New GM to experiment with cars sales on eBay Motors

If you live in California, General Motors will have a new experimental program to allow buyers to purchase cars through an eBay auction. The company has signed an agreement with eBay, but few details are available.

The program will be run through California dealerships and include an option to buy the car at a fixed price.

This marks the latest manufacturer attempt to provide a way for consumers to buy cars directly off the Internet and avoid price haggling in the sales office. However, bidders may find dealers still try to sell extended warranties, fabric and paint protection, and VIN etching once at they arrive at the sales office to complete the paperwork. 

Previous efforts to allow consumers to buy cars directly through manufacturer or third-party Web sites were not successful. But dealers now have many years of experience selling used cars on eBay, so they may be more comfortable with this program. If the experiment is successful, GM hopes to make it available more widely, said GM CEO Fritz Henderson in a speech this morning.

Read: “What the post-bankruptcy GM means to you” and also: “Winning at eBay.”

—Eric Evarts

What the post-bankruptcy GM means to you

General Motors quickly emerged from its May 31st Chapter 11 filing this morning, benefiting from the Chrysler bankruptcy process before them and Auto Task Force drive to get the corporate giant back on its feet. The transition from old to new GM should be rather seamless for consumers, at least initially.

GM has culled four divisions from its portfolio and down the road it plans to significantly reduce its dealer body by not renewing franchise agreements. These 1,100 dealerships, representing about 18 percent of GM’s total dealers, will have until October 2010 to sell their remaining cars. The product line will drop from 48 to 34 nameplates in the process.

This Q&A addresses some common questions, and we will continue to provide additional insights and advice as General Motors and Chrysler both begin their new chapters. For more information, go to our Auto Crisis page. Also, learn how bankruptcy works.

Who owns the new GM?
Earning the nickname “Government Motors,” the American tax payers are the majority owner for the new company. GM ownership breaks down to:

• The United States government—a 60.8 percent stake
• A trust fund (VEBA) that provides medical benefits for United Auto Workers retirees—17.5 percent
• The governments of Canada and the province of Ontario—11.7 percent
• Bondholders of the old GM—10 percent.

What brands and models are available?
The new GM will include Buick, Cadillac, Chevrolet, and GMC brands. GM has stripped itself of Pontiac, Hummer, Saab, and Saturn. The latter three divisions are being sold to other companies, so those brands are expected to continue to be available in the United States. Future GM models include the Buick LaCrosse; Cadillac CTS coupe, CTS Sport Wagon and SRX; Chevrolet Cruze, Orlando, Spark, and Volt; and GMC Terrain.

Will I be able to get parts and service for my GM car?
GM dealers will continue to provide service, as before. Hummer, Saab, and Saturn dealers will be supported until they are sold off, enabling them to continue without interruption. In emergency situations, most of these vehicles can be serviced at any GM dealer. Perhaps the greatest consumer impact will be the significant reduction in dealerships, making car maintenance less convenient.

Keep in mind that you don't have to take your car to a dealership for servicing, even if it’s under warranty. A good independent shop, especially one that specializes in your car’s brand, should be able to handle routine maintenance and many repairs. Moreover, independent repair shops are often less expensive than dealerships and, according to our Annual Auto Survey, generally provide a higher level of satisfaction. You will need to go to a dealership, however, for warranty and recall work.

Will GM still back my warranty?
Yes, GM will continue to support its vehicles’ warranties. Responsibility for warranties for Hummer, Saab, and Saturn rests with "old" GM and will eventually transfer to the new owners.

What if I want to sell my GM car?
Models from brands that are being phased out or sold will probably see a drop in value. But if the company re-establishes itself as a strong, stable automaker in the future, ongoing models could see a rebound in value. If you plan to keep the car for a long time, depreciation is less of a factor.

Should I buy a GM car now?
No reason not to buy a Buick, Cadillac, Chevrolet, or GMC vehicle. However, there are some considerations when choosing from an “old” GM brand. For instance, the future of Hummer, Saab, and Saturn is not yet carved in stone. Even when it is, it is unclear who will support current versions of those products, or for how long. Sales of these divisions are in process. Pontiac is being phased out, and finding long-term support for its products may be more difficult than with other brands.

That said, GM is offering some tempting sales incentives on many of its models, including ones that we recommend. And with slow auto sales and too much inventory, dealers are ready to negotiate. So, it’s likely that you could get a very good deal.

Several recent GM models have done well in our testing and are very competitive in their classes. Consumer Reports recommends the Buick Lucerne V8; Cadillac DTS; Chevrolet Avalanche, HHR, Malibu, and Silverado; and the GMC Sierra. The Cadillac CTS, and GM’s quartet of three-row, crossover SUVs (Buick Enclave, Chevrolet Traverse, GMC Acadia, and Saturn Outlook) all did well in our tests, but are not recommended due to below-average reliability in their first years. (Links in this paragraph go to model overview pages, where online subscribers can review ratings, pricing, reliability, and road tests.)

It’s important to remember that any deal is only as good as the vehicle you’re buying. As always, we recommend that you thoroughly research the performance, reliability, safety, owner cost, and owner satisfaction of any model you’re considering. Subscribers to ConsumerReports.org have access to our Ratings in all of those areas.

What if I have a claim against GM?
Under pressure from the government and consumer groups, GM has agreed to stand behind product liability claims for all GM cars and trucks that are filed after the company emerges from bankruptcy. However, hundreds of consumers with existing personal injury claims against GM will be left scrapping for the meager remains of the old GM.

To get answers to the most common questions and concerns about Chrysler’s and GM’s bankruptcy and reinvention, check out our Auto Crisis hub.

Judge approves "old" GM bankruptcy sale to "new" GM

Late yesterday, U.S. Bankruptcy Court Judge Robert Gerber approved the sale of General Motors to a new corporation, which will allow the company to come out of bankruptcy as early as Thursday.

The new company will be owned by:

• The United States government—a 60.8 percent stake
• A trust fund (VEBA) that provides medical benefits for United Auto Workers retirees—17.5 percent
• The governments of Canada and the province of Ontario—11.7 percent
• Bondholders of the old GM—10 percent.

Objectors, who included people ranging from consumer groups to bondholders, failed to present a viable alternative to the bankruptcy, the judge said. He allowed a four day stay of the sale until Thursday afternoon for appeals. Friday, July 10, is the last day the U.S. Department of the Treasury has agreed to extend any loans to the old GM.

The new GM will include Buick, Cadillac, Chevrolet, and GMC brands, with the automaker divesting itself of Hummer, Pontiac, Saab, and Saturn. It will also include some overseas operations, including those in China and Brazil. GM continues to work with potential buyers for its European operations.

The court-approved sale leaves behind hundreds of consumers who had personal-injury claims against GM for alleged defective products. (Read: "New GM" will cover future product-liability claims, but not pending ones.")

For most consumers, however, we expect the transition to the new company to be relatively transparent. The company has said it will still back warranties on all existing cars. If you own a Saab or Saturn new ownership may bring changes at your dealership, as these brands transition under new ownership. Hummer may be sold to Chinese truck maker Tengzhong. Pontiac will be closed. Through these changes, it is expected that more dealerships will also close.

If you’re thinking of buying a GM car or truck, the company is offering great incentives right now. But it’s important to remember that any deal is only as good as the vehicle you’re buying. Consumer Reports recommends the Buick Lucerne V8, the Cadillac DTS, the Chevrolet Avalanche, HHR, Malibu, and Silverado, and the GMC Sierra.

So if you’re looking for a new American car, these models might be a good place to start.

Use our new car selector to compare models based on ratings, reliability, safety, cost, and the factors that matter most to you.

—Eric Evarts

Read "What does the GM bankruptcy mean to you?" To get more answers to the most common questions and concerns about GM’s bankruptcy, visit our Auto Crisis hub.

Car brands: Who owns what?

The auto industry is very complicated these days, with constant change across all corners of the globe. The worldwide economic slowdown dictates widespread cost reductions, inspiring partnerships and changes in ownership. Further confusing the scene are past commitments between companies: For example, the new 2011 Jeep Grand Cherokee is based on a Mercedes-Benz platform–even though Chrysler and Mercedes are no longer joined at the hip.

To help clear up some of the confusion, here is a road map to navigate who owns what brands among the major companies that sell in the U.S. car market.

BMW owns: BMW, Mini, and Rolls Royce

Fiat owns: Alfa Romeo, Ferrari, Fiat, Lancia, Maserati; Chrysler, Dodge, Jeep–20-percent stake

Ford Motor Company owns: Ford, Lincoln, Mercury, Volvo (for now), and still owns 13.4 percent of Mazda

General Motors owns: Buick, Cadillac, Chevrolet, GMC. Also owns a controlling interest in Daewoo, as well as Opel and Vauxhall in Europe and Holden in Australia. (Pontiac to be discontinued)

Honda owns: Honda, Acura

Hyundai owns: Hyundai, Kia

Tata Motors (India) owns: Jaguar and Land Rover

Mazda (partially owned by Ford)

Mitsubishi

Daimler AG owns: Mercedes-Benz and Smart

Nissan owns: Nissan and Infiniti (Nissan is owned by Renault--France)

Porsche owns: Porsche and a majority share in Volkswagen

Subaru (A controlling interest of Subaru is owned by Toyota)

Suzuki

Toyota Motor Company owns: Lexus, Toyota, Scion, Daihatsu and Hino Motors, with a stake in Fuji Industries (Subaru’s parent company) and Isuzu

Volkswagen owns: Audi, Volkswagen, Bentley, Bugatti, Lamborghini, and overseas SEAT and Skoda.

In formal negotiations to be sold:
Hummer: Tengzhong (China)
Saturn: Penske Automotive Group
Saab: Koenigsegg (Sweden)

--Liza Barth

Move over McCain, what would Captain America drive?

In the daily news overload, with 1s and 0s streaming from myriad, disparate sources, two things struck me on the same day this week:

• Marvel Comics announced that the original Captain America, Steve Rogers, would be resurrected and returned to his namesake comic book. (See video.)
• Senator John McCain declared that he was buying a Ford Fusion hybrid on Twitter.

Clearly, McCain is sending a signal with his latest purchase, taking the prized pole position in his vehicle fleet away from his coveted Cadillac CTS, according to the Associated Press.

A patriot, McCain is buying American, though his brand choice is telling. The Senator had voted against providing money to Chrysler and General Motors back in December, according to the Detroit Free Press, and he apparently doesn’t want to give them any of his own earnings now.

McCain isn’t alone in moving to Ford. President Obama replaced his trendy-but-thirsty Chrysler 300C with a politically correct Ford Escape hybrid just in time to freshen his image for the presidential campaign.

Last month, Ford Motor Company saw its sales drop just 24 percent from May 2008 to May 2009, compared with 30 percent for GM and 47 percent for Chrysler, according to AutoBlog. Like these politicians, consumers have made similar moves during this tumultuous time, though possibly for other reasons.

I’m left with mixed feelings about these vehicle choices. What do you think these or other politicians should drive? Without political aspirations, though with an eye on a Hollywood career, Captain America could exercise the freedom he has fought for since World War II in choosing a car. Perhaps the bigger question is, what would the Captain choose?

—Jeff Bartlett

2010 GM model year changes boost fuel economy and safety

General Motors has released details of its model lineup for 2010. As might be expected from a company in bankruptcy, the number of model launches is modest, though significant. There are six new vehicles: the Buick LaCrosse, Cadillac SRX and CTS SportWagon, Chevrolet Camaro and Equinox, and the GMC Terrain, plus a special-edition Corvette, the Grand Sport.

But the bigger news may be what isn’t included in the plan; GM won’t be building the mild-hybrid versions of the Chevrolet Malibu, Saturn Aura or Saturn Vue, according to an AutoBlog report. (Since the company has announced it is selling Saturn, eliminating Saturn hybrids is not surprising.)

GM spokesman Brian Corbett confirms, “Production of 2010 model year Malibu hybrids is suspended due to high inventories of ’09 models for the remainder of the calendar year.” After that he says, the company will reassess whether to continue building Malibu hybrids. Production of the Saturn hybrids is also suspended for now pending final arrangements with Penske Automotive Group, the company buying Saturn.

Since GM is phasing out Pontiac, the laudable G8 sedan is also history (along with a number of other Pontiac models we won’t miss). The lone Pontiac listed for 2010 is the CR-recommended Toyota Matrix twin Vibe.

Beyond the new models, General Motors has new technology coming to improve fuel economy, including:

• Adding cylinder cutoff technology to the 6.2-liter V8 engine used in the Cadillac Escalade.
• Adding variable valve timing all 5.3-liter V8 and 6.2 liter V8s. (Flex-fuel capability will also be expanded to almost all the company’s V8s.)
• Making a single-speed transfer case standard on Tahoe, Yukon, Avalanche, and Suburban SUVs which means they become full-time four wheel drive. (A two-speed transfer case will still be optional.)
• Expanding the range of special XFE fuel economy trim lines to its large and small pickups.

Safety technology will also be expanded, with side and side-curtain airbags standard on Chevrolet Colorado and GMC Canyon pickups, a rearview camera available on the Chevy HHR, and lane departure warnings and blind zone alerts available on the Cadillac DTS.

USB ports for connecting portable music players will become more commonplace, as will XM Traffic alerts and advanced OnStar 8.2.

We hope these new technologies will help GM vehicles become more competitive. And, of course, we will test the new models as soon as they are available. In fact, we already bought a Camaro.

—Eric Evarts

General Motors files for bankruptcy

General Motors filed for bankruptcy this morning.

The Chapter 11 filing represents the largest corporate bankruptcy in history, and it was precipitated by federal government threats to cut off loans to the company if it didn’t meet specific restructuring goals. (Learn how bankruptcy works.)

With this move, the federal government now deems GM’s plan viable and will provide an additional $30 billion into GM to keep the company afloat through the bankruptcy process. The government is expected to own 60 percent of the new company. The governments of Canada and Ontario will lend $9.7 billion and take on 12 percent of the new GM.

As part of the further restructuring, General Motors will close 11 facilities and idle another three. However, GM is committed to building a new small car in an idled UAW factory, increasing the production percentage of American-made models sold in the United States from about 66 percent to over 70 percent.

Under the bankruptcy plan proscribed by the Treasury Department, GM is expected to emerge from bankruptcy quickly, in about 60 to 90 days, while some unprofitable GM divisions, including Hummer, Pontiac, Saturn, and Saab will be closed or sold off. The new, leaner GM expected to emerge from bankruptcy will include the Buick, Cadillac, Chevrolet, and GMC brands. The company will close about 18 percent of its dealerships.

Should the bankruptcy be similar to Chrysler’s Chapter 11 process, there may be concerns for consumers being left without recourse from the company for product defect, personal injury, or “lemon” claims. Consumers Union recently wrote a letter to the federal Autos Task Force urging the Treasury Department to make sure legitimate consumer claims do not become a casualty of the bankruptcy process.

To get answers to the most common questions and concerns about Chrysler’s and GM’s bankruptcy, check out our Auto Crisis hub.

—Eric Evarts and Jeff Bartlett

GM counts down to "B Day"

As the auto industry, and consumers await the fateful decision on whether General Motors will file for bankruptcy protection, several ripples have coursed through the auto industry recently. And, as ripples often do, they are heading in different directions. (Read "Failing to reduce debt, GM bankruptcy looks inevitable.")

Today’s highlights of the carpocalypse:

Bonds – Following direction from the U.S. Department of the Treasury, GM offered bondholders a debt-for-equity exchange, essentially trading $27.2 billion in debt for a 10-percent stake in the company. The deadline expired late Tuesday, without the bondholders accepting the offer, signaling bankruptcy was inevitable. However, today, the Treasury sweetened the deal, offering bondholders the rights to buy an additional 15-percent of low-price GM stock, according to a Securities and Exchange Commission filing. The major bondholders have accepted this revised offer, though GM could still be headed for bankruptcy. Under the new plan, the U.S. and Canadian governments would own 72.5 percent of New GM when it emerges from bankruptcy, according to the Detroit News.

New Cadillacs – Cadillac will replace the current SRX crossover vehicle with two models, a new, more SUV-like SRX and a CTS wagon. (Read: "Pricing: 2010 Cadillac SRX.")

GM pays early – To ease bankruptcy concerns, GM has paid about 90,000 employees three days early. Likewise, it plans to pay about 1,500 suppliers today, ahead of its scheduled June 2nd date, according to Reuters. This last gesture could be seen as a strong indicator of imminent bankruptcy, and also good will toward its valued business partners.

Suppliers file for bankruptcy – As feared, major and minor suppliers are suffering during the recession and some are moving to bankruptcy. Visteon today announced that it was pursuing Chapter 11. Spun off from Ford Motor Company in 2000, Visteon has failed to make a profit in the 21st century, according to Automotive News. Today, it supplies Ford as well as other automakers. The interior, climate system, and electronics producer joins Metaldyne, Delphi, Federal-Mogul, and Dana, among others, in seeking bankruptcy protection.

We will continue to monitor this fast-moving story, reporting here in the Cars blog and also updating advice and news on the Auto Crisis hub.

—Jeff Bartlett

Pricing: 2010 Cadillac SRX

Cadillac announced pricing on the new SRX crossover, which will go on sale this summer.

The base front-wheel-drive model will start at $34,155 with a 265-hp, 3.0-liter V6 engine. The SRX is a midsized, car-based SUV, with optional all-wheel-drive and an optional turbocharged, 2.8-liter V6 engine. A six-speed automatic transmission will be standard. This five-seat SUV boasts available technologies such as a pop-up navigation screen with three-dimensional display, adaptive lighting, dual-screen rear entertainment system, and power liftgate with adjustable height settings. Bluetooth connectivity is standard, as is OnStar with turn-by-turn navigation.

Standard safety features include front, side, and curtain air bags, rollover sensors, and stability control.

In addition to the SRX, Cadillac has announced that its new CTS wagon will go on sale about two months after the new SRX.

The new SRX marks a big change, as it moves from the rear-wheel-drive CTS platform to a new front-wheel drive architecture. From what we've seen from car shows and a brief drive of a prototype, the new SRX looks like a strong competitor. The interior is much improved, just like the stunning Cadillac CTS cabin. This time around, there is no third-row seat. but the outgoing SRX wasn't that efficiently packaged, anyway.

—Eric Evarts

Recalls: Cadillac, Chevrolet, Dodge , Ford and GMC vehicles

There have been a number of announced recalled the past few weeks that affect Dodge Rams, Ford F-150’s, Chevrolet Traverse’s, and a number of Cadillac, Chevrolet and GM SUVs. If your vehicle is listed here, the manufacturer will contact you with information about what to do, or you can use one of the numbers we list below to contact the manufacturer yourself.

2009 Ford F-150

Ford is recalling over 8,700 Ford F-150 trucks due to a problem with the break stop light not illuminating or delayed when brake pedal is depressed. The delay or loss of the light function may increase the risk of an accident. Dealers will inspect the lamp and reinstall it after the proper adjustment. Work will be done free of charge.

Owners may contact Ford at 1-866-436-7332 or at www.ownerconnect.com.

2009 Chevrolet Traverse

GM is recalling over 15,000 Chevrolet traverse SUVs for a problem with the park brake cable link. The connector may fracture when the brake pedal is depressed and could result in a crash.

Dealers will replace the park brake cable link free of charge. Owners will be notified via mail, but can also contact Chevrolet at 1-800-630-4236 or at www.gmownercenter.com.

2009 Dodge Ram

Chrysler is recalling over 37,000 Dodge Ram pickup trucks due to a problem with the manual temperature control, which can cause the windshield defrosting and defogging functions to not work. This can decrease a driver’s visibility and result in a crash. Dealers will reprogram the HVAC module free of charge.

Owners may contact Chrysler at 1-800-835-1403.

2009 Cadillac , Chevrolet and GM vehicles

GM is recalling over 27,000 Cadillac Escalade and Escalade Hybrid, ESV and EXT versions, Chevrolet Avalanche, Colorado, Suburban, Tahoe and Tahoe hybrid and GMC Canyon, Yukon, Yukon XL, and Yukon hybrid trucks. The fuel system could have a sealing problem that may cause separation and may allow water to seep in.

The water could cause a short, set off a check engine light or diagnostic code or engine may not start, which could increase the risk for a crash.

Dealers will install a new fuel system control module free of charge. Owners may contact Cadillac at 1-866-982-2339, Chevrolet at 1-800-630-2438 and GMC at 1-866-966-9463 or www.gmownercenter.com.