GM won’t import subcompacts from China, will build them in Michigan

>> Friday, May 29, 2009

It was reported earlier this month that GM is looking to import Chinese-made subcompact cars to the United States. The Detroit automaker had planned to export more than 51,000 vehicles from China by 2014. Yes, that had the UAW up in and arms and now, as a part of its concession deal with the UAW, GM has agreed not to import “made in China” cars.

Union President Ron Gettelfinger said that GM will build up to 160,000 units of subcompacts per year at an existing U.S. facility and will sell them in U.S.

New concessions by the UAW, which include freezing wage, cutting bonuses and reducing break time, will save GM more than $1 billion a year.

UAW members are scheduled to finish voting on the new deal by 4 p.m. today.


GM and Magna reach preliminary deal

According to a report by Reuters, GM and Canadian auto parts group Magna International have reached a preliminary deal to invest in Opel, increasing hopes for a deal with the U.S and German governments to save the brand. The move also kills Fiat CEO Sergio Marchionne’s dream of building the world’s second-largest automaker consisting of GM’s European operations and its new stake in Chrysler LLC.

Source said that Magna and GM are working out the final details of an agreement before they meet with Chancellor Angela Merkel and senior ministers.

“We have an agreement in principle between GM and Magna,” one source said.

Nonetheless, party-pooper German Economy Minister Karl-Theodor zu Guttenberg, who previously said that Fiat and Manga need to make their proposals more attractive and assume more risk, told reports that there is no guarantee a deal to save Opel could be reached Friday.

: Reuters


Detroit Mayor writes letter to Obama urging him ensure GM stays in Renaissance Center

Yesterday, Warren Mayor Jim Fouts made an offer to GM CEO Fritz Henderson offering the company long-term tax incentives to move its headquarters from the Renaissance Center in Detroit to the GM Tech Center in Warren.

Now, Wayne County Executive Robert Ficano and Detroit Mayor Dave Bing are doing all he can to keep GM in Detroit. Bing and Ficano announced today that Detroit will offer GM big tax breaks that come with a “renaissance zone” designation to stay in Detroit.

“So in their bankruptcy case, they can say now they have a business case to stay at the GM building,” Ficano told Automotive news. “We got together and asked what tools we have in our toolbox to tell the rest of the world that we’re really open for business.”

Bing even wrote a letter to President Barack Obama urging him to ensure that GM stays in the Renaissance Center and that the city isn’t gutted.

“The possibility of General Motor’s headquarters leaving Detroit would have a devastating effect on not only the surrounding business community, but our residents, our economic viability and the overall turnaround of the city of Detroit,” he wrote to Obama.

- By: The Daily Auto Editor

Source: Free Press


Lee Iacocca to lose pension and company car

We already know that Lee Iacocca, the man responsible for turning around Chrysler in the 1980s, is going to lose his life-long company car due to the Auburn Hills automaker’s bankruptcy filing.

Today, CEO Bob Nardelli told the U.S. bankruptcy court that Iacocca would also lose his pension since Chrysler will no longer have to pay it if gets bankruptcy court approval to sell itself as “Chrysler Group LLC,” which will be owned by Fiat, the U.S. and Canadian governments and its union.

Typically, Iacocca would be paid after secured creditors get their money but even secured creditors are not expected to get paid in full in the bankruptcy process.

Other former Chrysler executives will also lose their cars and pension.

Chrysler said it regretted the decision “in light of the many contributions these individuals have made to Chrysler over the years” and that Chrysler Group LLC does not expect to reinstate the car program.

- By: Kap Shah

Source: MSNBC


Papa John’s going on a cross-country trip to find his 1972 Z28 Camaro

John Schnatter, otherwise known as “Papa” John, is the founder and chairman of Papa John’s International. He founded the company in 1984 with $1,600 dollars that was needed to pay for the initial equipment for his first store. Today Papa John’s has grown to more than 3,000 stores in over 26 countries and has a market value of $750 million.

Of course, it wasn’t all fun and success for Schnatter. Like every other business started from the ground up, there was a lot of blood, sweat and tear involved.

One of the many sacrifices Schnatter made was giving up his 1972 gold-and-black Z28 Camaro to get the $1,600 he needed to start his pizzeria dreams. Well, Papa John now wants his Camaro back and is willing to give whoever has it, or finds it, a $25,000 reward. Schnatter will be going on a cross-country search for his lost car in another Z28 he purchased a couple years ago (pictured above).

Of course, at this time you might think that this is some clever marketing campaign - and it is. The search for the Papa John’s Z28 Camaro has a website and everything - but at the end of the day, John just wants his baby back (believe us we know the feeling).

Recalling his emotions at the time when selling his original Camaro Z28 Papa John said: “it was so painful I had to look away so I couldn’t see it driving off.”


UAW ratifies new GM labor deal, Fritz Henderson to hold press conference on Monday

GM has just dropped a short statement saying that “CEO Fritz Henderson will host a press conference on Monday, June 1.” The conference will be around mid-day at the GM Building, 767 Fifth Avenue, in New York.

After a whole week of GM heading towards bankruptcy news, we’re left wondering what possibly could Henderson have to tell us?

While the UAW employees have ratified the modifications to the GM-UAW 2007 National Labor Agreement, there are no bondholders lining up to show support for the struggling automaker. We will be up bright and early Monday morning preparing for all the GM news - stay tuned.

You can read GM’s statement regarding the newly ratified GM-UAW 2007 National Labor Agreement after the jump.

Newly Ratified GM-UAW 2007 National Labor Agreement Modifications Eliminate Competitive Gap for GM

DETROIT, Mich. - General Motors today confirmed that its UAW-represented employees have ratified the modifications to the GM-UAW 2007 National Labor Agreement. The amended agreement covers approximately 54,000 hourly employees located in 46 U.S. facilities.

“The leadership demonstrated by UAW president Ron Gettelfinger and UAW vice president Cal Rapson, and the hard work from the members of the GM and UAW negotiating teams, resulted in an innovative agreement that will enable GM to be fully competitive and has eliminated the gap with our competitors,” said Diana Tremblay, vice president of GM’s Labor Relations. “We very much appreciate the support of our employees and retirees. Their shared sacrifices will enable GM to become a stronger, more viable company that will continue to deliver world-class cars and trucks.”

Key highlights under the modified agreement include attainment of cost and cash savings comprehended in the GM Viability Plan that will enable the company to eliminate the wage and benefit gap with its competitors. It also includes changes to the agreements regarding the Voluntary Employee Beneficiary Association (VEBA) trust for retiree healthcare. The agreement also highlights GM’s plan to utilize an idled assembly and stamping facility for future production of a compact/small car in the United States to meet future fuel efficiency regulations.


Major GM bondholders agree to a new sweetened deal, creditors may get 25% of new GM

In its original offer to bondholders, GM was offering creditors a 10 percent stake in a new GM in exchange to reduce its $27 billion debt. That didn’t work out to well since GM failed to get the near 90 percent support of bondholders it needed to fight off bankruptcy.

Nonetheless, today a committee of major bondholders at GM and the U.S. Treasury Department have reached an agreement that would give creditors a larger stake in GM.

Revealed in a Securities and Exchange Commission filing by GM, the agreement says that bondholders would get 10 percent of the new company that comes out of bankruptcy but would also give creditors the rights to buy an additional 15 percent of the company’s stock at a low price.

While this is good news for GM, it will not help the struggling Detroit automaker avoid a Chapter 11 filing. The move, however, will clear potential obstacles for GM during its stay in court.

- By: Omar Rana

Source: CNNMoney


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