6:46 AM
7:05 AM
There was little doubt that Shelby would not call it a day following the completion of the 2010 Ford Shelby Mustang GT500. After all, 540 hp just might not cut it for some Shelby faithful. So to take the 2010 GT500 to the next level, Shelby revealed the Super Snake package at the Mid America Ford and Team Shelby Nationals in Tulsa, Okla.
With this post-title package, Shelby takes an existing customer car and performs power and handling upgrades. Depending on which supercharger the customer selects, the Super Snake will churn out 630 hp for the base configuration or 725 hp with the optional setup. Further changes under the hood include an upgraded intercooler, cold-air intake system and radiator. A Borla cat-back exhaust hangs out back for 630 hp models, while 725 hp cars use a JBA unit.
Handling improvements come courtesy of a Ford Racing suspension with adjustable dampers, stiffer springs, thicker antiroll bars, a front strut tower brace and 20-inch Super Snake wheels wrapped with Pirelli P-Zero tires. Helping to tame the additional power are Baer six-piston front calipers with cross-drilled rotors at all four corners.
While the onus clearly is on performance, the Super Snake does add a few visual enhancements. Those include an exclusive hood with a larger scoop and vents, striping decals, rear quarter window scoops and a carbon-fiber splitter and side sills. Inside, seat headrests feature embroidered Shelby logos and carbon-fiber gauge faces.
Pricing for the Super Snake package begins at $29,495 for the 630-hp model and $33,495 for the 725-hp kit, which includes installation at Shelby Automobiles’ Las Vegas plant or at a Shelby authorized mod shop. Additional options include a six-piston rear brake system, Eibach adjustable coil-over suspension and a two-tone leather interior upgrade. Each car will receive a Shelby consecutively number dash plaque, engine plate and listed in the official Shelby registry. Builds of the 2
For the thousands of Mustang GT owners out there, many probably are starting to feel a little left out with the GT500 receiving so much attention. Not to worry, because Shelby has heard the requests and also introduced a track-catering Shelby SR package for 2005-2009 Mustang GTs.
Power jumps to 550 hp with the help of a Ford Racing supercharger and Borla exhaust.
Extensive handling alterations begin with an Eibach suspension with coil-over shocks, struts, pro sway bars, bump steer kit, improved lower control arm bushings and caster/camber plates. A Watts Link suspension sits out back. Lightweight 18-inch aluminum wheels come mounted with 275/35 BF Goodrich R compound rubber. Brake performance is addressed with Baer six-piston front and rear units.
Need a new Mustang Body Kit? Then stop by AmericanMuscle.com and check out their large selection.
6:12 AM
From its striking design to its pulsating TV spots, the LaCrosse marks a decidedly different direction for Buick.
And that’s just on the surface. The change gets even starker under the hood, where for the first time in a decade, the brand will offer a four-cylinder engine, as General Motors works to meet stiffer fuel-mileage standards expected for 2016. Buick also will offer all-wheel drive in the LaCrosse, the first time it’s ever put that technology in a sedan.
The redesign for 2010 brings a lot of change for a brand that has become fairly stodgy in the marketplace. But that’s the idea, says Susan Docherty, vice president of Buick-Pontiac-GMC in North America.
“We’re working hard to change the perception of the brand and to let people know Buick may not be what they think it is,” she said in a Web chat with journalists Monday.
The LaCrosse will begin arriving at dealerships at the end of this month, and V6 models will start at $27,835, including shipping charges. The V6s are versions of the same engines that appear in a range of GM vehicles, including the Cadillac CTS and SRX and the Chevrolet Camaro. Using variable valve timing and direct injection, the 3.6-liter unit makes 280 hp, while the 3.0-liter is rated at 255 hp for front-wheel-drive versions.
The four-banger is thought to be the first in a Buick since the 1998 Skylark. It’s from GM’s Ecotec family and makes 182 hp and 172 lb-ft of torque. It’s an inline setup and employs direct injection; look for it to get an estimated 20 mpg in the city and 30 mpg on the highway.
The LaCrosse is a global blend of GM engineering and design resources. The interior, which features ice blue ambient lighting, Bluetooth connectivity and in-dash navigation, is a collaboration between American and Chinese designers. The platform was borrowed from the Opel Insignia, produced by GM’s European arm.
The chief competitor will be the Acura TL, while the Lincoln MKZ, the Lexus ES350, the Chrysler 300, the Toyota Avalon and the Ford Taurus also are expected to draw comparisons, officials said.
GM brass say they hope that the LaCrosse can continue the ongoing facelift for Buick and point to the path set by the Enclave. The median age of buyers of the handsome crossover is 12 years younger than the brand’s typical demographic, and Buick is planning a social-media component of its advertising to try to reach untraditional buyers in their 20s.
“Today, many people perceive Buick as a great brand with good quality and a high level of craftsmanship,” Docherty said. “However, they see it as a brand that’s ‘not for me.’ What started with the Enclave in terms of changing perceptions needs to continue with the LaCrosse.”
Meanwhile, Buick officials remain mum on how the brand might be fleshed out, noting that the Regal that has shown up in some advertisements is a concept (though it’s on sale in China) and saying it is unlikely that the Pontiac G8 would be rebadged.
8:09 AM
The U.S. Senate passed a scaled-back $1 billion cash-for-guzzlers bill and sent it to President Barack Obama for his expected signature.
The 91-5 vote took place after 5 p.m. Thursday, after the Senate beat back a Republican attempt to strip the auto proposal from a $106 billion spending package aimed primarily at aiding U.S. troops in Iraq and Afghanistan.
The $1 billion initiative that passed the House earlier this week seeks to boost auto sales and increase the fuel economy of U.S. cars and light trucks. It would offer $3,500 to $4,500 cash vouchers for about 3½ months to consumers who trade in their cars for new, more fuel-efficient vehicles.
"This program will provide a much-needed boost to the struggling auto industry, including manufacturers, dealers, suppliers and other related industries," Sen. Carl Levin, D-Mich., said on the Senate floor Thursday. It also will "encourage consumers to purchase more fuel-efficient vehicles," he said.
Congressional Budget Office data suggest the bill would result in the sale of 150,000 new cars, said Nichole Francis Reynolds, chief of staff to Rep. Betty Sutton, D-Ohio. Sutton sponsored the original bill.
Similar programs in Germany, China and France have resulted in substantial sales increases since the end of 2008.
Obama had fought hard for the bill, which passed by a 226-202 vote in the House.
The program would go into effect a month after the president signs the bill and extend until Nov. 1, Reynolds said. Sutton plans to try to resurrect the measure as a longer-term program in the fiscal year beginning Oct. 1, she said.
The current bill was pared back from a one-year, $4 billion program after some senators expressed concern that the measure would not do enough to assure a more fuel-efficient fleet.
Earlier Thursday, the Senate voted 60-36, largely along party lines, to defeat an effort by Sen. Judd Gregg, R-N.H., to remove the car-swap provision from the $106 billion supplemental spending bill.
Gregg, in his floor statements, questioned the relevance of the bill to the larger package of assistance to U.S. troops in Iraq and Afghanistan. He also said that the $1 billion program was "totally unpaid for," an assertion challenged by the chairman of the Senate Appropriations Committee, Daniel Inouye, D-Hawaii.
The 91-5 vote took place after 5 p.m. Thursday, after the Senate beat back a Republican attempt to strip the auto proposal from a $106 billion spending package aimed primarily at aiding U.S. troops in Iraq and Afghanistan.
The $1 billion initiative that passed the House earlier this week seeks to boost auto sales and increase the fuel economy of U.S. cars and light trucks. It would offer $3,500 to $4,500 cash vouchers for about 3½ months to consumers who trade in their cars for new, more fuel-efficient vehicles.
"This program will provide a much-needed boost to the struggling auto industry, including manufacturers, dealers, suppliers and other related industries," Sen. Carl Levin, D-Mich., said on the Senate floor Thursday. It also will "encourage consumers to purchase more fuel-efficient vehicles," he said.
Congressional Budget Office data suggest the bill would result in the sale of 150,000 new cars, said Nichole Francis Reynolds, chief of staff to Rep. Betty Sutton, D-Ohio. Sutton sponsored the original bill.
Similar programs in Germany, China and France have resulted in substantial sales increases since the end of 2008.
Obama had fought hard for the bill, which passed by a 226-202 vote in the House.
The program would go into effect a month after the president signs the bill and extend until Nov. 1, Reynolds said. Sutton plans to try to resurrect the measure as a longer-term program in the fiscal year beginning Oct. 1, she said.
The current bill was pared back from a one-year, $4 billion program after some senators expressed concern that the measure would not do enough to assure a more fuel-efficient fleet.
Earlier Thursday, the Senate voted 60-36, largely along party lines, to defeat an effort by Sen. Judd Gregg, R-N.H., to remove the car-swap provision from the $106 billion supplemental spending bill.
Gregg, in his floor statements, questioned the relevance of the bill to the larger package of assistance to U.S. troops in Iraq and Afghanistan. He also said that the $1 billion program was "totally unpaid for," an assertion challenged by the chairman of the Senate Appropriations Committee, Daniel Inouye, D-Hawaii.
1:49 AM
Where to start? That’s the question when confronted by the amazing Mercedes-Benz McLaren SLR Stirling Moss. No matter how often you’ve seen it in pictures, nothing prepares you for the impression the low-slung two-seater leaves as it hovers into view and you get the key for a world-exclusive drive.
Created as a parting gesture in the oft-turbulent collaboration between Mercedes and Formula One partner McLaren, the new roadster costs $1.1 million. And you don’t even get a windshield; it was deleted in a program that pared 441 pounds off the SLR’s curb weight, bringing it to 3,419 pounds. This is one of the most dramatic-looking and hardest-charging Benzes ever.
But you won't get it here. The car won't be sold in the U.S., due in part to the lack of windshield.
The SLR Stirling Moss was conceived in 2005 and then developed in Woking and Stuttgart. “We were conscious from early on that many customers were seeking a more extreme car,” said SLR development chief Detlef Barthelmes, “one that truly captured the essence of the original SLR.”
The basis is the standard SLR roadster’s carbon-fiber monocoque. It got beefed-up sills and an additional cross member behind the seats, helping to make the Stirling Moss one of the most structurally rigid open-top cars. Its carbon-fiber body shell gives the new car a menacing appearance.
The look is a mixture of old and new, with hints of the legendary 300 SLR Uhlenhaut (used by Moss to win the 1955 Mille Miglia) in its exaggerated proportions. Climbing in is tricky, but once you’re seated, the view is unique. The seats, thinly padded but supportive fixed-back units, are mounted low.
Along with the low weight, another target Barthelmes set was a 217-mph top speed. To that end, it uses the supercharged 5.4-liter V8 producing 650 hp at 6,500 rpm and a thumping 604 lb-ft at 4,000 rpm. This is one great engine, linear and hugely powerful. Mercedes claims 0 to 62 mph in 3.5 seconds. With a five-speed automatic sending the drive to the rear wheels, there’s no tricky clutch to contend with as you fire the car from the line; the traction control works overtime as the Mercedes lifts its nose slightly, squats at the rear and catapults forward.
Exposed to the elements, you feel the roar from up front enter your head, and it doesn’t leave until you’ve switched off the car. Passing beyond a high-pitched mechanical whine at low revs, it shifts to a deep exhaust blare before building to a crazed hammer near the redline.
The suspension is firm, but there’s sufficient travel so that the SLR Stirling Moss is not thrown offline by nasty expansion joints. The steering is nicely weighted and reasonably direct. Although there is a faint trace of body roll, it will not greatly upset the corning line. It all translates into sharper turn-in and an ability to carry greater speed through corners. The powerful brakes are a combination of vented and cross-drilled carbon-ceramic discs at each corner.
Some will see the SLR Stirling Moss as just a marketing folly. We did. But when it’s driven at speed over some of Italy’s best driver’s roads, it’s obvious there is substance, too. The remarkable thing is that even at $1.1 million, Mercedes says it won’t be making money on the car.
“Sometimes you hit on a good idea, and you just have to see it through,” says Barthelmes. It’s the sort of no-compromise attitude that sums up the car itself.
2009 Mercedes-Benz McLaren SLR Stirling Moss
ON SALE: Now in Europe
BASE PRICE: $1.1 million
DRIVETRAIN: 5.4-liter, 650-hp, 604-lb-ft supercharged V8; RWD, five-speed automatic
CURB WEIGHT: 3,419 lb
0-62 MPH: 3.5 sec (mfr)
FUEL ECONOMY: 14 mpg (est)
9:26 AM
Max Mosley is meeting the Formula One Teams Association team principals in London on Thursday--although it is believed that not all of them may be present--as both sides of the 2010 entry dispute try to hammer out a resolution.
The entry list is due to be published Friday with Williams, Force India and Ferrari (against its will) expected to be on it, and possibly some other teams that have indicated at the last minute that that they are willing to switch to an unconditional entry. The field will be bumped up to 13 by a selection of the new teams.
Mosley's position was made public with the disclosure of a letter he wrote to FOTA founder and Ferrari chairman Luca di Montezemolo on May 26, five days after his meeting with team owners at the Monaco Grand Prix and three days before the entry deadline for the 2010 season. AutoWeek obtained a copy of the letter.
In the letter, Mosley confirms that in 2010, a higher-than-planned cost cap--to a maximum of e 100 million, or about $140 million at current exchange rates--would have to be in place. The cap would be then reduced to the published figure of £40 million, or $65.8 million, in the second season.
This presumably is an answer to those teams who insist they cannot downsize their staffs by next season, and would give them more time to do so.
In addition, the letter confirms that there would be no special rules advantages given to teams that adhere to the cost cap, and that the FIA would help the transfer of "know how" between current teams and new entrants for 2010 and possibly beyond.
There also is the so-called "Adrian Newey rule," which allows one team member's salary to be outside the cost cap, in addition to the drivers.
Intriguingly, the FIA concedes that it is willing to call the new arrangements something such as "financial regulations," as the cost-cap label is not popular with teams.
It remains to be seen whether either side will move far enough in Thursday's meeting to reach a compromise, but there remains a chance that some teams will jump the FOTA ship. Brawn GP and the two Red Bull teams are not hamstrung by the $70 million (e 50 million) penalty agreed to among the five factory teams after Monaco.
MAX MOSLEY'S LETTER TO LUCA DI MONTEZEMOLO
Dear Luca,
As you probably know, Simone Perillo and Tony Purnell have done considerable work on a possible resolution of our current difficulties.
I have now had an opportunity to look in detail at their ideas and to consult both within the FIA and among other actual and potential Formula One stakeholders.
Although it contains much that is useful, the document as it stands is rather too complicated. I hope you will agree that what we need now is simplicity, clarity and above all certainty. Have also reflected carefully on our meeting last Friday we could, at the limit, go as far as to propose the following to the teams which have applied to enter the 2010 Championship.
1. A cap in 2010. This could be as high as 100 million euros, but we must have a cap and we must have certainty.
2. For 2011, again we must have certainty with a cap at 40 million pounds (or, if preferred, 45 million euros).
3. We can agree that all teams race under the same 2010 rules. These would be as published, but with the technical and sporting advantages originally offered to cost-cap team deleted.
4. Instead of these advantages, we will facilitate know-how transfer between certain current teams and new entrants at least for 2010 and possibly for 2011.
5. We can agree that one employee per team in addition to the drivers can outside the cap for 2011 and thereafter.
6. We are prepared to negotiate a new Concorde Agreement along the lines of the partial draft which was sent to us with the teams' letter of 24 May. Our (very) preliminary view is that this draft is broadly acceptable.
7. We are happy to call the cost cap "financial regulations" or any other sensible term, as the teams prefer.
I understand you have a meeting tomorrow. It would be excellent if you were able to agree the above so that we could make a joint announcement.
Yours sincerely,
Max Mosley
The entry list is due to be published Friday with Williams, Force India and Ferrari (against its will) expected to be on it, and possibly some other teams that have indicated at the last minute that that they are willing to switch to an unconditional entry. The field will be bumped up to 13 by a selection of the new teams.
Mosley's position was made public with the disclosure of a letter he wrote to FOTA founder and Ferrari chairman Luca di Montezemolo on May 26, five days after his meeting with team owners at the Monaco Grand Prix and three days before the entry deadline for the 2010 season. AutoWeek obtained a copy of the letter.
In the letter, Mosley confirms that in 2010, a higher-than-planned cost cap--to a maximum of e 100 million, or about $140 million at current exchange rates--would have to be in place. The cap would be then reduced to the published figure of £40 million, or $65.8 million, in the second season.
This presumably is an answer to those teams who insist they cannot downsize their staffs by next season, and would give them more time to do so.
In addition, the letter confirms that there would be no special rules advantages given to teams that adhere to the cost cap, and that the FIA would help the transfer of "know how" between current teams and new entrants for 2010 and possibly beyond.
There also is the so-called "Adrian Newey rule," which allows one team member's salary to be outside the cost cap, in addition to the drivers.
Intriguingly, the FIA concedes that it is willing to call the new arrangements something such as "financial regulations," as the cost-cap label is not popular with teams.
It remains to be seen whether either side will move far enough in Thursday's meeting to reach a compromise, but there remains a chance that some teams will jump the FOTA ship. Brawn GP and the two Red Bull teams are not hamstrung by the $70 million (e 50 million) penalty agreed to among the five factory teams after Monaco.
MAX MOSLEY'S LETTER TO LUCA DI MONTEZEMOLO
Dear Luca,
As you probably know, Simone Perillo and Tony Purnell have done considerable work on a possible resolution of our current difficulties.
I have now had an opportunity to look in detail at their ideas and to consult both within the FIA and among other actual and potential Formula One stakeholders.
Although it contains much that is useful, the document as it stands is rather too complicated. I hope you will agree that what we need now is simplicity, clarity and above all certainty. Have also reflected carefully on our meeting last Friday we could, at the limit, go as far as to propose the following to the teams which have applied to enter the 2010 Championship.
1. A cap in 2010. This could be as high as 100 million euros, but we must have a cap and we must have certainty.
2. For 2011, again we must have certainty with a cap at 40 million pounds (or, if preferred, 45 million euros).
3. We can agree that all teams race under the same 2010 rules. These would be as published, but with the technical and sporting advantages originally offered to cost-cap team deleted.
4. Instead of these advantages, we will facilitate know-how transfer between certain current teams and new entrants at least for 2010 and possibly for 2011.
5. We can agree that one employee per team in addition to the drivers can outside the cap for 2011 and thereafter.
6. We are prepared to negotiate a new Concorde Agreement along the lines of the partial draft which was sent to us with the teams' letter of 24 May. Our (very) preliminary view is that this draft is broadly acceptable.
7. We are happy to call the cost cap "financial regulations" or any other sensible term, as the teams prefer.
I understand you have a meeting tomorrow. It would be excellent if you were able to agree the above so that we could make a joint announcement.
Yours sincerely,
Max Mosley
7:56 AM
The formula for making a muscle car was established 46 years ago, when John Z. DeLorean dropped a 389 where a 326 had been and created the first GTO. That simple Frankenstinian act has been followed ever since by a parade of great brutes. We have loved them all.
So when Acura set out to expand its TSX line, it did just what DeLorean did 46 years before. In this case, engineers took the 3.5-liter V6 from the TL and wedged it into the smaller, lighter TSX. You can still get a 2.0-liter four-cylinder TSX, but you now have the choice of a bigger, badder powertrain.
The power output rises from 201 hp to 280 hp, while weight goes up by 210 pounds. Acura claims the new setup will lower 0-to-60-mph times by two seconds to 7.0 seconds, a figure Acura called "conservative." Your performance may vary.
There are drawbacks. Fuel economy drops to 21 mpg combined, something you might not expect for the smallest car in the Acura line. While the four-cylinder gets a six-speed manual or five-speed automatic, the TSX V6 comes with just the slushbox.
The cost will reel you back a few feet too, at $35,660, compared with $30,120 for the four-cylinder TSX. But the power may be worth the five and a half grand.
We drove a TSX V6 through the best roads of the Santa Monica mountains and did enjoy the extra horses. Though there was nowhere on our drive to test the 0-to-60 figure, it seemed highly plausible--indeed, conservative.
The five-speed automatic has the requisite shifter paddles behind the wheel for that boy-racer feel. Shifts came as quickly as any touring-car champion is ever going to want, and if you drop the console-mounted shift lever down all the way to S, the engine stays in gear no matter what, bouncing off the 6,800-rpm rev limiter all day if you so choose. On the best of the twisties, we flipped the paddles with glee and no complaints.
Whatever shortcomings we noted on our short drive might have been a result of our higher expectations. The electric steering was quick but not as communicative as we'd have liked and didn't deliver the same feel offered by, say, a 3-series. Springs are revised, but only enough to hold the extra 200 pounds. The front antiroll bar is also tuned for the added weight. The V6 model comes with 18-inch wheels instead of the 17s found on the four. Tires are 235/45 Michelin Pilot HX MXM4s.
The brakes feature the same diameter discs but get a new master cylinder and new rear pads. They, too, lacked the same feel we would have liked on a performance sedan. Going into fast corners, they didn't feel like they were grabbing those discs like a sport sedan should. Stopping distances felt longer than we might have expected.
This might not matter except that Acura compares its TSX V6 with the best performance sedans of this size on the market. If we were to put the car into a performance comparison with the Lexus IS 350 and an appropriate BMW 3-series, we'd have to place the TSX third. The TSX does start life out as a European Accord, remember. So maybe we were expecting too much.
And will any of that matter to the TSX V6's buyers? Maybe not. There are electronics galore on the features list, everything from navigation with real-time traffic (which Acura pioneered, by the way) to a whopping-good 415-watt, 10-speaker audio system with active sound control. The V6 buyer is expected to be seven years older than the four-cylinder buyer, so maybe this car is just right for them. Even Acura ultimately calls the V6 model a "performance-oriented sports sedan" and not a touring-car championship racer.
As always, the market will decide what it is when the car arrives in showrooms. This one comes in July.
SPECS
2010 Acura TSX V6
On sale: July
Base price: $35,660
Drivetrain: 3.5-liter, 280-hp, 254-lb-ft V6; FWD, five-speed automatic
Curb weight: 3,680 lb
0-60 MPH: 7 sec (mfr)
Fuel economy (EPA): 21 mpg
6:08 AM
General Motors, the largest U.S. automaker and one of the industrial icons that helped define the nation’s economic growth and prosperity for most of the 20th century, filed for bankruptcy Monday morning in New York.
Some of the proceedings are expected to be relatively swift, with the sale of GM’s “good” assets to an entity owned by the U.S. Treasury Department, the UAW, bondholders and the Canadian government within two to three months. That would pave the way for a restructured company to emerge while old assets such as dealerships, brands, factories and other legacy costs remain under court supervision to be sold or closed.
GM listed assets of $82.29 billion and liabilities of $172.81 billion in court papers.
GM will be backed by $30.1 billion in federal funding to help it through bankruptcy, and the U.S. government will be able to select most of the company’s board of directors. It will own 61 percent of the reorganized company. The governments of Canada and Ontario collectively will get 12 percent of the new GM in return for $9.5 billion in funds. The filing only applies to the automaker’s U.S. operations.
"GM and its stakeholders have provided a viable and achievable plan for this American icon to rise again," President Barack Obama said in an address Monday morning from the White House.
The bankruptcy filing is being pitched as a new beginning for the Detroit company, which just months ago still laid claim to the title of world’s largest automaker, a perch it had held since the Great Depression. In the past two months, chairman and CEO Rick Wagoner was ousted by the Obama administration, and the company is surviving on government loans.
The filing is a culmination of decades of declining sales and heavy structural costs, which came to a head last fall, when the combination of a dramatic downturn in auto sales and the global credit crunch began to cripple GM. The company was kept alive by federal aid in the waning days of the Bush administration, before being forced to ask for more loans this year.
"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," Fritz Henderson, GM president and CEO said in a statement. "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."
GM will close 11 plants and idle three more as part of its restructuring. Pontiac, Saab and Saturn are expected to be closed or sold. Opel, GM’s German unit and the linchpin of its European operations since 1929, has been sold--though the company will retain a stake in it--and the sale of Hummer is reportedly imminent.
Though usually defined by its sheer size--at its peak, it was one of the largest companies in the world--GM has given the industry scores of innovations dating to its infancy. It made Cadillac the brand of chrome and fins, made enthusiasts lust for the Corvette and engineered some of the most durable trucks and SUVs on the road. The 1957 Chevrolet remains an icon of American culture, and GM hopes to get the extended-range electric car, the Chevy Volt, on the road by the end of 2010.
“I recognize that today’s news carries particular prominence because it’s not just any company--it’s GM,” Obama said.
In the last few days, GM announced agreements with the UAW and the majority of its bondholders, which are expected to help smooth bankruptcy proceedings. Like Chrysler, which received approval of the sale of most of its assets to a Fiat-led entity early Monday, GM hopes to avoid a long and complicated court case by ironing out much of its restructuring ahead of time. The Chapter 11 filing is expected to help the company shore up the rest of its debts and emerge with a clean balance sheet, in the hopes of being successful when the struggling new-car market recovers.
Henderson said later on Monday that the company expects a quick bankruptcy--and that it needs one for the process to be successful.
“We need to move fast--speed is of the essence,” the GM chief executive said. “We have gotten ourselves prepared to move fast . . . not with a sense of urgency--I’m talking pure, unadulterated speed.”
The appointment of a restructuring officer, Al Koch, was announced. He is a former Kmart executive. Though the government will have a controlling interest in GM, it will take a hands-off approach and leave the company’s executives to make important decisions.
Sensing the historical moment of sending one of America’s flagship corporations in Chapter 11, Obama concluded his address with a tone of optimism for the outcome of GM’s restructuring.
“When that happens, we can truly say that what is good for General Motors, is good for the United States of America,” the president said.
Automotive News contributed to this report.
Statement from Kent Kresa, GM chairman:
“The General Motors Board of Directors authorized the filing of a Chapter 11 case with regret that this path proved necessary despite the best efforts of so many. Today marks a new beginning for General Motors. A court-supervised process and transfer of assets will enable a New GM to emerge as a stronger, healthier, more focused and nimbler company with a determination not to just survive but to excel. The board concluded that the proposed transformation will maximize the value of the enterprise, and the return to the many stakeholders who have been involved with GM over the years.
"We are appreciative of the support from the U.S. Treasury, the President’s Task Force on Autos, the UAW and its members, salaried employees and retirees, concurring bondholders, and very importantly, the American taxpayers. The board is confident that this New GM can operate successfully in the intensely competitive U.S. market and around the world. The board stands behind the people of GM in embracing this unique opportunity to create value and a new company that will design, engineer, build and market the best cars and trucks in world.”
PLANTS IMPACTED (with timing for idling or closure)
Assembly
--Orion, Mich., Standby Capacity – September 2009
--Pontiac, Mich., Close – October 2009
--Spring Hill, Tenn., Standby Capacity – November 2009
--Wilmington, Del., Close – July 2009
Stamping
--Grand Rapids, Mich., Close – June 2009 (previously announced)
--Indianapolis, Ind., Close – December 2011
--Mansfield, Ohio, Close – June 2010
--Pontiac, Mich., Standby Capacity – December 2010
Powertrain
--Livonia Engine, Mich., Close – June 2010
--Flint North Components, Mich., Close – December 2010
--Willow Run Site, Mich., Close – December 2010
--Parma Components, Ohio, Close – December 2010
--Fredericksburg Components, Va., Close – December 2010
--Massena Castings, N.Y., Closed – May 1, 2009 (previously announced)
Service & Parts Operations (SPO)
Warehousing & Parts Distribution Centers
--Boston, Mass., Close – Dec. 31, 2009
--Jacksonville, Fla., Close – Dec. 31, 2009
--Columbus, Ohio, Close – Dec. 31, 2009
Ford's Reaction
Ford, the only U.S. automaker not in bankruptcy, released the following statement in reaction to GM's filing:
"Today's announcement that GM is filing for Chapter 11 bankruptcy is another important development during this unprecedented period for the auto industry and the global economy.
"The Ford team continues to monitor the industry environment and plan for all contingencies to ensure our transformation plan remains on track. At this time, we do not expect any major disruptions to our operations as a result of today's news.
"We share President Obama's hope that GM's bankruptcy will be controlled and orderly, and we continue to believe it is important that our governmental leaders and the U.S. Automotive Task Force remain focused on the stability of the supply chain and on ensuring that a healthy U.S. auto industry emerges from this difficult economic period. We look forward to working with the Obama administration to ensure that the government's majority ownership of GM will not change the industry's competitive dynamics and that a level playing field will be maintained.
"Ford remains absolutely committed to continuing to make progress on our transformation plan without accessing emergency taxpayer assistance from the U.S. government. We have been executing our plan for several years and now, gaining market share and new customers with an unprecedented number of new high-quality, fuel-efficient vehicles."
Some of the proceedings are expected to be relatively swift, with the sale of GM’s “good” assets to an entity owned by the U.S. Treasury Department, the UAW, bondholders and the Canadian government within two to three months. That would pave the way for a restructured company to emerge while old assets such as dealerships, brands, factories and other legacy costs remain under court supervision to be sold or closed.
GM listed assets of $82.29 billion and liabilities of $172.81 billion in court papers.
GM will be backed by $30.1 billion in federal funding to help it through bankruptcy, and the U.S. government will be able to select most of the company’s board of directors. It will own 61 percent of the reorganized company. The governments of Canada and Ontario collectively will get 12 percent of the new GM in return for $9.5 billion in funds. The filing only applies to the automaker’s U.S. operations.
"GM and its stakeholders have provided a viable and achievable plan for this American icon to rise again," President Barack Obama said in an address Monday morning from the White House.
The bankruptcy filing is being pitched as a new beginning for the Detroit company, which just months ago still laid claim to the title of world’s largest automaker, a perch it had held since the Great Depression. In the past two months, chairman and CEO Rick Wagoner was ousted by the Obama administration, and the company is surviving on government loans.
The filing is a culmination of decades of declining sales and heavy structural costs, which came to a head last fall, when the combination of a dramatic downturn in auto sales and the global credit crunch began to cripple GM. The company was kept alive by federal aid in the waning days of the Bush administration, before being forced to ask for more loans this year.
"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," Fritz Henderson, GM president and CEO said in a statement. "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."
GM will close 11 plants and idle three more as part of its restructuring. Pontiac, Saab and Saturn are expected to be closed or sold. Opel, GM’s German unit and the linchpin of its European operations since 1929, has been sold--though the company will retain a stake in it--and the sale of Hummer is reportedly imminent.
Though usually defined by its sheer size--at its peak, it was one of the largest companies in the world--GM has given the industry scores of innovations dating to its infancy. It made Cadillac the brand of chrome and fins, made enthusiasts lust for the Corvette and engineered some of the most durable trucks and SUVs on the road. The 1957 Chevrolet remains an icon of American culture, and GM hopes to get the extended-range electric car, the Chevy Volt, on the road by the end of 2010.
“I recognize that today’s news carries particular prominence because it’s not just any company--it’s GM,” Obama said.
In the last few days, GM announced agreements with the UAW and the majority of its bondholders, which are expected to help smooth bankruptcy proceedings. Like Chrysler, which received approval of the sale of most of its assets to a Fiat-led entity early Monday, GM hopes to avoid a long and complicated court case by ironing out much of its restructuring ahead of time. The Chapter 11 filing is expected to help the company shore up the rest of its debts and emerge with a clean balance sheet, in the hopes of being successful when the struggling new-car market recovers.
Henderson said later on Monday that the company expects a quick bankruptcy--and that it needs one for the process to be successful.
“We need to move fast--speed is of the essence,” the GM chief executive said. “We have gotten ourselves prepared to move fast . . . not with a sense of urgency--I’m talking pure, unadulterated speed.”
The appointment of a restructuring officer, Al Koch, was announced. He is a former Kmart executive. Though the government will have a controlling interest in GM, it will take a hands-off approach and leave the company’s executives to make important decisions.
Sensing the historical moment of sending one of America’s flagship corporations in Chapter 11, Obama concluded his address with a tone of optimism for the outcome of GM’s restructuring.
“When that happens, we can truly say that what is good for General Motors, is good for the United States of America,” the president said.
Automotive News contributed to this report.
Statement from Kent Kresa, GM chairman:
“The General Motors Board of Directors authorized the filing of a Chapter 11 case with regret that this path proved necessary despite the best efforts of so many. Today marks a new beginning for General Motors. A court-supervised process and transfer of assets will enable a New GM to emerge as a stronger, healthier, more focused and nimbler company with a determination not to just survive but to excel. The board concluded that the proposed transformation will maximize the value of the enterprise, and the return to the many stakeholders who have been involved with GM over the years.
"We are appreciative of the support from the U.S. Treasury, the President’s Task Force on Autos, the UAW and its members, salaried employees and retirees, concurring bondholders, and very importantly, the American taxpayers. The board is confident that this New GM can operate successfully in the intensely competitive U.S. market and around the world. The board stands behind the people of GM in embracing this unique opportunity to create value and a new company that will design, engineer, build and market the best cars and trucks in world.”
PLANTS IMPACTED (with timing for idling or closure)
Assembly
--Orion, Mich., Standby Capacity – September 2009
--Pontiac, Mich., Close – October 2009
--Spring Hill, Tenn., Standby Capacity – November 2009
--Wilmington, Del., Close – July 2009
Stamping
--Grand Rapids, Mich., Close – June 2009 (previously announced)
--Indianapolis, Ind., Close – December 2011
--Mansfield, Ohio, Close – June 2010
--Pontiac, Mich., Standby Capacity – December 2010
Powertrain
--Livonia Engine, Mich., Close – June 2010
--Flint North Components, Mich., Close – December 2010
--Willow Run Site, Mich., Close – December 2010
--Parma Components, Ohio, Close – December 2010
--Fredericksburg Components, Va., Close – December 2010
--Massena Castings, N.Y., Closed – May 1, 2009 (previously announced)
Service & Parts Operations (SPO)
Warehousing & Parts Distribution Centers
--Boston, Mass., Close – Dec. 31, 2009
--Jacksonville, Fla., Close – Dec. 31, 2009
--Columbus, Ohio, Close – Dec. 31, 2009
Ford's Reaction
Ford, the only U.S. automaker not in bankruptcy, released the following statement in reaction to GM's filing:
"Today's announcement that GM is filing for Chapter 11 bankruptcy is another important development during this unprecedented period for the auto industry and the global economy.
"The Ford team continues to monitor the industry environment and plan for all contingencies to ensure our transformation plan remains on track. At this time, we do not expect any major disruptions to our operations as a result of today's news.
"We share President Obama's hope that GM's bankruptcy will be controlled and orderly, and we continue to believe it is important that our governmental leaders and the U.S. Automotive Task Force remain focused on the stability of the supply chain and on ensuring that a healthy U.S. auto industry emerges from this difficult economic period. We look forward to working with the Obama administration to ensure that the government's majority ownership of GM will not change the industry's competitive dynamics and that a level playing field will be maintained.
"Ford remains absolutely committed to continuing to make progress on our transformation plan without accessing emergency taxpayer assistance from the U.S. government. We have been executing our plan for several years and now, gaining market share and new customers with an unprecedented number of new high-quality, fuel-efficient vehicles."
