Autoblog

General Motors has announced that it wil close its SUV plant in Janesville, Wisconsin by the end of this year in response to the woeful market for utility vehicles. The plant produces the GMC Yukon and Chevy Suburban and employs 1,200 UAW workers. GM was originally planning to shutter the plant sometime before 2010, but deteriorating market conditions have expedited the plant's demise. The news comes only one week after the General announced that it would be closing its Moraine, OH SUV plant early, as well.

Some analysts think GM could pull the plug on its Oshawa truck plant and Mexico facility in Toluca early too since truck sales are down as well, as GM has already announced that those plants are slated for closure. GM top dog Rick Wagoner stated last week that some stamping facilities could also face closure to help align production capabilities to demand.

[Source: CNN Money]

A report by Barron's over the weekend cited (again) two unnamed sources that divulged General Motors has been after a loan from the Federal Reserve since last September. The Barron's article got somewhat specific about the unspecifics, namely how much, saying that the amount the General is after is unknown, "but it needs $5 billion to meet its goal of completing a $15 billion liquidity program, which actually is coming from cost cuts."

Reuters (via Automotive News) reports that GM isn't after the fed's cash, but isn't averse to the idea or "taking dramatic steps" to make ends meet during these tumultuous times.

GM spokesperson, Greg Martin, said that the automaker isn't "actively pursing" the loans, but "you really can't rule out anything." M-kay.

[Source: Barrons, Reuters, Automotive News – Sub. Req.]

Bill Vlasic, the man who was kind enough to drop the GM/Chrysler pseudo-bombshell on us late Friday night, posted a follow-up to his remarkably unremarkable story claiming that General Motors originally had talks with Ford about a possible merger before approaching the Pentastar people.

Again, the New York Times' scribe cites two unnamed sources about the merger discussions, reporting that GM approached Ford with the proposal, only to have FoMoCo execs shoot down the idea after several meetings. The talks included GM CEO Rick Wagoner, president Frederick Henderson, Ford's executive chairman Bill Ford Jr. and chief exec Alan Mulally.

According to the NYT's shy sources, the Blue Oval boys broke off talks in September when Ford and Mulally came to the conclusion that Ford would be better off reorganizing on its own rather than being tied to another automaker.

The Detroit News got in on the action yesterday, citing another anonymous source that said, "There were never in-depth, substantive discussions that went on. It was more an expression of interest [on GM's part], as in, 'Do you want to talk?'" Ford declined.

While all these reports are great at selling dead trees (and generating page-views), it deserves noting that high-level discussions between automakers are nothing new and hardly uncommon. Recent discussions – particularly those in the cited time-frame of three or four months, when federal loans to Detroit's Big Three were on everyone's lips – are surely newsworthy, let's not forget that parts sharing, from transmissions to hybrid drivetrains, have been happening routinely over the last few years. All this leads us to believe that business between Motown's finest will continue unchanged (for better and worse) and that unbelievable headlines are exactly that.

[Sources: NYT, Detroit News]

It's been a crazy few days as news broke that Chrysler and General Motors have been in talks to combine operations. It turns out that there's a pretty significant back-story to these proceedings, and it involves Cerberus Capital Management's possible desire to shed its car-building operations and acquire the rest of GMAC, of which it already holds a controlling stake of 51%, with GM holding holding the other 49%. According to reports, Cerberus would like to combine Chrysler Financial with GMAC, which would allow it to merge the offices of the two financial institutions and reduce costs. All right, that might make some sense, but what about merging the two automakers? That's the part that seems so confusing to analysts and us meager bloggers. Somehow, we feel certain that there's more to this story, which we'll be hearing about for some time.

[Source: The Detroit News]

Our heads are still reeling from one of the most tumultuous financial weeks on record, and the auto industry was far from immune. But despite our best efforts to drown our concerns in Racer5 IPA, the hits keep coming, and this time it's courtesy of the New York Times.

The Gray Lady is reporting that General Motors and Chrysler have been in talks about a possible merger for the past month, that "negotiations are not certain to produce a deal," "would most likely still take weeks to work out" and that two unnamed sources say that the chances of the merger going through are "50-50." Obfuscate much?

With GM's stock prices ending the week below $5 a share and Cerberus – the private equity firm that owns Chrysler – grasping at the flimsiest of straws, including continued talks with Nissan/Renault, a merger of unequals is two parts disturbing and one part intriguing.

Cerberus' people haven't been returning phone calls and the only comment offered to the NYT from the General's spokesperson, Tony Cervone, was, "Without referencing that specific rumor, as we've often said at GM officials routinely discuss issues of mutual interest with other automakers." Broad, unclear and exactly what we'd expect.

The merger of GM and Chrysler would put Cerberus in charge of an "unspecified equity stake" in the corporation, making the two-headed General-Chrysler (or Chrysler Motors?) the world's largest automaker, controlling over 35 percent of the U.S. vehicle market, causing rifts among brand faithful and offering more potential (vehicle) cannibalization than the Donner Party. Not to mention both automakers' labor contracts, supplier dealers and slipping market share. Shocked? Don't be. We give it a snowball's chance on the Sun. Thanks to ALL who tipped in.

UPDATE: Official statement from Lori McTavish, Executive Director, Communications, Chrysler LLC:

Chrysler LLC as a matter of policy does not confirm or disclose the nature of its private business meetings. As we have said, the Company is looking at a number of potential global partnerships as it explores growth opportunities around the world. Beyond those partnerships already announced however, Chrysler has not formed any new agreements and has no further announcements to make at this time.

[Source: NYT]
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General Motors and Ford just concluded an absolutely brutal business day on Wall Street, which echoed the performance of the markets in general as the Dow Jones Industrial Average slid another 678.91 points to close below 9,000 at 8,579.19 points. GM closed the day at 4.94 after having dipped as low as 4.72 just minutes before the bell rang at 4PM, while Ford ended today at just 2.14. Analysts are noting that GM shares haven't been this cheap since the 1950s and that a single share of Ford stock costs less than a gallon of gas at the moment. We are most certainly not financial analysts, but we do know these companies are heading in the wrong direction fast and that a brighter future is not weeks but months and years away.

[Source: AOL Money and Finance]

General Motors has nixed an optional hot-spray windshield washer system called HotShot from all of its cars and trucks after an electrical short in the systems caused the recall of 944,000 vehicles. GM told the National Highway Traffic Safety Administration that a short on the circuit board of the fluid heater could overheat the control-circuit ground wire. The problem has resulted in 34 warranty claims so far and three reports of fires may have been caused by the system. To fix the problem, dealers will add a wiring harness with an inline fuse, and all GM retail outlets should have the required parts to fix the problem free of charge by November 1. Vehicles affected include the Buick Lucerne and Enclave, the Cadillac DTS and Escalade, the GMC Yukon, Sierra and Acadia, the Saturn Outlook, the Hummer H2, and the Chevy Silverado, Avalanche, Tahoe, and Suburban.

GM blames the system's suburban Detroit supplier, Microheat, for the problem, and the small company has reportedly shrunk in size in preparation of forever closing its doors. The General wants Microheat to pay for the recall, which is estimated to cost between $20 and $25 million, and the small supplier has countered by reminding the automaker that it's still owed $3.7 million for parts and tooling. The whole affair is a shame, as heated windshield washer fluid is a nice luxury that makes de-icing and de-bugging your windshield a hands-off affair. As far as we know, Microheat is the only supplier offering this technology, so when it goes, so does the option altogether.

[Source: Automotive News, sub. req'd]

The rumormill is a funny thing, and sometimes it can run amok. This appears to be one of those times. The DigitalCorvettes.com forum posted a note earlier this evening saying that Corvette ZR1 production has been halted (Bowling Green is shut down this week, so no Vettes are being built at the moment) and suggesting that the ZR1 may be cancelled. A post on dealer Rick "Corvette" Conti's blog, linked in the referenced DigitalCorvettes thread, added to the intrigue.

Autoblog has contacted GM's Terry Rhadigan, who handles global communications for the Chevrolet brand. We presented the DigitalCorvettes link and asked for an official response. His was very clear:

"Not true."

Many people choose their car because it is an extension of themselves, their personality, their style and their passion. These folks tend to forge a deep attachment with their automobile, an inanimate object void of emotion. Despite that fact, a vehicle has wants and needs of its own, and some can be more demanding than a small child. As with any parent, there are curious automobile owners who often wonder, where did my baby come from? Recently 134 Chevrolet Cobalt fans got the chance to find out.

Back on September 27th, GM opened up the Lordstown, OH plant for 85 lucky owners and their guests. It was a rare chance for many to view the inner workings of an automotive assembly line, without a need to join the UAW. Event attendees received a full facility tour, on site lunch meet and greet, and of course freebee swag. Not surprisingly, the majority of the Cobalt fan base stemmed from the website CobaltSS.net.

The SS is about the only Chevy compact that can muster up an emotional following, as evident in the video of John Heinricy tossing the 2008 model around the Nurburgring. The turbocharged ECOtech powered econo car is just one of the models currently produced at the Lordstown plant. The massive facility is also slated to make the Cobalt replacement, the Cruze. Check out the gallery below to view photos from the event.