Government readies first $8 billion for GM, Chrysler

General Motors, Chrysler LLC and the government today were making final arrangements to transfer the first installments of federal emergency loans to the automakers.

"We're making good progress finalizing the automaker loans and are committed to closing them on a timeline that will meet their individual near-term funding needs," Treasury Department spokeswoman Brookly McLaughlin said in an e-mail to Automotive News.

Under terms of a deal announced Dec. 19 by President Bush, GM and Chrysler are to receive $4 billion each from the government today.

GM spokesman Greg Martin told Automotive News he expects the transaction to be completed on time.

Comment was not immediately available from Chrysler.

The Bush administration promises another $9.4 billion for GM early next year. The final $4 billion of that amount will require congressional action.

Amid collapsing sales, GM and Chrysler told government officials they need the federal funds to avoid running out of cash.

The automakers must file plans by Feb. 17 describing how they will restructure to become viable for the long term. Unless the agreement is changed by the Obama administration, a president's designee, or car czar, is to decide by March 31 if an automaker's restructuring plan is sufficient. If not, the first loans will be called in, possibly forcing the company into bankruptcy.

Ford Motor Co. is not seeking an emergency loan but wants to be able to tap a $9 billion government line of credit if necessary.

Together the Detroit 3 CEOs told lawmakers early in December they need access to at least $34 billion from the government to get through the extreme economic downturn.

Some analysts and economists say much more government help will be needed.

New Ford hybrid sedans post 41 mpg in the city

Ford Motor Co. said today that its Ford Fusion and Mercury Milanhybrid sedans have been certified by the EPA at 41 mpg city/36 highway.

The ratings put the hybrids' fuel economy at the front of the mid-sized pack, Ford said in a statement. Ford engineers spent three years revamping the gasoline-electric powertrain that debuted in the 2004 Escape Hybrid crossover.

The announcement underscores efforts by the Detroit 3 to bring more fuel-efficient vehicles to market.

During recent congressional hearings for federal bailout funds, the Detroit 3 were criticized for their past adherence to larger vehicles with poor fuel economy.

The latest version of Ford's hybrid powertrain again uses a one-speed continuously variable transmission. The size of the gasoline engine has been increased to 2.5 liters from from 2.3. The nickel-metal hydride battery pack is smaller and lighter but puts out 20 percent more power.

The Fusion Hybrid arrives in dealerships next spring with a base price of $27,270, excluding delivery charges that have not been announced. No price has been announced for the Milan Hybrid.

Competition is stiff among fuel-efficient cars.

Volkswagen's compact diesel-powered Jetta sedan delivers 30 mpg city/41 highway, while the Honda Civic Hybrid sedan gets 40 city/45 highway. The Toyota Camry Hybrid, similar in size to the Fusion and Milan, is rated at 33 city/34 highway.

But Ford may have the edge when it comes to driving on pure electric power. The Fusion Hybrid and Milan Hybrid can reach speeds of 47 mph on electricity alone, a higher speed than other hybrids.

"The Fusion Hybrid's ability to run at much higher speed in electric mode allows drivers to maximize fuel efficiently in many driving situations," said Praveen Cherian, Fusion Hybrid program leader. "This would allow drivers to travel around their subdivision and parking areas in all-electric mode."

Pininfarina eyes year-end debt deal

After months of talks that have forced it to postpone a crucial capital increase, Italy's Pininfarina said today it still expected to reach a deal with its creditors to reschedule its debt by year-end.

Like other suppliers and service providers in the car industry, the small designer and niche manufacturer has been struggling to pay off its debt.

Its business has been suffering since clients such as Ford Motor and Fiat's Alfa Romeo have seen their sales tumble in the worst crisis to hit the industry in decades.

One client, Swedish luxury brand Volvo, has had such a hard time that its owner, Ford, has put it up for sale.

Best known for designing Ferraris, Pininfarina was supposed to have reached an agreement with its creditors to reschedule 600 million euros of debt by Sept. 30.

But the talks stretched beyond the deadline.

Since a deal had been a prerequisite for a capital increase of 100 million euros, Pininfarina was forced to abandon its plans to raise the money in November. It was to use it for a joint venture with French financier Vincent Bollore to develop an electric car, a project pivotal to Pininfarina's revival.

The talks eventually led to Pininfarina proposing the banks convert 180 million euros of debt into shares representing up to 30 percent of the company.

The founding family had been ready to cut its stake to about 30 percent from more than 50 percent with the capital increase to a select group of investors including Bollore. But this latest proposal to the banks, announced on Nov. 12, was seen substituting that idea.

Other select investors had included Ratan Tata. But the Indian business leader has had his own money problems, with his Tata Motors finding it hard raising money to pay the $3 billion bridge loan obtained to buy Jaguar and Land Rover.

In light of plunging sales, Pininfarina has been cutting costs by halting production at its three plants on a rotating basis for one week a month in November and December. It plans to do the same thing for all of 2009.

Its creditors include Italian banks Intesa Sanpaolo and UniCredit.

Tata may need to invest $1B in Jaguar

 India's Tata group may have to spend at least $1 billion to revive premium brands Jaguar and Land Rover, which were bought by Tata Motors earlier this year, the Economic Timesreported on Tuesday.

Tata Sons, the holding company that holds large stakes in group firms, and unlisted financial services unit Tata Capital are among the options being considered to raise the cash, the newspaper said, quoting unnamed company sources.

"We will do everything in our ability to resource all our operations," the paper quoted a Tata Motors' spokesman as saying. Tata Motors paid $2.3 billion to buy Jaguar and Land Rover from Ford Motor Co. earlier this year, just as global auto sales began collapsing. He declined comment on the size of funds required.

A spokesman for Tata Motors could not be immediately reached by Reuters for comment.

On Monday, UK's Financial Times had reported that Tata Motors had agreed to inject "tens of millions of pounds" into Jaguar and Land Rover to prevent an immediate cash flow crisis.

Tata Motors, which has a market value of about $1.5 billion, has dropped 74 percent so far this year while the main BSE index is down more than half.

Zenvo ST1

Madly styled supercar boasts a Veyron-besting 1089bhp and 1055lb ft

Clearly the world doesn't have enough mad hypercars, with the Bugatti Veyron, Ruf CTR3 and TVR Speed 12 clamouring for more competition. It has come in the shape of this, the Zenvo ST1, quite probably the world's first all-Danish car.

It's a rear-wheel-drive coupe, propelled by a mid-mounted 7-litre V8 which boasts a supercharger and turbocharger - making it good for 1089bhp at 6900rpm and a fairly frightening 1055lb ft, which is available from 4500rpm. Whether all of that can be transferred to the tarmac without repercussions is an entirely different matter.

Claimed performance for the 1376kg coupe is 0-62mph in around 3sec, 0-124 in under 9 and an electronically-limited 233mph. That allows it to drive the length of Denmark in 18 minutes, apparently. Mated to that monster engine is a six-speed manual gearbox and a hydraulic limited-slip differential.

The brakes are ventilated discs, covered up by 19in alloys at the front and 20in at the rear, wrapped in Michelin rubber. Ceramic brakes are on the options list, and quite possibly a wise buy to rein in all that grunt. Also on the options list is a roll cage and four-point harnesses, turning this into a pretty extreme trackday car, no doubt.

Development on the ST1 has been ongoing since 2004, with deliveries penned to start in 2009. Just 15 are set to be made, with no price tag quoted. It'll be at least six figures, if not seven we'd imagine.

GM will equip Chevy Equinox with fuel-saving technology

General Motors' revamped Chevrolet Equinoxcrossover will carry direct-injection engine technology across the line, boosting fuel economy in the base model while delivering the same amount of horsepower.

The move will contribute to GM's goal of equipping most of its North American vehicles with direct injection. In the 2010 model year, GM says it will have 18 vehicles with the technology, including the Equinox, which goes on sale next summer.

The feature increases performance while curbing fuel consumption and emissions. GM plans to show the 2010 Equinox next month at the North American International Auto Show in Detroit

The base version will be powered by a 2.4-liter four-cylinder engine that develops 180 hp, about the same as the current V-6, GM said in a statement. The automaker expects that vehicle to deliver 30 mpg in highway driving. There is no four-cylinder 2009 model. The current Equinox has an EPA fuel-economy rating of 17 mpg city/24 mpg highway.

A 3.0-liter, direct-injected V-6 will be optional. That engine is rated at 255 hp. It will replace a 185-hp, 3.4-liter V-6 built in China that dates to the 1970s.

GM Powertrain spokesman Tom Read said the new V-6 will be built at GM's St. Catharines,Ontario, plant. The four-cylinder engine will be made at the former Saturn plant in Spring Hill, Tenn.

Ford has 2 finalists for car, truck of the year

Ford Motor Co. placed two candidates on the short list of finalists for the 2009 North American Car and Truck of the Year awards.

Ford's Flex car and the F-150 pickup are among the six vehicles to make it through the latest round of voting by 50 automotive journalists in the United States and Canada.

The other cars were the diesel-powered Volkswagen Jetta TDI and Hyundai's Genesis luxury sedan. No Korean automaker has made the cut before.

The Mercedes-Benz ML320 Bluetec and the Dodge Ram pickup round out the truck field.

The VW and Mercedes models are the first vehicles with diesel engines to qualify as finalists in the 16-year history of the awards. The winners will be announced Jan. 11 at the Detroit auto show.

Last year, the Chevrolet Malibu won car of the year, and the Mazda CX-9 was honored as the top truck.

Domestic automakers have won the car trophy eight times, the Europeans four times and the Japanese three times.

In trucks, domestics have won nine times, followed by the Japanese four times and the Europeans twice.

Additionally, hybrids have won four times.

More than 50 vehicles were considered this year; 14 cars and 11 trucks made the initial ballot.

Subaru Legacy

Hard pressed car maker Subaru will unveil its brand new Legacy at this year’s Detroit Motor Show.


Hard pressed car maker Subaru will unveil its brand new Legacy at this year’s Detroit Motor Show.

Following the announcement of its immediate and total withdrawal from the World Rally Championship, the Japanese firm moved quickly to prove it has ambitious plans for its road cars by releasing this single teaser image of the new model, expected to hit the road in 2010.

Though exact details remain scarce, it’s believed that the Legacy gets an updated chassis, and a development of Subaru’s trademarked symmetrical all wheel drive system.

Under the bonnet, there’s a new 3.6-litre flat six-cylinder engine, plus an advanced six speed gearbox.

For launch, it’s expected that the 3.6-litre unit could be joined by smaller, more fuel efficient engines. Both 2.5-litre four cylinder and 3.0-litre six cylinder boxer engines will be offered, as will the company’s first diesel, a 2.0-litre turbo, that’s also the world’s only oil burning boxer.

The Legacy concept makes its debut almost 20 years to the day of the lunch of the original Legacy model, and builds on that car’s instantly recognisable design.

With a new look nose, and wide track, the sporty looking saloon is aimed at the likes of the BMW 5-Series and new Mercedes E-Class, which will also debut at Detroit.

Honda scraps plans to build NSX sports car

Honda Motor Co. cancelled plans to build a new Acura NSX sports car as the automaker grapples with the global economic slump.

President Takeo Fukui announced the NSX's demise today as one of several cost-saving cutbacks.

The NSX was expected to have a front-mounted, V-10 engine that made at least 500 hp. It would have been the successor to the first-generation NSX, which had a mid-mounted V-6. That NSX went out of production in late 2005 after 14 years.

Its successor was expected to debut as a 2010 model and was poised to be Acura's answer to the Audi R8 and Nissan GT-R.

The NSX was expected to be outfitted with advanced technologies, including the Super Handling All-Wheel Drive system. It was also likely to get aluminum and carbon-fiber parts to keep weight low.

The program appeared to be on track as late as this summer, when spy shooters caught what looked to be an NSX on Germany's famed Nürburgring circuit.

That car looked similar to the Advanced Sports Car concept unveiled at the Detroit auto show in 2007.

In addition to canceling the NSX, Honda is cutting sales and profit forecasts and executive pay while delaying plant openings. It also scrapped plans to launch the Acura brand in Japan in 2010.

Scientists find hole in Earth's magnetic field

Recent satellite observations have revealed the largest breach yet seen in the magnetic field that protects Earth from most of the sun's violent blasts, researchers reported Tuesday. The discovery was made last summer by Themis, a fleet of five small NASA satellites.

Scientists have long known that the Earth's magnetic field, which guards against severe space weather, is similar to a drafty old house that sometimes lets in violent eruptions of charged particles from the sun. Such a breach can cause brilliant auroras or disrupt satellite and ground communications.

Observations from Themis show the Earth's magnetic field occasionally develops two cracks, allowing solar wind — a stream of charged particles spewing from the sun at 1 million mph — to penetrate the Earth's upper atmosphere.

Last summer, Themis calculated a layer of solar particles to be at least 4,000 miles thick in the outermost part of the Earth's magnetosphere, the largest tear of the protective shield found so far.

"It was growing rather fast," Themis scientist Marit Oieroset of the University of California, Berkeley told an American Geophysical Union meeting in San Francisco.

Such breaches are temporary, and the one observed last year lasted about an hour, Oieroset said.

Solar flares are a potential danger to astronauts in orbit but generally are not a risk to people on the surface of the Earth.

The research was funded by NASA and the National Science Foundation.

Scientists initially believed the greatest solar breach occured when the Earth's and sun's magnetic fields are pointed in opposite directions. But data from Themis found the opposite to be true. Twenty times more solar wind passed into the Earth's protective shield when the magnetic fields were aligned, Oieroset said.

The Themis results could have bearing on how scientists predict the severity of solar storms and their effects on power grids, airline and military communications and satellite signals.

The Themis satellites were launched to find the source of brief powerful geomagnetic disturbances in the Earth's atmosphere.