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GM Offering Online Selling Program to Dealers

October 8, 2013 by · Leave a Comment 

General Motors plans to go national by year end with a program that allows online shoppers to buy vehicles from start to delivery from dealership websites.

Automotive News reported that GM has been piloting its Shop-Click-Drive program since last year.

About 100 dealers in eight states, including Michigan and Arizona, are participating in the pilot, said GM spokeswoman Ryndee Carney. She said the program would be offered to all 4,300 GM dealers nationally by year end.

“Consumers increasingly want to do some degree of car buying online,” she said.

The program allows a customer to buy a vehicle from a participating dealership’s website by clicking on a button that takes the shopper through five steps:

1. Review inventory and choose a vehicle.

2. Get a value on a trade-in.

3. Fill out a credit application.

4. Select extended warranties and accessories.

5. Schedule delivery either in-store or at the buyer’s destination of choice.

To read the entire article click here.

 

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Ally Financial Will Become ‘Major RV Player’

December 13, 2010 by · Leave a Comment 

Tim Russi

Tim Russi

National wholesale and retail lender Ally Financial Inc. made its presence known at the 48th Annual National RV Trade Show, Nov. 30-Dec. 2 in Louisville, Ky., with stand-alone booths and desks within the displays of Thor Industries Inc. with whom Ally established a “preferred lender” relationship earlier this year.

“We wanted to be in Louisville to support the industry. If you are going to be a major participant in it, there are obligations to support the industry event,” stated Tim Russi, Ally’s executive vice president for North American Operations, who was joined at the show by more than 20 associates from the Detroit-based lender.

“With the announcement that we are getting into wholesale financing — and knowing the season that we are about ready to get involved in from an RV perspective — we want to make sure the dealers have us on their minds,” said Russi.

Indeed, Ally has its sights set on becoming a major factor – a national-scale RV industry lender – along with GE Capital and Bank of America. And that’s pretty big news, considering Ally Financial extended $22.3 billion in U.S. auto consumer financing for the first nine months of 2010, making it likely the No. 1 ranked provider of new car financing in the U.S. in 2010.

“We want to be part of the upswing of this industry,” Russi, a former Bank of America executive who oversees Ally’s automotive and RV lending services in the U.S. and Canada, told RVBUSINESS.com. “Some lenders have left the market while others in it are potentially retracting, and there are not many providers in the industry. So, we think the time is right to enter the market.”

In a way, Russi points out, Ally has been in automotive financing as GMAC for a long time. Formerly the captive finance company of 90-year-old General Motors Corp., Ally became an independent financial services company in 2006 and a bank holding company in 2008, launching Ally Bank in May of 2009. Ally’s parent company changed from GMAC Inc. to Ally Financial Inc. in May, followed by the rebranding of its automotive finance business in July.

In 2009, meanwhile, President Obama named Ally Financial as preferred financial provider for Chrysler Group LLC. “We have preferred provider relationships with GM, Chrysler, Saab, Fiat, Suzuki and Thor,” said Russi. “And we’re looking to expand our relationship with other OEMS as well, which is an important concept as we diversify our book of business from what was historically almost 100% GM. As a bank, what you’d like to see is a diversified business.”

Ally Financial offers a variety of auto-financing products, indirect retail financing for new and used vehicles and RVs, auto leasing as well as wholesale financing and remarketing services.

Leading the RV industry lending team are some familiar faces, including the bulk of the former Thor Credit staff. Industry veteran Ed Arienti runs the retail sales force for the RV sector as director of recreational finance sales and teams with Rich Morrin, commercial operators leader, for RV dealer wholesale financing.

Also key is Mark Manzo, who, as vice president of alliance sales, manages OEM relationships, including that between Ally and Thor.

Ally’s RV industry entry started with an April announcement by then-GMAC Financial Services that it would provide RV consumer financing, working with Thor Industries Inc. as a preferred retail lending provider.

Then, on Nov. 23, right before the Louisville Show, Ally announced that it would diversify into wholesale financing, focusing from the outset on Thor’s dealer network.

“We benchmarked current options and needs in the industry and will offer a very competitive wholesale financing product for RV dealers,” Russi stated. “Our program is tailored to the recreation vehicle business with attractive terms and flexible credit lines that will accommodate the seasonal fluctuations in RV inventory. We view our retail and wholesale financing, along with remarketing tools, as a full-service offering for dealers.”

Qualified dealers may obtain wholesale financing from Ally Financial for all or a portion of their inventory, reported Ally, which currently extends retail financing through dealers in about 40 states and plans to expand its RV retail financing nationwide by the end of the year.

“The way we like to create a relationship is a full spectrum relationship credit offering through the dealer,” Russi emphasizes. “Everything centers around the dealer. The more we do with them, the better our value proposition is.”

So, is the Thor relationship exclusive to Thor dealers?

“We are not exclusively Thor,” said Russi, “but because of our relationship with them we obviously are going to focus on their dealer network needs first. That’s our entry point into the industry. Keep in mind that Thor dealers — and I think they number 1,200 — represent about 75% of the RV space. We think by focusing there, we are going to build relationships with the majority of the industry.”

When a Thor dealer has multiple brands and sells non-Thor brands, he noted, Ally will still provide retail or wholesale financing for the products of those other branded companies.

Is Ally in it for the long haul?

“We wouldn’t have entered it to exit it,” added Russi. “We’ve got plenty of auto business. We are not going to run out of capacity. We’d like it (the RV segment) to be substantial. We’d like to systematically grow our book.”

The fact that Ally has a dedicated RV sales staff based in Orange County, Calif., is also a testament to Ally’s commitment, adds Russi. “But we also intend to leverage our entire structure into the space,” adds Russi. “If we don’t have someone conveniently located from an RV sales perspective, we will leverage the existing sales force, which is a national sales force of about 200.”

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Old GM Logged 70K Claims — $275B Total

September 1, 2010 by · 1 Comment 

Editor’s Note: The holding company for the properties of the old General Motors Corp. has filed its bankruptcy reorganization plan. The press release announcing the filing follows.

Motors Liquidation Company (f/k/a General Motors Corporation) (“MLC”) today announced that MLC, MLC of Harlem, Inc. (f/k/a Chevrolet-Saturn of Harlem, Inc.), MLCS, LLC (f/k/a Saturn, LLC), MLCS Distribution Corporation (f/k/a Saturn Distribution Corporation), Remediation and Liability Management Company, Inc., and Environmental Corporate Remediation Company, Inc. (collectively, the “Debtors”) have filed a Joint Chapter 11 Plan (the “Plan”) and proposed Disclosure Statement with the United States Bankruptcy Court for the Southern District of New York. The Plan creates a framework for resolving the challenges of one of the most complex chapter 11 cases in U.S. history.

“It is nearly impossible to redevelop such properties for productive, job-creating purposes unless environmental remediation is complete or the buyer can be assured the funding and procedures exist to do the remediation. The Plan establishes a framework that will provide this assurance.”

“The focus of our small, lean team at MLC has been to work closely with federal and local governments, regulatory bodies, local communities and creditors to develop a plan that comprises environmental remediation, asset liquidation and claims resolution, all on a very large scale, and to do so in very short period of time,” said Al Koch, CEO of MLC. “We not only have been successful in doing that, but we have also developed unique processes and approaches that could serve as templates for other big bankruptcies in the future. In both regards, what has been accomplished here is historic.”

If the Plan is confirmed, substantially all of the Debtors’ assets and liabilities will be transferred to four trusts, including one, the Environmental Remediation Trust, or “ERT,” that provides funds for the continuing environmental remediation of the Debtors’ remaining properties, and another, the General Unsecured Creditors Trust, that will be responsible for resolving the outstanding claims of the Debtors’ unsecured creditors and distributing the General Motors Company (“New GM” or “General Motors”) common stock and warrants owned by MLC to those unsecured creditors whose claims are allowed. MLC presently owns 10% of General Motors’ common stock, plus warrants that are exercisable for a further 15% of General Motors’ common stock on a fully diluted basis. MLC will be issued up to an additional 2% of General Motors’ common stock if the final estimated aggregate amount of the Debtors’ unsecured claims exceeds certain thresholds. A third trust will handle both present and future asbestos-related claims against the Debtors, while a fourth trust will deal with certain litigation-related claims of the Debtors.

One of the most significant aspects of the Plan is the ERT, which MLC was instrumental in crafting. If the Plan is confirmed, the ERT will make $536 million available to handle environmental-remediation activities at the Debtors’ remaining properties.

“A significant number of these properties are old industrial sites that have a need for substantial environmental remediation,” said Ted Stenger, executive vice president of MLC. “It is nearly impossible to redevelop such properties for productive, job-creating purposes unless environmental remediation is complete or the buyer can be assured the funding and procedures exist to do the remediation. The Plan establishes a framework that will provide this assurance.”

The ERT’s assets will consist of cash, the Debtors’ remaining unsold real properties, and the equipment that is located at those properties. The ERT differs from the structure that has been used in some other large environmental bankruptcies in that it provides an overall “national” remediation solution backed up by significant funds, while also providing a strong voice to the states involved in the process. If the Plan is confirmed, MLC anticipates that within a few years most of the real properties transferred to the ERT will be sold to third parties or otherwise prepared for redevelopment. In this regard, the Debtors have already received a number of expressions of interest regarding properties and are presently in negotiations to sell 17 properties, in addition to those already sold.

MLC anticipates that the majority of the environmental remediation contemplated in the ERT should be completed or well underway within five years, and that the ERT will have adequate funding to complete further remediation activities (such as periodic site testing and maintenance) for up to 100 years.

The Debtors are presently targeting the first quarter of 2011 for the confirmation of the Plan and expect that the majority of the Debtors’ unsecured claims will be resolved within the first two years after the Plan is confirmed.

Additional key highlights of the Debtors’ chapter 11 case to date include:

  • Management of more than 70,000 claims, totaling more than $275 billion, with more than $150 billion in claims already eliminated or resolved.
  • Management of more than 900,000 contracts covering more than 65,000 business partners.
  • Announced asset-sales activities that include the sale of the Debtors’ Wilmington (Del.) Assembly to Fisker Automotive Inc. (for the production of hybrid electric cars); the sale of Pontiac (Mich.) Centerpoint to Raleigh Studios Inc. (for the creation of a movie studio); and an agreement, subject to certain conditions, to sell Strasbourg (France) Powertrain to General Motors (which is expected to save 1,200 jobs).
  • The establishment of a Web portal to facilitate communication with interested parties, which has had almost 32 million hits to date.

About MLC

On June 1, 2009, General Motors Corp. and certain subsidiaries filed voluntary petitions for relief under chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. An order was entered approving the sale of substantially all of the company’s operating assets to a new and independent company under Section 363 of the Bankruptcy Code and the sale closed on July 10, 2009. On that date, General Motors Corp. changed its name to Motors Liquidation Co.

For court documents, a list of scheduled hearings, and other information related to Motors Liquidation Company’s bankruptcy proceedings, please visit http://www.motorsliquidationdocket.com/.

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Bankruptcy Judge OK’s General Motors Sale Plan

July 6, 2009 by · Leave a Comment 

A bankruptcy judge has ruled that General Motors Corp. can sell the bulk of its assets to a new company, potentially clearing the way for the automaker to quickly emerge from bankruptcy protection.

U.S. Judge Robert Gerber said in his 95-page ruling late Sunday (July 5) that the sale was in the best interests of both GM and its creditors, whom he said would otherwise get nothing, according to the Associated Press.

“As nobody can seriously dispute, the only alternative to an immediate sale is liquidation – a disastrous result for GM’s creditors, its employees, the suppliers who depend on GM for their own existence and the communities in which GM operates,” Gerber wrote in his ruling.

The ruling comes after a three-day hearing that wrapped up Thursday, during which GM and government officials urged a quick approval of the sale, saying it was needed to keep the automaker from selling itself off piece by piece.

“This has been an especially challenging period, and we’ve had to make very difficult decisions to address some of the issues that have plagued our business for decades,” GM President and CEO Fritz Henderson said in a statement early today. “Now it’s our responsibility to fix this business and place the company on a clear path to success without delay.”

But attorneys for some of GM’s bondholders, unions, consumer groups and individuals with lawsuits against the company argued for its rejection, saying that their needs were being pushed aside in favor of the interests of GM and the government.

It was unclear early today if any of those groups planed to appeal Gerber’s decision. The deadline to appeal is noon Thursday, after which point Gerber’s order takes effect and the sale is free to close.

Last month, a group of bondholders and others took their objections to Chrysler LLC’s sale plan all the way to the Supreme Court, delaying the Auburn Hills, Mich.-based automaker’s exit from bankruptcy protection.

Several consumer groups have objected to provisions in the sale that free the new company from liability for consumer claims related to incidents that occurred before GM went into bankruptcy protection.

That means that people injured by a defective GM product in connection with an incident that occurred before June 1 would have to seek compensation from the “old GM,” the collection of assets leftover from the sale, where they would be less likely to receive compensation.

Joanne Doroshow of the Center for Justice & Democracy said in a statement the issue “is far from over.”

“It is morally reprehensible that GM will pay for injuries and deaths that occur after the bankruptcy process, but not for the hundreds of victims who have already been hurt by defective GM cars,” Doroshow said.

GM’s government-backed plan for a quick exit from Chapter 11 hinges on the sale, which will allow the automaker to leave behind many of its costs and liabilities. The Treasury Department has vowed to cut off funding to GM if the sale doesn’t go through by July 10.

The Detroit car maker’s Chapter 11 filing on June 1 was the fourth-largest in U.S. history.

GM will leave bankruptcy court with significantly reduced debt and labor costs, as well as fewer dealerships and brands. But it’s still operating in an environment where fewer American are buying cars. At the current pace, automakers will sell around 9.7 million vehicles this year. That’s a reduction from sales of more than 16 million vehicles as recently as 2007.

In June, the automaker captured 20.3% of the U.S. market. GM has estimated that it can maintain a market share between 15% and 17%, reflecting its plan to sell off three brands and end its Pontiac line.

GM has several new cars coming to market next year, including the Chevrolet Volt, a plug-in hybrid electric car. The Volt might be a promising vehicle, but with an expected $40,000 price tag it might only be a niche player, said James E. Schrager, clinical professor of entrepreneurship and strategy at the University of Chicago Graduate School of Business.

Upcoming small-car models such as the Chevy Cruze and Spark may fare well, but will face heavy competition from foreign automakers already in that segment of the market and from Ford Motor Co.’s new Fiesta, which the company has already started advertising.

Overall, GM’s major challenge will be winning back customers who have migrated to foreign competitors. Some newer GM models have received good reviews for quality and performance, but that hasn’t persuaded enough consumers to buy GM cars.

“The problem is the status of General Motors’ brands,” Schrager said. “They have to have some really breakthrough products that work and resonate with consumers. And they may have to slowly, over time, turn the image around.”

The company has received $50 billion in taxpayer funds. In exchange for those funds, the government will own about 61% of the “new GM.” The Obama administration has said it does not plan to interfere with the day-to-day running of the company, though government has been involved in the selection of the new company’s 13-member board of directors and change of control transactions.

The company, in consultation with the government, named former AT&T Inc. CEO Ed Whitacre to chair the board. Whitacre is in the process of choosing four new directors.

The United Auto Workers union, which gets a 17.5% stake through its health care trust for retirees, has selected Stephen Girsky, a former GM adviser and Morgan Stanley analyst, to serve on the board. The Canadian government, which will control an 11.7% share, also will pick one member.

Henderson, who succeeded former CEO Rick Wagoner in March when the Obama administration forced Wagoner to resign, has said he expects to remain at the helm of the automaker as it comes out of bankruptcy.

Henderson has already said he would cut about 34% of GM’s executive ranks by the end of the year.

Assets that GM does not sell to the new company will become part of the separate “old GM,” which the company said Monday will be known as Motors Liquidation Co., and will be sold to the highest bidder under court supervision.

The old GM will include a smattering of properties, several of which are facilities already slated to be closed.

Other assets to be filed under the old GM include brands like Hummer, Saturn and Saab, for which GM has lined up buyers. They also include all current GM common stock, which – despite its active trading on over-the-counter markets – will soon be worthless.

The old GM will remain an entity until all of the facilities are sold off, a process that could take months or years to complete.

The government has said it plans to provide about $1.18 billion to fund the wind-down process.

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NASCAR Teams Brace for General Motors Cutbacks

June 15, 2009 by · Leave a Comment 

As word spread through Michigan International Speedway in Brooklyn, Mich., on Friday (June 12) that General Motors Corp. will pull its support from the NASCAR Nationwide and Camping World Truck series and reevaluate as soon as this week where its Sprint Cup dollars would go, drivers were quick to respond, according to the Detroit Free Press.

“I’m not sure what the cutbacks mean, and what it is going to mean for the sport,” said defending Cup champion and Hendrick Motorsorts ace Jimmie Johnson, driver of the No. 48 Lowe’s Chevrolet. “It’s obviously a tough time for GM. It’s a tough time for our country. One thing that I do know is that racing sells cars. And hopefully we can do that for Chevrolet and for GM and go out and win on Sunday and sell on Monday.”

Ryan Newman, who drives the No. 39 U.S. Army Chevy for Stewart-Haas Racing, said, “I don’t know the entire financial situation on any of the Big Three (manufacturers). The bottom line is we’re here to support all of them, and whatever we can do as drivers, team owners and sponsors to help the economy, to help GM, Ford, Chrysler and Toyota is what we need to do.”

According to a report on NASCAR.com, Kevin Harvick’s Nationwide and Camping World Truck teams will lose GM support, and Dale Earnhardt Jr.’s Nationwide outfit, JR Motorsports, also is a victim of the budget cuts.

“We will try to do the best we can to cover the void that will create,” Earnhardt said. “Chevrolet is going through some very challenging times.”

Greg Biffle, who runs the No. 16 3M Ford for Roush Fenway Racing, thinks teams can survive cutbacks and continue to compete.

“As we probably know, there have already been cutbacks from the support of those auto manufacturers,” said Biffle, who built his own cars early in his career. “And what people have to get through their head is that we are going to be racing cars with or without that support. The amount of support provided us is important, but we can continue to race without that support. It just means cutting back on technology or testing or whatever else.”

NASCAR spokesman Jim Hunter spoke to the Free Press on Friday’s reports.

“It’s no secret GM is going through serious restructuring,” Hunter said. “How it will affect NASCAR we don’t know. I would expect you’ll still see Chevys on the racetrack. In the short term, we don’t expect it to have serious effects. In the long term, NASCAR doesn’t have answers to that.”

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General Motors Jettisons Medium-Duty Truck Unit

June 9, 2009 by · Leave a Comment 

Chevrolet’s Kodiak and GMC’s Topkick medium-duty truck lines will be phased out by July 31 after General Motors Corp. was unable to locate a buyer for the two divisions.

According to a story Monday (June 8) in Automotive News, GM had been searching for a buyer for its medium-duty truck business ever since the divisions began losing money in 2005. A tentative deal was struck in 2007 with Navistar International, but it expired last summer without a final sale reached.

GM’s decision to jettison the money-losing business segment was apparently fueled by its bankruptcy filing last week. The company had already decided to shed its iconic Pontiac automotive division by 2010, and its Hummer division is in the midst of being sold to a Chinese manufacturer of heavy equipment machinery. A third GM nameplate, Saturn, was sold to Penske Automotive Group Inc. last week.

Although the Kodiak was a popular platform among RV manufacturers and offered owners a dependable truck-based “C-plus” motorhome with increased load-carrying capacity, sales of the Kodiak and its GMC counterpart fell off sharply in recent years. According to GM CEO Fritz Henderson, GM sold about 30,000 units in 2007, but that number dropped to just 20,000 vehicles last year as the country entered its worst recession since the 1930s.

Available in Class 5 though 7 model lines, the Kodiak and Topkick are built in five models, with GVWRs ranging from 16,500 to 63,000 pounds.

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Webinar to Explain Loan Payment Program

May 18, 2009 by · Leave a Comment 

The American Recreation Coalition (ARC) has found a way to bring to the RV sector a program pioneered by the U.S. auto industry to temper the fear of a job loss by potential buyers. This program makes monthly payments on a vehicle for several months if the buyer loses his or her job.

These programs have now become widespread throughout the auto market, including all vehicles manufactured by General Motors Corp.

Derrick Crandall, ARC president,  on behalf of the RV and boating industries, announced Friday (May 15) that the the program administrator of GM’s Payment Protection program, cynoSure Financial Inc., has offered to provide RV manufacturers with a similar program covering all U.S. purchasers.

The following is a brief synopsis of how this program might work.

The program offered by cynoSure is a short-term (12 or 24 month) protection instrument which provides up to a specified number of monthly payments of an agreed upon amount. There is also a 90-day exclusionary period and a 30-day waiting period built into these programs. The policies normally make three or six payments ranging from $500 to $1,500 a month. The program is designed to act as a bridge, as the buyer finds a new job, or to give the buyer time to sell his RV.

There are important exclusions, including pre-knowledge of a layoff or loss of employment. The exclusionary period begins the same day as the coverage period, which is the purchase date of the RV. The exclusionary period is used to eliminate those people who have prior knowledge of a potential job loss. If he/she loses his/her job during this period, there are no benefits eligible to be paid. Once the 90-day exclusionary period is up, the purchaser has up to 21 months of coverage remaining. If he/she loses his/her job any time during those 21 months, he/she is eligible (after waiting 30 days) to receive up to three or six loan payments for up to the maximum payment amount.

The cynoSure proposal can be modified by the RV industry as a whole, or for manufacturers of sufficient volume, on a company-by-company basis. For example, a manufacturer offering high-end RVs could increase the monthly reimbursement of payments to eligible buyers by paying a higher cost per vehicle.

If enough companies are willing to provide the information on the RV market, the pricing for various programs can be reduced below the following “ballpark” figures:

  • 12 month coverage period, 90-day exclusionary period, 30-day waiting period, three payments up to $500 $115/vehicle.
  • 12 month coverage period, 90-day exclusionary period, 30-day waiting period, six payments up to $500 $215/vehicle.
  • 24 month coverage period, 90-day exclusionary period, 30-day waiting period, three payments up to $500 $180/vehicle.
  • 24 month coverage period, 90-day exclusionary period, 30-day waiting period, six payments up to $500 $275/vehicle.

Keep in mind that there could potentially be many, many variations to this concept. The product could be offered to those purchasing:

  • At specific shows or during a specific period – say June and July.
  • Only new non-currents, adding value without further discounting prices.
  •  Wrapped into certain financing packages, including a national credit program. 
  • Qualifying used RVs that are financed.

cynoSure is planning a webinar at 1 p.m. on Friday to further explain the mechanics of the program and to answer questions on the proposal.  To participate in the webinar,  contact  Derrick Crandall, either by e-mail at dcrandall@funoutdoors.com or call (202) 682-9530 no later than close of business on Tuesday.

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Asian Automakers to Dominate U.S. Market?

April 23, 2009 by · Leave a Comment 

While no one seems to know when the current economic recession will hit bottom and begin the slow bounce back, indications are that when it happens, it will be a vastly different landscape.

According to a report Wednesday (April 22) in Automotive News, Michael Robinet, vice president for global vehicle forecasts at CSM Worldwide, Detroit, Mich., said it will take three to four years for North American auto production to recover to pre-recession levels. And when it does, Detroit automakers will only be filling 45% of the total. As recently as 2000, the “Detroit 3″ – General Motors Corp., Ford and Chrysler – produced more than 75% of all vehicles built in North America. 

The “Asian 4,” Toyota, Honda, Nissan and Hyundai, are seen as likely beneficiaries of the change in production from traditional domestic OEMs. 

Robinet’s comments were voiced during a meeting of the Detroit Regional Economic Partnership.

The executive also noted that the industry will downsize its offerings in order to meet federal fuel-economy requirements, with the strongest product segments forecast to be subcompacts, compacts and mid-sized vehicles. 

“We are going to start driving more appropriately sized vehicles,” he said.

While much of Robinet’s statements were directed at the North American market, he also noted that the current recession is having a worldwide impact. According to Robinet, automakers built vehicles at an annualized rate of 74 million units in January 2008; in January 2009, that rate fell 42%, to 43 million units. The dramatic decline has led to an industry capacity utilization rate of approximately 60%, far below the 80% to 85% rate Robinet said was required for automakers to operate profitably.

Nearly one-quarter of the way through the 2009 year, North American production (U.S., Canada, Mexico) has fared even worse. Through April 18, North American car and truck production totaled 2,237,575 units; through April 19, 2008, that year-to-date figure was 4,345,178 vehicles. Total U.S. production is down by more than 54%, 1,401,424 versus 3,051,203 units.

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