UPDATE: Saturn goes under- Penske drops bid, GM says it will not seek alternate buyer; The New GM – CNBC.com
Wow! 1992 (the album!) !? Damn am I old!
Update: 9/30 -Commenter Thomas Stewart notes GM called the end of Saturn today as Penske withdrew its bid.
General Motors will close Saturn and wind down its dealership network after a deal to sell the faltering brand to Penske Automotive Group collapsed, the automaker said Wednesday.The breakdown of a deal that had been widely expected to close this week will force some 350 Saturn dealerships to close and could cut thousands of auto retail jobs that would have been preserved under a plan by auto magnate Roger Penske.
Shares of Penske Automotive ..were down almost 10 percent Wednesday in aftermarket trade. The breakdown of the deal was announced after the New York Stock Exchange closed.
GM’s failure to complete the deal also adds uncertainty to the automaker’s production plans as it struggles to regain its footing following a $50-billion taxpayer funded restructuring.
“This is very disappointing news and comes after months of hard work by hundreds of dedicated employees and Saturn retailers who tried to make the new Saturn a reality,” GM Chief Executive Fritz Henderson said in a statement…
DOW now down 274 to 7503, S&P down 28 to 787, NAS down 52 to 1492…
Everyone catch Timmeh on Sunday saying the banks will need more money? The markets sure did. WOTS is Golden Slacks and others are being ENCOURAGED to pay back TARP so Timmeh can RECYCLE the TARP funds back to other banks….REGIFTING with our tax dollars…
…On the ABC program, Geithner would not specify whether he expects to ask Congress for more money this year, though he did not rule it out.
…He conceded that U.S. banks likely will need “large amounts of assistance” before the credit crisis is resolved and said it would be “a mistake” to think that they can earn their way out of the current downturn.
The ouster of Wagoner IMO reflects the TOTAL UNCERTAINTY this administration creates every day, and how can markets recover in that environment? Exactly…every good thing the FED is doing is being undone by the erratic, yeah erratic, TOTUS Team…Phil LeBeau’s blog on the end of an era at GM here
ROY is TOTUS is taking 500 PEOPLE with him to his European Vacation and G20
TOTUS ENTOURAGE MAKES EU HEADLINES WHEN RAHM LOSES IT:
500 PEOPLE and MRS TOTUS FLOTUS and her staff too
Way to show FISCAL RESTRAINT and respect for Americans hardship there..How much will that cost? More than Sarah Palin’s campaign wardrobe I’ll betcha….
Hypocrisy they name is TOTUS….
McCotter on Wagoner ouster:
Meanwhile back at the ranch, GM is in danger of bankruptcy still and looking for another bridge loan up at the WH, I would say they were lookin for love in all the wrong places, ask Canada, less strings….
We need a heavy manufacturing base in this country, but I doubt Pelosi, Waxman and Team Obama will give us what we need….
I am positive I heard Rick Wagoner humming Zeppelin..Oh will you excuse me I’m just trying to find the bridge… Has anybody seen the bridge?
(The Crunge is not on youtube so how about Over the Hills….)
General Motors on Thursday said its auditors had raised “substantial doubt” about its ability to survive outside bankruptcy if it fails to stem its losses and stop burning cash.
The “going concern” warning from the struggling U.S. automaker had been expected, but underscored the stakes for GM as it seeks up to $30 billion in U.S. government aid to restructure outside a court-supervised bankruptcy process.
The automaker faces an end of March deadline to complete concession talks with the United Auto Workers and bondholders to reduce its debt load as part of a bid to convince the autos task force assembled by President Obama that it can be made viable with a new round of government help.
Are you ready for your Homermobile designed by Waxman and Pelosi?
Markets tank on uncertain future….GM & Chrysler futures dim as Obama drops ‘Czar’ model for French Revolution Model, ‘Committee on Public Safety’ next?
Well, we tanked right out of the gate, DOW down 245 now, breaking the November 20 bottom….we escaped the global damage yesterday as we were closed when Japan released the worst economic data in 35 years....
Japan’s economy, the second-largest in the world after that of the United States, shrank at an annual rate of 12.7% in the final three months of last year, the government said Monday. It was the biggest contraction since a surge in worldwide oil prices precipitated an economic crisis in 1974.
but we are in the thick of it today, GLD is up, and so is the US Dollar which is not supposed to happen, lol….in other headlines, Obama will sign the stimulus in Denver and the markets could care less, we want a financial plan for the banking system and a HOUSING plan…
Arizona as the backdrop to announce his housing plan, Obama is choosing a state hit hard by foreclosures. In January, more than 4,500 homes in Arizona were repossessed, third highest in the nation, according to RealtyTrac, a company that collects foreclosure data. Last month, California ranked first.Obama has dropped hints about the outlines of his housing plan, estimated to cost from $50 billion to $100 billion. Speaking in Elkhart last week, he said he would push for a law that allows judges to rewrite the terms of a mortgage for homeowners who land in bankruptcy court.
Without such a law, people are being forced into “foreclosure who potentially would be better off, and the bank would be better off, and the community would be better off if they’re at least making some payments, but they’re not able to make all the payments necessary,” Obama said.
The BIG 3 are also in the minds of traders as Chrysler and GM prepare to present phase one of their feasibility plan to Team Obama. UAW walked away from talks this weekend when GM and Chrysler offered to fund the retirees with stock shares, methinks they know a government run bankruptcy is a-coming….
And I have to say now it looks like Team Obama has no one at the top calling the shots…
Truman said the buck stops here, the buck doesn’t seem to stop anyplace at Team Obama, every single issue has a TEAM a COMMITTEE, no one person calling the damn shots! We need a leader not a frakkin committee!!! Governing by committee is dangerous….
From the wonderful blog of Rich Geib: Gresham’s law of political morality: the bad drives out the good as everyone becomes corrupted while political life becomes not unlike the Hobbesian war of all against all in “a perpetual and restless desire for power, that ceaseth only in death.”
Gibby describes the newest flip flop from a Car Czar to a Committee a la Robespierre, and who will get a seat? Why the US Steel Workers Union Staffer!! BWAAAHAA!! Ahh man it is so terrifying you have to laugh!
GM big executives are ‘retiring’ ahead of the blitz by Pelosi and Waxman:
Lutz departs- Mr. Lutz’s frank statements have also drawn attention. A few years ago he referred to some of GM’s makes as “dead brands,” and last year he called global warming a “crock of s — .”
Corp. product chief Robert Lutz will give up his post for an advisory role April 1 and retire at year’s end, concluding a chapter in his colorful, 46-year career in the car industry and signaling a shift in emphasis at GM.
Mr. Lutz, a former Marine pilot known for his blunt manner and a love of “muscle cars” brimming with horsepower, was brought to GM in 2001 to liven up its vehicles. He is credited with improving the look and feel of its passenger cars and pushing the development of the Chevrolet Volt, a battery-powered car GM aims to launch in 2010.
“It just seemed to be the right time,” Mr. Lutz, 76 years old, said by email Monday. “As they say, ‘My work here is [largely] done.’ The fun and excitement have become fairly rare commodities, and others are temperamentally better-suited to dealing with this increasingly regulation-dominated product future.”
Exactly ‘regulation dominated’ ie Der Kommissar Pelosi is in town….and she is heavily invested in Boone Pickens’ natural gas plan
General Motors Corp. said Wednesday that William E. Powell, North America vice president of industry-dealer affairs, will retire on March 1.
Powell, 61, began his career at the automaker in 1977 at the company’s Buick Motor Division in Flint, Mich., and moved through several sales assignments. He has been in charge of the company’s dealer development group and regional general manager of GM’s southeast region for vehicle sales.
and Sen Lugar, good buddy to Obama, came out endorsing a GAS TAX just what American families need right now, but the leadership we have right now is all about the theme of green and not so much what American families can AFFORD to do right now, none of us are going out to buy a new green car I can tell ya that!
Another quote quite appropos from Rich’s page:
“Robespierre, with his cruel moral relativism,
embodied the cardinal sin of all revolution, the heartlessness of ideas.”
Paul Johnson “The Spectator”
Ladies and Gentlemen, start your car-buying engines….A few days after receiving the newly coveted ‘bank-holding’ status from the FED, GMAC has now been approved for an additional 5 billion in aid via the TARP as well as an additional 1 billion directly to GM…
Stepping into deeper waters to help the auto industry, Treasury Monday night added $6 billion to the $17.4 billion bailout announced Dec. 19, chiefly to help the financial arm of General Motors Corp.
Using financial markets rescue funds, Treasury will purchase $5 billion in senior preferred equity from GMAC LLC, and up to $1 billion more will be lent to GM itself so the automaker can participate in a rights offering at GMAC, which has wanted to reorganize itself as a bank holding company.
GMAC won approval from the Federal Reserve last week to become a bank holding company, but that was contingent on the auto and home loan provider raising at least $30 billion in capital. Treasury’s announcement would appear to move GMAC closer to that goal, and a GM spokeswoman was optimistic Monday night.
Still nada, zip, zilch for homeowners from Paulson…I would suggest anyone wanting a vehicle free of Congressional engineering standards buy now…HA!! Or take your chances on getting a Homer post Pelosi take-over….take a drive down your Miracle Mile of auto dealerships, we did yesterday and three of 10 are now empty lots, including Jaguar…
Breakdown on the stake taken by Treasury via CNN Money:
Under the agreement announced Monday to buy the senior preferred equity, GMAC must be in compliance with parts of the law Congress passed to bail out Wall Street.
GMAC will issue warrants to Treasury in the form of additional preferred equity in an amount equal to 5% of the preferred stock purchase that will pay a 9% dividend if exercised.
The loan of up to $1 billion will be exchangeable at any time, at Treasury’s option, into the GMAC equity interests being acquired by GM in the rights offering. The loan will be secured and will have other terms and conditions. The ultimate level of funding under this facility will be dependent upon the level of current investor participation in the rights offering at GMAC.
Update 3: 10:19am EST: Breakdown coming out on Big 3 loans: GM to receive 4 billion on 12/29, another 5.45 b on 1/16/09…Chrysler to receive up to 4 b on Dec 29th (don’t get me started they should’ve gotten nada, they are privately owned by Cerberus who refused to put up any more cash..at least Kokomo will have work, they better reopen those plants..)..Ford had said they were okay pending no further market deterioration in sales…
GM to hold presser in 44 mins, CNBC to cover it LIVE
UPDATE 2: 10:03am EST: CNBC reports that an additional 4 billion in loans is expected to come from TARP tranche Deux in February, contingent upon 2nd tranche approval by Congress…so total is 13.4 billion immediately, additional 4 billion from TARP part Deux under PEBO (which will give PEBO the opening to change the requirements :0))
UPDATE: 8:52am EST: The loan is a done deal. 13.4 Billion from TARP…
- Govt will have power to block large transactions,
- govt gets warrants ahead of all stakeholders
- new agreements with stakeholders, dealers, suppliers required by March 31st
- work rules and wages must be competitive by December 31, 2009…
- positive net present value by March 31, 2009, must reduce debt by 2/3
This can be modified by PEBO when he gets in…..
As the closing bell rings the DOW is down 222 to 8603; NAS down 27 to 1552 and S&P down 19 to 885.
The NAS was down all say on downgrade of chip makers and Intel in particular got hammered when their price target was downgraded below $12..
DOW turned down after Standard & Poor’s decided to re-affirm GEs AAA rating, but simultaneously downgraded their credit outlook from stable to negative…Ironically, S&P rang the closing bell on the Nasdaq today…
…Sprinzen’s report reaffirmed GE’s present rating, but pointed to earnings pressure and the need for funding at GE Capital that forced management to revise its earnings guidance. S&P generated its own projections, Sprinzen said, and “it’s clear that this is going to be a pretty severe credit cycle.”..
You know what Franck Eggelhoffer would say don;t you? ‘Party pooper Standard and Pooor’s'…where were these jokers since 2003??
Monday Morning Market Roundup: FED begins 2 day meeting on rates…next stop, Less Than Zero??..Jamie Dimon on 2009 and Housing…WH on Big 3…
Markets opened mixed, have all turned negative. DOW down 77 to 8552; NAS down 33 to 1507 and S&P down 11 to 870, the 10 yr is at 2.54% WOW!!
As the Federal Reserve begins a two day meeting expected to culminate in a rate cut of 50 bp tomorrow, consider recent comments by various former Fed Governors alluding to our ability to operate in an effective negative interest rate environment. Once they go to zero some think they are out of bullets. Less Than Zero…sooner or later we will pay the piper in inflation…
From the WSJ:
…The market expects the Fed to cut its key lending rate to 0.50%. But, more important, investors want to know whether there “are more aggressive quantitative moves soon to come, or are they further down the road,” said Rick Klingman, managing director of Treasury trading at BNP Paribas in New York.
The Fed is scheduled to meet Monday and Tuesday, with its interest-rate decision coming Tuesday at 2:15 p.m. EST.
Aware that its scope to cut interest rates is limited, the Fed already has tiptoed into the arena of quantitative easing, essentially printing money and using the cash to fund lending…
The EU nations are already making noises about ceasing interest rate cuts, remember their mandate is solely to manage against inflation. Our FED does full employment AND inflation, and frankly I have always found that to be a conflict, since economists feel full employment leads to …yes inflation…
On the auto bailout news, the White House is behaving rather strangely, floating various rumors. Fox reports Bush says, no bailout deal anytime soon, which would IMHO be deadly for the markets. Then we had a report on CNBC saying the bailout could be as high as 40 billion, which is more than double the amount that failed in the Senate. No one knows where it is coming from. We only have 15 billion left in TARP tranche one. A Treasury/Fed combo loan/guarantee program was the assumption the talking heads are making.
Perhaps the reason the WH is playing coy is b/c they are trying to get Congress to be more amenable to accessing TARP tranche deux (I don’t think POTUS’ trip to Afghanistahn would preclude Paulson from putting a package together) ..I don’t know but I do know if they don’t come out with a definitive plan very soon, the markets will begin to respond negatively…
Via Fox: The administration, following the legislative defeat, said it was considering several options, including using money from the $700 billion financial bailout fund to provide loans to the carmakers. Bush reiterated Monday that tapping the financial bailout fund remains an option. ..
Via CNBC: U.S. President George W. Bush said on Monday an announcement on a auto industry rescue was not imminent, leaving the industry’s fate clouded in uncertainty for a little longer..”We’re not quite ready to announce that yet,” Bush told reporters on Air Force One during a flight from Baghdad on an unannounced visit to Afghanistan.
Updated POTUS report: 11:25am EST: GOOD NEWS! Phil LeBeau on the Auto Beat reports POTUS said on AirForce One:
“This will not be a long process because of the economic, the fragility of the auto industry”
The dollar fell to an eight-week low against the euro and dropped versus the yen on speculation the Federal Reserve will cut interest rates and the U.S. will bail out General Motors Corp. and Chrysler LLC.
The greenback approached a 13-year low against the Japanese currency after U.S. President George W. Bush said yesterday he may use funds meant to shore up banks to keep the automakers out of bankruptcy. The Fed is forecast by economists to cut its benchmark rate tomorrow.
“There is dollar weakness in anticipation of this week’s meeting, where it’s widely expected that the Fed will cut the benchmark rate,” said Lee Hardman, a London-based foreign- exchange strategist at Bank of Tokyo-Mitsubishi…..
Anywho, markets expect 50 bp and for the first time I can recall the markets don’t really seem to care what the FED does. Sentiment is just that negative.
You wouldn’t know that based on the parade of talking heads who seem to be tasked with ‘talking up’ 2009. I will stick with what Jamie Dimon (JPM Chase CEO) told Erin Burnett on December 11th. Remember, only Jamie got it right on the housing meltdown. One of the comments he made was that he expects housing values to drop another 20%-OUCH!: