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Archive for November, 2010

Underwriters Boost GM Stock Sale By Additional 72 Mil Shares

“Over-allotment” generates additional $1.8 bil for U.S. taxpayers.

by on Nov.29, 2010

GM's IPO officially becomes the biggest ever with the successful sale of another $2 billion in common shares.

The underwriters of General Motors’ recent IPO have exercised an option permitting them to sell another 71.7 million shares, a so-called “over-allotment” worth $2.37 billion.

Along with another 13 million shares of convertible preferred stock, that brings the final tally for the automaker’s initial public offering to $23.1 billion, far exceeding the previous record IPO, the $19.5 billion raised by Visa in 2008.

The U.S. Treasury was able to sell another 54 million of its own shares through the over-allotment, worth $1.8 billion.  As a result of the IPO, taxpayers have now roughly halved their stake in the company critics dubbed “Government Motors,” after last year’s federal bailout.

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The IPO was held on November 18th and initially covered 478 million shares of common stock, worth $15.77 billion, as well as 87 million shares of preferred, worth $4.35 billion – a total just slightly exceeding the 2008 Visa offering.

The convertible preferred shares convert to common no later than December 1, 2013.  They carry a 4.75% dividend rate and a liquidation value of $50 apiece.

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DoE Offering Aid For New Wheelchair Accessible Vehicle.

MV-1 will rely on alternate fuels.

by on Nov.26, 2010

The VPG MV-1 is specifically designed for wheelchair access and will run on CNG fuel.

The U.S. Department of Energy is offering the Vehicle Production Group a $50 million conditional loan to support the development of a six-passenger, factory-built wheelchair accessible vehicle.

The VPG vehicle would use compressed natural gas for fuel and be produced at the AM General Plant in Mishawaka, Indiana which, over the years, has built vehicles for General Motors and the U.S. Department of Defense.

“This project represents an investment in innovation that will create new jobs, promote the use of alternative fuels, and help our nation maintain its competitive edge in the automotive industry,” said Secretary Steven Chu.

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“It is part of a broad effort to reclaim America’s leadership in auto manufacturing – ensuring that our workers are producing the best, most innovative, most efficient vehicles in the world,” Chu added.

As a dedicated compressed natural gas vehicle, VPG’s MV-1 will use no gasoline and produce lower emissions than gasoline-fueled vehicles, the company claimed.

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Alfa Romeo And Jeep To Team Up At Italian Assembly Plant

Planned $1.4 billion investment follows news of $843 mil Chrysler investment in Indiana.

by on Nov.26, 2010

Marchionne planning to build Jeeps in Italy.

Chrysler and its Italian ally Fiat plan to team up in a European manufacturing venture that will expand the Jeep presence overseas.

Sergio Marchionne, who serves as CEO for both Chrysler and Fiat, says his company will invest $1.4 billion in the Mirafiori plant, in Turin, to permit the production of Jeep and Alfa-Romeo sport-utility vehicles.

The move could help Fiat achieve one of the critical benchmarks set by the Obama Administration as part of the Chrysler bailout last year.  Fiat currently holds a 20% stake in the long-troubled American maker.  Each of three key goals will boost that stake by 5%, including the requirement to boost Chrysler’s overseas sales.

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But expanding cooperation between Fiat and Chrysler is critical for both companies to achieve the necessary sales volumes and economies of scale that Marchionne believes are necessary to compete in today’s global auto industry.  The Fiat brand is making a comeback in the U.S., after a two-decade absence, with next month’s launch of its 500 microcar.

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Chevrolet Volt Rated At 93 MPGe In Battery Mode

New plug-in hybrids mileage slips to 37 mpg on gasoline.

by on Nov.26, 2010

The first production versions of the Chevrolet Volt are rolling down the line, with official sales set to begin in December.

The Chevrolet Volt gets the equivalent of 93 miles per gallon when run in electric-vehicle mode, the U.S. Environmental Protection Agency has declared, and 37 miles gallon when it switches to its onboard gasoline engine.

Coming up with a rating for the Volt was a significant challenge for the EPA because of the multiple modes of operation available for the 2011 Chevy hybrid, which General Motors prefers to call an “extended-range electric vehicle,” or E-REV.  Unlike a conventional hybrid, which typically can get no more than a short run on battery power alone, Volt is capable of running for up to 50 miles in electric vehicle mode.  But, unlike pure battery-electric vehicles, it can switch to gasoline power for longer journeys.

In this mixed-mode operation, the EPA has decided, the 2011 Chevrolet Volt will carry a 60 mpg rating on the Munroney sticker, mounted on the vehicle’s window for motorists to use when comparison shopping.

The agency also determined that with a full charge and a full tank of gas Volt can travel 379 miles before needing to be either refilled or plugged back in again.

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The news came days after the EPA gave the Nissan Leaf, a pure BEV, a 99 mpge rating, the “e” standing for equivalent, reflecting the fact that government analysts had to decide how to make a meaningful comparison between the energy usage of a battery-powered vehicle and a conventional gasoline or diesel automobile. (Click Here for more on the ratings for the 2011 Nissan Leaf.)

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Happy Thanksgiving!

We're busy making our turkey. Look for TheDetroitBureau.com to return Friday!

by on Nov.25, 2010

All of us TheDetroitBureau.com want to wish you a safe and happy Thanksgiving, wherever you might be!

We’re letting our team take the day off to celebrate with their family and friends and hope you’ll do the same.

Thanks for joining us and look for our regular content to return on Friday, November 26th!

GMC Granite Concept – A Compact Pickup For Millennials?

GM’s truck brand could fill a gaping hole in truck segment.

by on Nov.24, 2010

The GMC Granite Pickup Concept - designed for Californians by Californians. But will it appeal to the rest of the country?

Could the GMC Granite Concept be the shape of things to come in the compact pickup segment?

American automakers have walked away from the once huge niche – or at least they will when Ford pulls the plug, next year, on the ancient Ranger.  A new Ford bearing that name has been launched overseas but there are no plans to bring it here, the maker firmly declares.

For those who want something smaller than an F-150, Chevy Silverado or GMC Sierra but want to stick with the domestics, that leaves little – make that no – option.  Maybe.

“GM Design believes there is an opportunity for a small truck because nobody else is doing this right now,” says Clay Dean, the executive director of GM’s advanced global design studios.

If the Granite name sounds familiar, that’s because GMC has already used it on an edgy little crossover/SUV, which made its debut at the 2010 Detroit Auto Show.  Indeed, the pickup prototype has some key design features in common with the crossover concept from the nose back to the B-pillar.

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Developed at the GM studio in Southern California, the Granite pickup was “designed to be modular,” according to the studio’s manager, Robb McCann.

That brings to mind some of the funky, but flexible styling exercises the now-abandoned Pontiac brand rolled out in the late 1980s and 1990s.  The goal, back then, and again now, is to come up with a sort of Swiss Army Knife on wheels.

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Government Recoups Nearly $12 Bil On GM IPO

Taxpayer Losses Narrowing.

by on Nov.24, 2010

Taxpayers still stand to lose as much as $9 billion on GM's bailout - unless subsequent offerings rise to nearly $53 per share.

U.S. taxpayers have gotten a nearly $12 billion check from General Motors, the proceeds from the sale of 40% of the government’s holdings in the automaker during GM’s IPO, last week.

The maker’s return to public trading proved an unanticipated success, with GM and its underwriters both raising the price of the initial offering – to $33 a share from an earlier projected low of $26 – and adding significantly more shares to the pot than first planned.  After deducting underwriter fees, the Treasury will keep $11.7 billion.

Nonetheless, taxpayers would stand to lose as much as $9 billion on the $49.5 billion GM bailout unless the price tag on later sales of Treasury-held stock is increased to at least $52.80 a share, analysts reported.

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The government now estimates its potential loss on last year’s $85 billion in auto bailouts – which also include Chrysler and the captive finance company now known as Ally – at $17 billion.  Earlier this year, the likely loss was forecast to reach as much as $30 billion.

Nonetheless, government officials defended the bailouts, which began under former President George W. Bush but were then significantly expanded when his successor, Barack Obama, moved into the White House.

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First Drive: 2011 Chevrolet Malibu

Chevrolet's Malibu has a sharp exterior and a stunning interior design.

by on Nov.24, 2010

The design of the Chevrolet Malibu has aged well since its 2008 introduction.

A little inside the NFL, if you’ll indulge: Automakers typically send out well-optioned versions of the cars auto scribes test. There’s a simple reason for that. Carmarkers want us to write about all the bells and whistles so you, the car buyer, to fall in love with the car and liberally check those pricy option boxes. They want you to go for the upmarket trim, the more powerful engine, fancy wheels.

But the reality is that most buyers look at their needs, check them against their desires and cross reference their budget as they decide between a nicely equipped LT1, like the Malibu tested here, an LTZ with the hot V-6 and leather or something inbetween.

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Malibus start at $22,695, including destination for the base LS. The LT1 starts at $23,545. With just one option – $250 for a USB port for the stereo and a rear 110-volt outlet – the as-tested price is $23,795.

But even without many options, the Malibu has some unexpected features. How about cool green ambient lighting illuminating the center console. Gas struts to hold up the hood and trunk lid. Power lumbar support and height adjustment for the driver’s seat. Seventeen-inch aluminum wheels.
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Volvo Aiming To Double Sales by 2020

Swedish maker counting on big growth in China – but U.S. remains critical.

by on Nov.23, 2010

The hare beats the tortoise? Stefan Jacoby plans to get Volvo moving fast under its new Chinese owners.

According to Aesop, it took the slow but steady tortoise to beat the hare.  Don’t count on it, says Volvo Cars’ news CEO, Stefan Jacoby.  In today’s ever more competitive auto market, “the fast ones are eating the slow ones.”

Never known for setting a benchmark pace, the former Volkswagen executive says Volvo now plans to be “leaner, better, smarter and, especially, faster,” as it adjusts to life under Chinese ownership.

Sold earlier this year by Ford Motor Co., which decided it needs to get back to basics, Volvo hopes to more than double sales – to 800,000 annually – by 2020.  That goal will not only require speed by a shift in focus, Jacoby told TheDetroitBureau.com.  Look for Volvo to put more emphasis on emerging markets, including places like Brazil, as well as China.  But, Jacoby cautioned, don’t expect the maker to walk away from the U.S., which has traditionally served as its largest single source of sales.

The sale of Volvo to Zhejiang Geely Holding Group came at a critical came, said Jacoby.  The maker has suffered a significant slide, in recent years, only partially to blame on the global economic downturn.  Global sales are expected to reach just 380,000 for all of 2010, and in the U.S. demand is off almost 60% from its 2004 peak – from 140,000 down to just 60,000.

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But Jacoby is the proverbial optimist, looking at what he sees as a half-full glass.  “We are standing at the bottom looking up,” he said.

Part of the challenge will be to find the way to take advantage of the resources – and potential – offered by the Swedish maker’s new parent and Volvo’s Chinese sibling, the Geely brand.

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