Ford Motor Co. announced that it will make buyout offers to hourly workers at its several plants across Southeast Michigan and Northern Ohio. The company made buyout offers previously in June and it’s planning to extend another round of offers as the company struggles to reduce production capacity to match declining demand for its cars and trucks.

The company is planning to offer the buyouts to workers at about fourteen plants, starting next week as it looks to trim its workforce to match a declining U.S. market share. Reportedly, Ford posted a $2.7 billion loss in 2007 and has abandoned a long-standing goal of returning to profitability in 2009. The automaker had previously extended buyout offers at plants in Kentucky and Ohio due to the declining demand for large pickup trucks and SUVs. (more…)

Despite the huge fall in oil prices, the shares of automobiles managed to climb up by their biggest margins in the recent months. The oil prices dropped by $10 a barrel in two days but the shares of General Motors and Ford Motor Co. each managed to achieve a profit margin of more than 15 percent after going downwards in the share market in recent weeks.
 
The stock market drew all its support margin from the huge fall in oil prices, that fell by a combined $10.58 a barrel in last two days. General Motor finished up $1.64 to $11.48 (16.6 percent) a share, while Ford finished up at 18.0 percent per share in the share market. (more…)

According to reports, Nicole Nason, head of the National Highway Traffic Safety Administration or NHTSA will be resigning next month.

Nason joined the NHTSA on May 31, 2006. She has been the nation’s chief motor vehicle safety regulator since then and she has been responsible for the implementation of several important auto safety regulations. Earlier, she was the assistant secretary for government affairs in the Department of Transportation since July 2003. (more…)

The shift in the U.S. auto market has finally compelled General Motors Corp., the largest local car maker to take new actions to fight through the current economic challenges. The automaker is trying to deal with the shift in the U.S. market and will improve through 2009 by its new restructuring plan, GM said on Tuesday morning in a press conference.

The restructuring plan as announced by the officials, includes laying off some white-collar workers, reducing health care coverage for white-collar retirees, making more cuts in truck production, suspending dividends, eliminating executive bonuses. These changes are expected to raise GM cash by about $15 billion, by the end of 2009, the company said. (more…)

Europe’s largest and world’s fourth largest car producer, Volkswagen AG favored Huntsville in North Alabama as the site for its new U.S. car plant, according to sources. The plant would cost $800 million to $1.2 billion and it would create as many as 2,000 jobs. The production at the plant is slated to start in 2010, with an annual capacity of 300,000 cars to be reached by 2018.

After considering several states for a new U.S. manufacturing facility, Volkswagen seems ready to break ground for the plant in Huntsville, Alabama. The German automaker is planning a U.S. plant to help reach its ambition of more than tripling its annual U.S. sales by 2018 to 1 million, including 800,000 VW brand and 200,000 Audi sales. In April, the automaker had narrowed the finalists for a possible U.S. assembly plant to sites in Alabama, Tennessee and Michigan. (more…)

In a response to slumping sales, high gas prices and increasing consumer demand for hybrid vehicles, like most of the U.S. motor companies, Toyota Motor Corp. plans to make some changes in its production line. The Japanese company will scramble its manufacturing plans to fewer light trucks and more hybrid cars in the United States.

Toyota announced that it will build the hybrid Prius in the United states for the first time as the automaker adjusts its U.S. manufacturing operations to meet consumer demands for smaller and more fuel-efficient vehicles. Prius will be the second hybrid car next to the hybrid version of Camry sedan, that is being scheduled to build outside Asia. Camry’s hybrid version is built in Georgetown, Kentucky. (more…)

The U.S. third largest automaker, Chrysler LLC denied the bankruptcy rumor, speculated by analysts after the automaker exercised a $2 billion line of credit from Cerberus Capital Management LP and Daimler AG. Chrysler drew down a $2 billion credit line late last month from Cerberus and Daimler AG, the German car maker that sold, roughly 80 percent stake in Chrysler to Cerberus.

Cerberus Capital Management LP is a private equity firm that bought Chrysler LLC about a year ago.

Chrysler said it has plenty of cash, while denying the speculation, that Chrysler was planning to file for bankruptcy protection through the credit. (more…)

The record gasoline price of $ 4 per gallon has not only shifted the consumers’ demand from pickup trucks and sport utility vehicles to cars but, also from six-cylinder models to four-cylinder models. The demand for four-cylinder engines is at its highest since the energy crisis of the early 1980s and many automakers simply don’t have the capacity to keep up with the demand.

A wild swing towards four-cylinder engines that has been caused by high gasoline prices ultimately made most of the automakers including Detroit Big 3 suffer badly in the June U.S. auto sales. A shortage of four-cylinder engines cost General Motors Corp. 10,000 sales last month, says GM sales chief, Mark LaNeve.

According to a report of the Power Information Network, more than half of all new cars and trucks purchased in June had four-cylinder engines. But, the scene was different a year ago, when barely
one- third of new-vehicle buyers chose four-cylinders. (more…)

DETROIT -  Several reports are prompting out that General Motors is considering the sale of more than just one of their eight brands. But a GM spokesperson today denied all allegations explaining that apart from Hummer, no other brands are under any review.
 
"No other GM brand (besides Hummer) is under strategic review,” GM spokesman Tony Cervone said in an e-mail to Automotive News today.

Out of eight GM brands, most of them including Saturn, Buick and Saab are struggling to attract the buyers. So the company has already made up their mind to review their Hummer division for sale and the prospective buyers may include Mahindra & Mahindra.

David Healy, an auto analyst with Burnham Securities, said that “GM has enough money to make it through this year but may need more cash in 2009. The automaker, he said, has ways to raise money other than selling brands.” (more…)

One of the Detroit Big 3, Chrysler LLC plans to idle its St. Louis South assembly plant that makes minivans and cut the production at St. Louis North plant as the U.S. sales for larger vehicles continue to fall.

Both the plants are located in Flenton, Missouri in St. Louis County. The tough decisions have been taken due to the slow sales of the larger vehicles in the market. The moves will affect a total of 2,400 employees in both the plants.

Chrysler LLC will close its St. Louis South assembly plant indefinitely, effective October 31.

The automaker’s co-president Tom LaSorda said that the plant is not likely to reopen in future. He further added, "We see no intent to rerun this plant. We’re idling it and it will likely be fully closed." (more…)