General Motors, Chrysler and Ford sales rise, perhaps

Could it possibly be true that U.S. automobile companies General Motors, Ford and Chrysler are reporting sales gains and, assumedly, profits instead of more red ink?
That is what U.S. automakers said Tuesday, even though many of the figures were adjusted to allow for corporate changes, like Ford's sale of its Volvo brand, and the bankruptcies of GM and Chrysler, according to the Reuters international news service. The announcements were not well-received by stock market investors, who sent Ford shares down nearly 2 percent, even though normally buoyant Toyota and Honda sales fell in July. But the sales increases were met with enthusiasm by some industry analysts, who had feared the U.S. economy was facing a double-dip recession. "In June, you had the feeling that maybe the industry wasn't out of the woods, and there was a lot of talk of a double dip. But June really seems to have been a blip," Al Castignetti, the head of Nissan sales in the U.S. market, told Reuters. Yeah, maybe. The big problem is that auto industry players talk on and on but what they say may not have anything to do with what's really going on. GM and Chrysler have been allowed to take billions of dollars worth of debt off their balance sheets -- without paying the money back, of course, and eventually sticking the taxpayer with the bill -- and to re-enter the world of real companies even though the U.S. taxpayer owns major amounts of their shares. How can anyone ever trust company reports again? Ford did not take bailout money or file for bankruptcy but have shown little resiliency going forward. Where are the new U.S. car models? Where are the new head-turning designs? Doesn't anyone in the industry care that nobody talks about American cars anymore unless they work for the Justice Department? "We are certainly optimistic about our prospects for the third quarter," Ford's U.S. sales chief, Ken Czubay, told Reuters. Yeah, right.

New GM venture raises uncomfortable questions

Is anyone else uncomfortable about Friday's announcement by post-bankruptcy General Motors, still the largest U.S. automaker, that it would create new venture capital firm to invest in new technologies? The new GM, now 61 percent owned by the U.S. government, said it would put $100 million into a new company to help startup companies working on renewable fuels, advanced materials and other automobile-related ventures. The announcement, reported by the New York Times, came amid an almost unbelievable run of good fortune for the company, which was able to shed a list of troubled subsidiaries in its short trip to bankruptcy court. GM reported its first quarterly profit in three years while its chief rival, the usually unimpeachable Toyota Motor Co. -- is still preoccupied with the discovery of manufacturing defects that caused the recall of millions of cars worldwide and resulted in millions of dollars in fines, so far. “We are constantly looking for ways to deliver the best technology for our customers,” Stephen Girsky, a G.M. executive, said in a written statement. “Our goal is to nurture these innovative technologies to help bring them to market, and to ensure our customers have access to the best technology available.” Spokeswoman Sherrie Childers-Arb told the Times that the new subsidiary, General Motors Ventures, had already identified companies to invest in. But will it be the new, nimble, embarrassed and chastised GM that will be buying into startups with promising ideas, or the old GM that wants to buy new companies to block their products from gaining market share? That's what happened, we still can recall, to the early electric car and, even earlier, to transit systems across the country.

Toyota makes it look easy -- automaker races back in the black

Well, maybe that's why it pays to hire a good accountant. Toyota Motor Corp. announced Monday that it is profitable again despite being accused of safety lapses, paying millions of dollars in fines and being forced to recall millions of cars around the world. Toyota, the world's largest automaker, reported a profit of $1.2 billion in the first quarter of 2010 after losing millions of dollars in 2008 and 2009. “After taking over amid a storm, I wanted to do anything to avoid a third straight year in the red,” said Akio Toyoda, Toyota's president, according to the New York Times. Toyoda said the automaker had made "tough and anguishing decisions" to return to profitability, including cost-cutting and layoffs in Japan and in other countries where Toyota cars and trucks are manufactured. The company said it expected to make more than $3 billion this year as its worldwide sales surged, particularly in the United States and China. The rebound surely is good news for slumping U.S. automakers General Motors, Ford and Chrysler, if it reflects worldwide trends. GM and Chrysler borrowed billions of dollars from the U.S. and Canada to stay afloat during the global recession. But Toyota's good news could not completely obscure problems looming in the near future for the automaker. The U.S. National Highway Traffic Safety Administration announced this week that it was investigating the company's handling of a steering defect in its popular Tacoma truck after denying it for a year. “We’re still in a storm — there’s been no change on that front,” Toyoda said. “But from the storm, we’ve begun to see glimpses of sunny but faraway skies. I feel that we’re starting to approach safer waters.” Toyota still faces lawsuits from car buyers claiming injuries causes by acceleration problems and a series of shareholder suits. U.S. regulators also are considering imposing additional fines on the automaker, which paid a $16.4 million fine -- the largest permitted under U.S. law -- to the Transportation Department in April.

General Motors claims profit -- but only if discounts its expenses

Maybe it was naive to have assumed that General Motors, the top U.S. automaker, would have been required to stop playing games and be upfront about its finances as a condition of being saved from the junkyard by billions of dollars from U.S. taxpayers. Well, at least the naivete was short-lived. Today's release of its first detailed financial statement since emerging from bankruptcy protection shows that GM has not forgotten the sleight-of-hand that enabled it to pretend to be solvent for years despite epic mismanagement that caused what was then the world's largest automaker into bankruptcy. Focusing on what it called "positive cash flow of $1 billion since its bankruptcy," GM -- now known as General Motors Co., instead of General Motors Corp. -- said it wasn't counting the more than $4 billion it has to spend to settle with the United Auto Workers union to pay with retiree health benefits, according to the New York Times. If this is an example of what the company called its "fresh start" accounting principles since bankruptcy, it looks like there was nothing learned from its near-collapse as well as nothing to be learned from its official reports. Maybe what GM is doing is standard practice for bailed-out businesses, but it's no more reassuring -- especially since the company is now more than 60 percent owned by the U.S. government. “We don’t need to make that much improvement to get to profitability,” GM Chief Financial Officer Christopher Liddell told analysts and reports in a conference call, the Times said. “It’s getting close to break-even if you get rid of those one-off items that happened in the fourth quarter.” Well, any company would post a profit if it left losses off its balance sheet, right? But would that paint an accurate picture of its financial health? Still, many analysts said GM was considerably healthier than a year ago. “It would be a really impressive achievement if they were able to make a profit,” Rebecca Lindland of IHS Global Insight told the Times. “They’ve been able to do an awful lot, and all of those things should lead to a profitable picture.” GM said it would finish repaying $8.3 billion in loans from the U.S. and Canadian governments by June. The other U.S. automaker that took billions in bailout cash from the government, Chrysler Corp., is expected to release its first financial statement since its bankruptcy later this month, the Times said. Narayanan Jayaraman, a finance professor from Georgia Tech's College of Management, told the Times that he thought GM's prospects were better than Chrysler's. “Between G.M. and Chrysler, if I had to place a bet, I would place it heavily on G.M.,” Jayaraman said. “They seem to be doing the right things. They have some headwinds, so help from the economy would be good, but even in the absence of that they can do well.” He said the government could begin selling the millions of dollars in GM shares no earlier than 2011, after GM has "two or three quarters of profitability." GM's bankruptcy wiped out $83 billion in liabilities, the Times said.

General Motors changes focus to profit, not survival

News from Detroit that General Motors could make money this year after losing as much as $88 billion since 2004 probably comes as a big surprise -- and a good one for U.S. taxpayers, who own 60 percent of the country's largest automaker as a result of government efforts to save the company. GM's new chief financial officer, Christopher Liddell, who left a similar job at Microsoft in December, said the company had a "reasonable chance" of earning money in 2010, according to the New York Times. "Preconditions for success are extremely good," Liddell said at a news conference at GM headquarters. Liddell also said GM was considering a stock offering this year that could substantially increase the value of the government stake, the Times said. "It's an important part of rejuvenation for the company," he said, "but it's important that we do this at the right time." Liddell said GM would wait until the national economy and the automobile market had improved before attempting to sell shares, the Times said. General Motors, once the world's largest carmaker before losing that title to Toyota, emerged from bankruptcy protection last summer. Liddell said the company was in better financial shape than critics contended, and said it had made substantial progress since its bankruptcy filing in 2009.

General Motors signals improving financial situation with bigger investments

Tuesday's announcement by General Motors of more than a billion dollars in increased investment in its European operations could be a signal that the worst is over for U.S. automakers in the global economic slowdown. GM said it would pump the additional money into its ailing Opel operation in Germany and its Vauxhall subsidiary in Great Britain, according to the New York Times. The added investment more than triples the automaker's previously announced investment in the European brands, and appears designed to leverage promised subsidies from European governments. GM has asked for $2 billion in loan guarantees in addition to a $2.7 billion package of subsidies from Britain, France, Spain and other countries with Opel factories, the Times said. Those governments and unions in Europe had demanded that GM pay for 50 percent of the cost of restructuring its operations, the Times said. The United States government has paid billions of dollars to rescue General Motors, once the world's largest automaker and still the largest in the United States, and will own half of the legendary U.S. automaker when it emerges from bankruptcy reorganization. GM released a statement calling the increased investment “a vote of confidence in Opel/Vauxhall’s long-term business strength.” But the head of Opel/Vauxhall's European works council, Klaus Franz, said the new money meets the demands of the countries and unions in Europe. "They saw we were running out of cash and running out of time," Franz said. "I think they saw that there was no alternative if they wanted to get aid from European governments." British business minister Ian Lucas and Kurt Beck, premier of the German state of Rhineland-Palatinate, welcomed GM's announcement. "After a long period of uncertainty, it's high time to offer the Opel factories and employees reliable prospects for the future," Lucas and Beck said in a joint statement. GM's increased investment actually was signaled Monday by Nick Reilly, the president of GM Europe, who said in Geneva that GM believed it could not continue to be a global automaker without a major presence in Europe. Reilly said that was the explanation for GM's decision in November to back out of a deal to sell a majority of Opel to Magna International, a Canadian-Austrian auto parts company, and a Russian partner. Opel still plans to close a factory in Belgium and to cut 8,300 jobs in Europe, the Times said.

GM announces shutdown of Hummer

Just when it seemed that General Motors had started down the yellow brick road to solvency comes word that a deal to sell its money-losing Hummer brand to a Chinese company had collapsed. Sichuan Tengzhong Heavy Industrial Machines said Thursday that it was pulling out of an agreement reached eight months ago to buy Hummer, the builder of large sport utility vehicles modeled after the military's Humvee troop transport vehicle. The Chinese company said it was unable to get approval from the Chinese government for the $150 million deal, according to the New York Times. General Motors, which has been trying to sell off subsidiaries in an effort to emerge from bankruptcy protection, said it would close the brand. GM finally was successful this week in selling Saab, but has already announced the closure of Pontiac and Saturn. Had the deal been approved, Tengzhong would have been the first Chinese company to sell vehicles in North America, the Times said. "Tengzhong worked earnestly to achieve an acquisition that it believed to be a tremendous opportunity to acquire a global brand at an attractive price,” Tengzhong said in a statement.
“We have since considered a number of possibilities for Hummer along the way, and we are disappointed that the deal with Tengzhong could not be completed,” said John Smith, G.M.’s vice president for corporate planning and alliances. “G.M. will now work closely with Hummer employees, dealers and suppliers to wind down the business in an orderly and responsible manner.” Hummer caused a splash after its introduction in 1992 with celebrity endorsements, including by California Gov. Arnold Schwarzenegger, who owned several of the powerful-looking SUVs. GM bought the company in 1999. But rising fuel prices dimmed demand for the vehicles, and it became a symbol of inefficiency because of its gas mileage. Hummer sold only 265 vehicles in the United States in January and just over 9,000 last year, a decline of 67 percent, the Times said.

U.S. automakers say "domo arigato" to Toyota

Maybe all U.S. automakers should call their next new vehicles by the name "Domo Arigato," which means "thank you very much" in Japanese. With the Toyota Motor Corp. on the ropes following a series of safety recalls that has so far reached 8 million vehicles and sent its stock price plummeting, the U.S. Congress announced an investigation into the formerly formidable Japanese carmaker's response to the crisis. In addition to recalling millions of cars in the United States, Toyota has suspended most of its U.S. manufacturing and sales and expanded its recall to include vehicles made in China and in Europe, according to the Reuters international news service. U.S. Rep. Henry Waxman (D-Los Angeles), chairman of the House Energy and Commerce Committee, said Thursday he planned a hearing to see "how quickly and effectively" Toyota has responded to complaints about malfunctioning gas pedals. "Like many consumers, I am concerned about the seriousness and scope of Toyota's recent recall announcements," Waxman said. The recalls and repairs alone will cost hundreds of millions of dollars to Toyota, which last year supplanted General Motors Corp. as the world's largest automaker. Combined with the expected loss of customers and the damage to its reputation, the crisis is a still-growing disaster for Toyota. The car company told its dealers on Thursday that it would take months to repair all of the affected vehicles. Toyota said it would send recall notices to vehicle owners in lots of 10,000 to try to avoid overwhelming car repair shops, according to spokesman Mike Michels. "Obviously, the dealers couldn't handle everybody coming all at once," Michels said. "So that does have to take place over time. This volume of vehicles will obviously take a number of months. I don't have an estimate on that." Some U.S. dealers told Reuters they were making plans to hire additional staff and extend their hours to handle the repairs.

Saab closure could be the result of poor GM management

From New York comes word that embattled General Motors has decided to shut down Swedish automaker Saab, the iconic 3,400-employee company it bought 20 years ago. GM has been trying for months to sell off the brand as part of its bankruptcy filing but was unable to reach deals with at least two suitors, according to Cable News Network (CNN). A long anticipated arrangement with Swedish exotic carmaker Koenigsegg fell through earlier this year and a last-minute deal with Dutch automaker Spyker couldn't be concluded in time to save the brand. "Despite the best efforts of all involved, it has become very clear that the due diligence required to complete this complex transaction could not be executed in a reasonable time," said Nick Reilly, president of GM Europe, CNN reported. "In order to maintain operations, Saab needed a quick resolution. We regret that we were not able to complete this transaction with Spyker Cars." The Koenigsegg deal's collapse followed a similar pattern, with last-minute complications also scuttling that arrangement. "In the end, Koenigsegg discovered some issues they didn't think could be overcome in a timely fashion," said John Smith, GM's vice president of corporate planning and alliances. "Like everybody, we would have preferred a different outcome." Well, that's what they say and, maybe in today's worldwide credit starved business environment, that's exactly what happened. But in light of the September failure of a deal to sell GM's Saturn subsidiary, and GM's decision to shut down its Pontiac brand, there may be another dynamic at work. If the Pontiac, Saturn and Saab brands were in good shape, any carmaker -- except, perhaps, for the other bankrupt U.S. company, Chrysler -- should have been happy to own them. At the price GM should have been willing to part with them -- the largest U.S. automaker is a highly motivated seller, remember -- there shouldn't have been any reason for all three deals to fall through in such a similar manner. GM's deal to sell its Hummer brand to Sichuan Tengzhong, a Chinese heavy equipment maker, is still awaiting government approvals, CNN said.

General Motors could close Saab next week

The latest word from General Motors Corp. in Detroit is that it could close its Saab Automobile subsidiary next week if it cannot find a new buyer after a reported deal to sell the legendary company collapsed. The troubled U.S. automaker said today that its board would meet next week to decide the fate of the 70-year-old Swedish automaker, which it bought in two parts in 1990 and 2000, according to the New York Times. GM could be forced to close the 4,000-employee company because Swedish exotic car maker Koenigsegg unexpectedly pulled out of the deal Tuesday. Koenigsegg issued a statement blaming the collapse on GM taking too long to close the deal. “The time factor has always been critical for our strategy to breathe new life into the company,” Koenigsegg said. “Unfortunately, delays in closing this acquisition have resulted in risks and uncertainties that prevent us from successfully implementing the new Saab business plan.” GM appeared surprised by Koeinsgegg's decision, Reuters said. “We negotiated in good faith and we met all our timing obligations under the agreement,” said a G.M. spokeswoman, Renee Rashid-Merem. GM chief executive Fritz Henderson said he was "very disappointed" by the failure of the Saab deal. But Henderson should not have been surprised. It is the third time in the past two months that a GM brand sale was scuttled at the last minute. Its proposed sale of its Saturn brand to Penske Automotive Group collapsed just before it was final in September, and GM pulled out of a deal to sell its Opel operations in Europe last month. GM is being forced to sell off some of its parts as it reorganizes under bankruptcy court protection.

Effects of G.M bankruptcy still roiling San Francisco Bay

Did the State of California get the raw end of the deal along with thousands of autoworkers when the Toyota-General Motors joint venture in Fremont shut down last month? That's what a state panel that gave New United Motor Manufacturing Inc. a $2 million training grant in February is investigating, now that the automobile facility is scheduled to close early next year. The acting chairman of the Employment Training Panel, the little-known state agency that awarded the grant, has asked NUMMI to withdraw its request for the money in light of Toyota's announcement in August that the facility would be closing, according to the San Francisco Chronicle newspaper. "We would never have approved this if they had told us they were closing this factory in a year," said the acting chairman, Barry Broad, a labor union attorney. But NUMMI and the California Manufacturers and Technology Association, which helped train the workers, said the facility deserved the money because the training had been ongoing for months before the decision to close the plant was made. "We were hopeful that (Employment Training Panel) funding, along with other state and local programs, would enable Nummi to continue production at its Fremont facility," CMTA President Jack Stewart said, according to the Chronicle. "We expect that contractual obligations regarding completed employee training will be met." In fact, panel rules permit the agency to recover training funds when the company that gets money closes down or leaves the state. But a panel official said the $2 million was an indirect contract with CMTA, not NUMMI, so the recapture provision did not apply, the newspaper said. NUMMI received more than $18 million in training funds prior to the dispute. A spokesman for Gov. Arnold Schwarzenegger told the Chronicle that the governor's office requested the investigation.

General Motors emerges from bankruptcy after crash diet

The rich elite in the United States must be different from ordinary folks. How else to explain the behind-the-scenes maneuvering that brought the largest U.S. automaker, General Motors, out of bankruptcy in a lightning-quick six weeks and lighter by tens of billions of dollars in debt. With the completion of the sale of assets Friday to a company set up solely to liquidate them under bankruptcy court supervision, GM returns to the competitive world of automobile designing, building, servicing and selling -- largely under the same management that led the company's decline, according to Cable News Network (CNN). Of course, there'll be some major differences -- GM is now more than 60 percent owned by the U.S. Treasury. In addition, by the end of next year, the new GM will also be lighter by tens of thousands of jobs and thousands of dealerships across the country. "This is an exciting day for General Motors, one that will allow every employee, including me, to get back to the business of designing, building and selling great cars and trucks and serving the needs of our customers," GM Chief Executive Fritz Henderson said, CNN reported. "We deeply appreciate the support we've received. We'll work hard to repay the trust, and the money, that so many have invested in GM." But Henderson, who took over the top spot at GM after the Obama administration forced out then-CEO Rick Wagoner as a condition of loaning the automaker as much as $50 billion, faces a daunting challenge. GM lost most of its market share, now 20 percent of the U.S. market, in the last few decades, was overtaken by Toyota Motor Co. of Japan as the world's largest automaker, and even lost its standing as a component of the Dow Jones Industrial Average. GM also will be losing its Saturn, Saab and Hummer brands, and previously decided to drop Pontiac. Henderson even said that he didn't know if GM would be able to repay the billions it borrowed from the treasury, according to CNN, but probably wouldn't have to borrow more next year. "This is a precious second chance," he said. "There are no third chances." Even if there were, who could afford them? GM has lost $88 billion since 2005 while its debt rose to $54 billion, CNN said. Bondholders who loaned money to GM before the bankruptcy will end up with around 10 percent of the new company, CNN said, but shares will not traded until next year at the earliest.

Industry experts fear GM still stuck in same gear

Nice to hear that automobile industry experts have begun to question General Motors' decision to choose a longtime veteran insider to run the largest U.S. automaker after the federal government made removal of the old CEO a condition of extending billions of dollars in loans. Cable News Network (CNN) said today that "many" industry experts are questioning whether 25-year GM insider Fritz Henderson is the right person to make the major changes needed to turn the largely moribund carmaker around, an issue raised here three months ago. Like the Ford Motor Co. and bankrupt Chrysler Corp., GM has been unable to build fuel-efficient vehicles that could compete on quality with rival Japanese automakers Toyota and Honda, even more than 30 years after the first OPEC oil embargo heralded a sea change in world fuel supplies. GM filed for bankruptcy protection at the urging of the Obama administration on June 1. "The removal of managers and executives has been mainly at lower levels, thinning ranks and taking out layers. It's not replacing people who made the mess and created the culture," said former GM market research and planning executive Rob Kleinman. Now managing director of consulting firm RAK & Co., Kleinman said what GM needs now is a management overhaul if it is to return to profitability. "Most successful turnarounds have been led by outsiders," he said. "The fact that Fritz [Henderson] seems dedicated to keeping the management team in place makes me extremely uncomfortable." In fact, GM's domestic rivals are being run by former industry outsiders, with Ford hiring Alan Mulally from Boeing in 2004 and Chrysler now headed by Fiat CEO Sergio Machionne, who was not in the industry when he was hired by the Italian carmaker in 2004, Reuters said. "You need some fresh blood in there," said industry analyst and consultant Erich Merkle. "The culture is not one that fosters speed, especially speed to market." But Henderson insisted Fortune magazine that he can bring about the necessary changes, CNN said. "I know the industry inside and out; I know the industry well," he told the magazine. "I think that does bring some experiences that can be very helpful in terms of change because I know what needs to be changed." And David Cole, chairman of the Center for Automotive Research, called Henderson a "high-speed decision-maker" who already has made important changes in GM's executive culture, CNN said. But Kleinman said GM was suffering from being out-of-touch with consumers and a decided lack of accountability, things a corporate insider would be unlikely to be able to fix.

Dismantling of General Motors picks up speed

News from Detroit that General Motors Corp. had agreed to sell its Saturn brand to Penske Automotive Group Inc. seems to be good news for 13,000 Saturn employees but not such good news for the largest U.S. automaker. The dismantling of bankrupt GM, which sought bankruptcy protection Monday, raises real doubts about whether the automotive giant will ever emerge as a viable company. GM has already agreed to sell its Hummer brand to a Chinese company and its Saab subsidiary to a fellow Swedish automaker, Koenigsegg Automotive AG of Angelholm. GM and Penske plan to complete the sale of the brand and its 350 dealerships by this summer, according to the Reuters international news service. GM has said it plans to reorganize in bankruptcy court and return as a smaller company concentrating on its core brands, Chevrolet, Buick, GMC and Cadillac, Reuters said. Penske, which operates hundreds of car and truck dealerships and supply stores across the United States and Britain from its headquarters in Bloomfield, Mich., was one of more than a dozen bidders for Saturn, which was created by GM in 1984 and began selling cars in 1990. GM announced it would sell the Saturn brand in February. Under the agreement with Penske, GM will continue to build the Saturn Aura, Vue and Outlook as a Penske contractor, Reuters said.

General Motors gets rear-ended by its executives

Top executives at General Motors finished running the once-proud automaker into the ground Tuesday as they dumped their remaining shares of stock and watched the company's stock price fall to its lowest since the Great Depression in the 1930s. The stock sank as low as $1.09 on the New York Stock Exchange before closing at $1.13, a 22 percent decline, according to the Reuters international news service. Former GM vice chairman and product chief Bob Lutz and five other execs revealed Monday in Detroit that they were selling their last holdings in the largest U.S. automaker, including $315,000 in stock, Reuters said, as GM approached a government-imposed deadline for reorganizing or filing for bankruptcy protection. It was a humiliating collapse for the carmaker, one of the original members of the NYSE, which for decades symbolized the strength and success of U.S. capitalism. But GM came to stand for corporate atrophy, as the automaker doggedly refused to build energy-efficient small cars to compete with its overseas rivals despite a plunging market share. Instead, GM used its wealth to lobby for tax changes and environmental law waivers that kept profits high in the short term but actually sealed its doom. Few Americans will forget seeing the chief executives of the three largest U.S. carmakers waste tens of thousands of dollars flying to Washington, D.C., in private jets to beg Congress for taxpayer bailouts. Now, that's out of touch! Of the three -- Rick Wagoner of GM, Bob Nardelli of Chrysler and Alan Mulally of Ford -- only Mulally remains in his post. Not coincidentally, Ford is the only one of what used to be known as the Big Three to have refused government loans so far.

Closure of Pontiac shows GM still doesn't get it

Speculation that General Motors plans to kill off its Pontiac brand instead of trying to revitalize it with new models and better values is an indication that the country's largest automaker is still locked-in on a highway to failure. With new leadership at the top and billions of dollars in federal loans, General Motors should be making plans to build better, more-attractive cars across all of its divisions. Instead, the automaker is trying to suck the remaining life out of itself as it careens toward bankruptcy. An official announcement about Pontiac's fate is expected as eartly as Monday, according to Cable News Network (CNN). A GM spokesman, Jim Hopson, declined to comment Saturday on the future of the Pontiac brand, saying the automaker was not prepared to comment at this time, CNN said. Pontiac was GM's third-best selling brand last year, outselling Cadillac and Buick. But Cadillac is the corporation's most-profitable brand and Buick is very popular in China, CNN said. Pontiac once built GM's most exciting vehicles, from the high-performance GTO to the flashy Firebird. The 1964 Pontiac Tempest LeMans GTO is credited with creating a new class of American car, the muscle car.

General Motors is already bankrupt every way but legally

News that General Motors told the Treasury Department this week that it could seek bankruptcy protection comes as a surprise to no one, except maybe the federal regulators who have been propping up the auto giant with billions of dollars in taxpayer money since last year. The admission, the first time GM has openly discussed a bankruptcy filing, appeared in a regulatory filing about its restructuring progam, according to the Reuters international news service. Of course, new GM chief executive Fritz Henderson, who took over the top spot after the Obama administration demanded the removal of former CEO Rick Wagoner, mentioned the possibility earlier in the week after its proposed restructuring plan was rejected by the government. In its report to Treasury, GM said it was trying to restructure out of court but would file bankruptcy if it was unable to reach cost-saving agreements with its bondholders and employee unions. "If the changes needed for long-term restructuring cannot be obtained out of court, the company is prepared and would consider in-court options,” GM said in its filing. The United States has loaned the automaker billions of dollars in an effort to help it recover from the economic downturn, and also has suggested guaranteeing warranties and aiding GM in emerging from bankruptcy after restructuring. But if what GM really wants is to get out of its labor contracts while stalling on new car development and continuing to overpay its executives, maybe it really should get out of the way and let emerging automakers with better ideas take over.