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)

It's Official: GM Strikes Deal To Sell Hummer

After months of negotiations — and rumors — General Motors has officially reached an agreement to sell the Hummer brand to China’s Sichuan Tengzhong Heavy Industrial Machinery, according to Nick Richards, spokesman for Hummer. U.S. and Chinese regulatory agencies still need to approve the transaction, and government approval is expected by the end of this year or by early 2010.

“The investment from Tengzhong in Hummer will give the company the capital it needs to create new products and focus on the brand in a manner that it deserves,” Richards told PickupTrucks.com this morning. “We’ll be able to create new vehicles, like the Hummer HX Concept, that will help Hummer meet future environmental and regulatory standards as well as meet the demands and expectations of our customers.”

Until the Hummer deal was announced, Tengzhong was a relatively unknown Chinese builder of commercial trucks and industrial machinery with no experience in consumer vehicle manufacturing.

Richards wouldn’t comment on the deal’s value, though recent rumors have said GM is selling Hummer for around $150 million.

Chinese Purchase of Hummer Won't Affect Dealer Network

Now that the purchase of Hummer by Tengzhong appears to be all but in the bag, an executive for the Chinese heavy machinery company has said that it will maintain Hummer’s network of auto dealerships throughout the U.S.

The deal appeared to be an iffy proposition earlier this summer. However, the Chinese commerce ministry seems to have dialed down its skepticism, and the opposition on state-run media has evaporated, as well.

Tengzhong has said it expects to close the deal this fall, and analysts estimate the final price as somewhere between $150 million and $200 million. This is well below the $500 million GM wanted for the brand. Hummer sold 799 vehicles last month compared to 1,877 purchased during the same period in 2008 while gas prices were at record levels.

Barring any last-minute surprises, it would appear that Hummer will become Chinese-owned well before 2010.

Tengzhong Deal Won’t Affect Hummer Sales Network: Exec (Reuters)

GM Signs Agreement to Sell Saab

After announcing its intention to buy the Saab brand from GM back in June, Swedish company Koenigsegg has now signed an agreement to buy the brand, making it mostly a done deal.

We use the word “mostly” only because Swedish government officials have said that more capital is needed before the deal can be closed. While the specifics of the deal have been kept under wraps, the Swedish Ministry of Enterprise has said that Koenigsegg must add more private capital and negotiate loans with the European Investment Bank. Approval from the European Commission must also be secured, and the Swedish National Debt Office must make state credit guarantees.

While these bureaucratic hurdles remain, Swedish business papers have reported that the main obstacle is $412 million in capital that Koenigsegg needs to put up, as well as the loan from the European bank. Carls-Peter Forster, the president of GM Europe, has said he expects the deal to be completed in the next few months.

Saab will launch several new cars it developed with GM — including an all-new 9-5 sedan — and continue to share services and technology with the Detroit automaker for “a defined period of time,” according to GM.

GM Seals Deal to Sell Saab to Koenigsegg (Detroit Free Press)

Toyota to Liquidate California Plant

According to a Japanese news agency, Toyota is pulling up stakes at its Fremont, Calif., factory, known as NUMMI. This is the plant that was jointly run by Toyota and GM before GM’s bankruptcy filing this summer. The Detroit-based automaker decided NUMMI — where it built the Pontiac Vibe alongside the Toytoa Corolla and Tacoma — was not integral to its future. NUMMI employs 4,700 people and is the only U.S. Toyota plant with UAW employees.

This would shake up Toyota’s U.S. manufacturing plans, as the company doesn’t build the Corolla or Tacoma anywhere else in the country. The Corolla is also built in Canada and Japan. Toyota recently built a plant in Mississippi that is sitting empty. It was scheduled to build the Prius hybrid, but those plans were put on hold after demand for the car fell along with gas prices.

Toyota could shift Corolla and Tacoma production there.

Update: Toyota previously moved Matrix production to Canada. The Wall Street Journal is also reporting that negotiations have begun for Toyota to pull out of NUMMI.

Update 2: L.A. Times also confirms the closing, mentions this is the last California auto plant.

Report: Toyota to end venture with GM in Calif. (Detroit News)

Times Square to Lose GM Advertising

GM is being allowed to cancel 54 sponsorship deals as part of its bankruptcy filing. These canceled deals include marketing agreements with the Oakland Raiders, the University of Southern California, the Arnold Palmer Invitational and, perhaps most notably, billboards in Times Square.

GM has advertised in Times Square since the 1930s, changing locations several times but always maintaining a presence. Most recently, in 2007, the Chevrolet clock replaced the Cup O’ Noodles billboard at Times Square’s southern edge.

Check out the New York Times story to see some images of GM’s Big Apple marketing from the ‘30s and ‘40s.

G.M. Says Farewell to Times Square (Wheels)

What Would You Do if You Ran GM?

Cars.com’s Lindsay Bjerregaard and Stephen Markley pounded the pavement at the 2009 Taste of Chicago in search of an answer to one simple question: Now that we, the taxpayers, own a part of GM, what should we do with the company? They interviewed plenty of people with ideas about what direction the storied automotive company should take. Watch the video, then let us know if you agree.

Not So Fast: GM Not Sold on Pontiac G8 as a Chevy

Buzz around the internet the past 24 hours has made it sound like GM had decided to save its Pontiac G8 rear-wheel-drive sport sedan by remaking it as a Chevy and calling it the Caprice.

However, the company says it’s only exploring that as an option, and we’ve confirmed with GM that this is indeed just a possibility, not a definite product plan. In fact, the company had a canned answer ready to go: “As part of its reinvention, General Motors is exploring every opportunity of effectively utilizing its global portfolio of vehicles, facilities and talent. While this exploration includes the possibility of extending imports of Holden vehicles (such as the recent Pontiac G8) to North America, no decision has been made at this time.”

The thinking behind such a move is two-fold: GM would like to have a car it could sell to fleets as police squad cars, and it would also like a larger sedan in its lineup that is more modern than the still strong-selling Impala, which is itself in need of a redesign.

GM's Other Halo Cars

The New York Times weighed in today on the popularity of the new Camaro, saying, “With GM shrinking, hot products like the Camaro become more critical to its survival.” In reality, while it’s great for the Detroit Three (really the Detroit Two, Rome One) to have halo products with waiting lists a few months long, the cars that will turn GM around are more, for lack of a better word, pedestrian.

Take for example Chevy’s new midsize SUV, the Equinox. Completely redesigned for 2010, this SUV is as comfortable as a Toyota RAV4 or Honda CR-V, its interior quality is at least equal to those high-selling rivals, and it gets 32 mpg on the highway (with its four-cylinder engine), besting both. Granted, the four-cylinder Equinox won’t win any drag races, but neither will the RAV4 or CR-V. The compact crossover market is also booming, unlike the sports cars market.

For another example, look at Chevy’s Malibu. Since it was redesigned a couple of years ago, it has been popular with consumers, garnering enough sales to propel it to No. 3 on our American-Made Index (although fleet sales are included in those numbers). It might not have as much interior room as the Accord, but its ride is more pleasant. It was one of the first examples of GM turning the corner in interior quality, as well. Oh, and it beats the Japanese rivals in gas mileage (as of the 2009 model year).

Sure, the Camaro looks retro cool, but as our staff experts decided, it couldn’t beat the Ford Mustang or Dodge Challenger in a head-to-head-to-head matchup. There’s heavy demand for the Camaro now, but in time its shine will dull a little, just like the new Mustang’s. That shouldn’t worry GM, as long as it can continue to build more cars, trucks and SUVs like the Malibu and Equinox.

Quality. Reliability. High mpg. That’s the recipe for the Detroit automakers to muscle aside foreign manufacturers to regain their market share, and that’s the way they’ll be able to fire us taxpayers as their employers and bring us on as customers.

A Muscle Car to the Rescue (New York Times)