The End Of An Era

General Motors announced on Monday that the company will cut 21,000 hourly jobs and dissolve its Pontiac brand within one year.  Once labeled as GM’s  “excitement division,” the company that helped create the muscle car niche in the US auto market with the Lemans GTO in the 1960’s will soon be unceremoniously put to rest in a fashion similar to Saturn, Saab, and Hummer.  

M has been surviving on federal loans for several months and is under pressure from the Obama auto task force to restructure by June 1 or face bankruptcy.  GM’s fourth try at an approved viability plan reflects the decision to do away with Pontiac and focus on smaller more sustainable operations. Even though Pontiac was GM’s third best seller in 2008, GM decided to put a halt on Pontiac so the company can focus on what they call their “four core brands” Chevrolet, Buick, GMC, and Cadillac which GM views as the most profitable. GM also said that they will be restructuring their US dealer organization by getting rid of 40% of their dealerships by the end of next year.

Auto Makers Thinking Universally

Mass production of electric vehicles took a huge step forward on Monday at a technology fair in Hanover, Germany. RWE, a German energy and natural gas utility company has announced an agreement between Volkswagen, BMW, Ford, General Motors, Fiat, Toyota and Mitsubishi to universalize plugs for electric cars. “A car must be able to be recharged in Italy in exactly the same way as in Denmark, Germany or France," a spokesperson from RWE said in a press release.  The plan is for a three-pronged, 400-volt plug that will rest where the gas lid sits on an internal combustion engine. RWE says that it will only take a matter of minutes to charge your car at a charging station. It is unclear at this point whether or not this technology will be implemented in the first generation of electric vehicles in the US such as the Chevy Volt, but the agreement is viewed as a major stepping stone towards making electric cars more practical and competitive.  

GM Teaming Up With Segway Launches Project PUMA

Charged with laying out a vision of the future by President Obama’s Auto-Task Force last week, GM introduced Project PUMA to the public on Tuesday.

PUMA, which stands for Personal Urban Mobility and Accessibility, is the result of a partnership between GM and small vehicle company Segway. The 700-pound, two-seat vehicle can reach speeds of up to 35 mph and is powered by lithium ion batteries that can travel approximately 35 miles on a single charge. The easily maneuverable PUMA is ideal for crowded cities.

Not so much SUVs. According to GM, gas-guzzling SUVs average just over 18 mph and between 30-40 percent of fuel is wasted looking for a place to park. And you thought the meters were expensive!

The PUMA prototype is fully operational, and a next generation model is expected to be unveiled to the press later this year.

Ford Falls In Line, Offers Advantage Plan

In light of slumping sales figures, Ford announced last week that they will be offering an assurance plan similar to those currently available for GM and Hyundai. Ford is hoping that the new program  that they call the Ford Advantage Plan  will help restore consumer confidence and get customers back into Ford dealerships. 

The Ford Advantage Plan is available now through June 1st, and can be applied to all Ford, Lincoln, and Mercury vehicles. The plan  offers zero percent financing and covers payments in excess of $700 for as many as 12 months in the event of the customer loosing his or her job.

Washington Takes Tough Stand Against Automakers

President Obama announced this week that the government is rejecting the turnaround plans by General Motors and Chrysler, and has denied both automakers more long term federal aid based on the viability plans that they presented late last year. The president also implied that bankruptcy is a very real possibility for one or both of the companies. The two Detroit automakers have to date received over $17 billion in federal aid and have been under the magnifying glass to illustrate sustainable operations.

In an effort to regain consumer confidence, president Obama also announced that the government will insure new car warranties issued by GM and Chrysler even if the companies dissolve. Obama has stated that the goal of congress and US automakers is to “lead the world in building the next generation of clean cars” and that currently the American auto industry “is not moving in the right direction fast enough to succeed.”

Deemed as too small to survive on its own, Chrysler was granted 30 more days of federal funding to reach an agreement with Italian automaker Fiat, or another automaker. Fiat and Chrysler had been working on a proposal where Chrysler would receive small car technology, transmissions, and other manufacturing techniques  and in exchange Fiat would assume 35 percent stake in Chrysler.

General Motors was granted 60 additional days of federal funding to revise its turnaround strategy. As part of the negotiations, GM’s long time CEO Rick Wagoner was forced to resign from his position and walk with a $23 million pension plan. In quick response, GM has introduced a new assurance package similar to the successful approach by Hyundai. In the event of a new car purchaser being laid off or fired within the first two years, GM dealerships will cover as many as 9 car payments worth up $500 each. GM calls the program Total Confidence and it is available through April 30.