Happy Birthday GM- 100 years old!

On September 16, 1908 the General Motors Company was founded by William Durant. Durant later on loses control of his creation and dies as a bowling alley operator. As some speculate over whether or not GM can survive its current seemingly insurmountable and many problems, perhaps it is instructive to review some of the little-remembered facts and incidents of its now 100 year past.

In recognition of GM’s 100th birthday today, the Associated Press prepared a list of events that marked the century of achievement. Some are little known and ironic, some may supply some perspective on how to evaluate GM’s present problems. Here is a sampling from the list:

September 16, 1908 – Durant forms the General Motors Company

In 1909 – They sell 25,000 units.

In 1910 – Durant brings in Buick, Oldsmobile, Pontiac, Cadillac, Champion, AC spark plug and others. Bankers give Durant the boot after assessing the debt he amassed.

In 1916 – GM incorporates and Durant, after starting yet another car company – Chevrolet – gets back his seat at the head of the GM table.

In 1920 – Durant quits. After a bout with personal bankruptcy, Durant dies as a bowling alley operator.

In 1929 – GM becomes the owner of Adam Opel AG in Germany.

In 1955 – GM brings a V-8 engine to the Chevrolet line up.

In 1960 – With the growth in popularity of smaller European imports, Chevrolet markets the Corvair. Safety concerns with the vehicle were the subject of a book by Ralph Nader (yes the same one running for President in 2008), launching congressional hearings, Nader’s career, and dooming the Corvair brand.

In 1980 – Roger Smith becomes chairman – vehicle sales fall by 26 percent and GM loses $750 million.

In 1983 – After forming a manufacturing alliance with Toyota and announcing the formation of a new car line – Saturn – GM posts a profit of $3.7 billion.

In 1991 – GM loses $4.45 billion – announces closing of 21 plants and plans to cut 9,000 salaried positions along with 15,000 hourly worker jobs.

In 2007 – The company loses $38.7 billion – but that loss includes a $39 billion charge taken for unused tax credits. GM also negotiates an historic labor agreement that will allow the company to pay new workers at $14 per hour- the effects of this achievement will not be fully realized until 2010, but will bring the company into near parity with labor costs of key foreign competitors.

What’s the toughest job in a car dealership these days?

Pick one: Dealer/principal, general manager, finance manager, service manager, parts manager. The Financial Times says it has the answer. What’s the toughest job in a car dealership these days? London’s Financial Times thinks it has the answer.

The toughest job at North American car dealerships these days, according to an article in the Times, arguably belongs not to the sales or service staff but to the finance managers.

" Extremely difficult" is how Carl Strobl, who holds that title at Brown-Daub, a Chrysler and Jeep dealer in eastern Pennsylvania, describes life at the office compared to a year ago.

Almost every way of paying for a new vehicle, apart from hard cash, has become less accessible or more expensive, or both.

Mark LaNeve, General Motors’ North American marketing boss estimates that tighter credit is costing GM about 10,000 vehicles a month in lost sales.

HSBC and Texas-based Triad Financial are among lenders that have pulled out of vehicle financing in recent months. Citigroup chopped its car loan advances by more than half in the second quarter to $800 million, from $2.8 billion a year earlier. Even buyers with strong credit records are being asked for bigger down payments to secure a loan.

AmeriCredit, a Texas-based finance company with about $1 million vehicles on its books, charges borrowers 3-4 percentage points more now than in early 2007, despite record low borrowing costs.

AmeriCredit has also become choosier, pushing up the average household income of its customers from about $50,000 a year to $60,000.

While the credit crunch is squeezing the entire industry, it is most acute for the three Detroit carmakers and their financing arms. Chrysler Financial shocked dealers and customers by pulling out of the leasing business last month because of the high cost of funds.

Mr. Strobl's dealership has struck deals with two independent leasing companies. However, leasing terms have tightened sharply, especially on big sport-utility vehicles and pick-up trucks, to reflect lower resale values at the end of the lease.

On another front, the housing slump has dried up access to home-equity loans, an important source of funds for vehicle purchases.

CNW, an Oregon-based automotive research company, estimates that home-equity loans financed 5.3 percent of vehicle purchases in the first seven months of this year, down from 11.8 percent in 2007.

Proposed settlement reached in GM class action suit

The Consumers’ Association of Canada has announced the details of a proposed settlement of 17 class actions that in 2006 alleged that nylon intake manifold gaskets installed in certain GM vehicles were defective. The action covers certain 1995 to 2004 model-year vehicles. A proposed certification and settlement approval hearing will take place in October in Toronto. The settlement provides anywhere from a maximum of $50 to $400 per person, an amount equal to the eligible repair expense, depending on when the repair was performed. The settlement provides that fees and disbursements of class counsel across the country are $2,816,000, including taxes, for work up to August 28, 2008, and $131,250 for further work after that date.

NFL players lining up for bulletproof cars

Attack on Jaguar’s Richard Collier was the latest incident Texas Armoring Corporation announced that the company has been in contact with key security personnel affiliated with the National Football League (NFL). Following the recent attack on Jacksonville Jaguars tackle Richard Collier, representatives of professional athletes and their security staff have reached out to Texas Armoring Corporation to provide them with custom bulletproof car solutions. According to the company, approximately 80-90% of attacks occur while victims are traveling by automobile, thus a bulletproof vehicle is the first line of defense for individuals in the public eye.

Trent Kimball, chief executive of Texas Armoring, said “Professional athletes and celebrities are prime targets for attacks. Because of this, we are working with a number of high-profile clients who are following the examples of public figures like Tom Cruise and David Beckham by acquiring bulletproof cars for themselves and their loved ones. Mercedes Maybachs, Cadillac Escalades, Range Rovers, and other luxury models are our specialty.”

In addition to offering armored bulletproof cars and SUVs to the NFL, Texas Armoring announced that it has retained the exclusive services of two former CIA operatives to help athletes and celebrities with a wide range of security services.