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GM Estimates Victims Fund Will Cost at Least $400 Mil

Forecast comes in lower than many estimates – but impact of safety scandal still severe.

by on Jul.24, 2014

GM CEO Barra shown during her most recent testimony before a Senate subcommittee this month.

General Motors anticipates it will spend at least $400 million to recompense victims of a defective ignition switch so far linked to the death of at least 13 people, though it cautioned that the figure could run as high as $600 million, depending upon how many people qualify for the program.

Those numbers, while significant, come in substantially below widespread reports that had placed the potential cost of the program at as much as $1 billion or more. GM announced details earlier this month of the victims’ compensation program that will be handled by compensation specialist Kenneth Feinberg.

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“There’s no cap on this program and at the end of the day Ken Feinberg will determine how much this program costs,” GM Chief Financial Officer Chuck Stevens told reporters on Thursday morning following the release of the maker’s second-quarter earnings. (more…)

Consumer Reports Gives Buick Regal Thumbs Up

Buyers echoing sentiment as sales up 40% this year.

by on Jul.23, 2014

Consumer Reports recently gave the Buick Regal a glowing review, putting it in a tie for second-best vehicle in its segment.

Buick was at death’s door just a few years ago. A staid image and a mandate to cut down the number of brands in its portfolio, it looked like General Motors’ oldest nameplate would be heading to the scrap heap of automotive history.

However, GM surprised everyone by keeping Buick and repositioning the brand. And now those efforts are paying off in spades as Consumer Reports recently gave the Buick Regal a big pat on the back and sales of the Regal and the brand are both up double digits.

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Consumer Reports, after testing the Regal and the new Volvo S60, described both cars as serious competition for the more prestigious competitors from BMW and Mercedes-Benz. Apparently, the magazine was a bit late to the party as Regal sales are up nearly 40% through the first half of this year. Buick’s overall sales are up 12.5% in the first half of the year. (more…)

GM, Ford Vehicle Sales Blazing in China

Makers posted record results for first six months.

by on Jul.08, 2014

With cars like the Focus selling well, Ford set a sales record for the first six months in China this year.

General Motors, Ford and their joint venture partners posted record sales in China for the first half of the 2014, capping off the period with a strong showing in June.

GM’s sales in China in the first six months increased 10.5% from last year’s previous record for the period to 1.73 million units. In June, GM’s sales increased 9.1%. Ford China reported a 35% increase for the first six months of 2014, selling 549,256 vehicles. Ford China’s June sales increased 17%, the automaker reported.

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“GM has experienced growth in demand for our products across China this year, especially at the higher end of our lineup and in the SUV/MPV segment,” said Matt Tsien, GM executive vice president and president of GM China. “We anticipate sales remaining strong through the end of 2014, as more people – particularly outside China’s major cities – become first-time vehicle buyers.” (more…)

GM Recall Blitz May Be Winding Down

Biggest issues already dealt with, maker hints.

by on Jul.07, 2014

There are signs that GM CEO Mary Barra may not have to answer more questions about the company's latest recall as GM may finally be done recalling vehicles.

It has so far recalled nearly 26 million vehicles in the U.S. alone, and almost 29 million worldwide – more than any other maker in a single year. But after announcing 54 separate service actions since just the beginning of the year, GM is signaling that its recall blitz finally might be over.

Even then, the maker’s recall headaches are far from over. GM last month announced details of a new victims’ compensation fund to cover the deaths and injuries linked to a faulty ignition switch, a plan that could top $1 billion, according to some analysts. The maker also faces an assortment of legal problems, including a class action lawsuit filed in Seattle that could seek as much as $10 billion in damages. There are separate investigations underway in both houses of Congress, as well as a probe by the Justice Department. And GM has already said it expects to spend about $2.4 billion to handle all those recall during just the first half of 2014.

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But the worst, in terms of new recalls could be over, wrote JP Morgan auto analyst Ryan Brinkman, in a report last week, noting that, “GM concluded its enhanced product safety review that has led to a significantly elevated pace of vehicle recalls.” (more…)

Ford, GM Continue Torrid Sales Pace in China

Makers set May record; Ford expects to hit 1 million units in 2014.

by on Jun.09, 2014

With cars like the Focus selling well, Ford expects to surpass 1 million in sales in China this year.

General Motors and Ford continue to roll up big sales totals in China, setting sales records during May.

Ford China sales grew 32% in May with 93,323 and Ford now expects to sell more than 1 million vehicles in China for the first time ever during 2014. Year-to-date sales were up 39%, with 461,473 wholesales sold compared to 332,308 wholesales sold in the first five months of 2013, Ford said.

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“Our sales are a direct reflection of our continued commitment to bring the best of Ford to China with a great lineup of Ford cars and utilities that offer high quality, great fuel efficiency, world class safety and smart technologies,” said John Lawler, chairman and chief executive officer, Ford Motor China. (more…)

Death Toll from GM Defect Expected to Rise

Critics claim fatalities exceed 50, not the 13 claimed.

by on May.30, 2014

GM is expected to face even more claims related to its faulty ignition switch, including a rise in the number of deaths from 13 to more than 50.

Warnings have already been issued to expect the number of recalls from General Motors to rise this summer. Now, critics are claiming the number of fatalities blamed on an ignition-switch defect that forced General Motors to recall 2.6 million small cars will also rise dramatically in the coming weeks.

An attorney for a group claiming to have been injured in a GM vehicle with an ignition switch that turned off suddenly killing the engine and disabling the air bag claims to have evidence that at least the defect has contributed to the deaths of 60 motorists.

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Clarence Ditlow, the head of the Center for Auto Safety and a long-time GM critic, said this week that his review of complaints filed with National Highway Traffic Safety Administration indicates that the defect has contributed to at least 50 deaths and he expects the total to rise as investigators uncover more cases where air bags failed to deploy in GM cars because the engine had switched off. (more…)

GM, Ford Leading Automotive Innovation Pack

Makers secure patents for vehicles, drivetrains and fuel cells.

by on May.28, 2014

GM secured more than two dozen patents for the eight-speed transmission for the Corvette Stingray.

While a number of automakers claim they are leaders in innovation, General Motors and Ford can bask in the glory of knowing they can back those claims with hard data.

GM led all automakers for the 11th consecutive quarter in filing for patents while Ford’s new F-150 has more patents filed than any pickup truck in history.

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GM’s patents cover a number of areas and include patents for fuel cells and technology that reduces energy consumption and phone apps that make life more convenient for motorists, according to the Patent Board and Clean Energy Patent Growth Index. (more…)

Buffett, Soros Sell GM Shares – But JPMorgan Bank Calls Maker’s Stock “Very Inexpensive”

by on May.16, 2014

GM's stock price has bouced a bit but largely been stuck in neutral over the past three months as the maker copes with its recall crisis.

Investors generally don’t like turmoil or uncertainty – something in abundant supply at General Motors these days, which may explain why the makers share price has been performing so poorly.

Yet even after expressing high hopes for the maker’s new CEO Mary Barra, mega-investor Warren Buffett has sold off a quarter of the GM shares held by his investment firm, Berkshire Hathaway. And he’s not alone. Other major investors, including George Soros’ Soros Fund Management, and David Einhorn’s Greenlight Capital, have abandoned the maker in recent months, selling part or all of their holdings.

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Yet even while cautioning that GM will be taking an earnings hit for its latest series of recalls – six separate service actions covering nearly 3 million vehicles announced this week alone – influential JPMorgan’s auto analyst may have sent the sort of positive signal other investors are looking for.

“We note the recalls are very proactive in nature,” Brinkman wrote in a report to investors. “We see GM stock as very inexpensive.”

(more…)

Ignition Switch Victim’s Family Re-files Suit Against GM

Suit alleges engineer lied under oath.

by on May.12, 2014

GM CEO Mary Barra's congressional committee testimony may have led to the most recent lawsuit filed against the maker.

The family of perhaps the best-known of the victims General Motors’ faulty ignition switch, Brooke Melton, is refiling its civil liability suit against the automaker – after agreeing to a settlement earlier.

The filing alleges a GM representative lied about his knowledge of the problem. Lance Cooper and Jere Beasley, attorneys for Ken and Beth Melton, parents of Brooke Melton who died behind the wheel of a 2005 Chevy Cobalt, claim that GM CEO Mary Barra’s assertion that one of the engineers involved in the case may have lied under oath gives them the green light to refile their lawsuit. Barra’s claim came during her testimony in congressional hearings in early April.

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“The Meltons would not have settled their case if they had known of the perjury and concealment of critical evidence,” said Cooper, founding partner of the Cooper Firm in Marietta, Ga., in a statement. (more…)

GM, Ford Enjoy April Sales Jump in China

Ford sees biggest jump of the two with a 29% increase.

by on May.09, 2014

With vehicles like the Kuga, Ford China saw sales jump 29% in April.

General Motors Co. and Ford Motor Co. increased their sales in China during April: GM climbed 6.3% to a record 278,263 units, while Ford’s sales increased by 29% to 96,829 units.

GM reported Shanghai GM and SAIC-GM-Wuling, as well as their Buick, Chevrolet, Cadillac and Wuling brands, all reached new highs for April sales, GM said.

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Overall, GM’s sales for the first four months of 2014 to a record 1,197,375 units, an increase of 11% on an annual basis. This is the eighth consecutive year and the earliest ever that GM has sold more than a million vehicles in a calendar year in China. (more…)