Looking back, 2009 has been a momentous year for the U.S. auto industry. Two of Detroit’s “Big Three” declared bankruptcy and took billions in government loans to survive. Chrysler was sold to Italian automaker Fiat. Car sales nosedived by about 40 percent. And General Motors cut the number of brands it sells in half. Indeed, these are historical times, and it’s not over yet.
In the final weeks of the year, the automakers are trying to put 2009 to rest with a number of significant announcements:
- After firing its last CEO, Fritz Henderson a veteran company insider, after just eight months on the high-profile job, General Motors announced it will pay back its outstanding $6.7 billion in government loans by next July. That’s significant, because it would free the company from the oversight of federal pay czar Kenneth Feinberg, who monitors top-level executive pay at companies that owe the government large amounts of money. That couldn’t come at a better time for a corporate titan with a historical litany of problems as it begins the search for a new CEO. The other $53 billion in federal assistance had been put into GM was given as an investment and won’t be paid back until the new company makes a public stock offering, which could also happen next year.
- Meanwhile, after seeing two out of three deals to sell divisions to other companies, GM Chairman and interim CEO Ed Whitacre announced that Saab’s fate will be sealed by the end of the year. After a deal with a group lead by Swedish supercar maker Koenigsegg fell apart, Whitacre announced that the only remaining bidder for Saab is another tiny exotic-car upstart, Spyker, a Dutch company that sold all of 37 cars in 2008.
- Sweden’s other major automaker is faring only slightly better as Ford shops the company around. Volvo’s sale to Chinese automaker Geely is on track for early 2010, according to trade magazine Automotive News, which cited sources inside the transaction. The deal is estimated to be worth about $1.8 billion.
- Over at Chrysler, the liquidation-destined automaker known as Old Carco that was split from “new” Chrysler and saddled the old company’s worthless assets, announced it will have no money left to repay the $4 billion the government lent it. No surprise there. The old companies left behind in the GM and Chrysler bankruptcies were never expected to pay back any money.