Tuesday, May 31, 2011

Delphi gets ready for IPO

By Joseph Szczesny
  Delphi Corp. is asking the Securities Exchange Commission for clearance to sell shares in the company through an initial public offering of stock.
  The list of hedge funds and private investment funds preparing to sell shares in what is now London-based Delphi Automotive PLC,  includes Paulson & Co., Elliott Associates, L.P. Elliott International, L.P., Silver Point Capital and Oak Tree Capital , the documents , Delphi  said in a SEC filing
 Delphi didn’t specify the size of the offering but the it is expected to top $100 million, according to the SEC documents, which said the IPO will be managed by  J.P. Morgan and Goldman Sachs.
  Delphi filed for bankruptcy in 2005 in a bid to scrap what it described as an unsustainable business model that included a heavy reliance on its former parent and large manufacturing base in the United States. The bankruptcy wiped up Delphi’s old shareholders and left the company’s salaried pension fund in the hands of the Pension Benefit Guarantee Corp.
The Troy-based automotive supplier spent four years in bankruptcy before emerging from bankruptcy with a much smaller manufacturing presence in the U.S. and a focus in supplying safety equipment, fuel-management and electronics.
The new Delphi is now counting on growth in the automotive market in the next few years to impress would be investors.
Global vehicle production is forecast to grow at a compound annual growth rate of 6.8 percent from 2010 to 2015. In the near term, the mature markets, including North America and Western Europe, are expected to grow at 3.3 percent from 2010 to 2015 for an increase of approximately 6.9 million units, while the emerging markets are forecast to grow at 10.3% during the same period, for an increase of approximately 22.2 million units.
 “We expect that nearly half of our total future growth will be generated from emerging markets, especially China, which now represents a larger market for automotive components than either the United States or Japan. As a consequence of this shift in demand, many automotive manufacturing and supply companies have located operations in China and have entered into strategic partnerships and supply arrangements designed to support increased production, the SEC documents said.
 “Acquisitions and strategic alliances represent an important element of our business strategy and we believe we have the financial flexibility to pursue these opportunities with our current capital structure and liquidity profile. We believe that there are opportunities to grow through acquisitions, given the trend by OEMs to source globally and from a smaller number of suppliers, and that strategic alliances will allow us to pursue new opportunities faster and with less risk and investment,”  Delphi said in its SEC filings.
 Delphi also said it intended to pursue selected transactions that leverage its technology, enhance its customer base, geographic penetration and scale to complement the company’s existing businesses.
 The “complementary opportunities” will provide us with access to new technologies, expand our presence in existing markets and enable us to establish a presence in adjacent markets, Delphi said in its filing.

Friday, May 20, 2011

  The U.S. Postal Service is issuing a new foreever stamp to mark the 100th anniversary of of the Indianapolist 500.
 The new stamp features Ray Harroun, winner of the first Indianapolis 500, racing his Marmon “Wasp.”
“At the Postal Service, we understand the power of our stamps in celebrating American history and culture — in this case, the 100th anniversary of the Indianapolis 500,” said Postmaster General Patrick Donahoe in dedicating the stamp. “I won’t be so bold as to predict the winner of the race, but I will predict that 50 or 100 years from now the U.S. Postal Service will issue another stamp to commemorate the next milestone anniversary of this great event.”  “We’ve eagerly been awaiting this day since the United States Postal Service announced the commemorative stamp honoring the 100th Anniversary Indianapolis 500 last December,” said Jeff Belskus, Indianapolis Motor Speedway president. “It’s a great honor and an important part of our Centennial celebration that the iconic image of the Marmon ‘Wasp’ will be seen on mail sent from coast to coast.”  
 On May 30, 1911, approximately 80,000 spectators gathered at the Speedway to witness the first running of the Indianapolis 500. Driving a Marmon “Wasp” he designed, Ray Harroun beat 39 other drivers to win with a time of 6 hours, 42 minutes and 8 seconds. A century later, the Indy 500 has become an American cultural phenomenon rich in ceremony and tradition and is hailed as “The Greatest Spectacle in Racing.”
  The car was built by the Indianapolis-based Marmon Motor Car Company and included one of Harroun’s own inventions, the rearview mirror. The car is now a prime attraction at the Indianapolis Motor Speedway Museum.

GM to halt Volt production temporarily

By Joseph Szczesny
 General Motors Co. is planning to halt production of the Chevrolet Volt for four weeks in June as it prepares to build additional vehicles at the company’s Detroit-Hamtramck assembly plant.
 Cristi Landy, director of Chevrolet Volt Marketing, said production of electric-powered sedan will be expanded to meet the rising demand for the vehicle in the U.S.
  GM also is preparing to export the Volt to China and the  Opel Ampera, the European version of the Volt later this year. Landy added total EV production at the Detroit-Hamtramck or Poletown plant is expected to reach 60,000 units next year.
“The Volt will be available to customers nationwide by the end of 2011,”  Landy said.. “By taking the time to reconfigure the plant, we will be better able to meet the tremendous consumer demand.”
Both the expansion of distribution of the Volt in the U.S. and the exports to Europe and China have been in the works for well over a year.
Already in tight supply, the number of Volts available for delivery to retail customers will be restricted over the next three months before production resumes, Landy said.
The 2011 Volt was launched in California, New York, Connecticut, Maryland, Michigan, New Jersey, New York, Texas, Virginia and Washington, D.C.  The Volt will be available nationwide and in Europe, China and Canada by the end of this year.
As a result of the plant upgrades, planned Volt and Ampera production capacity this year will increase to 16,000 units, including exports and a fleet of several hundred demonstration units sent to U.S. dealers.  In 2012, global production capacity is expected to be 60,000 vehicles with an estimated 45,000 to be delivered in the United States.
In addition to expanding production of the Volt, GM also is preparing the “Poletown” plant  to build the  mid-sized 2013 Malibu  , home of the Chevrolet Volt, will close for four weeks beginning in June for planned, starting next year. GM recently unveiled the updated version of the Volt at auto shows in New York and China..
During the four-week shutdown this summer, the plant will complete some pre-scheduled upgrades, including the installation of new tools, equipment and overhead conveyor systems throughout the facility. 
 The Detroit-Hamtramck plant also will start production next year of the 2013 Chevrolet Malibu. The next Malibu will build on Chevrolet’s reputation for providing the most fuel-efficient passenger cars. The 2013 Malibu launch will be led by the Eco model, expected to achieve 38 miles per gallon on the highway.
Earlier this month, GM  broke ground on a six-acre field of solar panels in front of its Detroit-Hamtramck plant as part of an effort to green up  production of the Volt.
DTE Energy will own and operate the 516-kilowatt system as part of its Solar Currents program, which is installing photovoltaic systems at sites such as Monroe County Community College and a Blue Cross Blue Shield of Michigan parking structure in downtown Detroit. DTE will lower GM's energy bill because of the solar panels will be combined with more efficient lighting and equipment updates to lower Detroit-Hamtramck's energy costs by nearly $3 million annually.

Friday, May 13, 2011

Auto Affordability holds steady

 Consumers were voluntarily paying more for new vehicles duringthe first quarter of 2011, according to a new survey by Comerica Bank. However, the purchase and financing of an average-priced new vehicle took 23.2 weeks of median family income in the first quarter of 2011, unchanged from its fourth quarter 2010 level, the bank's quarterly survey said.  Consumers on average spent $400 more, or 2 percent more than in the previous quarter, on new cars in the first three months of 2011.  The average rates on car loans during the quarter increased to 4.7 percent, the highest average since the first quarter of 2009.  "The total cost of purchasing a new vehicle increased approximately $425 in the first quarter of 2011, as consumers opted for more expensive cars against a backdrop of rising rates," said Dana Johnson, Chief Economist at Comerica Bank in Dallas.  "Looking ahead, affordability has the potential to erode as financing costs and consumer appetites for more expensive vehicles increase."

Wednesday, May 4, 2011

GM plans for new generaton of Corvettes

 By Joseph Szczesny
 General Motors plans to spend more than $131 million over the next two to prepare for the production of the new generation Corvette at its assembly plant in Bowling Green, Ky.
 GM said Wednesday the invest $131 million in the Bowling Green Assembly plant to support production of the next generation Chevrolet Corvette will add about 250 jobs to the plant's payroll.
 “This is a significant day for anyone who believes that America should build world-class, high-performance products,” said Mark Reuss, GM North America president.
 "Corvette has no domestic peer for performance and pedigree and stands alongside the world's best supercars with almost 60 years of continuous heritage,” Reuss said.
 The plant in Bowling Green is scheduled to continue building the current generation Corvette for at least the next two model years, including the 2012 model year that begins this summer.  During this period, the investment starts to take effect, preparing the facility for the next-generation Corvette, Reuss said.
 "This investment in Kentucky is among $3.4 billion made in the United States since mid-2009 to keep or create more than 9,000 jobs for American workers," Reuss added.
 Bowling Green is the exclusive manufacturer of all versions of the Chevrolet Corvette –Coupe, Convertible, Grand Sport, Z06, and ZR1.  Corvette’s current generation, the sixth in its 58-year history, has seen the car enter the realm of the world’s highest-performing cars.