Autoblog

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.]

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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Sheriff Buford T. Justice will now be able to chase your Bandit *** all over the country if he's protecting and serving behind the wheel of a 2009 Dodge Charger police car. The Charger's 368-horsepower HEMI is nearly double what Pontiac was putting underneath the screaming chicken back in '77, and gives the cop-spec Charger the most power of any police car on offer; plenty of snort underfoot when it's time to apprehend individuals devoid of respect for the law. Hot pursuit will last longer, too, with Chrysler's Multi Displacement System switching off half the cylinders in the V8 to conserve 20-percent more fuel. The venerated Ford Panthers were rugged and inexpensive for fleets, but the Charger gives officers a firepower upgrade while also offering a chassis that's far more capable. It's never been advisable to attempt running from the police, but that's now an extremely bad idea with the upgraded Charger on the beat. We discovered this first hand, not when we were arrested, but when Dodge gave us a cop-spec Charger to play with for a week, which you can read about here. Press release after the jump.



[Source: Chrysler]

We haven't heard a peep from Carbon Motors in a very long time, but that doesn't mean the company hasn't been hard at work on its purpose-built E7 police car concept. To prove that it's moving forward, the automaker-to-be has just released two shots of a real E7. What's more, the company will show the car to prospective clients – police officers – at the upcoming 115th Annual International Association of Chiefs of Police (IACP) Conference and Exposition. Unlike curent cop cars driven by these officers, usually police-spec Crown Vic Interceptors, the E7 was specifically designed just to do police duty. Instead of a 4.6-liter Ford V8 engine underhood, the E7 will feature a clean-diesel engine capable of running on biodiesel. With a cockpit derived from jet-fighter technology that includes built-in radar, radiation and biological threat detectors among other techno goodies, the E7 sounds suitably high-tech for real-life crime fighters of the modern era. To further highlight this point, check out the video, along with the press release, after the break.


[Source: Carbon Motors via Jalopnik]

Simply put, the U.S. economy is in the crapper. Stocks are yoyoing and our mortgages are a fraction of what they were even a year ago. For all that's fiscally wrong here in the States, there is one pleasant side effect: the price of a barrel of oil is dropping faster than Kimbo Slice against a two bit hack. Oil dropped 6% in trading on Monday, bringing down the price of a barrel of crude to $87.81. Black Gold has been on a downward trajectory since July 11, when it peaked at $147 per barrel. Since then, demand has weakened both in the U.S. and China, with demand slacking so badly that the Communist government hasn't purchased any oil in two months, and it's even selling some of its stockpiles.

While demand for oil is down to where it was eight months ago, OPEC is watching with a wary eye. The oil consortium, which on several occasions has increased oil production over the past year, is likely to slash production when it meets again in December. In the short term, industry experts are predicting that gas prices will drop below the $3 mark by November 1, which will make for one piece of good news in an otherwise lousy news cycle.

[Source: Reuters]

Fed up with all of the cars parked along the street in her quiet neighborhood, an 89-year-old grandmother in Germany started slashing their tires. Altogether some 50 tires were vandalized before a neighbor spotted and reported the nefarious nana. The granny, Heidi Kohl, eventually confessed and was fined, but the story doesn't end there. When she told authorities she wouldn't be able to pay, they decided to have her work off her debt. They instead sentenced her to hard time knitting sweaters for her victims. We don't know how sweaters work for traction, but if the German officials are satisfied who are we to question their judgment? Prosecutors added that they don't fear any further actions by the sassy senior, pointing out that she has since moved to a retirement home.

[Source: Digital Spy]

Whenever there's auto industry-related lobbying going on in Washington D.C., the Alliance of Automobile Manufacturers is there. Consisting of eleven automakers representing 77 percent of all vehicle sales in the United States, the Auto Alliance has a "role in shaping meaningful public policy on the federal, state and even global levels," according to President and CEO Dave McCurdy. The newest member of the Alliance is Jaguar Land Rover, representing the two brands that were recently sold by Ford Motor Company to Tata Motors.

With the addition of the Indian-owned, British-based automaker, the membership now consists of BMW Group, Chrysler, Ford Motor Company, General Motors, Jaguar Land Rover, Mazda, Mercedes-Benz, Mitsubishi Motors, Porsche, Toyota and Volkswagen.

[Source: Alliance of Automobile Manufacturers]

This week, Detroit got its $25B bailout loan approved by Washington, and according to The Wall Street Journal, European carmakers are making like this is a game of "Simon Says." The Journal reports that Fiat has proposed the idea of hitting up the European Commission for €40 billion ($55B USD) to help the European auto industry make the move to cleaner, greener cars ahead of the strict new emissions regulations currently being bandied about. Like we said, this rationale is very similar to the one Motown used to get its money.

Fiat's grand idea was presented to other automakers at the ACEA meeting on Friday, and according to a spokesman for the automaker, "All European carmakers agree on the [€40 billion] demand." What a shocker. Said demand hasn't been formally made to EC bigwigs yet, but the lobbying is obviously well underway.

[Source: The Wall Street Journal]

You know what they say: "Buy low and sell high." General Motors stock closed at $9.45 on September 30, which is 78% below its 52-week high of $43.20. That little piece of news, coupled with GM's enormous financial losses and declining sales, makes stock in the 100-year-old company sound like a bad bet, but employees don't agree. The low price of GM shares has lead workers to snatch up all available employee purchasable stock, which is capped by volume in the company's two 401(k) programs. As a result, GM employees can no longer buy stock in the automaker through the company. Because of the share freeze, GM executives are also not allowed to buy, sell or trade any of the company's stock during this time due to the Sarbanes Oxley act. To obtain more employee purchasable shares for its 401(k) program, GM has to register more shares with the SEC, which is expected to happen on November 9.

[Source: Detroit Free Press, Photo by jzakariya | CC2.0]

What do failing banks and foreclosed houses have to do with race tracks? A lot, apparently, if you're Charles Schumer. The New York Senator added an earmark to the nation's $700 billion "rescue plan" that will extend current tax laws for race tracks that allow them to be considered the same as amusement parks in the eyes of the IRS. As long as that's the case, track facilities can write off improvements to their concession stands, parking lots and the tracks themselves over a seven-year period rather than 15 years. On the surface this sounds like small potatoes, but adding up the numbers reveals that the tracks will save $100 million in taxes by writing off improvements over a shorter span of time. That means less of the earnings from each of those seven years will go towards taxes, helping the track owners achieve a higher annual profit in the short term.

The race track earmark wasn't in the House bill that got shot down last week, but was added by Senator Schumer to the 450-page bill, along with a number of other earmarks by other senators, to attract a few more Yes votes when the bill returned to the House of Representatives. It must have worked, as the House passed the bill today by a vote of 263-171 and it was signed into law by President Bush this afternoon. We feel rescued already.

[Source: Miami Herald]