First Preproduction Chevy Volts Roll Off Line

The first three preproduction models of the Chevrolet Volt extended-range electric car rolled off the production line at GM’s Detroit-Hamtramck Assembly Plant last week to cheers from a spontaneous crowd of onlookers, according to the Detroit Free-Press. GM officials expect to produce 500 preproduction models before official production of the car begins in November.

Already, the preproduction of the Chevy Volt has spurred interest from outsiders and improved morale within the plant. GM officials have said that they expect a significant interest from tour groups, schools and industry executives to tour the plant when production begins in earnest.

“I’m expecting that we will have all different kinds of visits,” said plant manager Teri Quigley. “I think it will be five times as many people as normal at the onset,” she said.

According to the article, beginning production on the Chevy Volt has also sparked interest in workers at the plant. Quigley was able to drive one off of the lot and called it a “heart-pumping moment.”

“It’s really, really great that we’ve got this Volt in our system. It’s real. We can touch them and feel them and do our job on them. But at the end of the day, the customer who is buying the DTS in front of that Volt or the Lucerne behind that Volt, doesn’t care that there was a Volt between the two,” Quigley said. “We can be excited, but we have to be focused, we can’t let the Volt distract us from what we’re doing on these other cars.”

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UAW Sues GM Over Delphi Payments

The Detroit Free-Press reports that the United Auto Workers has filed a lawsuit against General Motors, claiming the auto maker owes the union $450 million in retiree health care for workers of its former parts division Delphi.

According to the lawsuit, GM is obligated to make the payments to the UAW’s Voluntary Employee Beneficiary Association for Delphi workers because of a three-year contract and the terms of the bankruptcy settlements of both GM and Delphi.

The lawsuit claims that GM rejected UAW’s request for payment in November and has since “failed and refused to make the contractually required payment.”

GM declined comment on the lawsuit.

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Ford and GM See Sales Increases in March

Despite what analysts are calling a “rough market” for cars, both GM and Ford showed significant improvements in U.S. sales last month, according to figures calculated by Automotive News. GM’s sales were up 21 percent over the previous month, while Ford saw sales climb by 40 percent.

However, the news wasn’t rosy for all domestic car makers. After posting its first monthly gain in four years in February, Chrysler saw sales dip eight percent last month. Some foreign car makers also saw disappointing numbers despite sales growth. For example, sales of new Hyundais were up 15 percent from the previous month, a number that was far below analysts’ previous estimates of 30 percent growth.

Many of the sales increases were attributed to car dealers being forced to match incentive offers introduced by Toyota in March as a counter measure to the wave of negative press about the company’s global vehicle recalls.

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GM Expands Chevy Crossover Production

Recently, General Motors has been dealing with a welcome problem: how to respond to the consumer demand for the Chevrolet Equinox crossover. Dealers have been airing concerns in recent months that they have been dealing with shortages caused by steady interest in the car. Automotive News reports that GM is responding to these concerns by adding a third shift to production at its plant in Oshawa, Canada.

The Equinox is currently built in GM’s CAMI plant in Ingersoll. The company had originally announced plans to expand that plant; the new announcement states that body assemblies will now be shipped to Oshawa for final painting and assembly.chong qi zhang peng

The third shift in Oshawa is scheduled to start in October, and will restore jobs for 600 employees who had previously been laid off. In addition, the expansion of the CAMI plant will not only restore all laid off jobs but require hiring an additional 70 employees by October.

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GM Scraps Plans to Cut Back on Cadillac Dealerships

Last year, GM had announced plans to significantly reduce the number of Cadillac dealers operating in the United States, going from a total of about 1,400 at the start of 2009 to around 500 by the end of the year. However, Automotive News is reporting that those plans have been scrapped, as GM is planning on reinstating Cadillac dealerships across the country.

The initial plan was created to bring Cadillac in line with luxury car lines such as Mercedes and BMW, which have a smaller number of dealerships located in major metropolitan areas. The majority of the more than 900 Cadillac dealerships that were scheduled for closure were in rural or smaller metropolitan areas, with GM focusing its growth of the Cadillac brand on larger populations on the East and West Coasts.

“We think that GM realized that terminating these dealers would leave a lot of loyal Cadillac customers orphaned and not produce a material benefit in the form of increased sales,” said Ernie Manuel, president of the Fontana Group in Tucson, Ariz., a financial consulting firm for dealerships.

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Ed Whitacre Named New GM CEO

General Motors’ search for a new chief ended with a decision based on stability, as the automotive giant named interim CEO Ed Whitacre as its permanent boss on Monday. Whitacre had been serving in that position since the beginning of last month, when then-CEO Fritz Henderson was fired.

Whitacre’s hiring makes sense because he had already hired the management team that would be working underneath the CEO, including bringing in new CFO Chris Liddell from Microsoft. In addition, the pool of qualified candidates who could step in and handle running a major car company in the midst of a massive overhaul was severely limited.

While GM was wrapping up its search for a new leader, Tata Motors will be starting one to find a new head of its Jaguar Land Rover division after David Smith stepped down as CEO. Director Ravi Smith will take over on a temporary basis until a permanent replacement can be found.

General Motors Offers Dealer Incentive Plan for Pontiacs, Saturns

The post-Christmas season is typically a time for retailers to clear out their old items to make room in their stores for new product. For General Motors at the end of 2009, this is especially true as its dealerships are looking to clear out the remaining inventory of the discontinued Pontiac and Saturn models as quickly as possible. To facilitate this, the New York Times reports that G.M. is giving its dealers incentives to sell as many cars as possible within the next week.

G.M. is offering dealers $7,000 for every Pontiac and Saturn vehicle they move into their rental or service fleets, allowing them to be sold to customers. However, the incentive might not trickle back to customers in terms of discounts on the cars. In addition, any vehicle bought through this program is considered to be a “used” vehicle, meaning that buyers will not be eligible for incentives of up to $6,500 that G.M. is offering for buyers of new cars. People who are financing their purchase will also have to pay the higher interest rates typically placed on used car loans.

Car Dealers Slated to Close Reject Appeals Process

General Motors and Chrysler offered on Thursday to reconsider closing more than 3,000 car dealerships after pressure from Congress, but according to the Detroit Free-Press, car dealers called the announced plan little more than window dressing.

The auto manufacturers would allow dealers whose stores are slated for closing to appeal their case to an independent panel, which would hear why the dealership decided to reject particular dealerships. However, dealers such as Jeffrey Tamaroff, who was forced to close his family’s Southfield Dodge dealership, say the move will do little to help.

“I want to throw up,” said Tamaroff. “They want us to sit in front of a review panel, all of whom will be sitting there with folded arms waiting for us to finish, then they will say ‘Next.’ It is really cruel.”

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Auto leasing programs on the comeback

Bloomberg reports that auto leasing programs are starting over again as consumers are beginning to look for cheap ways to drive expensive cars. The story reports that both General Motors and Chrysler have restarted their previously-discontinued GMAC Financial Services leasing program, which had been stopped after demand for leasing fell in 2008. In addition, Ford and Toyota are both planning extended marketing pushes and promotions for their existing marketing programs.

“Leasing is really a critical piece of the business because people who lease have much higher loyalty to your brand,” Jim Farley, Ford’s group vice president of marketing, said in an interview. “This is something the dealers have been asking for for a long time.”

“Leasing is coming back,” Jeremy Anwyl, chief executive officer of researcher Edmunds.com of Santa Monica, California, said in an interview yesterday. He predicts the practice will soon account for 20 percent of U.S. auto sales, more than doubling from the first half of 2009. Increased used-car values are “making leasing more attractive,” he said.

Colorado dealership urges Penske to reconsider Saturn decision

The end might be near for Saturn, but that’s not stopping some car dealers from doing everything they can to fight for the beleaguered car company. The Denver Business Journal reports that Colorado’s Phil Long Dealerships have asked the Penske Automotive Group to reconsider its decision to back away from a deal to buy the car line from General Motors.

In a statement, Jay Cimino, CEO and president of Phil Long Dealerships, said the company was making “one last plea to [Penske Automotive owner] Roger Penske to make the final lap and finish this race.”

Cimino added, “There is much loyalty for this brand, which leaves me optimistic about the fate of Saturn.” He urged Saturn fans to leave “messages of support” at www.foreversaturn.com, a website oriented toward persuading Penske to buy Saturn.

At the same time, Cimino also said that the dealerships would be offering major sales to clear their lots of the remaining Saturns in stock.