Projo Cars Blog

General Motors could tap some of the $50 billion in aid it has received from the U.S. government to help finance its plan to restructure its European Opel unit, GM's top executive said Thursday, according to The Associated Press.

But CEO Fritz Henderson said it would do so only if necessary and would try to finance the $4.5 billion (3 billion euros) restructuring with loans from European countries, money generated by Opel and by reducing royalties that Opel pays GM for use of technology.

Henderson's statements come two days after GM's board shocked German leaders and labor unions by rejecting a plan to sell 55 percent of Opel to a partnership of Canadian auto parts supplier Magna International Inc. and Russian lender Sperbank.

For my research into Wednesday's article on Bob Roy's 1988 Buick Reatta, Roy leant me his copy of the February 1988 issue of Automobile.

The magazine not only contained a review of the Reatta, but also an article about the Detroit Three buying exclusive European carmakers.

Talk about a different era!

Titled "Why is Detroit buying the Grand Marques?" it discusses the 1986 acquisition of Lotus by General Motors; Ford's purchase of Aston Martin in 1987; and, most improbable of all given recent history, Chrysler's acquisition of Lamborghini, also in 1987.

None of the purchases worked and the companies were sold following years of losses. Typical of the rarified world of specialty car makers, the paper trail of subsequent owners is pretty arcane.

Lotus
Take Lotus, the iconic British racing and sports car company. GM sold the company in 1993 to A.B.C.N. Holdings of Luxembourg which was controlled by Italian businessman Romano Artioli.

Artioli also owned Bugatti, which went belly up in 1995 and was subsequently sold to Audi. To raise money, Artioli sold a majority share in Lotus to Proton (Perusahaan Otomobil Nasional Bhd) of Malaya in 1996.

Aston Martin
Aston Martin has ended up owned by an English group of investors backed by Kuwaiti money. Ford had placed the company in its Premier Automotive Group which at one time included Lincoln, Jaguar, Mercury and Land Rover.

However, in 2006 Ford decided to sell Aston Martin as oart of its restructuring and the company sold in 1987 to a group made up of British auto racing tycoon David Richards, American banker and Aston Martin collector John Sinders and two Kuwaiti companies, Investment Dar and Adeem Investment.

Lamborghini
Meanwhile, Lamborghini's road to its present ownership by Audi has been arcane in the extreme. It started back in 1974 when founder Ferrucio Lamborghini sold out his remaining interest to Swiss businessmen and retired.

The company entered bankruptcy in 1978 and in 1980 the Mimran brothers were appointed to run the company. They invested money in a new factory before selling it to Chrysler which was then headed by auto legend Lee Iacocca.

In 1994, Chrysler sold Lamborghini to three Indonesia companies: Megatech,V'Power and Mycom. They sold it to Audi in 1998.

Survival
Given their ups and downs, it's actually surprising that all three marques still exist. Think of all the marques, some like Studebaker and Pontiac very long lived, that have disappeared into the shadows of history.

At any one time in their recent past any one of these companie could have closed up.

Their markets are so small and specialized. But maybe that is what has kept them alive - investors with deep pockets who not only see business opportunities but are drawn to something very special.

"The dream for me was to own an Aston Martin, never to own part of the company," John Sinders told the BBC after the acquisition in 2007. "It's a dream come true."

Peter C.T. Elsworth

There was a lot of encouraging news this week, with last month's U.S. auto sales indicating the market may have finally bottomed out.

Most carmakers scored marginal gains against last year - a big deal in a year that has seen double digit declines for months.

At the same time, the numbers are being compared against last October which was when the stock market crashed. And that setback followed months of declining sales due to the hike in oil prices to $147 a barrel and gas prices to $4 a gallon.

So it will be interesting to see what November brings in terms of auto sales.

Most companies scored modest gains - Nissan up 5.6 percent, General Motors up 4.7 percent, Ford up 3.0 percent, Toyota up less than one percent and Honda flat, according to The Associated Press.

Chrysler's sales were down 30 percent and new owner, Fiat CEO Sergio Marchionne and his team, spent about six hours on Wednesday explaining their game plan to industry insiders and the media in Detroit. By all reports, very businesslike and no big changes or surprises for a couple of years at least.

Meanwhile, Hyundai Group's October sales were up a whopping 49 percent! But even there, a note of caution should be sounded. Hyundai's October U.S. sales were about 33,000 compared to GM's 178,000 and Toyota's 152,000. A smaller base always distorts the percentage change, up or down.

Overall good news, certainly, but don't break out the champagne just yet.

Peter C.T. Elsworth

Toyota announced Thursday a surprise profit last quarter and trimmed its projected red ink for the year, underlining the gradual recovery under way for Japan's giant automakers, according to The Associated Press.

The world's largest car company attributed the unexpected profit - its first after three losing quarters - to government measures around the world designed to boost sales of environmentally friendly cars and other vehicles.

It was the latest in a string of healthier reports and forecasts from rivals like Honda and Nissan adding to growing evidence that carmakers are starting to rebound after being battered by the deepest industry downturn in years.

Fiat and Chrysler Group are scheduled to spend an almost unblievable six hours Wednesday briefing analysts and journalists about the U.S. automaker's five-year business plan, or survival plan, if you prefer, according to USA Today.

Word already has spread about a number of Chrysler, Dodge and Jeep models that are supposed to be discontinued by 2012. Less has been said about what Fiat Group models might replace them.

The accuracy of those reports, which have kept Chrysler scurrying to stamp out rumors without giving away too much in advance, will be verified or refuted today.

BERLIN -- Germany's politicians fumed with anger and Opel workers canceled cost concessions and readied walkouts after General Motors abandoned the sale of its European subsidiary to parts maker Magna International and Russian lender Sberbank, according to The Associated Press.

Klaus Franz, Adam Opel GmbH's top employee representative, called it a "black day" and said workers would start brief work stoppages Thursday.

GM's decision Tuesday to abandon the deal was a sharp blow to government and labor officials who supported it as the restructuring option that would save the most jobs in Germany.

The German government had put up a euro1.5 billion ($2.2 million) bridge loan to keep Opel afloat as a buyer was sought, and promised euro4.5 billion in further financing so Magna International Inc. and Sberbank could take a 55 percent stake.

Magna had said it planned to cut about 10,500 of the 50,000 Opel jobs in Europe, with less than half the job cuts, or around 4,500, in Germany. It also said it would keep all four German plants open.

With the deal now off, German workers face the prospect of a restructuring that is less favorable to them.

After months of roller coaster-like sales, the auto industry offered signs of recovery from its yearlong slump on Tuesday, as most automakers reported higher levels of U.S. sales in October, according to The Associated Press.

GM, the largest U.S. automaker, reported its first monthly sales gain in almost two years, while Hyundai and Subaru were huge winners thanks for their popular models and fuel-efficient sedans. Other top automaker - Toyota, Ford, Nissan - also posted higher sales.

The mood was in contrast to a year ago, when consumers were frightened away from showrooms by the early effects of the financial meltdown, plunging stock markets and the credit freeze.

Automakers had said this October would be a test of the strength of the auto market after the volatile effects of the government's Cash for Clunkers program. The industry staggered through a tough September following the summer's clunker-fueled sales surge.