RebuildGM.org

GM REPAYS DEBT: Way to GO GM and Chock this one up for I Told you so America!

DETROIT — General Motors Co. has repaid the $8.1 billion in loans it got from the U.S. and Canadian governments, a move its CEO says is a sign automaker is on the road to recovery.

GM CEO Whitacre formally announced the loan paybacks Wednesday at the company’s Fairfax Assembly Plant in Kansas City, Kansas, where he also announced that GM is investing $257 million in that factory and the Detroit-Hamtramck plant, both of which will build the next generation of the midsize Chevrolet Malibu.

GM got a total of $52 billion from the U.S. government and $9.5 billion from the Canadian and Ontario governments as it went through bankruptcy protection last year. The U.S. considered as a loan $6.7 billion of the aid, while the Canadian governments held $1.4 billion in loans.

The U.S. government payments, made Tuesday, came five years ahead of schedule, and Whitacre said they are a sign that the automaker is on its way toward reducing government ownership of the company. The payments on the Canadian loans were also made Tuesday.

GM still owes $45.3 billion to the U.S. and $8.1 billion to Canada, money it received in exchange for large stakes in the company. The U.S. government now owns 61 percent of the company and Canada owns roughly 12 percent. GM plans to repay both with a public stock offering, perhaps later this year.

“Nobody was happy that GM needed government loans — not the governments, not the taxpayers and, quite frankly, not the company,” Whitacre wrote in an op-ed article that appeared on The Wall Street Journal’s Web site Tuesday night. “We believe we can best thank the citizens of the U.S. and Canada by making sure that their investments are hard at work every day, building high quality, fuel-efficient vehicles.”

The factory investments in Kansas and Michigan will not create any new jobs, but will preserve jobs at both plants. The Kansas plant, which employs 3,869 workers, also builds the midsize Buick LaCrosse luxury sedan. The Detroit-Hamtramck plant, which has 1,048 employees, now builds the Cadillac DTS and Buick Lucerne large sedans and is gearing up to make the Chevrolet Volt rechargeable electric car.

During the financial crisis that led to GM filing for bankruptcy protection last year, the automaker closed 14 factories and shed more than 65,000 blue-collar jobs in the U.S. through buyouts, early retirement offers and layoffs. The company now employs about 40,000 hourly workers in the U.S.

Preserving jobs at the two GM plants won’t help the nation’s unemployment picture, but it won’t make it worse.

Employers nationwide in March added 162,000 jobs, the most in three years. But the pace of the economic recovery and job creation won’t be robust enough to quickly drive down the unemployment rate. It’s been stuck at 9.7 percent for three months, close to its highest levels since the 1980s.

GM had made about $2 billion in loan payments to the U.S. government and $384 million to Canada in December and March, and had promised to repay the full loans by June. But company officials have said its cash flow, mainly from the sales of newer models, has been better than expected, allowing it to make the remaining $5.8 billion in payments early.

Repaying the loans has been a top priority for Whitacre.

GM officials say the company’s public stock offering will take place when the markets and the company are ready. They will not predict how much of the remaining government debt will be repaid from the stock offering, but said it likely will take years for the governments to divest themselves fully.

The stock offering hinges on GM posting a profit, which Whitacre has said could come this year. GM lost $3.4 billion in the fourth quarter of 2009 on revenues of $32.3 billion. After the event at the Kansas City plant on Wednesday, Whitacre heads to Washington, where he is scheduled to meet with House Speaker Nancy Pelosi and other lawmakers.

Candidly, I am not sure what t make out of Toyota’s sudden acceleration issues. I suppose that I’ll leave that up to the experts and the courts.

I do know that the Sacramento Bee just reported that a California Highway Patrol officer helped slow a runaway Toyota Prius from 94 mph to a safe stop on Monday after the car’s accelerator became stuck on a San Diego County freeway, the CHP said. Prius driver James Sikes said that the incident Monday occurred just two weeks after he had taken the vehicle in to an El Cajon dealership for repairs after receiving a recall notice, but he was turned away. “I gave them my recall notice and they handed it back and said I’m not on the recall list,” Sikes said. In a statement, Toyota said it has dispatched a field technical specialist to San Diego to investigate the incident according to the report.

While all of this is taking place, I am still driving my 96 GMC Yukon and I am not having any sudden acceleration issues. It’s an odd thing really, I wonder if this would have happened to GM what kind of reaction the public would have? My hunch is that they would have closed the plants all together.

According to news report, California Gov. Arnold Schwarzenegger speaking at the Society Automotive Engineers 2009 World Congress on Monday, Schwarzenegger said Washington has failed to create an energy policy that would help automakers develop fuel-efficient or alternative fuel vehicles more quickly. “Washington hasn’t been able to show any leadership in the last few years. It’s been very frustrating,” he said. “How can car manufacturers go and start changing their plans when there’s no goal?”

The Associated Press reports that Schwarzenegger said the Obama administration is now working to create a vision for U.S. energy policy. He said he has had conversations with federal officials and wants California to lead the country when it comes to setting low emission standards.

The governor said General Motors Corp. and Chrysler LLC have an opportunity to survive and make progress in creating cleaner vehicles. “I think the car companies need help and they should get help. Washington should be a partner in this,” he said. “I don’t think taxpayers mind if you do it the right way.”

The SAE World Congress is a four-day conference that focuses on research and development of vehicle components such as powertrains and exhaust systems, and materials such as metals and composites.

The annual event comes as automakers globally are experiencing a downturn in sales, as the recession keeps many consumers from making big purchases. Lower revenues are putting a pinch on research and development efforts at automotive companies and suppliers.

But SAE officials say despite the challenges facing the industry, it must forge ahead in creating new technologies for better, more efficient vehicles.

Schwarzenegger echoed those sentiments, adding that he’s a fan of the cars Detroit produces, including two Hummers that he owns. He turned one into a hydrogen vehicle and converted the engine of another to run on biofuels. He said vehicles like Hummers and SUVs shouldn’t be taken off the roads, but they should utilize different technologies to be more efficient and clean.

“There’s nothing wrong with the Hummer, it’s a great vehicle,” he said. “We need to get off of gas engines and on clean fuel engines.”

He also volunteered to be the first to film a television commercial — for free — promoting Detroit cars.

“Detroit is going to be back,” he said,

 

 Why Rebuild GM? - A Note from the Publisher : Play Now | Play in Popup | Download

News Blaze Interview of William Cullifer:
Alan Gray Executive Editor

Alan: William, I understand that you are interested in Rebuilding GM? Can you tell us about that?

William: Yes, I’d be happy to. There are a number of good reasons to rebuild GM I think. For starters, it’s an American Icon and it deserves to be recognized for its successes past and present. Also, what Americans need to better understand is that GM is not that far off of the track and their not asking for a handout. With that in mind, I’d like to lend a hand.

Alan: Why is this important to you?

William: Because this is an American story and it affects us all.

Alan: What prompted you to do this?

William: My interest in this topic stems from a recent interview of a GM worker on National Public Radio (NPR). As a result of the interview, I would like to support the rebuilding of GM and its workforce by lending my skills.

Alan: How do you intend to support the rebuilding of GM?

William: Specifically, I’d like to drill down into the stories documentary style using today’s Web resources to feature those that build the cars that Americans drive everyday. It’s the American workforce that’s the real essence of this story in my opinion and it’s worth documenting.

Alan: What about the GM worker interview that inspired you?

Willam: Like many Americans today, I worry about the economy and how the current situation will affect my family and those around me. The recent NPR interview entitled “Michigan Worries Economic Recovery Will Pass It By” featuring a GM employee by the name of Don Skidmoore struck a chord with me.

Alan: How so?

William: Don talked about how the plant that he works for in Michigan built the B24 back in World War II which I didn’t know. He also also talked about he’s been around long enough to witness a few ups and downs of the past but how things are really different now. Things are really different now it seems and I walked away from the interview feeling inspired by the fact that Don is trying to help others that he works with to stay upbeat. I liked to think that I’d do the same if I we’re in the simailar situation. Additionally, Don’s interview put a face to GM and made it well, human. It also got me to thinking about a time when America pulled together as one and how GM helped America through some difficult times. Last but not least, I walked away thinking about the significant contributions of the American worker to the our overall health of our economy.

Alan: Why should we rebuild GM?

William: Well, for starters, I am of the opinion that the average American doesn’t fully understand the implications of a GM failure. I’m not just talking about the economy in general because I think that it will prevail over time time. What I am talking about is erosion of the middle class. An American auto industry failure is not just a GM problem it’s an American problem. Also, lets be clear, a rebuild of GM is not a handout since I don’t think that they’re asking for that. The American car manufactures play a significant role in supporting the our country financially and the cars they build are ingrained in our culture and heritage.

Alan: Do you think that the cars will sell William?

William: Yes, I do and they have. I own a GM product, I also own a Toyota and a German car and they all have over 100,000 miles on them. While it’s true, all of them could be more energy efficient they’re still on the job. Truth is, GM builds nice cars and trucks and given the demand they can improve the items buyers want over time.

Alan: What would you say to those that say that its a business mantra that the strong survive and the weak die?

Willam: Let’s face it, even the strongest among us need support from time to time. Sure the rebuilding of GM might be painful for a period of time but I get the sense that these guys get it and I also think that they employ a lot of great talent as well. It’s not like all of the cars and trucks GM sell are bad because they’re not. Also, we’re not talking about bailing out Wall Street bailout or AIG. GM might be able to be blamed for big cars but they cant be blamed for the fact that banks stopped loaning money. That’s a simple cash flow situation. For me personally, I’m in favor of making loans available to rebuild GM that’s even better and more fuel efficient than they are today.

Alan: What do you hope to achieve with the RebuildGM.org website?

Wilam: Well, I am hopeful that this effort will support the dialogue on the topic. I’m also hopeful that your listeners will sign up for the e-mail news alerts on the RebuildGM.org website and that they will follow along with what I hope to be a documentary of sorts complete with in depth interviews, audio and video podcast and insights on this topic. Sure GM needs to retool and improve with some new and improved models and strategies but what American company doesn’t these days?

Alan:I think that’s something that Americans can get behind and they just need to go to rebuildgm.org

William: Yes, that’s right rebuildGM.org

Alan:Thank you for your time.

William: My pleasure.