Saab's Buyer Backs Out

Koenigsegg, the Swedish boutique car maker, has terminated its purchase agreement to buy Saab from GM. General Motors just released a statement from CEO Fritz Henderson:

"Many have worked tirelessly over the past several months to create a sustainable plan for the future of Saab by selling the brand and its manufacturing interests to Koenigsegg Group AB. Given the sudden change in direction, we will take the next several days to assess the situation and will advise on the next steps next week."

What the next steps will be is uncertain. GM recently decided to keep Opel, it’s German subsidiary instead of selling it off. Could Saab possibly remain under the GM umbrella? Or will it suffer the same fate as Saturn?

The sale was based on a loan from the Swedish government of roughly $600 million and a Chinese company was planning on a minority stake as part of the deal as well.

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Fewer Than 200 Have Returned GM's Guaranteed Cars

GM’s 60-Day Satisfaction Guarantee program has proven to be a confidence booster for the company. Today, GM announced that fewer than 200 buyers out of 222,000 who purchased a new GM car have returned them unsatisfied. However, that’s out of 658 who took the guarantee offer over $500 in cash back. That’s a 33% return rate.

These returns don’t cost the buyer the full price of the car, but they are out taxes, fees and two car payments. This means those who returned cars were very unsatisfied and skeptical to begin with. GM says it is being proactive about the returns; they're following up with each customer and conducting high-level interviews with engineering staff to find out what the customers didn’t like. A few of the purchasers returned the cars for other models or trim levels, but many just didn’t like the cars or trucks.

GM to Announce Where You Can Get a Volt

GM will use the 2009 L.A. Auto Show to announce where you can buy a new Chevrolet Volt when the groundbreaking vehicle debuts next year.

GM will begin production of the Volt late next year, and it’s scheduled to go on sale by the end of 2010. The announcement of the Volt’s initial retail markets will shed light on how GM plans to introduce Americans to a new, unfamiliar transportation technology.

Dealers must be certified to sell and service the plug-in hybrid vehicles, and by no means will every Chevy dealer in the country have the Volt on their lots.

The only clue so far? Jack Maxton Chevrolet in Columbus, Ohio, is already taking deposits on the Volt, according to Maxton sales representative Mike Garvey.

LA Auto Show: GM to Announce Where Volt Will Be Sold Initially (Detroit Free Press)

U.S.-Bound 2011 Chevy Cruze to Appear at L.A. Auto Show

GM will show off the U.S.-spec version of the 2011 Chevrolet Cruze at the upcoming L.A. Auto Show.

We got a look at the overseas version of the compact sedan at last year’s Detroit auto show; it’s been available in Europe and Asia for more than a year now. Production on the U.S. Cruze and its turbocharged 1.4-liter four-cylinder engine with direct injection will begin in April at GM’s Lordstown, Ohio plant.

Expected to get 40 mpg on the highway, the Cruze is GM’s chance to edge in on territory now in the grip of Toyota’s Corolla and the Honda Civic. We’ll let you know more when we get a look at the newbie in L.A.

The Cruze is slated to hit dealerships in the third quarter of 2010.

GM to Start Repaying Government Loan Next Month

In a surprising but welcome turn, GM will begin repaying its debt to the U.S. government next month, which is years ahead of schedule.

Despite posting a $1.15 billion third-quarter loss, the automaker has performed better than expected after cutting costs and moving through bankruptcy faster than expected. It plans to pay $1 billion per quarter until it repays a $6.7 billion loan, according to the Washington Post.

Keep in mind that the $6.7 billion is only the debt owned by the U.S. The eventual return to taxpayers on their $50 billion investment -- representing a 61% stake in the company -- will be determined by GM’s eventual stock value.

The $6.7 billion debt was not due to be repaid until July 2015, and the move to repay the tab early indicates that GM is “performing modestly above expectations,” according to the Post.

This news comes on the heels of GM repaying Germany 200 million euros ($297.6 million) in loans that sustained Opel, its European arm, through the downturn.

GM to Start Repaying Debt to U.S. Government Next Month (Washington Post)

GM Could Repay Some Bailout Money in '09

After a strong October, there is a chance that GM may repay some of its $50 billion in government bankruptcy aid before the end of 2009, according to Chairman of the Board Ed Whitacre (above).

Although Whitacre declined to name an actual figure, the possibility of even a modest loan repayment could help GM’s image. Since it filed for bankruptcy in June — after bleeding $88 billion since 2004 — the Obama administration has made a priority to keep GM afloat with a 61% government stake in the company.

October was the first time GM’s sales have risen since January 2008, and its market share improved to 20% for the month. It’s only one month, but it has given Whitacre and CEO Fritz Henderson hope that the automaker has made it through the roughest waters. Even if the amount is negligible — $50 billion is a pretty deep hole — in terms of a PR move, it couldn’t hurt.

GM May Repay Some Fed Aid in ’09 (Detroit News)

Straits Not as Dire for Ford, GM

The term “back from the brink” has been making the rounds these days as the economy struggles back from its darkest hour. Perhaps nowhere is there a more surprising example of this than Ford and GM.

First, Ford posted a profit of nearly a billion dollars in the third quarter, shocking most analysts and giving the Blue Oval its first profitable quarter in more than four years. Ford owes the Cash for Clunkers program for some of the bump in sales during August and September that helped it earn $997 million, but the company also attributes its success to cost cuts and higher net pricing for vehicles. Ford expects to return to full profitability by 2011.

Meanwhile, GM CEO Fritz Henderson visited Capitol Hill to update its major shareholder — namely, us, the taxpayers — on its progress. According to Henderson, GM will not require any more aid. But will the government be getting back its $50 billion in loans and equity by 2015? Yes, says Henderson, and in addition, “We are looking at all kinds of ways that would actually accelerate that.”

While Henderson’s words are nice, GM is still a long way off from making good on this promise.

Nevertheless, there was a time last winter when people were seriously discussing the possible collapse of the U.S. automotive industry. After facing down a crushing year, these two companies have to be feeling good that they now stand a few feet — and in Ford’s case, even yards — back from the brink.

No More U.S. Aid Needed, Says GM Chief (Washington Post)

Recall Alert: 52,937 GM Compact Cars

GM has issued a recall for 52,937 vehicles, including the 2006-2007 Chevrolet Cobalt, 2007 Pontiac G5 and 2006-2007 Saturn Ion, according to the National Highway Traffic Safety Administration.

The recall is for vehicles sold or currently registered in Arizona, California, Florida, Nevada and Texas and is due to a plastic supply or return port on the modular reservoir assembly that could crack. If either of these components cracks then fuel will leak, which could cause a fire if it ignites. The fuel leak may be visible depending on the size of the crack.

Dealers will replace the fuel pump module for free. Even if you do not own a vehicle sold or registered in the aforementioned states, check with your dealer all the same. Some vehicles from the same timeframe in other states may be eligible for special warranty coverage.

Owners may contact Chevrolet at 800-630-2438, Saturn at 800-972-8876 and Pontiac at 800-620-7668 or NHTSA’s hotline at 888-327-4236.

2007|Chevrolet|Cobalt

2007|Pontiac|G5

2010|Saturn|Ion

Select GM Models to Get Wi-Fi

GM will offer dealer-installed Autonet routers in select SUV and truck models. This comes a year after Chrysler began offering the same service.

The installation will cost $500 as well as $29 a month for 1 GB of service (service cuts out if you surpass 1 GB). The signal reaches up to 150 feet around the vehicle, but there will be no encryption so beware of Wi-Fi leeches.

Chrysler was the first automaker to offer Autonet routers in its vehicles over a year ago, and Volkswagen jumped on board this August, offering router docking stations in the Routan minivan.

Autonet installations will be available starting this month, but you can also order it from GM’s accessories website. Keep in mind, this is only an option in the “new GM” lineups of GMC, Chevy, Buick and Cadillac.

Source: GM

GM, Chrysler Execs Could Face Pay Cuts

The U.S. Treasury Department under the leadership of so-called “pay czar” Kenneth Feinberg has ordered pay cuts for the top 25 executives at seven companies, including GM and Chrysler, that received substantial federal aid.

While banks and the insurance company AIG will face the steepest cuts, GM and Chrysler could see some minor pay adjustments. GM has already cut CEO Fritz Henderson’s 2009 pay by 27% from last year, to $1.26 million. CFO Ray Young got a 15% reduction to $720,000.

GM, Chrysler and their financing arms GMAC and Chrysler Financial knew this was coming; it was included as a condition of the government loans that saved the automakers.

AIG will face the Treasury Department’s greatest wrath, which is probably fair since it nearly caused a meltdown of the global economy through its credit default swaps. AIG received more than $180 billion from taxpayers, which was three times more than GM’s aid and over 20 times more than Chrysler’s; the insurance company’s executives could face average pay cuts of 50%.

Fiat executives are the only ones who will escape the cuts because it was a part of the deal that brought the Italian automaker on as Chrysler’s 20% stakeholder.

Auto Execs Could See Pay Cuts Under Obama Order (Detroit Free Press)