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Auto Bailout


In Pictures: The Bailout

Chrysler Financial Starts Paying Uncle Sam Back

Good news, taxpayers.  We're starting to get our money back from the auto bailout.

The Wall Street Journal reports, "Chrysler Financial said Tuesday it reimbursed the federal government $1.5 billion, becoming the first auto-sector company to pay off the loans provided by the U.S. Department of Treasury."  Chrysler Financial was the main lending arm of Chrysler corporation for many years, but in the aftermath of the bailout, GMAC now has that role. 

Bloomberg explains, "Chrysler LLC declared bankruptcy April 30, severing ties with the finance company, and sold the bulk of its assets to a company controlled by Fiat SpA on June 10 called Chrysler Group."  Chrysler Financial, though independent of the Chrysler Group, continues to offer loans to some auto dealers and is allowed to offer auto loans to individual customers, but is locked out of many dealerships by GMAC's agreements.

Chrysler Financial accepted loans from the government's Trouble Asset Relief Program (TARP).  The Journal reports, "The money was plowed into new consumer incentive programs and used to fund 85,000 consumer loans for the purchase of Chrysler cars and pickup trucks. Chrysler Financial had five years to pay off the loan."

The move may not be the start of a trend.  The AP reports, "Chrysler Financial said its original TARP loan contained provisions that increased its costs over time, motivating the company to pay off the loan quickly."

If you're in the market for a new car, check out the U.S. News rankings of this year's best cars as well as this month's best car deals.

Ex-GM CEO Gets Millions Post-Bailout

Posted: Jul. 15, 2009 11:07 a.m.

We should all hope to be fired by Barack Obama.

The President insisted that former General Motors CEO Rick Wagoner step aside as a condition of bailing out the troubled company in March, but apparently, Wagoner made out fairly well in the deal.  Continue

Head of Auto Task Force Steps Down

Posted: Jul. 14, 2009 11:07 a.m.

Steven Rattner, head of President Obama's auto industry task force, has resigned from his post overseeing the government's efforts to boost the struggling U.S. auto industry. Continue

GM Exits Bankruptcy

Posted: Jul. 10, 2009 10:07 a.m.

The New York Times reports, "General Motors completed a major step in its turnaround on Friday and closed the sale of its good assets to a new, government-backed carmaker, at a speed unimagined by auto and bankruptcy experts even six months ago." Conintue

Bill to Reopen Shuttered Dealers Wins Committee Approval

Posted: Jul. 09, 2009 10:07 a.m.

The dealers that were closed by Chrysler or slated to be closed by GM may have a new lease on life.

The Detroit Free Press reports, "By a unanimous vote, a U.S. House committee has approved a measure that would restore 2,100 dealers either cut or scheduled to be closed by General Motors Corp. and Chrysler Group LLC."  Continue

GM Reorganization Continues

Posted: Jul. 09, 2009 10:07 a.m.

General Motors' bankruptcy reorganization continues, and some reports indicate it could be over soon.

AFP reports, "General Motors could exit bankruptcy protection very soon by selling its best assets to a new, leaner company in which the US government will hold a majority stake."

GM to Accept Some Product Liability

Posted: Jun. 29, 2009 11:06 a.m.

The Wall Street Journal reports, "General Motors Corp., under pressure from state attorneys general, agreed to assume legal responsibility for injuries drivers suffer from vehicle defects after the auto maker emerges from U.S. bankruptcy protection. The concession means consumers who are injured in car accidents after GM emerges from bankruptcy protection will be able to bring product-liability claims against the government-owned auto maker."

Report: China May Block Hummer Sale

Posted: Jun. 29, 2009 10:06:16 a.m.

GM's plan to sell its underperforming Hummer division to an obscure Chinese construction equipment manufacturer may have hit a snag.

USA Today reports, "China's planning agency is likely to reject a Chinese company's bid to acquire General Motors' Hummer unit, in part because its gas-guzzling vehicles conflict with Beijing's conservation goals, state radio reported." The agency, known as the National Development and Reform Commission, may also block the sale on the groups that "Sichuan Tengzhong Heavy ...

Legal Bill for Chrysler Bankruptcy? $21 Million...in May

Posted: Jun. 26, 2009 10:06:05 a.m.

Failure isn't cheap, apparently. Bloomberg reports, "Chrysler LLC's law firm Jones Day said it incurred fees and expenses of $12.7 million in May in its work for the bankrupt automaker, while other lawyers and advisers seek $8.5 million more, according to court filings." Chrysler had already spent "$18.9 million from November to May, partly to try to keep itself out of bankruptcy," before finally succumbing to the court process.

According to Reuters, Jones Day employed ...

Lawsuits Seek to Block GM Bankruptcy Sale

Posted: Jun. 22, 2009 11:06 a.m.

General Motors' bankruptcy plan is headed to court...again and again. The Detroit News reports, "The proposed sale of General Motors Corp.'s best assets drew a flurry of objections Friday from attorneys general in 10 states, union retirees and small bondholders, setting up potential speed bumps in the automaker's path out of bankruptcy." Among the most serious challenges to the bankruptcy plan is the objection by ten states, who argue that "the asset sale would deprive consumers the right to pursue product liability claims." . . .

Deal Reached on Saab Sale

Posted: Jun. 16, 2009 11:06:08 a.m.

 Fans of oddly-placed ignitions and clamshell hoods, rejoice. In its quest to shed brands, GM has finalized a deal to sell Saab.

According to Reuters, "Sweden's Koenigsegg, maker of some of the world's fastest and most expensive sports cars, has struck a deal to buy loss-making Saab Automobile from General Motors, the companies said on Tuesday."

The New York Times reports, "The companies said they had signed a memorandum of understanding, contingent on $600 million of financing from ...

GM: No, Really, Stop Buying our Stock

Posted: Jun. 11, 2009 10:06:02 a.m.

General Motors would like to remind you that it's worthless. It's bankrupt. It's gone. It has no value.

The Los Angeles Times reports, "General Motors Corp. filed for bankruptcy protection, got kicked off the New York Stock Exchange and out of the Dow Jones industrial average. And its stock has mostly been rising ever since. In fact, GM has been one of the hottest issues on Wall Street over the last six trading sessions, surging from 61 ...

Chrysler Bankruptcy Ends; Supreme Court Clears Sale to Fiat

Posted: Jun. 10, 2009 10:06:50 a.m.

The New York Times reports, "With the touch of pen to paper and a simple wire transfer, Chrysler completed its deal with Fiat on Wednesday morning, largely ending its quick trip through bankruptcy.  The last obstacle to an exit -- a temporary stay imposed by the Supreme Court -- was lifted late Tuesday, after the nine justices declined to hear a challenge of the deal by three Indiana state funds and several consumer groups."

The Wall Street Journal explains, "The Supreme Court ...

GM Officially Files Bankruptcy

Posted June 1, 2009 10:29:39 a.m.

   

At 7:57 a.m. this morning, a court clerk in New York accepted a Chapter 11 bankruptcy petition that launches what many analysts are calling the most complex bankruptcy case in U.S. History.

In the filing, the New York Times reports, "G.M. said it had $82.3 billion in assets and $172.8 billion in debts."  The filing "culminates a remarkable four months of confrontation between Washington and Detroit that is expected to result in a drastic downsizing of the company. It also places the government in uncharted territory as a business owner, as it takes a majority ownership stake in the company during its restructuring."  . . .

Court Approves Chrysler Sale to Fiat

Posted: Jun. 01, 2009 10:06:11 a.m.

On the same day that General Motors filed for bankruptcy protection, cross-town rival Chrysler took what may be its most significant step toward emerging from bankruptcy.  The Washington Post reports, "A federal bankruptcy judge approved the sale of most of Chrysler LLC's assets to Italy's Fiat, moving the American automaker a step closer to its goal of a quick exit from court protection."  A federal judge rules "that a speedy sale - the centerpiece of a restructuring plan backed ...

Reports: Despite Bondholder Deal, GM to File Bankruptcy Monday

Posted: May. 29, 2009 12:05:09 p.m.

General Motors surprised auto industry observers by reaching an 11th-hour deal with a group of bondholders who own $27 billion worth of the company's debt, but press reports say the development won't stave off bankruptcy.

Bloomberg reports, "General Motors Corp., the world's largest automaker until its 77-year reign ended in 2008, plans to file for bankruptcy protection on June 1 and sell most of its assets to a new company, people familiar with the matter said. GM ...

Union: GM Won't Import Cars from China

Posted: May. 29, 2009 12:05:56 p.m.

General Motors' plan to import tens of thousands of Chinese-built cars to the U.S. over the next several years may be on hold.

The AP reports, "General Motors Corp. agreed not to import Chinese-made subcompact cars to the U.S. as part of its concession deal with the United Auto Workers, union President Ron Gettelfinger said Thursday. Instead, the company will build up to 160,000 of the cars per year at an existing U.S. factory and sell ...