The U.S. economy expanded at a 2.8% annual rate in the third quarter of this year, down from the original estimate of 3.5% reported a month ago, says the Dept. of Commerce.

Gross domestic product was less robust because the trade deficit was wider than predicted, and growth in consumer spending was slower than forecast. Still, the country’s economic expansion in the third quarter was the strongest in two years, the Commerce Dept. says.

Separately, the Federal Reserve has hiked its forecast for economic growth in 2010 to a range of 2.5% to 3.5% from its previous forecast of 2.1% to 3.3%. That’s according to the minutes of the Fed’s early November meeting, which were released last week. The central bank expects the U.S. economy to contract by 0.1% to 0.4% this year.

General Motors Co. wants emergency loans of as much as 5 billion kronor ($716 million) from the Swedish government to keep its Saab Automobile unit afloat, says Bloomberg News, citing government and labor officials.

GM’s board will discuss Saab’s future at its regular meeting tomorrow. The company’s plans to sell the Swedish brand to Koenigsegg Group fell apart last week. The group, which included Swedish supercar maker Koenigsegg Automotive AB and Beijing Automotive Industry Holding Co., says negotiations with lenders and investors dragged on too long.

GM’s board wants to know before it meets whether Stockholm will provide aid, Bloomberg says. Swedish government officials are in the U.S. to meet with GM officials.

A Swedish official tells Bloomberg the country is unlikely to relax a state rule that requires rescue loans to be repaid within six months. Changing the rule would require a parliamentary decision, which isn’t likely to happen by tomorrow.

But Sweden says it remains willing to guarantee €400 million ($600 million) of loans from the European Investment Bank, which will await final approval.

Analysts say GM could decide to close Saab or maintain operations until it can arrange a sale to another buyer. They doubt the company will keep Saab for the long term. GM put the Swedish brand up for sale last December and later decided to sell or close it by the end of this year.

Saab Automobile says it is engaged in “intense dialogue” with a number of “seriously interested” potential buyers after a deal to sell the Swedish brand to Koenigsegg Group collapsed last week. Parent General Motors Co. says none has yet submitted a firm bid.

News reports say at least three parties are eyeing Saab, including the other two finalists in the bidding contest before GM chose Koenigsegg in June: Wyoming-based investor group Merbanco Inc. and New York City-based private equity firm Renco Group Inc. Beijing Automotive Industry Holding Co., which was a partner in the Koenigsegg deal, says it will “cautiously” reconsider plans to buy a stake in Saab. The Wall Street Journal says at least one of the other two parties would be willing to partner with BAIC on a bid.

Merbanco says it is “definitely” interested and might arrange a deal similar in structure to Koenigsegg, which could allow for a quick transaction. Renco, which is owned by billionaire Ira Rennert, hasn’t commented. Renco owns a minority stake in Hummer maker AM General and bought Delphi Holdings LLP’s interiors and closures unit in March 2008.

The collapse of the Saab deal follows the failure in late September of GM’s plan to sell its Saturn brand to Penske Automotive Group Inc. The sale of its Hummer SUV brand to China’s Sichuan Tengzhong Heavy Industrial Machinery Co. is still pending. GM is winding down its Pontiac brand.

Toyota Motor Corp. says it will shorten the accelerator pedals on 4.3 million vehicles it is recalling in the U.S. to prevent them from jamming.

The National Highway Traffic Safety Administration says the floor mat can hold the accelerator pedal in the full open position after the driver presses down on the pedal and then releases it. The agency has confirmed five fatalities linked to the problem.

In addition, Toyota will remove a layer of foam under the carpeting to increase the space between the pedal and the floor. By April, the company plans to replace the shortened pedals with a new version on all recalled vehicles and replace all-weather floor mats.

When the recall begins in January, Toyota dealers also will reprogram an electronic control unit to add a brake override in some of the recalled cars. The system, which prevents a vehicle from accelerating if pressure on the brake pedal is detected, will be standard on all the company’s new vehicles beginning in January.

In late September Toyota announced plans to recall 3.8 million sedans and pickup trucks from the 2004-2010 model years as soon as it devised a remedy. The company has since expanded the action. Toyota also is recalling 209,000 vehicles in Canada for the same problem, according to the Toronto Star.

Toyota denies allegations from consumers and safety advocates that a defective electronic throttle system is causing the sudden acceleration incidents. NHTSA says it has found no such defect in several vehicles it has examined.

China’s Zhejiang Geely Holding Group Co., which plans to buy Volvo Cars, says it has reached an agreement with Ford Motor Co. to obtain intellectual property rights for all technology developed by Volvo.

Geely says Ford will have access to Volvo technologies that are critical to its business, including environmental and safety systems. Volvo will be able to use Ford intellectual property needed for its existing business.

A resolution of tricky intellectual property issues would remove a major obstacle to completing the sale. Ford selected Geely as the preferred buyer for Volvo in October but said much work remained to be done. The Chinese company is believed to be offering $2 billion for the brand.

Americans became slightly more upbeat about the economy in November, according to the New York City-based Conference Board. The board’s consumer confidence index increased to 49.5 from 48.7 in October.

But a separate survey by the University of Michigan contends consumers grew a bit gloomier this month. The university’s consumer sentiment index dipped to 67.4 in November from 70.6 the month before.

Both groups say confidence remains tepid as consumers worry about their jobs. The Conference Board says plans to buy autos and homes dropped this month.

Separately, the Dept. of Commerce reports that consumer spending, which dropped 0.6% from August to September in the wake of the “cash-for-clunkers” program, increased 0.7% in October. Disposable income rose 0.2% last month.

Russia has agreed to invest 50 billion rubles ($1.7 billion) in its largest automaker OAO AvtoVAZ to help the company-Russia’s largest carmaker-restructure its debt and modernize its Togliatti assembly plant.

In return, partner Renault SA agreed to contribute engineering and technology worth at least €240 million ($361 million) to help AvtoVAZ develop new vehicles based on the no-frills Logan sedan, expand powertrain production and develop an entry-level Lada car. The companies hope to produce as many as 900,000 Lada, Renault and Nissan vehicles at the Togliatti plant by 2015.

The parties will sign a final agreement in March. Investment bank Troika Dialog and state-owned Russian Technologies, who each own a 25% stake, also are part of the deal.

Prime Minister Vladimir Putin backed off his threat to dilute Renault’s 25% stake in AvtoVAZ if it didn’t contribute cash. The French company stuck to its goal of providing technical expertise but not more capital. Putin says Renault has signaled it might contribute an additional €60 million in direct investment, but the French company has not expressed any interest in doing so.

Ford Motor Co. says its lenders have agreed to push back the maturity of a $7.2 billion revolving credit facility by nearly two years to November 2013.

The plan also reduces that credit facility from $10.7 billion. Ford plans to repay $1.9 billion later this week and must pay an additional $886 million in December 2011. Lenders will convert $724 million into a term loan maturing December 2013.

Ford has been working to clean up its balance sheet. The company, which did not file for bankruptcy like Chrysler Group LLC and General Motors Co., carries more debt than its domestic rivals.

Toyota Motor Corp. is recalling 110,000 Tundra fullsize pickup trucks from the 2000-2003 model years that were sold or registered in cold-weather states to replace rusted rear cross members.

The National Highway Traffic Safety Administration says road salt can corrode the cross member and allow the spare tire stowed under the truck bed to fall off. The corrosion also can damage the rear brake lines, thus diminishing braking capability. The agency opened an investigation into the problem last month.

Toyota is asking owners to remove the spare tire until the problem is remedied. Dealers will replace damaged cross members and brake lines and spray an anti-rust compound on undamaged cross members.

Volkswagen AG plans to invest $3.6 billion in Brazil over the next five years to increase capacity there to 1 million vehicles from 800,000 now.

The company plans to expand assembly plants in Anchieta and Taubate and at an engine plant in Sao Carlos. VW’s sales in Brazil are up 16% in the first 10 months of this year vs. a 6% industrywide increase.

Ford Motor Co. said last week it will invest $2.3 billion over the next five years on plant expansion and product development in Brazil. ANFAVEA, Brazil’s automakers’ trade group, predicts automakers will spend $18 billion through 2012 to increase capacity to 6 million units.

Toyota Motor Corp. says it will reduce winter bonus payments for 8,700 managers in Japan by 20% from a year earlier as the company faces its second consecutive fiscal year of losses.

The company slashed summer bonuses this year by 60% and cut last year’s winter bonus by 10%. Winter bonuses for hourly workers will average $10,700 this year, down 18% from last year. Toyota expects to lose 200 billion yen ($2.3 billion) in the fiscal year ending March 31, 2010.

Chrysler Group LLC has tapped Scott Sandschafer, an information technology manager at Fiat SpA’s CNH America farm equipment unit, to become its chief information officer, effective tomorrow. Sandschafer will report directly to Sergio Marchionne, CEO of Chrysler and Fiat.

Walter Bodden, Chrysler’s chief investment officer, will become the company’s treasurer, reporting to CFO Richard Palmer. Bodden and Sandschafer are splitting the responsibilities of Jan Bertsch, who is leaving the company today.

Those who follow automotive technology know that modern diesel engines for passenger vehicles are clean, quiet, powerful and extremely fuel efficient. They would make an excellent addition to America’s arsenal of options for lowering greenhouse gas emissions and reducing demand for petroleum.

Consumers are beginning to move past diesel’s legacy perceptions, but that isn’t enough. Proponents of modern diesels say the technology deserves a fair hearing when regulators and legislators set policies intended to promote “green” technologies. Jeff Breneman, executive director of the recently formed U.S. Coalition for Advanced Diesel Cars in Washington, D.C., explains.

What is the coalition’s purpose?

We were founded by Bosch and BorgWarner at the beginning of 2009 specifically to make sure the voice of light-duty diesels is being heard when government policy is being written. Our coalition is supplier-driven, and our message to energy and environmental policymakers is to focus on the desired result and not try to pick the technology to get there. We’re pushing for technology-neutral policies.

Our focus is specifically to promote light-duty diesel cars, pickup trucks and SUVs whose engines meet federal tier 2 bin 5 standards. These are “clean” diesels that can be sold in all 50 states. As a group, they get 30% better fuel economy, emit 25% less carbon dioxide and deliver as much as 50% more torque than comparable gasoline-powered vehicles.

Why the push for diesels now?

We all remember the diesels of old. But they bear no comparison with today’s diesels. Advanced diesels became feasible in the U.S. in 2006 when low-sulfur fuel standards took effect. A year later the federal government put its tier 2 bin 5 emission standards into effect that made exhaust emissions from diesels and gasoline engines virtually the same.

The reality is that advanced diesels offer consumers an immediate improvement in fuel economy and a reduced carbon footprint without sacrificing any power. We’re not saying diesels are the only solution. They aren’t a silver bullet, and it’s important to note that our members supply technologies for hybrids and other environmentally friendly options. But if we’re going to reduce CO2, we need a portfolio of technologies. Diesels currently account for only about 3% of America’s overall vehicle fleet. We think it could be several times that level over the next five years.

How is your message being received by government policymakers?

These are very smart individuals, and they know their issues well. We don’t have to start with Diesel 101. They know the technology, and they know the options.

When we say we want technology-neutral policies and real-world reduction in petroleum usage and emissions, they agree. But then we point out policies that aren’t that way, such as incentives that are skewed toward a particular technology or fuel.

Does your effort also include consumer education?

There’s no question that consumers need more information to help them choose technologies that best suit their needs. But we think this is something that carmakers can do best.

It is important for consumers to understand the importance of choosing a fuel-saving technology that fits their driving patterns. For example, it doesn’t make sense to buy a hybrid SUV if your commute involves mostly highway driving. Hybrids are built primarily to help boost fuel economy in stop-and-go city traffic. On the highway, you’re just using your hybrid’s gasoline engine to lug around an extra battery and electric motor. For that type of driving, a diesel-powered SUV would probably be the better option.

What about the price of diesel fuel?

Currently we are seeing a degree of price stability at the pumps. Ultra-low-sulfur diesel is roughly the same as regular unleaded, and that’s in spite of a 33% tax penalty currently imposed on diesel fuel: 24.3 cents per gallon for diesel vs. 18.3 cents for gasoline. That penalty may change when Congress updates the transportation bill.

To learn more, please click HERE or call the U.S. Coalition for Advanced Diesel Cars at (202) 585-6382.