You’d think that General Motors Chairman and CEO Ed Whitacre, who built AT&T with $200 billion worth of deals, would be a savvy poker player. Well, judging from the grousing over his recent television ad, in which he talks about paying off the government’s loans ahead of schedule, he may have overplayed his hand. Yes, GM paid off $8.4 billion in loans to the U.S. Treasury and the governments of Ontario and Canada about five years early. But crowing about it in a television commercial has generated some controversy.

You don’t have to go too far to find someone in the commentariat grousing about how GM paid back the loans. The gripe is that GM paid the debt portion of the government’s investment with cash the company got from the government’s equity investment. Here’s how it works. When GM emerged from bankruptcy, it got $49.5 billion in cash. The U.S. Treasury and governments of Ontario and Canada gave GM $8.4 billion in loans. The rest of the money was given to GM in exchange for stock. The U.S. government owns 61% of the company and Canada owns 11.7%. Back in July, the feds decided to give GM enough cash to get through a longer, deeper recession, according to a former member of President Obama’s Auto Task Force, who asked not to be named because the discussions were private. As the economy started to recover and auto sales have climbed, GM found it had more cash on hand than it needed. Repaying the government loans wasn’t such a hard thing to do. So when Whitacre goes on television saying “we have repaid our government loans, in full, with interest, five years ahead of the original schedule,” his comments raised a few hackles. “They were repaying Uncle Sam with money they already got from the government,” snapped Maryann Keller, an independent consultant in Stamford, Conn. Senator Chuck Grassley (R-Iowa) weighed in during his weekly webcast calling Whitacre’s television appearance, “a little bit disingenuous.” He also said, “They’re paying it back with bailout money that they have from the federal government in the first place.”

To be fair, there is plenty of politics in play. Some critics simply didn’t like the bailout in the first place. The early payment is a small sign that GM’s business is getting back on track. If the company’s sales were tanking and cash flow was a problem, they’d keep all of the money until things turned around. GM’s sales are up 18.4% this year. GM-North America President Mark Reuss has done a commendable job of reining in incentive spending, giving GM better pricing on its cars. The company may turn at least an operating profit this year. So far, Whitacre and GM are doing many of the things they need to do to turn the business around.

The problem is that the early payoff shows only that GM is stable enough to give some money back. They aren’t making big profits yet. It’s one small benchmark on a longer haul. Going on television raised a hue and cry to a feat that some see as pretty marginal. There’s one other problem with Whitacre’s ad. He kicks it off by saying, “a lot of Americans didn’t agree with giving General Motors a second chance. Quite frankly, I can respect that.” Why would Whitacre want to remind Americans that the company needed to be bailed out? GM has a bit of momentum in the market. Vehicles like the Chevrolet Camaro, Buick Lacrosse sedan and Cadillac SRX and Chevy Equinox SUVs are red hot. Clearly, plenty of consumers are getting past the now-tired “Government Motors” tag and buying GM’s cars on their merits. If Ed goes on TV again, he might want to start with that.

Filed under: Spy Photos, Sedan, Performance, Europe, Videos, BMW, Luxury

The 2011 BMW M5 has been caught on video doing its thing around the ‘Ring, and by “doing its thing” we really mean shredding the life out of the rear tires. Judging from the quick video, the massive sedan seems to have no problem hustling through the banked curves of every automaker’s favorite test track.

BMW has kept its lips sealed when it comes to what exactly is under the hood of the next-generation M5 or when the lowly public will be able to get their greedy paws on the finished product. Rumor has it the German automaker has ditched the big, naturally-aspirated V10 we all know and love in favor of the same twin-turbocharged V8 found at the heart of X5 M and X6 M. If true, that means the car is packing somewhere around 578 horsepower in its arsenal.

As for when we’ll finally see this big beastie without its psychedelic camouflage, your guess is as good as ours. In the mean time, hit the jump to see the uber sedan tackle the ‘Ring.

[Source: YouTube]

Continue reading Spy Video: 2011 BMW M5 undergoes ‘Ring Taxi practice

Spy Video: 2011 BMW M5 undergoes ‘Ring Taxi practice originally appeared on Autoblog on Thu, 29 Apr 2010 20:00:00 EST. Please see our terms for use of feeds.

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Filed under: Etc., Motorcycle

If you thought you’d previously seen it all, well, you’re wrong. Case in point: David Morales Colón, a 22-year-old Puerto Rican man who was shot to death last Thursday, and whose wake is now making headlines here in the United States mainland. How come? Well, suffice it to say that the funeral directors at Marin Funeral Home in San Juan’s Hato Rey neighborhood have a flair for the unorthodox. For example, in 2008, they embalmed another young shooting victim and displayed his body standing up for the duration of a multi-day wake.

Back to the present: Yesterday and today, callers who stopped to pay their final respects to the late Mr. Colón got a bit of a surprise. Instead of the traditional presentation of the body in a casket, Mr. Colón’s corpse, dressed in casual duds and sunglasses, was instead posed in a very lifelike position atop his Repsol-liveried Honda CBR600 F4. According to Puerto Rico’s Primera Hora newspaper, the motorcycle was given to the victim by his uncle, and upon Mr. Colón’s untimely demise, family members delivered the bike to the funeral home specifically for this unusual wake.

Lest you think this is some sort of insane hoax, here’s the link to the local Primera Hora coverage, which features a multi-shot photo gallery, and here’s the less detailed Associated Press wire version, which is presently making the rounds. Finally, we’ve got a video posted after the jump. We’ll say this: David Morales Colón rides into the afterlife in memorable style. Thanks to Joel for the tip, and thanks to Wes Siler for the bike ID.

[Source: PrimeraHora.com, YouTube]

Continue reading Puerto Rican funeral home presents shooting victim on his motorcycle [w/video]

Puerto Rican funeral home presents shooting victim on his motorcycle [w/video] originally appeared on Autoblog on Tue, 27 Apr 2010 21:30:00 EST. Please see our terms for use of feeds.

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Insurance at its very core essentially helps the individual deal with a certain amount of risk through a network of people. Each person within the network complies with a pre-arranged agreement for specific situations. The insurance policy is given in return for premium rates purchased by the holder. There are many different factors that play a role in determining how much each policyholder will pay and an underlying determinant is your credit rating and history.

The use of credit to determine car insurance rates has met with criticism and controversy. Auto insurers insist that a person’s credit history is a valuable barometer of the likelihood of future claims. Consumer advocacy groups, on the other hand, insist that not only is it a poor gauge of risk, but is also fraught with numerous problems. We’ll explore this issue in greater detail below.

A Predictable Indicator Of Future Claims?

Car insurance companies, like the majority of all insurance providers, measure the risk potential and assign a related score to each new customer. This score is an amalgamation of your driving record, the type of vehicle you drive, average number of miles driven, and a host of other factors. The purpose of calculating this score is to assign a simple value that represents the probability of the policyholder filing a claim. This probability signifies risk for the insurer.

Your credit is used to calculate your risk score because car insurance companies claim there is a positive correlation between poor credit and increased claims. The underlying reasons are varied.

First, insurers assert that a high credit score suggests the policyholder is responsible. This denotes that the individual will make more informed judgements behind the wheel, therefore increasing the likelihood of avoiding accidents and that means not losing money. That translates into fewer claims.

Another point to be made is that auto insurers will generally make the assumption that a below-average credit score equates to a person’s financial instability. This leads to higher stress levels and a greater likelihood of taking unnecessary risks on the road. Consequently, more claims.

Whether this correlation between credit usage and claims risk is provable is questionable. Although each insurance company has their own means of calculating the potential of risk with each new policyholder, there are a couple of drawbacks when it comes to using a customer’s past history.

Limitations Of Using Credit To Calculate Premiums

The first – and obvious – problem is that credit reports from Equifax and TransUnion contain errors. These errors often push consumers’ scores down undeservedly. If a car insurance company pulls your credit report, they will assume the information is valid and calculate your premiums according to their proprietary risk formula.

The second problem involves identify theft. Suppose you’re a victim. Unauthorized revolving credit accounts and loans can be opened in your name and allowed to go into default, damaging your record. This too, can affect your auto insurance premiums.

The third problem is that personal circumstances can impact your credit file while having little to do with your fiscal responsibility. For example, a divorce or a prolonged period of unemployment can cause your credit score to plummet.

There is little you can do to convince an auto insurer to overlook your credit if they already use it to calculate risk scores. Though, it’s still important to observe that each insurance company has their own propreitary equation. Credit to some is not as important of a factor as other measurables.

The Advantage Of Conducting Periodic Comparisons

This brings us to one of the most compelling reasons to shop for lower car insurance rates on a regular basis: variability between insurers. Most people simply renew their contracts each year, assuming the premiums they’re paying are the lowest they’ll find. Or, they assume that every insurance company offers the same level of coverage for the same rates. This is a common misconception.

In reality, every auto insurer relies upon their own data to determine the risk of future claims. Some insurance companies will have discovered a high correlation between their policyholders’ credit files and the likelihood of claims. Other companies may have data that support the opposite.

You owe it to yourself to shop around for different insurance rates at least once annually but more often is recommended. Question insurance companies on whether or not a person’s credit history is used as a determinant for insurance premiums. It’s possible to find more suitable insurance coverage at better rates – there’s no way to know for certain unless you shop around.

About the Author

Kade Phillips has been a long time publishing author for the insurance marketplace website, Kanetix. Receive virginia beach auto insurance quotes and save on insurance rates today. Canadians can compare car insurance rates as well to find the most suitable insurance provider.

Article Source: Content for Reprint

Filed under: Budget, Sedan, Hatchback, Ford, First Drive

With over 750,000 Fiestas floating around Europe and a highly-successful social media campaign (if one can quantify such a thing) under its belt, the 2011 Ford Fiesta is nothing if not overexposed. And we’ve driven it. Thrice. So is there really anything left to learn?

As a matter of fact, yes.

The Fiestas we’ve sampled over the last year have all been European-spec models, which had us constantly questioning whether Ford would neuter its soon-to-be least expensive offering on its way to U.S. shores. After two days of fruitful flogging on the roads surrounding San Francisco, those concerns have largely been laid to rest. However, like any inexpensive conveyance, it’s all about compromise. But Ford has managed to restore some balance to the B-segment while putting the rest of the subcompact class on notice.

Photos by Damon Lavrinc / Copyright (C)2010 Weblogs, Inc.

Continue reading First Drive: 2011 Ford Fiesta aims to be the new subcompact king [w/video]

First Drive: 2011 Ford Fiesta aims to be the new subcompact king [w/video] originally appeared on Autoblog on Mon, 26 Apr 2010 00:01:00 EST. Please see our terms for use of feeds.

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Well, I haven’t heard too many people say this since the late ‘70s: American cars are better than Asian cars. No, really. Associated Press and GfK Roper Public Affairs and Media conducted a survey of 1,000 adults in early March. The results showed that 38% of Americans said that they think American cars are the best-made vehicles and 33% said Asian cars are the best. The same survey done in December 2006 showed that 46% of Americans thought that Asian cars were the best and just 29% favored American cars.

This is especially good news for Ford and General Motors, both of which are in different stages of a turnaround. Chrysler gets a bit of a boost here, too, though the company’s product line has yet to get the same kind of overhaul as its two larger Detroit rivals have done. Making some hay of this kind of sentiment will be tougher until Chrysler has some new cars to tout. All three can capitalize on this newfound respect if they continue to build better models and if, a big IF in GM’s case, they can market the cars well. They also need to show better business results.

There is one big question. How long will this last? The survey was done March 3 though March 8, when Toyota’s recall news hit a fever pitch. Toyota has been the talisman of Japanese industrial superiority. When its brand image takes the kind of body blows Toyota has sustained in recent months, you can bet the others will feel some of the pain. Remember, too, that Ford was also putting out good news. The Dearborn, Mich., automaker is firmly in the black and sales are surging. A lot of the change in consumer attitude comes from reversing fortunes at Toyota and Ford.

GM could burnish its image further in mid-May when the company will release its first-quarter earnings. Already riding a high from the fact that it paid off $8.4 billion in government loans about five years early, GM could look sharper still by reporting a tidy profit, which is possible. It may only be an operating profit, with one-time charges and problems in Europe still dragging earnings down. But the company is expected to show a profit.

This could be an inflection point for Detroit. After years of losing to Japan, GM, Ford and Chrysler became a symbol of American failure. While Google and Yahoo showed the way to the Internet and Apple has dominated Sony in portable music players, Detroit continued to strike out. If Motown carmakers put out a few more hot cars and keep improving quality, they may be able to finally steal back respect and a lot of customers.

Filed under: Sedan, China, Government/Legal, Beijing Motor Show, Luxury

Beijing-based First Auto Works has long been the provider of the official transportation for the hierarchy of the People’s Republic of China. Back in the 1950s, FAW started off building a localized version of the standard Soviet parade car, and over the past half century, they have evolved. FAW has also built licensed stretched sedans based on Audi and Lincoln vehicles.

Here at the Beijing Motor Show, FAW is showing off a new limo that is a modern interpretation those original models from the 1950s, but with a greenhouse and door array that looks more like a contemporary Rolls-Royce Phantom. We couldn’t find any press materials written in English, but we have reason to believe that this machine is powered by a V12 engine that looks suspiciously like the one from the BMW 7 Series V12 of the late-1980s.

Photos by Sam Abuelsamid / Copyright (C)2010 Weblogs, Inc.

Beijing 2010: First Auto Works Red Flag limo is fit for government work originally appeared on Autoblog on Fri, 23 Apr 2010 20:26:00 EST. Please see our terms for use of feeds.

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Contrary to popular belief and motoring beliefs, Americas (as well as Canada’s) controlled access highways and byways are among the safest ‘ not the most dangerous roads to drive. Indeed the fatality average reported by Canadian authorities for highways in Canada is about ½ the national average (one half) that of the serious accident rates for all roads taken as a full average. However it can be said that even for the most experienced motorists these high speed routes present special challenges and demand quick and determined judgments. So notes experienced Winnipeg based auto industry analyst and pundit William S. Simpson

If you pre-plan your route you will not have to rely completely on sometimes misplaced or even misleading road signs, which can well distract you from safely paying attention to the road. Tailgaters are an annoying and dangerous hazard. Move to the right lane, reduce your speeds and signal the vehicle to quickly pass. Do not brake, instead switch on the emergency flashers to activate your break lights. With hands free cell phones you can easily call phone numbers on the go – Passing on the right can be dangerous and downright illegal. Instead of waiting for other vehicles to return to the right lane, a most impatient motorist may well have inadvertently slipped to the right side. Amazingly and unwittingly the other motorist may well be in his or her direct blind spot.

As you drive down the entrance ramp or ramps to enter a highway via acceleration lanes, signal your intention and intentions to best merge with highway traffic. If there is a car or vehicle ahead of you, don’t make your move until that driver has merged fully and successfully. Trucks – especially those with wide or heavy loads, are far far less maneuverable than a novice or non professional driver might think. Truck tractor trailers require much more and additional distance and distances to stop than automobiles or even pick up trucks or SUVs . As a defensive driving motorist it is always best to increase your following distance and distances an extra truck length or second or two behind large commercial trucks. In addition beware of loose cargo and cargoes – and not even then. It’s just too dangerous. Never mind the other driver. Imagine your vehicle – Professional tractor trailer drivers , and driver training schools advise to place flares and / or along with brightly burning flares well back from the auto ,car , truck ,SUV or bus.

This is routine and standard practice notes Kirker Stevens of Ace Employment Safety Truck Safety Training Driver School at the fish farm in Winnipeg Manitoba. Lastly it is standard accepted semi trailer truck professional driving school teaching not to slow down to rubberneck. Imagine being hit by a train and even your full size vehicle being reduced to a pancake – with you and your family inside.

It may not be a major highway you are traversing say a California freeway or a New York toll road. Indeed it may be a lonely stretch of the Alaska Highway – you being asked to deliver a Dodge Ram truck to Whitehorse or Yellowknife NWT north of Edmonton Alberta. Indeed it may be the caribou and elk on the road or the Wood Bison which may well be your the greatest safety road hazards during nighttime driving. At least 1 mile (1.55 km) before the exit. Always signal your intention and intention long and well ahead of the turn off. A merging vehicle must always as a matter of standard freeway safety routine always yield to highway traffic. Sadly this is seldom the case in real life highway and turnpike driving . Take care that when you approach an “entrance ramp”, move one lane to the left if it safe to do so. According to the BC traffic safety school it is always best if not essential to plan an actual “escape ” route just in case the merging automobile swerves directly in front of you. Take care behind gravel trucks – especially those with uncovered beat up loads. It may be the law in your area for sand and gravel trucks to have their loads covered by canvas. Yet why risk a pitted or smashed windshield needlessly and for no apparent reason ? It may not even be the tractor trailer that you are following behind the do the damage to your glass. It may even be a stone tossed into the air by a truck on the other side of the highway that hits your window – being thrown by a truck tire – all the while smashing your window. By the time you have turned around to chase the vehicle in the opposing traffic lane they may be long gone – and you are left with a needless MPI glass damage claim – so notes well known friend of MPI autopac William S Simpson. Vehicles entering and exiting high speed highways and roads are often forced to merge into a “weaving lane”. It is always best to especially careful of vehicles crossing your path at high speeds – A hitchhiker anxious for a lift has one foot on the side of the pavement. When driving on a highway scan the shoulder for such smaller hazards, not just cars and trucks. Never stop unless it is an obvious emergency or you may well be a victim in a multi vehicle pileup. No doubt about that. After all shinder says “Drive Safe”.

You can never play it too safe on the roads for yourself and your family – Drive with the flow of traffic, unless the cars and vehicles around you are speeding. Check your speedometer frequently even if you routinely turn on “cruise control”. A clear stretch of highway or a steep downgrade often invites speeding and speeders as your roadside companions. Be a loner in highway traffic. Drive defensively.

About the Author

http://vancouverautoinfo.com

Article Source: Content for Reprint

GM CEO Ed Whitacre is scheduled to be at the company’s Fairfax, Kan., plant tomorrow to announce that his company has paid the debt portion of the government’s assistance back early. Sources briefed on his plan say that he will announce that GM has paid the remaining $5.8 billion back to the U.S. Treasury Department and Canada and Ontario governments by the time he addresses the press at the plant. It’s a big step, but don’t expect a Lee Iacocca moment.

Back in 1983, Chrysler paid off a $1.5 billion rescue loan—which was backed by the U.S. government—and the company settled the account early. Iacocca made the most of the moment, saying, “We at Chrysler borrow money the old-fashioned way. We pay it back.” That was vintage Lido. He never missed an opportunity to make a sales pitch or take over a room with his personality.

GM’s situation is different. Paying off its government debt early is, no doubt, an impressive feat. But GM’s can’t declare a big victory yet. The government invested about $50 billion in GM. The loan portion from the U.S. and Canada was $8.4 billion. The rest of the investment came in equity. That’s why the U.S. owns 61% of GM. The taxpayers will only get all of their money back once GM launches an initial public stock offering and if the Feds can eventually sell the stock at a price fat enough to recoup the rest of the investment. Whether that happens depends on many factors, like GM’s progress in fixing its woeful European business, how fast the economy and car sales improve and—not to be discounted—fuel prices. If gasoline prices soar, sales of profitable SUVs can take a hit. Crude oil prices are up 81% during the past year.

There’s another reason this won’t be a Iacocca moment. Whitacre is no Iacocca. He was an unqualified success at AT&T and has gotten traction at GM. He is certainly a CEO with some chops. But he is also a man of few words. Whitacre may have starred in GM’s ads, but he does not ham it up for the cameras the way Iacocca did. Besides Bob Lutz, what car executive really does? A source close to Whitacre says his message will be that the loans are paid back in full, with interest and ahead of schedule. That’s Whitacre’s style. Short, to the point and without a lot of ballyhoo. Besides, he can’t go Lido until delivers big profits and a doll of a stock offering.

Filed under: Performance, Plants/Manufacturing, Chrysler, Dodge, Maserati, Ferrari, Alfa Romeo, Fiat, Luxury, Lancia

It would seem that Fiat head Sergio Marchionne is nothing if not ambitious. Following the seven-hour-long marathon presentation of Chrysler’s latest business plan back in November of 2009, the giant Italian automaking alliance has just released its own five-year business plan, which includes Fiat, Maserati and Ferrari in addition to announcing the long-awaited return of the Alfa Romeo brand to the United States as a full-range automaker.

We’ll start with Ferrari… for obvious reasons. Kicking off a series of six new models will be a replacement for the four-seat 612 Scaglietti, which is destined to add a hybrid powertrain to its impressive V12 engine. Next up is a convertible version of the new 458 Italia sometime next year, and later another 458-based model that will be much more track focused, like the 430 Scuderia.

Staying with the Prancing Horse lineup, we should see a new range-topping Ferrari to take the mantle from the discontinued Enzo hypercar, very likely to see an engine utilizing forced induction along with a lightweight platform. The 599 GTB will get a replacement as well, and the recently released California will see itself updated and granted an M designation.

Like what you’re hearing so far? There’s plenty more where that came from, make the jump for the rest of the goods.

Continue reading Fiat unveils five-year product plan, we dissect in detail

Fiat unveils five-year product plan, we dissect in detail originally appeared on Autoblog on Wed, 21 Apr 2010 20:01:00 EST. Please see our terms for use of feeds.

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