After three days of hearing a federal judge has approved a plan that allows General Motors to sell its best assets to a government-run company.
The three days saw 850 objections to the restructuring plan addressed. Ultimately the judge agreed with GM’s main point that the sale was mandatory to save the company.
This ruling is a significant victory for the Obama Administration as it has been putting enormous pressure on the American auto industry to restructure in a very short amount of time.
In June, Chrysler rose from bankruptcy after only 42 days despite seeing shcallenges from three state funds that went all the way to the Supreme Court.
By Friday, General Motors will likely have be a changed company, having taken the fast track to the bankruptcy courts and coming out the other end as a smaller car manufacturer with fewer brands and a greater focus on more fuel-efficient cars like the Chevy Volt (pictured above).
As we are on the verge of seeing the Obama Administration’s Cash for Clunkers program on the verge of becoming a reality, we’re now starting to hear more dissenting voices that warn that the program might not jump start U.S. auto sales like they hoped.
Arguably, the problem comes from it seeing so many changes since it’s original introduction. It’s current form was recently analyzed by four experts at Automotive News who estimate that the bill will only result in new car sales of 70,000 – 200,000.
They base this estimate on three main issues surrounding the Cash for Clunkers program.
The first issue being that the limit of 18mpg doesn’t encompass enough vehicles. The second being that clunkers will only be able to be turned in between July 1 and November 1. And finally, they point out that most people who could afford a new car would probably already have bought one and that even with the maximum discount of $4,500 it probably still makes more sense to buy a used car.
One thing is for sure though, at very least we will see some polluting clunkers pulled off the road and replaced with newer, cleaner vehicles. Whether or not it manages to give a the struggling US auto industry a boost remains to be seen.
President Obama will file GM for bankruptcy on Monday as the U.S. government takes control of 60% of the failing automaker while the Canadian government takes 12%.
This weekend saw the final step toward bankruptcy made when the majority of GM bondholders decided to forgo disputing the filing in court and to accept trading their debt for GM stock.
The national icon of American capitalism will undergo serious restructuring as the federal government attempts to turn what’s left of it into a successful business once again.
The New York Times is reporting that President Obama intends to explain on Monday that he believes that GM can still turn a profit. Obama is expected to explain that GM can still flourish even if it continues to only sell 10 million cars per year in the U.S.
To make this happen Obama will explain that taxpayers will need to invest another $30 billion in GM to make this possible. Cut backs ill include the loss of 21,000 unionized positions and up to 20 factories. Of the roughly 6,000 GM dealerships, approximately 2,500 will be closed.
What will this mean for the future of GM’s Chevy Volt (pictured above) remains to be seen.
While the Obama Administration is definitely behind green initiatives and reducing vehicular carbon emissions, they have officially started cutting ties with hydrogen fuel-cell technology in favor of plug-in electric vehicles.
The DOE secretary Steven Chu stated yesterday that hydrogen vehicles are still 10 to 20 years from being practical and consequently the federal government will be dropping millions of dollars of hydrogen fuel cell funding from next year’s budget.
This announcement was in stark contrast to what Chu stated several weeks ago when he announced that $41.9 million for hydrogen projects.
Obviously the latest announcement has ruffled some feathers. The National Hydrogen Association immediately fired off a statement that decries the cuts as stifling to hydrogen fuel cell technology development, which they claim is showing “exceptional promise and beginning to gain market traction.”
A sentiment reflected in the fact that this year’s New York Auto Show named the hydrogen fuel cell powered Honda FCX Clarity (pictured above) was named the World Green Car of the Year.
What do you think? Is hydrogen technology worth investing in or is the Obama Administration right to just focus on electric cars?
Chrysler is expected to file for bankruptcy today, becoming the first major automaker to file for Chapter 11.
President Obama was scheduled to deliver a noon ET address to discuss the bankruptcy plan. The Treasury is expected to provide financing for the company while it is in bankruptcy with the intent that the automaker will reposition itself as a smaller company under the umbrella of Italian automaker Fiat. Chrysler chief executive Robert Nardelli will be replaced by the management of Italian automaker Fiat.
Reportedly, under the plan, the flailing company will receive billions more in aid from the United States and Canada, where the company has much of its operations.
President Obama said it was “not yet clear” whether Chrysler would have to move forward with bankruptcy.
“I am actually very hopeful, more hopeful than I was 30 days ago, that we can see a resolution that maintains a viable Chrysler automobile company out there. The fact that the major debt holders appear ready to make concessions means that even if they ended up having to go through some sort of bankruptcy, it would be a very quick type of bankruptcy.”
Despite the negative reaction from the Obama administration over GM’s pricey Chevy Volt, it’s still the basket that GM has its eggs in. While it’s a very interesting time with the current economy, brutal levels of unemployment and the major US car manufacturers on the brink of oblivion, it’s nice to see that GM has a sense of humor. Because the above ad has to be a joke, right? Wait, it’s not? Oh. My. God. What were they thinking?
President Obama announced plans to buy 17,600 American-made, fuel-efficient cars and hybrids for the government fleet, in an effort to salvage flailing U.S. automakers and promote environmentally friendly cars.
Obama plans to spend $285 million in stimulus funds by June 1 to buy fuel-efficient vehicles from the big three: GM, Ford and Chrysler. The purchase is slated to include 2,500 hybrid sedans, the largest one-time purchase of hybrid vehicles to date for the federal fleet.
“This is only a first step, but I will continue to ensure that we are working to support the American auto industry during this difficult period of restructuring,” Obama said in a statement.
The Obama administration said that the initive will reduce the government’s gasoline consumption by 1.3 million gallons a year and relieve the atmosphere of 26 million pounds of carbon-dioxide gasoline vehicles would otherwise release.
Was it GM and Chrysler’s failure to fully address Obama’s environmental plans for the auto industry that prevented further bailout funds? Both Chrysler and GM had submitted plans detailing how they’d use the funding to help salvage their companies, however both sets of plans were deemed “not viable.”
Reportedly, among their reasons was that neither planned on going green enough. The Obama administration laid out a “Path to Viability” for both companies, which emphasized allocating resources towards developing and selling fuel efficient vehicles.
The “Path to Viability” laid out by the Obama administration states, “Industry financial analysts and industry experts are nearly unanimous in their views that, to be competitive in the decades to come, auto companies will need to transform their processes and products to improve efficiency, reduce costs, and offer higher quality, more fuel efficient fleet.”
Good news for the electric vehicle industry. President Obama announced $2.4 billion in grants he intends to designate to the electric vehicle industry. After promoting environmentally friendly vehicles on Jay Leno last night, the auto industry is reveling in the news that Obama plans to put one million of the environmentally friendly vehicles on the roads by 2015.
“We can let the jobs of tomorrow be created abroad or we can create them here in America and lay the foundation for lasting prosperity,” Obama said while touring the Southern California Edison Electric Vehicle Technical Center.
Operating for 16 years, the Edison Electric Vehicle Center maintains a fleet of more than 300 electric and gas-electric hybrid vehicles that it says has logged more than 17 million miles.
“We’ve been at times feeling maybe a little lonely out there with our support for electric transportation,” Edison International Chairman Ted Craver Jr. said after showing Obama around the plant. “To have this recognition, this exposure of electric transportation and what we have been able to accomplish is just a real thrill for the company.”
“Whether you capture everybody’s enthusiasm and get the adoption, of course, is part of what all of this is about,” Craver said of Obama’s plan to put one million more electric vehicles on the road. “To get people to understand what the benefits are and how it could really be good for the system and good for the individual.”
President Barrack Obama has made it clear that he considers the environment a priority of his administration. He started back when he was a mere presidential hopeful in August of 2008 when he called for a million plug-in hybrids by 2015. He even traded in his V-8 Chrysler for a hybrid while on the campaign trail.
Now, in office his economic stimulus package provides about $80 billion for renewable energy, increasing energy efficiency, improving and expanding mass transit, updating the electrical grid and research.
This Thursday, President Obama will continue to emphasize the role that hybrids and other clean vehicles play in America’s future by visiting the Southern California Edison Electric Vehicle Technical Center in Pomona to check the progress being made by SCE and Ford on their clean vehicles like the Escape hybrid.
