This follows Planegate Part One and Part Two, which didn't go over so well. Having a corporate jet is a justifiable expense for a large, mutli-national organization but a fleet of jets operating as your own private airline is a perk that doesn't hold up well after media scrutiny — especially when Saint Alan decides that a company that makes cars should drive everywhere. The media may appreciate this but the people who work for the Not-So-Big Three's jet companies are going to have a crappy Christmas. Press release below

GM Ceasing Corporate Aviation Operations

DETROIT — GM today announced that it is ceasing operations at General Motors Air Transportation Services (GMATS) at Detroit Metro Airport.

Due to significant cutbacks over the past months, GM travel volume no longer justifies a dedicated corporate aircraft operation.

GM is currently exploring options for transferring its aircraft to another operator. The company is pursuing sale of four of the aircraft so it can terminate the leases.

GM will shutter the facility at Metro Airport effective January 1, 2009. GM will work with the airport to seek a tenant for the balance of the lease, which expires in 2009.

[Source: GM, Photo: IAA via Getty Images]

Before the company got in the business of making PR gaffes, GM was known for just making cars and trucks. We think Pop Mech was being charitable in only listing ten, including the crowd pleasing Cadillac Cimarron. GM, you've got a bad reputation. And it isn't just talk, talk, talk. [Popular Mechanics]

GM And Tiger Woods Announce End To Endorsement Deal

DETROIT, MICHIGAN – General Motors and Tiger Woods announced today that they will conclude their endorsement deal effective December 31, 2008.

Both GM and Woods agreed to a mutual and amicable separation that included a desire for more personal time for the 14-time major winner who is expecting his second child in late winter as well as the search for budget efficiencies during a difficult economy for General Motors. For the past nine years, Woods has endorsed GM products around the world and has been heavily associated with the Buick brand in the US, Canada and China markets.

Mark LaNeve, General Motors North American Vice President of Sales, Service and Marketing said, “Tiger has been a great friend to GM and a fantastic asset through the years helping to bring consumer awareness to many new GM products. In light of the news coming out of Washington,” LaNeve added, “This decision is the result of discussions that started earlier in the year and the timing of this agreement with these other activities is purely coincidental.”

In a statement, Woods commented, “I am very proud of the long standing partnership I’ve had with GM and have enjoyed being a part of the company’s dramatic product evolution. We’ve had a lot of fun together and I participated in some unique and rewarding activities. We’ve enjoyed a tremendous partnership over the years and we will maintain strong ties with the many people at GM we call friends.”

[Source: GM]

From plants to parks. From dealerships to driveways. From gas stations to grocery stores. What happens in the automotive industry affects each and every one of us. In fact, the collapse of the U.S.-based auto industry wouldn't just impact the more than 239,000 Americans directly employed by the Big Three. One out of every 10 people in America is employed in a service that is related to the U.S. auto industry. If a plant closes, so does its suppliers, the local stores, the hot dog vendors, and the local restaurants. The effect would be devastating in ways of which you never have thought:

* Nearly 3 million jobs would be lost in the first year alone – with another 2.5 million to follow over the next two years
* Personal income in the United States would drop by more than $150.7 billion in the first year
* The cost to local, state, and federal governments could reach $156.4 billion over three years in lost taxes, and unemployment and health care assistance
* Domestic automobile production would more than likely fall to zero – even by international producers, due to supplier bankruptcies

The credit crisis that is affecting us all is wounding the U.S. auto industry in many different ways. Carmakers can’t get loans to restructure and to produce new advanced technology vehicles. Suppliers and dealers can’t get loans for routine business, and customers can’t get loans for new cars.

[via Facts and Fiction]

Hot on the heels of yesterday's e-mail plea to employees from GM's Troy Clarke comes the following e-mail from GM's Mark LaNeve. The General's marketing maven e-mailed dealers asking for them to make calls to their members of Congress asking them to "Save GM" from the grips of the Financiapocalypse. Hey, we just noticed, how come neither GM exec is asking for GM fanboys to buy a t-shirt? How can they "Save GM" without a t-shirt? Hmm...at least buy a button.

Well, OK, someone over at the RenCen's urging co-workers to do more than buy a silly "Save GM" t-shirt.

Hat tip to Wired on a copy of the e-mail!

That's good news for Detroit given today's bad...err... awful... news. Although after Wagoner's remarks earlier, we're hoping there will be an industry to save after he's inaugurated. Full remarks from Detroit's personal Jesus below:

The news coming out of the auto industry this week reminds us of the hardship it faces – hardship that goes far beyond individual auto companies to the countless suppliers, small businesses and communities throughout our nation who depend on a vibrant American auto industry. The auto industry is the backbone of American manufacturing and a critical part of our attempt to reduce our dependence on foreign oil. I would like to see the Administration do everything they can to accelerate the retooling assistance that Congress has already enacted. In addition, I have made it a high priority for my transition team to work on additional policy options to help the auto industry adjust, weather the financial crisis, and succeed in producing fuel-efficient cars here in the United States. I have asked my team to explore what we can do under current law and whether additional legislation will be needed for this purpose.

Preach it.

There's nothing like power of denial. Though asked the question a couple different ways, Wagoner wouldn't take the bait, only saying "We've said this before: we have no plans whatsoever than to continue to run the business... you can't sell cars under that circumstance." Yes, as opposed to all of those cars you're selling now. Either way, the bottom line from GM continues to be that either a magical fairy fixes the economy quickly, or someone bails them out.

[Source: CNBC]

First of all, Ford has around $30 billion in both liquid assets and a credit line the company secured just in case the global economy turned south (that seems prescient). That means the "should they go bankrupt" conversation is much further away. Additionally, Mulally claims the third-quarter cash loss was higher than usual because Ford cut production of the F-150 in advance of the 2009 Ford F-150. As hard as it is to believe, Mulally said that "this goes back to our fundamental plan." Ford's plan to realign earlier seems to have put them in a better position. Of course, they still want/need the money to help cover pension liabilities and the development of more fuel efficient cars.

[Source: CNBC]

GM Announces $5 billion in Additional Liquidity Enhancement Initiatives

DETROIT – General Motors Corp. (NYSE: GM) today announced it is taking further actions to improve liquidity and reduce structural cost in response to deteriorating global economic conditions, tight credit market conditions and a rapid retraction of sales in the auto industry.

“Volatility in the world’s financial markets, tightening of consumer and business credit and historically-low consumer confidence has created a very challenging environment ,” said Rick Wagoner, GM chairman and chief executive officer. “Given the current lack of credit availability we must take further difficult ‘self-help’ actions .”

Over the past several years, GM has been taking major actions to restructure its business and position it for long-term growth, making dramatic reductions in structural cost, revitalizing its product portfolio with award-winning vehicles, growing aggressively in emerging markets around the world and making demonstrable strides in advanced technology leadership (link to release).

As part of its ongoing restructuring, on July 15, 2008 GM outlined a number of initiatives aimed at improving liquidity by an estimated $15 billion through 2009. Those initiatives included internal operating actions within the company’s control that are estimated at $10 billion, asset sales estimated at $2-4 billion and capital market activities targeted at $2-3 billion (link to release).

To date, the $10 billion in internal operating actions have either been completed or are on track for full execution by the end of 2009.

GM’s assets currently being assessed for potential sale include the Hummer vehicle business and brand and its ACDelco all-makes aftermarket parts business, which has distribution channels in more than 100 countries. GM is also evaluating strategic options for its technical and manufacturing center in Strasbourg, France. GM is also analyzing other potential asset sales.

Despite the seizing up of the credit markets, GM completed some capital market transactions (link to release) in September to improve the company’s liquidity by $500 million by year-end 2009. While GM has unencumbered assets of more than $20 billion that it could potentially use as collateral for a secured debt offering, the U.S. credit markets remain inaccessible, and the contagion effect on other financial markets around the world provides limited alternatives. Accordingly, t he timing of the $2-3 billion of capital market financing GM initially targeted remains uncertain.

In light of the further deterioration in the U.S. auto market and continued turmoil in the global financial markets, GM is making downward revisions to its liquidity planning assumptions. For planning purposes, GM is assuming U.S. light industry sales volumes of 11.7 million units in 2009, and 12.7 million units in 2010. GM is also revising its average oil price estimates to range between $60-80 per barrel in 2009, and $100-$120 per barrel in 2010.

In addition to its previously announced liquidity and capacity actions, GM is taking further actions to improve liquidity by an incremental $5 billion by the end of 2009.

GM is reducing its capital spending for the calendar year 2009 from approximately $7.2 billion to $4.8 billion. The reductions will be achieved by retiming select vehicle programs in North America and Europe by three to 12 months, and deferring capacity expansion projects. Every automaker is having to adjust portfolios and spending plans to some degree, due to the rapidly changing business conditions and increasing challenging regulatory requirements. Lengthening product lifecycles is a common response to these pressures.

Although the timing of several vehicle programs will be revised, key product and technology programs remain on track. GM has a robust pipeline of competitive new vehicles over the next two years. In GM’s largest markets, U.S., China and Europe, 22 new vehicles will be launched in 2009, and 19 in 2010. In the U.S. alone, GM will launch 15 new vehicles through year-end 2010, 14 of which will be fuel-efficient cars or crossovers, including the Cadillac CTS wagon and SRX crossover, Chevrolet Camaro Coupe and Equinox crossover in 2009, and Saab 9-4x crossover, Chevrolet Cruze small car in 2010. Spending levels for the extended range electric Chevrolet Volt and other fuel-economy improvement initiatives to meet increasingly aggressive global fuel economy standards have been increased.

GM is also taking steps to reduce structural cost by an additional $1.5 billion. Actions being employed to achieve the savings include further reductions in sales promotion spending, further reductions in support of dealer network activities and channel consolidations, and further revisions to production scheduling reflective of depressed industry conditions. In response to declining demand, GM will re-rate operations at a number of operations in North America to scale back production, beginning in the first quarter of 2009.

GM also expects to make further reductions in engineering expense due to the aforementioned delays in capital spending. In addition, various types of discretionary spending, such as travel, use of consulting resources, and non-scheduled overtime for hourly and salaried employees, will also be restricted.

A number of working capital improvements, totaling approximately $500 million, are also being taken, including additional inventory reductions, with an emphasis on further cuts in components, buffer stocks and finished goods.

Measures are also being taken to further reduce salaried employment costs in the U.S. and Canada. The cost reduction target has been increased to approximately 30 percent, up from approximately 20 percent as announced on July 15. The reductions will be achieved with further contract and salaried headcount reductions by the recent over-achievement of the salaried window retirement goal, mutual separation programs, and if necessary, involuntary separations. Employment cash cost savings will also be achieved in Western Europe in 2009 as part of its necessary, broad-based labor cost reduction initiatives.

Salaried employees will not receive enhanced variable pay (incentive compensation) in 2009 for the 2008 performance period. GM had previously announced there would be no discretionary cash bonuses for 2008 for the company’s executive employees.

In addition, GM suspended the company match for the stock savings (401k) plan in the U.S., effective November 1, 2008, and matching contributions for tuition assistance and other reimbursement programs are being suspended effective January 1, 2009.

Even if GM implements the planned operating actions that are substantially within its control, GM's estimated liquidity during the remainder of 2008 will approach the minimum amount necessary to operate its business. Looking into the first two quarters of 2009, even with its planned actions, the company's estimated liquidity will fall significantly short of that amount unless economic and automotive industry conditions significantly improve, it receives substantial proceeds from asset sales, takes more aggressive working capital initiatives, gains access to capital markets and other private sources of funding, receives government funding under one or more current or future programs, or some combination of the foregoing. The success of GM's plans necessarily depends on other factors, including global economic conditions and the level of automotive sales, particularly in the United States and Western Europe.

Further detail on the additional liquidity actions and GM’s current liquidity position and outlook will be disclosed in a Form 8-K filing with the Securities and Exchange (SEC) later today.

GM has taken a host of aggressive “self help” actions to improve its business, but additional support from the U.S. government to aid the auto industry during this industry downturn is essential. The company has engaged in discussions with various U.S. federal government agencies and Congressional leaders about the important role that the domestic automotive industry plays in the U.S. economy, and the need for immediate government funding support given the economic and credit crisis and its impact on the industry, including consumers, dealers, suppliers and manufacturers. Many in the government have acknowledged the important role of the industry in the national economy and the discussions are ongoing; and at this point, their outcome cannot be predicated with certainty.

“These tough actions, though very difficult to make, demonstrate our commitment and determination to weather this economic downturn and emerge a stronger and more competitive company,” said Wagoner. “We remain focused on retaining our focus on product excellence and our commitment to advanced propulsion technology leadership and returning the business to profitability despite the current market conditions.”

Finally, GM has recently explored the possibility of a strategic acquisition that it believed would generate significant cost reduction synergies and substantially strengthen GM’s financial position in the medium and long term, while being neutral or modestly positive to cash flow even in the near term. While the acquisition could potentially have provided significant benefits, the company has concluded that it is more important at the present time to focus on its immediate liquidity challenges and, accordingly, considerations of such a transaction as a near-term priority have been set aside.

[Source: GM]

Why is the cash burn rate so important? GM isn't exactly cash rich and needs to have at least $10 billion to operate and currently has around $15.8 billion on hand. This means that if the current trend continues the company will be unable to operate in approximately three months, meaning that they'll have to declare bankruptcy as we previously outlined. GM itself basically admits this themselves saying:

"Even if GM implements the planned operating actions that are substantially within its control, GM's estimated liquidity during the remainder of 2008 will approach the minimum amount necessary to operate its business. Looking into the first two quarters of 2009, even with its planned actions, the company's estimated liquidity will fall significantly short of that amount unless economic and automotive industry conditions significantly improve, it receives substantial proceeds from asset sales, takes more aggressive working capital initiatives, gains access to capital markets and other private sources of funding, receives government funding under one or more current or future programs, or some combination of the foregoing."

To summarize: give us some money or we're going to go bankrupt and the economy will have to grapple with the horror of hundreds of thousands of unemployed workers. Announcement from General Motors below.

GM Reports Third Quarter Financial Results

DETROIT –General Motors (NYSE: GM) today announced its financial results for the third quarter of 2008, reflecting rapidly deteriorating market conditions in the U.S., slowdowns in other mature markets around the world, and continued losses at GMAC Financial Services (GMAC).

During the third quarter the turmoil in the global credit markets resulted in the worst financial crisis in more than 70 years. The upheaval has had a dramatic impact on the auto business in particular, especially in the U.S. and Western Europe.

Tight credit, rising unemployment, declining income, falling stock markets, and continuing deterioration in the housing market in the U.S., resulted in an abrupt halt in consumer spending, with most consumers exiting the vehicle market. Many of those still intending to purchase vehicles were denied financing, or found the cost of financing prohibitive.

“The third quarter was especially challenging for the auto industry. Consumer spending, which represents close to 70 percent of the U.S. economy, fell dramatically, and the abrupt closure of credit markets created a downward spiral in vehicle sales,” said Rick Wagoner, Chairman and Chief Executive Officer. “The U.S. government’s actions to help stabilize the credit markets and eventually ease the credit crunch are an essential first step to the economy’s and the auto industry’s recovery, but further strong action is required.”

GM reported a net loss of $2.5 billion or $4.45 per share for the third quarter, including special items. That compares with a net loss from continuing operations of $42.5 billion or $75.12 per share in the third quarter of 2007, which included a non-cash charge of $38.3 billion to establish a valuation allowance against some of the company’s net deferred tax assets.

On an adjusted basis, GM posted a net loss of $4.2 billion or $7.35 per share, compared with a net loss from continuing operations of $1.6 billion or $2.86 per share in the same period last year.

Revenue for the third quarter was $37.9 billion, down from $43.7 billion in the year-ago quarter, reflecting dramatic sales declines across the industry driven by unstable market conditions, instability in the credit markets and dramatic retraction in consumer demand, especially in North America and Europe.

GM recorded net favorable charges of $1.7 billion for special items in the third quarter. Included in the charges was a curtailment gain of $4.9 billion resulting from the UAW Settlement Agreement becoming effective. The curtailment represents the accelerated recognition of net prior service credits, largely relating to the 2005 GM UAW healthcare agreement, scheduled for amortization after January 1, 2010.

The curtailment was recorded because GM's UAW retiree health plan will not exist after January 1, 2010, and therefore no further basis for deferring unamortized prior service credits exists beyond that date. The $4.9 billion curtailment gain was partially offset by a non-cash $1.7 billion settlement charge related to the elimination of post-65 salaried retiree healthcare coverage, including the cost of increased pension benefits that were announced in July as part of GM’s operating actions to improve liquidity as well as the recognition of accumulated deferred losses related to the healthcare plan.

In addition, GM reported charges of $652 million relating to its commitments as part of Delphi’s bankruptcy proceedings, $251 million for impairment of investments in GMAC, and $641 million in restructuring-related and other charges. Details on these and all other special items are in the financial highlights section of this release.

GM Automotive Operations

GM reports its automotive operations and regional results on an earnings-before-tax basis, with taxes reported on a total corporate basis.

GM recorded an adjusted automotive loss of $2.8 billion ($947 million reported loss) in the third quarter 2008. The loss compares with adjusted automotive earnings from continuing operations of $98 million in the third quarter of 2007 (reported net loss of $1.6 billion).

The results reflect losses in GM North America (GMNA) driven largely by the U.S. industry volume decline of nearly 20 percent, and shifts in product mix. In addition, Europe saw rapid auto market contraction, leading to sharply lower GM Europe (GME) sales volume in the third quarter. GM Asia Pacific (GMAP) results were down due to commodity hedging charges and moderating demand in key markets including China, Australia and India. These losses were partially offset by very strong results in the GM Latin America, Africa and Middle East (GMLAAM) region.

GM’s automotive results in the third quarter include $1.5 billion of expenses related to mark-to-market changes in the value of GM’s commodity and foreign exchange hedging contracts, due almost entirely to falling commodity prices.

GM sold 2.1 million vehicles worldwide in the third quarter, down 11 percent year over year. Sales in GMNA were down 19 percent compared to third quarter 2007. GM global market share was 13 percent, down 0.7 percentage points compared with the third quarter of 2007, due largely to weakness in North America and Western Europe.

Cash and Liquidity

Cash, marketable securities, and readily-available assets of the Voluntary Employees’ Beneficiary Association (VEBA) trust totaled $16.2 billion on September 30, 2008, down from $21.0 billion on June 30, 2008.

The change in liquidity reflects negative adjusted operating cash flow of $6.9 billion in the third quarter 2008, driven by the industry-wide slowdown in vehicle demand and compounding credit crisis, especially in North America and Europe. During the quarter, GM drew the remaining $3.5 billion of its secured revolving credit facility and made $1.2 billion in payments to Delphi as required by agreements between the companies as part of Delphi’s bankruptcy proceedings.

GM expects adjusted operating cash flow in the fourth quarter to be much improved versus the third quarter, and more consistent with the first half of the year. Improvements in fourth quarter cash flow are largely driven by anticipated improvements in working capital in North America relating to sales allowances, and lower fourth quarter finished vehicle inventory in Europe.

Improving its liquidity position remains a top priority for the company. In response to deteriorating market conditions, GM announced today that in addition to the $15 billion in liquidity initiatives it outlined in July 2008, it has identified $5 billion of incremental liquidity actions. Cumulatively, GM has announced actions aimed at improving liquidity by $20 billion through 2009. To date, $10 billion in internal operating actions have either already been completed or are on track for full execution by the end of 2009.

Even if GM implements the planned operating actions that are substantially within its control, GM's estimated liquidity during the remainder of 2008 will approach the minimum amount necessary to operate its business. Looking into the first two quarters of 2009, even with its planned actions, the company's estimated liquidity will fall significantly short of that amount unless economic and automotive industry conditions significantly improve, it receives substantial proceeds from asset sales, takes more aggressive working capital initiatives, gains access to capital markets and other private sources of funding, receives government funding under one or more current or future programs, or some combination of the foregoing. The success of GM's plans necessarily depends on other factors, including global economic conditions and the level of automotive sales, particularly in the United States and Western Europe.

[Source: GM]

Possible Important Changes

• In order to save money, GM will now stop offering Heinz Fancy Ketchup packets in employee lunchrooms; workers will now be forced to share jars of Hunts
• GM plans on putting its company jet up for sale on eBay
• Tiger Woods as new CEO
• Joining the Pontiac G8 ST will be the Pontiac G5 ST, G3 Wave ST and Buick LaCrosse ST
• They're going to stop making cars
• GM will be merging with Ford Chrysler Tesla Motors!

[Source: Detroit News]

"I don't have anything specific I want to talk about at this point," he said. "There may be ways (to help a merger) ... but I better leave it at that."

Levin obviously has his own ideas about how to facilitate a GM/Chrysler deal. Whether he's thinking low-interest loans — more of them — or something more akin to the recent banking deal that saw the federal government gain minor stakes in the companies themselves remains to be seen. But at this point, we're not sure the federal government is in any better shape than GM or Chrysler. [Detroit News]

An end date isn't specified, but the incentive applies to all 2008 and 2009 Chevrolet, Pontiac, Buick, GMC, Cadillac, Saturn and Hummer vehicles. If you buy a new GM vehicle with an outside lender, make sure you negotiate for some of that spiff off your your purchase price. [Automotive News, Sub. Req.]

Gerald Meyers, former AMC chairman turned U of M business professor says, "The others (automakers) will be delighted to have Chrysler just die and take 1.5 million units out of the industry, which is about what the excess is." And indeed, the elimination of a major automaker may be precisely what's needed to right-size the industry. But the nationwide cost in terms of lost jobs and plant closures would be massive.

GM and Chrysler are both struggling with overcapacity and an oversupply of dealerships; combining the two would simply give the resulting entity an excuse to shed tremendous redundancy in one fell swoop. Problem is, most of those redundant assets have families to feed and bills to pay; the impact to Michigan's already-fragile economy would be devastating, but every state in the union would feel some of the effects.

So what do you to if you're GM? Save yourself at the expense of tens of thousands of jobs? Would the result lead to a GM that's healthy and profitable again, or would it stave off the inevitable bankruptcy filing and lead to a generation of ill-will toward the automaker from families ruined by its scorched-earth takeover of Chrysler? We don't know the answer, but we certainly hope GM's corporate captains are asking the hard questions before making any far-reaching moves. [Detroit News]

Options now include seeking other methods of funding or actually selling off the RenCen though if a sale were to take place, GM would retain the headquarters on lease. Considering GM bought the whole place in May for $626 million and now is considering refinancing, this reminds us of our own investments these days: Buy high, sell low and the like. [DetNews]

Anyone with a heated washer fluid system on a GM product, as Microheat was the only manufacturer used. Specific vehicles include the Hummer H2, Buick Lucerne and Enclave, the Cadillac DTS and Escalade, the GMC Yukon, Sierra and Acadia, the Saturn Outlook and the Chevy Avalanche, Silverado, Tahoe, and Suburban. No word yet on whether other manufacturers will discontinue the system — currently Microheat is only company making washer fluid heating products. They may not have a choice, however, since the GM complaint and resulting expenses are reportedly driving the supplier out of business in short order. [Automotive News; Sub. Req.]

According to the Detroit News, the city pension and Detroit Police and Fire Fund have over $8 billion in assets between them, and have been active in financing several key downtown development projects. GM wants to borrow $500 at what we would presume are very favorable interest rates to finance the Renaissance Center complex. Do they have to refi or sell? That's the unknown here: It could be that GM is simply using the "we'll sell the RenCen" threat to put political pressure on the pension funds to green-light the refi deal. Or it could be GM thinks the interest rates they'll see from the Detroit Police and Fire Fund will be better than whatever horrifyingly poor rate they're able to get from the capital markets right now.

What happens if the pension funds don't blink? GM says it would try to sell the center but lease its office space, so tenants and GM employees would likely see little change in day-to-day business. GM would get a chunk of cash to fund its operations, then make monthly rent payments to the new owners. And who would the new owners be? Who knows, but with the dollar where it is, we'll bet our Volt futures that they won't be American. [Detroit News]

Quite a few DOTS cars were bought new at Good, including this '65 Impala.


Über-dealerships located in unincorporated county areas don't have to pay city sales taxes, so the older car dealerships located in urban centers- such as Alameda's Park Street and Oakland's Auto Row- have been feeling the squeeze.


The old Ford dealership next door was built back in the early 1920s, one of the first purpose-built automotive showroom buildings in the area and a really cool piece of architecture. After Winner Ford bailed a decade or so back, the building was converted into a sort of indoor farmer's market, which has done pretty well.


There's a scooter dealership across the street now. Is that the future of motorized transportation?

[San Jose Mercury News]

GM's 'Boost' In Efficient Four-Cylinders Includes More Turbos
Strategy Highlighted by the 2011 Chevy Cruze's new 1.4L Turbo that is Expected to Be a Fuel Economy Leader

FLINT, Mich. – GM will double its global production of small four-cylinder engines (1.0L to 1.4L) by 2011, with more than half of the increase coming in North America. The strategy is highlighted by an all-new, 1.4L Turbo engine that will power the 2011 Chevrolet Cruze.

The 1.4L Turbo enables great vehicle performance and fuel economy. In fact, the Cruze is expected to be a fuel economy leader in its segment when it launches in mid-2010, and its new engine reinforces GM’s commitment to replacing larger-displacement engines with more compact, advanced four-cylinder engines that optimize performance and fuel savings.

One-third of GM’s North American engine volume will be four-cylinders by 2011, and 21 percent of the four-cylinder volume will be turbocharged – a seven-fold increase over today’s volume of turbo engines.

“Power-dense four-cylinders such as the 1.4L Turbo are an integral part of GM’s portfolio of advanced propulsion technologies, including cam phasing, direct injection, Active Fuel Management, clean diesels, hybrids, flex-fuel vehicles, six-speed transmissions and electric propulsion,” said Tom Stephens, executive vice president, GM Global Powertrain and Global Quality. “GM is focused on delivering vehicles that look great, are fuel efficient and fun to drive.”

The Chevy Cruze is such a vehicle. It is an all-new, global compact car that will be built for worldwide distribution at GM’s Lordstown, Ohio facility. It will be offered with the 1.4L Turbo in North America, along with additional small-displacement engines for models sold outside of North America.

A non-turbocharged 1.4L variant will serve as a secondary energy source for the 2011 Chevrolet Volt extended-range electric vehicle. For trips up to 40 miles, the Volt’s primary source of power comes from its lithium-ion battery. When the battery’s energy is depleted, the 1.4L engine activates, generating electricity to power the Volt for several hundred additional miles until its battery is recharged.

1.4L Turbo details

At 100 horsepower per liter, the new turbocharged 1.4L has the power of a larger engine but retains the efficiency of a small-displacement four-cylinder in most driving conditions.

“Because of the turbocharger’s on-demand power and responsiveness, it’s like having two engines in the same vehicle – one for power and one for fuel economy,” said Stephens. “It’s truly the best of both worlds.”

The 1.4L’s turbocharger is integrated within the exhaust manifold, for reduced weight and greater packaging flexibility in smaller vehicles. A reinforced crankshaft and stronger connecting rods are unique, delivering additional strength to support the engine’s pressurized, high-rpm performance.

Estimated power ratings for the 1.4L Turbo will be 140 horsepower (104 kW) with a torque rating of 148 lb.-ft. (200 Nm).

In addition to the Chevrolet Cruze, GM will introduce the 1.4L turbo in the U.S. in two additional GM models in 2011.

Global engine family

GM’s small four-cylinder gasoline engines include displacements of 1.0L, 1.2L and 1.4L. The engines were designed with fuel efficiency in mind, including technology such as full variable valve timing that optimizes power and fuel efficiency across the rpm band.

More importantly, torque for these engines – the pulling power that is felt when accelerating from a stop – is generated at lower rpm, for strong, off-the-line launches and confident acceleration at all speeds. Supporting powertrain features, such as torque converter design and transmission gearing, accentuate engine power and contribute further to the feeling of performance.

All engines in the family have premium design elements that contribute to world-class smoothness and durability, including:

* Dual overhead camshafts
* Roller-finger follower valvetrain
* Chain-driven camshafts
* Flow-controlled oil pump
* Piston-cooling oil jets
* Thermal management

The engines also incorporate numerous mass-reducing features, including a cast iron block with a hollow frame structure, hollow-cast camshafts, and on non-turbo engines, crankshafts with hollow-core main bearing journals and connecting rod journals.

[GM]

Jalopnik Snap Judgement: If this rumor proves to be true, GM is working hard to put together cash and not letting the broken deal with Navistar stop them. The problem we see is that medium-duty trucks offer excellent return on investment as major systems have long life cycles and redesigns and retooling efforts are rare occurrences. Add to that long service lives with a healthy parts business and the building of trucks is a good business to be in.

However, trucking faces hard times ahead as rising fuel prices drive down profitability and fleet operators are making current trucks last longer instead of buying new. On top of that the 2010 EPA regulations on diesel trucks are forcing major engineering expenditures, driving costs and complexity up. GM may be throwing the baby out with the bathwater when considering this deal, but it may be worth it to save the North American business, and who knows, the baby in this case might grow up to be an asshole anyway. We mean, he is a big movie star now. [AutoNews (Sub. req)]

Relentless competition, the domestic economic meltdown and fuel prices are all combining to make GM's hundredth year one of its most difficult. The company has exciting new products in the pipeline like Volt and Cruze, as well as current offerings like the groundbreaking Corvette ZR1. But constant progress will be essential: Are they up to the job? Will General Motors last another hundred years?

(QOTD is your chance to answer the day's most pressing automotive questions and experience the opinions of the insightful insiders, practicing pundits and gleeful gearheads that make up the Jalopnik commentariat. If you've got a suggestion for a good "Question Of The Day" send an email to tips at jalopnik dot com.)

A V8 engine is rumored to be required for any possible downsizing to happen, and Lambda is said to be able to accomodate such a mill; whether it will be the corporate 5.3-liter unit or something altogether different remains to be seen. Whither Escalade EXT? Apparently it could go to the Zeta platform or get dropped altogether.

Jalopnik Snap Judgment: Those old enough to think "Cimmaron" anytime someone mentions a downsized Cadillac probably shouldn't be too concerned: The current Buick Enclave demonstrates that Lambda is well-suited for luxury duty, and GM's efforts at interior and exterior styling differentiation among its various brands show the company is taking each division's uniqueness seriously. With a V8 featuring Active Fuel Management and some readjustment of the 6-speed tranny's shift points, we'll bet a Lambda-based Escalade would see a significant jump in sales over the current truck version. [Automobile; Photo Credit: Premiumposts.com]

Jalopnik Snap Judgment: We love us some pushback, even if it is filtered through the mind-numbing, creativity-sapping lenses of corporate PR and legal departments. It reads sort of like a GM Fastlane blog for the general public; if the folks in charge can answer real questions with straight answers, and not dumb them down to meaninglessness in order to appease every possible visitor, we applaud GM's move. If they make it another "We value your opinion. Here are 12 sentences of vaguely related marketingspeak that are mainly bullshit but somehow made it through legal," then it could do more harm than good. Either way, we'll be watching closely.

The Volt Is Vaporware
There are dozens of companies around the world promising a practical electric vehicle in the near future. While we can’t comment on the efforts of others, we can assure you, the Volt is for real.

On June 3, GM announced that production funding for the Volt had been approved, and that GM’s Detroit Hamtramck plant has been selected as the assembly plant, pending government approvals.

Meanwhile, development of both the car and its lithium-ion batteries continues apace. For the latest information, please see our Volt website.

The Chevy Volt is a revolutionary product, and as such, it demands maximum effort from everyone involved. But we are on target to start production toward the end of 2010, and excited about the potential for the Volt.

GM Can't Compete
GM competes head to head with the best global carmakers in every major market except Japan, which is effectively closed to non-Japanese companies. And we do quite well, thank you. We are on track to sell more than 9 million vehicles globally for the fourth year running, and we are setting sales records in our three regions outside of North America.

In North America, our new vehicles have been consistent award winners, and they continue to win over customers in a very tough market.

GM is one of a handful of companies with the resources to truly reinvent the automobile. Whether it is advanced internal combustion engines, biofuels, hybrids, fuel cells, or electrically driven vehicles like the Chevy Volt, GM is committed to being a global leader in advanced propulsion, which will reshape the auto industry during its second century.

[gmfactsandfiction.com via Detroit News; Photo Credit: TTAC]

"I've never seen that vehicle and I've never seen that color... You can tell it caught me off guard. I didn't even realize it (the Volt) was out of the state of Michigan."

Jalopnik Snap Judgment: Of course this isn't exactly what the production Volt will look like. The production model likely won't have the big showoff rims, and perhaps some of the badges on the movie prop are slightly oversized for the camera. It's probably just minor stuff that will change from the styling of this car to the one you'll see in showrooms — the basic shape should be here to stay. [Inside Line, AutoblogGreen]

Jalopnik Snap Judgment: We've been over this a hundred times. Europeans get cool cars that we cannot get because they don't meet our emissions standards or our crash test standards. Making Euro NCAP an acceptable standard for American vehicles would remove one of the huge challenges domestic manufacturers face in supplying a market hungry for stylish small vehicles. And it's not like Euro NCAP is the Sichuan Province Regional Crash Academy — some vehicles that pass NHTSA do very poorly on NCAP, and even NHTSA has admitted that its testing standards are out of date, requiring an overhaul. So let's look at the score: This proposal would make it easier for manufacturers to provide us with more choice at less cost to them, all without endangering our safety. We have a winner; now let's make it happen. Just don't cheat and try to sneak some tin-can-crumpling third-world garbage onto the market, ruining it for everyone else.
[Wards Automotive, Sub. Req.]

Jalopnik Snap Judgment: So how rampant is this problem? Considering that a massive corporation like GM is going after less than half a million bucks, it wouldn't seem like a very big deal. But GM is sending a message here that they're taking everything seriously. And, being as some of us are Metro Detroiters, we can sympathize with GM to some extent: Automaker employee discounts are swapped and sold like cash in this town (even appearing on Craigslist at times) since everyone knows someone who works at each of the Detroit Three. Bottom line: It sucks that it's getting harder to game the system, but we can't blame GM for asking people to play by the rules. [Detroit News]

Jalopnik Snap Judgment: Obviously, gas falling below $4 a gallon is having some effect — unleaded suddenly seems like a bargain, and the short-sighted are likely convinced the energy crisis is over. But we think it's pretty humorous that Lutz is touting the recovery of the truck and SUV market just as GM is in the midst of a huge and well-advertised "employee pricing for everyone" sale. Of course sales are seeing an uptick; that's what incentives do. So, while we're happy for GM that they're able to clear some excess inventory, we're not quite ready to say the truck and SUV sales slide has bottomed out. [Bloomberg]

With the Pontiac G6 in refresh limbo and a probable Pontiac G5 based on the Chevy Cruze, it's a hard to argue the case for an all-rear-wheel-drive lineup at the moment. MotorAuthority contradicts an earlier GM statement saying we wouldn't be seeing the Pontiac G3 in the US. They go one step further and imagine a car between the G3 and the G5 — we're no rocket scientists, but "G4" is a good bet for a name. So, lets count it all up: No rear-wheel-drive lineup and a rebadged Aveo? We don't like this story; put it back. [MotorAuthority]