The paper, citing people familiar with the board’s thinking, said the stance puts it in conflict with chief executive Rick Wagoner, who told lawmakers this week bankruptcy is not a viable alternative for the company.

GM, in a statement to the newspaper, said the board has discussed bankruptcy, but said the board did not view it as a “viable solution to the company’s liquidity problems.”

A GM spokesman told the paper that management is doing everything it can to avoid a bankruptcy filing.

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