GM Europe’s clouds of uncertainty.

Welcome to another chapter in the strange world once called GM Europe. Within a week the deal for Opel with Magna International and their  Russian partners seems on the rocks. Saab is waiting for a loan from the European Investment Bank and is seeing production slow in comparison to orders.

GM has rankled negotiations by insisting on a buyback clause which is strongly opposed by the government of Hesse the state in which Opel is headquartered.  Roland Koch prime minister of Hesse has backed Magna’s bid. Sources say that Sberbank and Magna may withdraw their bid due to General Motors latest demands. GM has raised the price of Opel.  GM is looking for an investment of 7 billion euros in Opel which is 14 times greater than the Sberbank initially offered.

GM is now looking to sign a non-binding agreement with Belgian holding company RHJ International and Beijing Automotive as a second option should the deal with Magna and partners fail.

Some of the sticking points on the Magna deal are:

  1. GM is concerned that Magna is planning significant changes in engineering and design which would eliminate parts sharing with other GM cars.
  2. GM is pertubed by Magna’s Russian partners. GM is worried that they will use Opel’s designs to help improve the Russian car industry.

Fiat also doesn’t seem out of the picture. Following a meeting with Fiat CEO Segio Marchionne, Italian prime minister Silvio Berlusconi told reporters the Fiat deal is “still on the table”.
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Curtain Call for Pontiac Vibe

2010 Pontiac Vibe AWD

The sad tale of Pontiac winding down its existence as a brand continued today with the announcement from GM that the Vibe would cease production by the end of August. The Vibe is produced at the NUMMI plant in Fremont, California, where its sister car, the Toyota Matrix is produced. Production of the Toyota Matrix continues, so fans of the Vibe still have an option.

The Vibe holds the distinction of being one of the “good” cars sold by “Bad GM”. As such, some held hope the Vibe would be reborn as a Chevy, but it appears that will not be the case. GM did say it will remain in talks with Toyota to discuss future vehicles to be built at NUMMI.

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GM Canada wins another quality award

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For those south of the border who might question why GM decided to keep the plant here in Oshawa, today’s news is pretty clear. This is one of the best auto manufacturing facilities in the world! JD Power has awarded Oshawa with the Silver Plant Award for quality. This is not the first time either. In fact, Oshawa has been receiving plant quality awards for years.

No wonder the 2010 Camaro is built here! Well done folks!

Full press release after the break
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Koenigsegg signs letter of intent regarding Saab.

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The sale of GM’s Swedish brand Saab has been fraught with red herring after red herring (no pun intended). While many Swedish observers have reported several companies from China, Italy and Germany being the potential new owners, it seems that Saab will be in Scandinavian hands.

According to Svenska Dagbladet,  Koenigsegg has signed a letter of intent regarding the negotiations and purchase of Saab.

Koenigsegg’s majority shareholder is Norwegian industrial designer BÃ¥rd Eker. Through his holding company Eker Group he owns 49 percent of the Swedish supercar manufacturer. It has been reported that Eker had told a Norwegian newspaper that his dream was to buy Saab. Eker Group Chairman Sture Berg’s only response to this news was “Ingen kommentar” or “No comment”. The same comments were coming from officials at GM Europe. BÃ¥rd Eker, and Christian von Koenigsegg were both unavailable for comment.

There has been speculation that Koenigsegg has been an interested party for some time.  Some industry observers have had their doubts. Koeniggsegg had 45 full time employees in 2008 or roughly about 1 percent of Saab’s workforce in Trollhättan. How does a car company that can make seven cars at a time, run a company that produces 100 cars every day?
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Penske Auto Group to Buy Saturn

2009 Saturn Outlook XR

GM has been busy ridding itself of what many call the “Bad GM”-namely, Pontiac, Hummer, Saturn, and Saab, brands that won’t be a part of the “new” GM. Pontiac is being phased out, earlier this week Tengzhong announced plans to purchase Hummer, and today, Penske Auto Group announced that it will buy the Saturn brand and its dealer network from GM. Price was not disclosed, but the deal is expected to close in the third quarter. 

Penske gains 350 dealers and other assets attached to Saturn. GM hails the purchase a victory in that the move will preserve 13,000 jobs. When Saturn changes hands, there will still be vehicles to buy: the Aura, Outlook and Vue will be provided on a contract basis from GM. It should be noted that in Penske Auto Group’s press release that this arrangement would only be for “an interim period.”

It is too early to know for sure what cars Saturn will sell in the future, or if Penske will use the existing dealer network to expand the availability of the Smart car (In the US, Penske operates Smart USA). Penske is rumored to be in talks with several manufacturers who are interested in having their cars sold in North America.

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Gallery: Wednesday night cruise in Oshawa

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Now that the weather is finally warming up and the sun sticks around a little longer in the evenings, cruise season has finally begun. Here in Durham region, there are several cruises a week to choose from thanks to the Road Legends Cruisers. Wednesdays are at a pool hall called Le Skratch in Oshawa, just a few kilometers from GM’s Canadian headquarters.

As one might expect, The General’s cars were in abundance this evening and lots of folks were wearing shirts and hats that showed support of the town’s livelihood. There were a few Mopars and Fords and even an older Benz and a MG TD replica to round out the evening.

Gallery after the break
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Details Emerge on Sale of Hummer

2009 HUMMER H2 SUT

It was a whirlwind of a news day surrounding Hummer today, starting with word the brand was sold, that it would be to an unnamed Chinese company, then the name of the company (Tengzhong), and finally a joint statement from GM and Tengzhong themselves. 

Here is what we know about the near-term future of Hummer. First, if all goes to plan, the sale should close by the end of September. The senior management and operation team of Hummer will remain, and existing dealer agreements will continue to be honored by Tengzhong. Hummer headquarters will remain in the United States. Hummer is also expected to enter into a “long-term contract agreement with GM for assembly, component and materials.” In other words, even once the sale is complete, the Hummer H2 and H3 will continue to be built, at least for now. AM General builds the H2, but the H3 shares factory space with the Chevy Colorado and GMC Canyon pickup trucks.

Sichuan Tengzhong Heavy Industrial Machinery Co., Ltd. is best know in China for manufacturing road, construction and energy industry equipment, so Hummer  will be the company’s first foray into the manufacture and sale of passenger vehicles. While Hummer is estimated to be worth around $500 million, it is not known how much Tengzhong is paying. 

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The one that got away Papa John’s Pizza style

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Most car guys have a story about the one that got away. Not many have the opportunity to reunite with their former flame. Not many former flames form the basis for an empire. The one above did just that.

That guy up above, looking like he’s straight out of a John Hughes movie is John Schnatter. Way back in ’84 he sold his pride and joy for $1,600 to fund his new pizza business. That business, Papa John’s Pizza has grown into 3,400 stores across America. Papa John wants the source of his seed money back in his garage.

Not only is this a great car guy story, but it is also a killer marketing tool for an American success story at just the right time. John will spend the summer traveling the United States in a replica of his old pride and joy. Along the way, he’ll visit stores, deliver the occasional pie and meet with other budding entrepreneurs. Oh yeah, he’ll also be looking high and low for his old car, most certainly chasing down any tips people may offer. If he finds the object of his quest, John will pay the owner 25 grand to bring it home.

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On the marketing side, there is the Papa John’s Road Trip web site and customers can follow along on their pizza box. These folks are pretty web 2.0 savvy, as we can also follow along via Twitter, Facebook and Youtube. The Road Trip site has a blog and photo galleries, though it looks like following @papajohns on Twitter will be updated most often.

I don’t know about all of you, but I’m actually interested to see if John can find his ’72 Camaro. Truth be told, a needle in a haystack might be easier!

Is There Hope for the Sky & Solstice?

2009 Saturn Sky Red Line

Saturn will be either sold, or shut down. Pontiac has one more production year left, and the story ends there. It’s a pity when perfectly good cars like the Pontiac Solstice and Saturn Sky are destined to vanish from the automotive landscape. For fans of GM’s two seater sports cars, there is a glimmer of hope. GM CEO Fritz Henderson told Autoweek that the company is open for offers to buy the rights to the cars, and the Wilmington, Delaware factory they are built in. The foreign market Opel GT is also built alongside the Sky and Solstice.

The offer appears similar to Chrysler’s plans for the Dodge Viper. The Viper and the factory it is built in have been up for sale since August, 2008. Rumors have swirled about possible buyers (Saleen, Hennessey?) but no announcement has been made.

These cars are the best small sports cars GM has ever built. They can compete with the Mazda Miata, something the Pontiac Fiero could not do against its rival Toyota MR-2. But who would want them? As halo cars for their respective brands, fat profit margins are unlikely. Obviously, with Saturn dealers anxious to stay alive selling a new line of cars here (Chinese, Indian?) the inclusion of the Sky would be a natural. With GM selling Opel, it is possible the buyer would want to keep the GT as well. 

As GM is rumored to be on the brink of bankruptcy, the pressure is more intense than ever to shed unprofitable lines, and to show the US Government and its taxpayers they are serious about turning the company around. The Saturn Sky, Pontiac Solstice and Opel GT can either become extinct, or stay around, with GM getting at least some money out of selling the design and the plant to an eager buyer.