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January 5, 2010

GM Sales in China Soar 67% in 2009

General Motors Co. sold 1.83 million passenger and commercial vehicles in China last year-a company record-compared to 1.09 million in 2008, as tax cuts and government subsidies boosted sales of small cars and commercial minivehicles.

GM’s share of the country’s total vehicle market rose an estimated 1.3 points to 13.4%. The company predicts strong growth for its sales in China this year, although at a slower pace.

GM’s minivehicle joint venture with SAIC Motor Corp. and Liuzhou Wuling Motors Co. sold 1.06 million vehicles last year, the first time any automaker’s annual volume in China has topped 1 million vehicles.

Demand for the venture’s Wuling Sunshine van exceeded 596,600, a Chinese industry record for a single model.

GM’s car joint venture with SAIC boosted its sales 64% to 727,600 units. The U.S. company also launched a 50:50 truck joint venture with China FAW Group Corp. in August, which added 34,500 units of volume for the year.

Separately, GM says it expects its sales in India to increase to at least 100,000 vehicles this year, helped by the new Chevrolet Beat, from about 70,000 in 2009.


Cold Snap Lifts Oil to 15-Month High Above $81

Crude oil futures rose $2.15 per barrel yesterday on the New York Mercantile Exchange to close at $81.51, the highest since October 2008.

That marked the eighth consecutive trading session of rising oil futures. Analysts say cold weather in China, Europe and the U.S. is boosting demand for heating oil. They add that a weaker dollar and hopes for an economic recovery that would increase energy demand also are contributing to gains in oil futures.


U.S. Manufacturing Activity Rebounds

Activity at American factories increased for the fifth straight month in December as new orders pushed production to a five-year high, according to the Tempe, Ariz.-based Institute for Supply Management.

The institute’s manufacturing index advanced from 53.6 in November to 55.9, the fastest pace of activity since April 2006. Any reading above 50 indicates expansion. The index hit a 28-year low of 32.9 in December 2008. ISM says production increased last month, and employment improved for the third consecutive month.

New surveys of purchasing managers in Asia and Europe indicate that factory activity also is increasing there. Economists say the data reinforces a belief that the global economy is recovering.

But the optimism hasn’t yet spread to the U.S. construction sector. The Dept. of Commerce reports that construction spending fell for the seventh straight month in November-a 0.6% decline to a six-year low. Spending dropped for both commercial and housing projects.


UAW Shoulders Big Three Retiree Healthcare Burden

Chrysler, Ford and General Motors confirm they have transferred their healthcare liabilities for about 675,000 current and future U.S. hourly retirees and their spouses to three trusts overseen by the United Auto Workers union.

Ford says it made its first scheduled payment of $2 billion, plus an additional early payment of $500 million, to its trust on Dec. 31.

The transactions were expected to occur by year-end under the UAW’s 2007 national contracts with the companies. The automakers agreed to contribute about $54 billion to the trusts in exchange for removing some $87 billion of liabilities from their books.

As the U.S. auto industry neared collapse last spring, the UAW agreed to let the companies make as much as half of their retiree healthcare contributions in stock. As a result, during the bankruptcy reorganization of Chrysler and GM, the trusts received equity stakes of 55% and 17.5%, respectively. The UAW says the trusts plan to sell the stock after the companies go public.

Chrysler must still pay its trust $10.3 billion over time. GM is slated to make three $2.5 billion installments between 2013 and 2017.


Penske Taps Ex-Saturn Boss to Head Smart

Penske Automotive Group Inc. has named Jill Lajdziak, who retired as general manager of General Motors Co.’s Saturn unit at year-end, as president of its Smart USA unit, which distributes Daimler AG’s Smart city cars.

The Bloomfield Hills, Mich.-based company said last month it planned to hire Lajdziak on Jan. 1 as Smart’s sales and marketing chief. GM is winding down Saturn after a deal to sell the brand to Penske collapsed in September.

Lajdziak succeeds Dave Schembri, who is moving to Penske’s retail operations. The company is of the nation’s largest publicly traded dealer chains.


Truck Design Chief Leaves Ford

Pat Schiavone, design director for Ford Motor Co.’s North American trucks and SUVs, has stepped down to join Benton Harbor, Mich.-based appliance maker Whirlpool Corp. in an undisclosed capacity, according to PickupTrucks.com.

Ford confirms to Automotive News that Schiavone’s resignation took effect yesterday. During his 21 years at the company, Schiavone is credited with designing the 1994 Mustang and being involved in designing the last three generations of the F-150 fullsize pickup truck.


Chrysler Picks Chief Investment Officer

Chrysler Group LLC said yesterday it has appointed finance executive Robert Watson as assistant treasurer and chief investment officer, effective Dec. 30.

Watson is responsible for managing the company’s U.S. and Canadian pension funds. Watson, who joined Chrysler in 1985, reports to Treasurer Walter Bodden Jr.


Court OKs SsangYong Restructuring Plan

A South Korean court has approved SsangYong Motor Co.’s reorganization plan to swap debt for equity and seek a new owner by the end of this year.

The court action last month averts the immediate threat of liquidation, although analysts say the SUV maker’s future is far from ensured. SsangYong, which aims to return to profitability within three years, promises to present a long-term “action plan” soon.

The restructuring plan was opposed by foreign creditors and by shareholder SAIC Motor Corp., whose stake will shrink to 11.3% from 51.3%. The Chinese automaker lost management control of SsangYong after a severe cash crunch forced the company to seek bankruptcy protection in February 2009.

SsangYong has been hard hit by the global economic downturn and the declining popularity of SUVs. Its sales fell by two-thirds to 30,000 vehicles in the first 11 months of 2009. After workers occupied its main plant for 77 days last summer, the company’s third-quarter loss tripled from a year earlier to $78 million.


Veteran Analyst Keller Joins Advisory Firm

Maryann Keller, a respected former auto analyst, has joined New York City-based consultancy Casesa Shapiro Group LLC as a senior adviser.

Keller, the author of several books about the auto industry, also served on National Academy of Sciences panels that studied fuel economy and intelligent vehicle systems in the 1990s and early 2000s. After a 28-year career on Wall Street, she became president of Priceline.com’s auto services unit and an auto industry consultant.