2010 Buick LaCrosse Offers Four-Cylinder

From its striking design to its pulsating TV spots, the LaCrosse marks a decidedly different direction for Buick.

And that’s just on the surface. The change gets even starker under the hood, where for the first time in a decade, the brand will offer a four-cylinder engine, as General Motors works to meet stiffer fuel-mileage standards expected for 2016. Buick also will offer all-wheel drive in the LaCrosse, the first time it’s ever put that technology in a sedan.

The redesign for 2010 brings a lot of change for a brand that has become fairly stodgy in the marketplace. But that’s the idea, says Susan Docherty, vice president of Buick-Pontiac-GMC in North America.

“We’re working hard to change the perception of the brand and to let people know Buick may not be what they think it is,” she said in a Web chat with journalists Monday.

The LaCrosse will begin arriving at dealerships at the end of this month, and V6 models will start at $27,835, including shipping charges. The V6s are versions of the same engines that appear in a range of GM vehicles, including the Cadillac CTS and SRX and the Chevrolet Camaro. Using variable valve timing and direct injection, the 3.6-liter unit makes 280 hp, while the 3.0-liter is rated at 255 hp for front-wheel-drive versions.

The four-banger is thought to be the first in a Buick since the 1998 Skylark. It’s from GM’s Ecotec family and makes 182 hp and 172 lb-ft of torque. It’s an inline setup and employs direct injection; look for it to get an estimated 20 mpg in the city and 30 mpg on the highway.

The LaCrosse is a global blend of GM engineering and design resources. The interior, which features ice blue ambient lighting, Bluetooth connectivity and in-dash navigation, is a collaboration between American and Chinese designers. The platform was borrowed from the Opel Insignia, produced by GM’s European arm.

The chief competitor will be the Acura TL, while the Lincoln MKZ, the Lexus ES350, the Chrysler 300, the Toyota Avalon and the Ford Taurus also are expected to draw comparisons, officials said.

GM brass say they hope that the LaCrosse can continue the ongoing facelift for Buick and point to the path set by the Enclave. The median age of buyers of the handsome crossover is 12 years younger than the brand’s typical demographic, and Buick is planning a social-media component of its advertising to try to reach untraditional buyers in their 20s.

+ Auto China 2008: Buick Invicta Concept Debut
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+ 2008 Beijing Auto Show: Buick Invicta Sleek Car (Debut Pics)
+ 2009 Detroit Live: 2010 Lincoln MKT Luxury Sedan
+ 2010 Ford Fusion and Lincoln MKS to Get EcoBoost Engine
+ 2010 Ford Taurus (SHO) Pricing Details
+ 2010 Ford Taurus SHO Road Test

“Today, many people perceive Buick as a great brand with good quality and a high level of craftsmanship,” Docherty said. “However, they see it as a brand that’s ‘not for me.’ What started with the Enclave in terms of changing perceptions needs to continue with the LaCrosse.”

Meanwhile, Buick officials remain mum on how the brand might be fleshed out, noting that the Regal that has shown up in some advertisements is a concept (though it’s on sale in China) and saying it is unlikely that the Pontiac G8 would be rebadged.

Gallery: 2010 Buick LaCrosse

SUVs, trucks Dealers Facing Tight Supply

If you've got your eye on a new SUV, don't blink.It might be gone.

Even with the auto industry mired in depression – sales are down nationally 36.5 percent – big vehicles such as the Ford Expedition and Chevy Tahoe are in tight supply because of drastic production cuts that automakers imposed last year as sales began to plummet.

Now, a year after $4-a-gallon gas nearly killed SUVs, some dealers in this market are selling them for window-sticker prices. Moreover, most late-model used pickups and SUVs have regained all of the thousands of dollars in trade-in value they lost last summer, dealers say.

Dealers love for demand to exceed supply, but many are concerned that they could run short of profitable trucks if the economy improves in the second half of the year. Their supply of cars – particularly compacts – remains high, they say.

"When you go through the inventory, you find we've got an 18-day supply of Expedition ELs," said Sam Pack, who owns Five Star Ford in North Richland Hills, Sam Pack's Five Star Ford in Carrollton and Ford Country in Lewisville. "That's too low. It starts costing you sales."

"We're very short of Expeditions and [Lincoln] Navigators," said Randall Reed, owner of Prestige Ford-Lincoln-Mercury in Garland and Park Cities Ford-Lincoln-Mercury in Dallas. "We have been selling record numbers of [crossover] Flexes because of it, I think."

Some full-size pickups such as the Toyota Tundra are also hard to get. Truck and SUV production was initially slashed last summer when fuel prices began to skyrocket. As the economy continued to crumble, it was cut further.

The General Motors Assembly Plant in Arlington, for example – GM's only factory building full-size SUVs – is in the midst of a two-month shutdown. Last month, overall car and truck production in North America was 45.1 percent lower than in May 2008, according to Automotive News.

Changing times

Tight supplies could become the norm, some dealers say. GM and Chrysler LLC, which are in bankruptcy, have dramatically reduced production – as has Ford Motor Co.

With fewer factories, the domestic automakers may struggle to meet demand for some vehicles when the economy improves. And they may not view it as such a bad problem.

"GM wants them to come in and immediately hit the streets," said Tom Durant, who owns Classic Chevrolet in Grapevine, the largest Chevy dealership in the nation. "Prices will be firmer, and margins will be better. They don't want a bunch of vehicles that we have to keep on the lot for several weeks."

Drew Campbell, president of the New Car Dealers Association of Metropolitan Dallas, added: "It's a lot drier out there than people realize."

For example, the back three rows at Five Star Ford in Carrollton – the store's SUV sector – were empty recently because the dealership had sold all of its Expeditions and Explorers, said Brian Huth, general manager of the dealership.

"I told my guys it looked like we were going out of business," Huth said. "But I think dealers are going to have to learn to sell with less inventory on the lot."

Since then, he and his staff have hustled to buy more new and late-model SUVs from other dealers and at auctions. The dealership – which sold 176 cars and trucks last month – is contending as well with occasional shortages of compact Escape SUVs and a fairly tight supply of full-size F-150 pickups.

'Pretty tight'

Much of the shortage in Expeditions is related to Ford's decision to move production from Michigan to a truck factory in Kentucky, which took about three months, said Doug Scott, Ford's truck marketing manager. Although production has resumed, supplies remain limited because Expedition sales have been 20 percent higher than Ford had forecast.

"We knew we were going to run short," Scott said. "With what we were going through last year, we were scaling back production right up to the end of the year. Then we moved production of the Expedition."

Meanwhile, at Toyota of Richardson, Steve Grogean grapples with a limited supply of Tundra pickups and Sequoia SUVs. He thinks Toyota simply overreacted when sales began dropping by amounts the company had never seen before. Toyota recently announced that it's restoring some of its truck production.

"If business picks up as it usually does in the summer, things could get pretty tight in the next 45 to 60 days," said Grogean, vice president and general manager of the dealership.

For the past year, dealers accustomed to having one of everything on the lot have learned to function on smaller inventories, noted Paul Taylor, chief economist at the National Automobile Dealers Association.

"But when the market comes back, inventories will increase to a 60-day supply," he said.

Veteran dealer Ron Kutz isn't so sure. He thinks tighter inventories are probably good for the auto industry.

"In the '80s, we ran a Nissan store off a 30-day supply of vehicles," said Kutz, general manager of Grapevine Dodge-Chrysler-Jeep. "There's no way GM or Chrysler should have 120-day supplies. It just makes no sense financially."

CAR, TRUCK PRODUCTION

Production in North America through June 13, compared with the same period last year:

Cars

1,509,084
-49.4%

Trucks

1,745,752
-50.9%

Total

3,254,836
-50.2%

2010 Chevrolet Equinox Crossover Road Test

2010 Chevrolet Equinox ,GM’s latest is a real crossover contender.

Say what you will about legacy costs, screwball UAW agreements, and brand hyper-proliferation, General Motors has undeniably talented designers and engineers.

Those folks have in recent years created stellar products such as the current Cadillac CTS, the new Chevrolet Malibu, and a quartet of well-executed full-size crossovers.

The problem, though, is that GM’s efforts—including the above standouts—tend to arrive late to their games. And even then, many whiff in their first at bat, only hitting home runs during their second generation. By the time GM gets into it, the competition has put a few runs on the scoreboard and the General spends the rest of the game playing catch-up.

Such is the case with the 2010 Chevrolet Equinox compact crossover.

Following a rather milquetoast first generation (which itself arrived nearly a decade after the U.S.-market Toyota RAV4), the nearly all-new Equinox is far more praiseworthy, a fact you can tell simply by scanning its winsome styling. Like its big, three-row brother, the Chevrolet Traverse, the new Equinox is sleek and rather large for its class.

It’s very expressively styled, with a hunkered-down road stance and more sparkling body jewelry than a Las Vegas can-can dancer. Fat fender flares break up the tall body sides, and blackout D-pillars visually shorten what is ultimately a long vehicle by wrapping the upper rear end in what looks like one piece of glass. Body seams are kept to a minimum, with paper-thin slits replacing the outgoing model’s finger-thick gaps. Slick.

Swank, Spacious Interior

More glitz can be found inside. The Equinox’s dashboard is easily the most futuristic and detailed in its class, with silver-trimmed, Camaro-like “squircle” gauges bracketing a classy LCD containing an array of trip- and vehicle-related data. The dash and door panels are rendered in a variety of silver, gray, and chrome materials. They’re mostly rigid except for the main touch points, and the center-stack button arrangement takes some learning. We sampled three different color combos: all black, chocolate and black, and black and stone gray, with our favorite being the latter. Each is subtly enhanced with red seat stitching and red rubber liners in most of the storage cubbies (of which there are lots). The elbow-deep center console is equipped with a power port, USB and aux jacks, and most important, a light in the event that you drop something into that deep abyss.

Remedying one of the previous model’s chief shortcomings are the seats: the front buckets are far more comfortable and supportive than the chair-shaped balloons that came with the last Equinox, and the wide rear seat (which slides up to eight inches fore and aft) is no longer as flat as a diving board. Those short of thigh might find the cushions in front a touch long, but otherwise, the seating position is exceptional.

For our drive opportunity, Chevy brought along a couple of base model competitors, a Toyota RAV4 and Honda CR-V (which, incidentally, placed first and second in our 2008 “Mud Puppies” comparo) for side-by-side comparison. With almost no options, both were predictably spartan next to the comfortably equipped Equinoxes we had been driving all day. However, we were surprised just how dated their designs appeared and how comparatively cheap the materials were. While we’ve complained about lackluster materials in recent Toyotas, the fact that the Equinox outshined the Honda was unexpected.


Fuel Economy First, Speed Later

For the first time, the Equinox is offered with a four-cylinder engine. In spite of developing just three fewer horsepower than the previous model’s 3.4-liter V-6 (182 versus 185), the direct-injected, 2.4-liter four achieves a remarkable 22 city/32 highway mpg when driving only the front wheels and 20/29 with all-wheel drive. The smaller motor also allowed Chevy to keep the Equinox’s weight from exploding, at least in the base trim, which Chevy pegs at 3750 pounds. An available 264-hp, 3.0-liter V-6 serves as the step-up motor (replacing last year’s 3.6-liter V-6). Fuel economy with that engine drops to a less remarkable but still respectable 18/25 mpg (17/24 for AWD).

Now, while the Equinox is certainly on the porky side no matter what’s under the hood, we found ourselves attracted to the four-cylinder models. With a claimed 0–60 time of a leisurely 8.7 seconds according to GM, it isn’t all that much slower than the V-6, which GM puts at an unimpressive 7.8 seconds. Our impressions confirm that both get about the task of acceleration in a rather relaxed fashion, although each is smooth and quiet as they rev up to their redlines.

Both engines feature direct injection and are mated to six-speed transmissions with manumatic shifting (still a novelty in this class), although to actuate the manual mode, one must slip the gear selector down to “M” and then use the thumb-rocker on the side of the shift lever to execute up- and downshifts; there are no steering-wheel controls nor separate gates to work with. Given that, we see the manual shifting capability as geared more to those who tow than gear-rowing enthusiasts. Response seemed crisper and quicker when the gearbox was simply left in drive, anyway.


Shhhhhh! This is the Buick of Crossovers

Don’t expect much from the chassis, which itself starts with a stiffening of the last-generation’s Theta architecture. The electric power steering drains feel in order to save fuel, and the brakes are merely ho-hum. The CR-V and particularly the RAV4 offered much more steering feel, although both were far noisier than the whisper-quiet Equinox. The Equinox is shockingly calm and vibration-free inside, the result of a rigid structure, soft bushings, and compliant suspenders. Feel free to think of the new Equinox as the Buick of compact SUVs—we do.

+ 2010 Chevrolet Equinox Crossover to Get 32 MPG
+ 2009 Detroit Live: 2010 Chevrolet Equinox

Aggressive Pricing

In spite of its added content and superior powerplants, Chevrolet has dropped the price on the Equinox by more than a grand on all trim levels. The base LS starts at $23,185, with the 1LT package coming in at $24,105, 2LT at $26,190, and the top-rung LTZ at $28,790. All-wheel drive costs $1750 on all trim levels, while the V-6 (available only on 1LT, 2LT and LTZ models) costs $1500. Fully equipped with stuff like a sunroof, a tow package, OnStar-enhanced navigation, a 40-GB entertainment system, and slick independent DVD screens that flip up from the front seatbacks, it is possible to stack the Equinox past the $37K mark, which seems like a lot to us. Alas, many of its competitors are cheaper—some by a little, some by a lot—but none convey the same quietness and refinement as the Equinox.

On sale now, the 2010 Chevy Equinox expands the General’s roster of seriously competitive players. It may be relatively bland to drive, but this new Equinox is good enough at crossover-y tasks (like family-hauling, cargo-carrying, and commuting) to establish a fan base moving forward. That’s a good thing, as GM needs all the good players on its roster it can get.
Gallery: 2010 Chevrolet Equinox Crossover

GM New Chairman: Former AT&T Chief (Edward E. Whitacre Jr.)

General Motors named Edward E. Whitacre Jr., the former chief executive of AT&T, on Tuesday as the chairman of a recast board to oversee the “New G.M.” that will emerge from bankruptcy.

G.M., which filed for Chapter 11 bankruptcy protection on June 1, said Mr. Whitacre would be joined on the board by Kent Kresa, its current interim chairman, and G.M.’s chief executive, Fritz Henderson.

Four other G.M. directors will keep their seats, but six — including the long-time lead director, George Fisher — will retire before G.M. is reorganized in bankruptcy court.

The overhaul of the G.M. board was a condition set by the Treasury Department for continued financial assistance to the insolvent automaker.

G.M. has received $19.4 billion in federal loans since December, and will get another $30.1 billion in government aid.

The sweeping changes in the board room follow President Obama’s decision to ask Rick Wagoner, G.M.’s previous chairman and chief executive, to resign in March.

Mr. Whitacre’s appointment reflects the need seen by the president’s top auto advisers to put an outsider at the top of G.M., which will be 60 percent owned by the federal government when it comes out of bankruptcy.

“I am honored to be able to serve G.M. at this critical juncture and take part in its reinvention,” said Mr. Whitacre, who was chairman and chief executive of AT&T, and predecessor companies, from 1990 to 2007.

Several other candidates for four other board seats are still being considered by Steven Rattner, one of the leaders of Mr. Obama’s auto task force.

Upon Mr. Wagoner’s resignation on March 27, Mr. Kresa was tapped by the government to act as interim chairman.

He said Tuesday that the appointment of Mr. Whitacre was “a very auspicious beginning” for the company.

“We look forward to working with him to complete the reinvention of G.M. and maximize the enormous potential of this new enterprise,” Mr. Kresa said.

Besides Mr. Kresa and Mr. Henderson, the directors who will remain on the board are Philip A. Laskawy, Kathryn V. Marinello, Erroll B. Davis Jr. and E. Neville Isdell.

Pretty GM Incentives, Ready to Buy New GM Cars

If you are not afraid of the buying a vehicle from the GM then you might be able to snag some pretty good deals. GM head honcho Fritz Henderson stated at a press conference recently, that the company is still selling vehicles although it is in the throes of a reorganization.

"We look forward to the chance to win your business," Henderson said, speaking directly to customers. "The GM that you know, and the GM that let many of you down is history."

If you’re a savvy shopper and have got the gift of gab, you might be able to snatch up some pretty descent buys.

If you like ‘em big, there are ’09 humvees, H2 and H3 with rebates that range from $2,000 to $5,000.

Chevy SUV’s like the Trailblazer and Silverado are $3,000 less than the asking price.

Like Caddies? Does a $4,500 incentive on an XLR and XLR-V tickle your fancy? Prefer an STS, CTS or Sclade (Escalade), check out the hot deals on them as well.

If you are not trying to keep up with the Joneses and are good with an ’08 model, then there are deals aplenty on these. Enticing deals like $8,500 cash allowance on a Sclade, the XLR and XLR-V.

The cash allowances for the H2 is $8,000 and for the H3, $7,000.

The Colorado will be $4,250 less and the Impala will have a $3,250 discount.

A Saab lover? They are practically being given away with cash allowances of $6,500 to $10,000.

Like ‘em small and sporty, you can put an ‘08 Vette in your garage for less than $2,000 off the asking price.

These deals depend on what state you live in and of course, there are stipulations, so…do your homework first.

Nothing lasts forever, so make sure you check out the expiration dates of these offers. If you’re game, you might want to act quickly!

Ready, set…dash!

U.S. Auto Sales May 2009 Predicted Upside as Chrysler Bankruptcy

A late month surge in sales from Chrysler dealerships that are losing their franchises as part of the automaker's bankruptcy may have driven U.S. auto sales in May to levels above those seen in recent months.

But automakers are expected to report steep sales declines from a year earlier with the U.S. economy in a tailspin, the industry reeling from Chrysler's bankruptcy on April 30 an General Motors Corp's (GM.N) bankruptcy filing on Monday.

"We will probably see a little upside, a little pop," said Mirko Mikelic, an analyst at Fifth Third Bank. "But other than that sales will probably be much the same as in April."

"More people will probably have been looking at cars," he added. "But consumers are not ready to open their wallets."

Deutsche Bank said it expected light vehicle sales to be down 36.5 percent year-over-year in a survey taken just before the Memorial Day weekend, which is seen as the start of the busy U.S. summer driving and car buying seasons.

The six largest automakers all are expected to post sales declines from a year earlier, led by a 54 percent drop at Chrysler, according to industry tracking firm Edmunds.

DEATH RATTLE

A late May sales surge at dealerships being eliminated may have pushed Chrysler's sales higher and the industry as well, Ford's chief sales analyst George Pipas said on Friday. That would not indicate a sustained recovery in sales, he said.

"I think we won't have a true picture for some time as to what is happening with industry sales," Pipas said.

Edmunds expects GM sales to drop 36.9 percent, Ford Motor Co (F.N) 28.5 percent, Toyota Motor Corp (7203.T) 40.6 percent, Honda Motor Co Ltd (7267.T) 39.3 percent and Nissan Motor Co Ltd (7201.T) 35.1 percent.

A Reuters poll of analysts found a median expectation for U.S. auto sales to reach 9.4 million units on a seasonally adjusted annualized basis in May, a slight increase from April, but far below the 14.3 million unit rate a year earlier.

The seasonally adjusted annual rate is a key measure used by economists to gauge the health of the U.S. economy. Auto sales are also one of the earlier economic indicators.

At the height of the recent credit-fueled boom, U.S. auto sales reached 17 million units in 2005.

INCENTIVES AND DEALS

JP Morgan analyst Himanshu Patel said on Wednesday the result could depend on incentives offered by Chrysler dealers in the last selling weekend of the month with the seasonally adjusted annual rate possibly reaching 10 million.

"It appears Chrysler sales have improved notably versus early-month trends, as terminated Chrysler dealers try to liquidate inventory ahead of their June 9 franchise termination deadline," Patel said in a note to clients.

Ford's Pipas also said industry sales could hit the 10 million unit annualized mark, but pointed to the Chrysler dealers sales as creating distortions in the market that could continue with Chrysler and GM in bankruptcy.

GM filed for Chapter 11 bankruptcy protection on Monday.

Chrysler plans to terminate 789 U.S. dealerships from its network by June 9, or about 25 percent of the total. It is not providing financial assistance to the dealers.

Chrysler Chief Executive Bob Nardelli told the bankruptcy court on Thursday that dealerships Chrysler plans to terminate June 9 had sold 4,000 vehicles at retail and transferred 15,000 to other dealerships through Wednesday.

"We are seeing a clearing out of inventories and in some cases people looking to buy Chrysler vehicles, but only at steep discounts," independent industry analyst Erich Merkle said.

GM as well plans to cut 1,600 dealers between now and October 2010 as it hives off brands that are not part of the new GM and lets long-term agreements with about 1,100 dealerships expire.

Chrysler is seeking bankruptcy court approval for the sale of most of its assets to a new company led by Italy's Fiat SpA (FIA.MI) which could come as soon as Friday.

"They still have to try to find some way to entice consumers into showrooms without any product except for a couple of models that are arriving maybe next year and nothing that is arriving from Fiat for maybe 18 months," IHS Global Insight analyst Aaron Bragman said of Chrysler.

GM Agree to Sell Hummer, Who is Buyer?

General Motors Corp. said Tuesday that it has tentatively agreed to sell its Hummer brand, a day after the U.S. automaker filed for bankruptcy protection with hopes that it will transform its most profitable assets into a new company within just 30 days.

The Detroit-based company did not name the proposed buyer or the price, but said the sale will likely save more than 3,000 U.S. jobs in manufacturing, engineering and at various Hummer dealerships.

"We're not today in a position to be able to identify a buyer. it was part of the agreement," GM Chief Executive Fritz Henderson told CBS's "The Early Show." ''We believe the buyer is quite capable of closing."

Critics had seized on the rugged but fuel-inefficient Hummer as a symbol of excess as GM's financial troubles grew and gas prices rose. Sales at Hummer, which is known for hulking sport utility vehicles like the H3, have been in a steep slide since gasoline prices rose to record heights last summer. For the first four months of this year, Hummer sales are down 67 percent.

GM and other automakers will report May auto sales later Tuesday.

A sale of the Hummer brand had been expected. Chief Executive Fritz Henderson had said in April that the automaker was expecting final bids from three potential buyers within the month.

Other terms of the transaction, which is currently tied to a memorandum of understanding, were not disclosed.

The unnamed buyer is planning to "aggressively" finance Hummer's future product programs, according to GM.

"I'm confident that Hummer will thrive globally under its new ownership. And for GM, this sale continues to accelerate the reinvention of GM into a leaner, more focused and more cost-competitive automaker," Troy Clarke, president of GM North America, said in a statement.

GM is also trying to sell its Saab and Saturn brands and will phase out its Pontiac brand as it concentrates on its Chevrolet, Cadillac, Buick and GMC nameplates.

In advance of Monday's bankruptcy filing by GM, the automaker had agreed on a deal to sell a majority interest in its Adam Opel GmbH unit in Europe.

Under that plan, Canada's Magna International Inc. would get a 20 percent stake in Opel and state-controlled Russian lender Sberbank would take a 35 percent stake. GM will retain a 35 percent holding, while the remaining 10 percent will go to Opel employees.

The proposed deal for Hummer will allow it to continue to contract vehicle manufacturing and business services from GM during the transition process.

The Hummer sale is expected to close by the third quarter's end.

GM sought court protection from its creditors on Monday under Chapter 11 of the U.S. bankruptcy code. The company said it hopes to reshape the company within a month and emerge from reorganization in 60 to 90 days as a profitable entity with fewer employees, factories and dealers.

Buy A GM Car Now as Tempting Incentives

Should I buy a GM car now? GM is offering some tempting sales incentives, including zero-percent financing and/or cash rebates, 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 during this restructuring period.

In addition to advertised customer incentives, automakers often provide behind-the-scenes dealer incentives. Knowing about these can help you to negotiate a lower price. Consumer Reports’ New Car Price Reports give you a list of all national and regional incentives for a particular model, including the hard-to-find holdback amounts, and the CR Bottom Line Price, which factors in all those to give you a good starting point for negotiating the vehicle’s price. Dealer sales incentives can also be found at various auto-pricing Web sites.

It’s important to remember that any deal is only as good as the vehicle you’re buying. 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.

Several recent GM models have done well in our testing and are very competitive in their classes. This includes the Chevrolet Malibu, Cadillac CTS, and GM’s quartet of three-row, crossover SUVs (Buick Enclave, Chevrolet Traverse, GMC Acadia, and Saturn Outlook). All except for the Malibu, however, have shown below-average reliability in their first years.

Overall, you need to balance a good deal with the risk of greater depreciation, the chance of reduced consumer protections (see What If I Have a Claim Against GM?), and the chance that your local dealership could go out of business in coming months. (GM recently notified about 1,100 of its dealers that it will not renew their franchise contracts in October 2010. This will leave the company with about 5,000 dealerships in the U.S., still well more than Toyota’s 1,600 or Honda’s or Nissan’s 1,200.)

What brands and models will still be available?
GM plans to trim its number of U.S. brands from eight to four. It plans to retain Buick, Cadillac, Chevrolet, and GMC, while phasing out or selling Hummer, Pontiac, Saab, and Saturn. GM has said that it will not rebrand any vehicles from those divisions to be sold by the remaining divisions.

Pontiac is expected to be phased out by the end of 2010. GM has been meeting with parties interested in buying Hummer, Saab, and Saturn. But since no final details have been announced, the future of those models remains uncertain.

GM has also said that it will discontinue several of its high-performance models by the end of this year, including the Chevrolet Cobalt SS sedan, HHR SS, and Impala SS, the Cadillac STS-V, and the Pontiac G6 GXP.

GM Bankruptcy, What Does it Mean?

General Motor’s decision to file for Chapter 11 bankruptcy has created a lot of uncertainty for both car buyers and owners of GM vehicles.

While it’s too early to know how all of the variables will play out, both the company and the federal government are hoping for a relatively short restructuring period.

Ideally, GM will emerge from this as a leaner, more streamlined automaker—with fewer brands, dealerships, and models—that is better positioned to compete in today’s automotive environment.

In the meantime, the restructuring processes could be fairly transparent for most car buyers and owners.

Exceptions include those who have a local dealership close its doors or discontinue carrying a certain brand. And for car shoppers in general, it could be a great time to buy.

1. Will I be able to get parts and service for my GM car?
GM has said that it will continue to support their authorized dealerships with parts during this restructuring period, so that the dealers can continue to service your vehicle. Of course, common third-party replacement parts are also widely available through auto-parts stores.

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.

2. Will GM still back my warranty?
GM has said that it will continue to support its vehicles’ warranties during this restructuring period.
In addition, the Treasury Department’s Warranty Commitment Program says that the federal government would back warranties for any GM vehicle bought during the restructuring period, should the automaker go out of business. The government would contract with a third-party auto-service provider to provide warranty repairs. Such a program might not run as smoothly as an automaker program, but it wouldn’t kick in unless the automaker is liquidated.

3. Will this affect the resale value of my GM car?
With the uncertainty surrounding GM, it’s likely that its cars will drop in value during this restructuring period, especially for brands that are being phased out or sold. But if the company re-establishes itself as a strong, stable automaker in future months, ongoing models could see a rebound in value.

The resale value for brands that are discontinued is likely to drop dramatically, as happened when GM phased out Oldsmobile in 2004 and Chrysler dropped Plymouth in 2001. This would have the most effect on owners who keep their vehicle for only a few years, say five or less. But if you plan to keep the car for a long time, depreciation is less of a factor.

To help compensate for this drop in value, GM is currently offering a sales-incentive program that gives you extra money if you trade in a current GM car for another. It also covers selling your car privately, but you still need to buy another GM vehicle within a certain period of time. For details, go to www.gm.com/vehicles/currentoffers/.

After GM Bankruptcy, Everything Go Where?

The General Motors Corp. bankruptcy filing expected Monday follows weeks of maneuvering and preparation.

The government has said it wants GM’s trip through bankruptcy to be quick, and various stakeholders will have to accept sweeping changes.

Still, the future of the auto giant — and its significant presence in Western New York — is shrouded in questions.

The answers matter to everyone — active and retired workers, dealers and suppliers, and, most importantly, to car buyers.

GM has an engine plant with more than 1,000 jobs in the Town of Tonawanda. Suppliers with a local presence, including Delphi Corp., American Axle & Manufacturing, and other smaller companies ship products to GM. In the eight counties of Western New York, 48 dealerships sell new GM vehicles.

And retirees rely on the automaker for health benefits and pensions.

Here is a look at what might unfold:

1. Employees

Members of the United Auto Workers last week approved revisions to their 2007 labor contract with GM, with 74 percent voting in favor.

If GM went bankrupt, the union felt, it was better to have an amended contract in place.

A lot of local jobs are at stake. The Tonawanda plant has about 1,140 employees, including about 1,010 hourly workers.

About 360 of the hourly workers are on layoff.

The amended contract calls for suspending workers’ cost-of-living adjustments and suspending performance bonuses planned for this year and 2010.

It also eliminates the chance of a strike against GM until 2015 and shortens workers’ break times. A new round of buyout and early retirement offers was included.

Garry Graber, a partner in the Hodgson Russ law firm, doubts the contract will be altered in bankruptcy court.

“A judge won’t change the labor contract unless the company asks them to,” he said.

And he doesn’t expect GM to ask for changes, since the contract was just agreed to.

2. Retirees

The revised contract calls for reducing retirees’ health benefits in areas such as dental and vision programs.

The reduced benefits could lead to an “induced effect” on retirees, said George Palumbo, an economist at Canisius College. If they have to spend more on health care costs, they might cut back their spending in other areas, affecting the local economy, he said.

Retirees will have a major interest in the future version of GM: The union’s retiree health care trust will have a 17.5 percent stake in the company.

3. Plants

GM is downsizing its U. S. manufacturing and plans to announce Monday the closing of 14 plants by the end of 2010 to reduce its capacity and costs.

The Tonawanda plant probably will not be targeted, according to Art Wheaton, director of labor studies at Cornell University’s School of Industrial and Labor Relations in Buffalo.

“They can build more than one type of engine,” he said. “They’re not a one-trick wonder.”

Paul Lacy, who analyzes powertrain operations for IHS Global Insight, was less sure.

The Tonawanda plant is “certainly more vulnerable than some of the others,” he said, citing GM’s decision earlier this year to delay indefinitely a diesel engine line that had been announced for the site.

“Without the previously planned 4.5 liter diesel, the plant seems to be without purpose,” he said.

The plant closings will be costly to their home communities, eliminating about 21,000 jobs.

4. Suppliers

Even before bankruptcy talk began to swirl around GM and Chrysler LLC, suppliers to the auto industry were financially strained. The sharp downturn in auto sales has led to less production, so the automakers need fewer parts.

Both Chrysler and GM plan to idle many of their manufacturing operations for several weeks this summer to reduce their vehicle inventories. Those cutbacks will be felt through the chain, as suppliers cope with reduced business.

“The backward linkage [from automakers to suppliers] is extensive,” Palumbo said.

A GM bankruptcy filing could create more pain for suppliers, depending on the payments they collect. Suppliers might not get paid, or may have to settle for pennies on the dollar in compensation, Wheaton said. “It depends on what deal they cut.”

The federal government’s $5 billion Supplier Support Program is designed to help “tier one” suppliers that directly serve GM and Chrysler stay out of bankruptcy. Some suppliers have called for expanding its eligibility.

Gibraltar Industries supplies both GM and Chrysler, and both companies are current in their payments, said Ken Houseknecht, a Gibraltar spokesman.

While Gibraltar has good relationships with both automakers, the company over the years has diversified, lessening its reliance on the auto industry’s sales trends, he said.

The automakers have a “mutually dependent relationship” with many of their suppliers, Graber said.

“The manufacturer needs them as much as they need the manufacturer,” he said.

It is in GM’s interest to ensure its suppliers survive, he said, but there are limits to how much support it can provide to them.

The Center for Automotive Research believes the survival of the suppliers, like the dealers, requires a quick bankruptcy process.

“If GM and Chrysler are able to emerge from bankruptcy and resume operations within 60 to 90 days, the supplier sector — aided by the U. S. government — could remain viable,” its report said.

Delphi has been in bankruptcy for years, but there is a twist to its situation.

GM intends to reacquire five of Delphi’s operations, including its Lockport and Rochester plants, that were part of GM before the Delphi spinoff a decade ago.

5. Dealers

GM already informed more than 1,100 dealers that it will not renew their franchise agreements as of October 2010. On top of those reductions, it plans to cut ties with its Saturn, Hummer and Saab brands, and drop Pontiac altogether.

Saturn, Hummer and Saab all could survive under new owners. GM intends to concentrate on its Chevrolet, Cadillac, Buick and GMC brands.

Since auto dealers are protected by state franchise laws, GM dealers targeted for shutdown could go to court. But bankruptcy law trumps those franchise laws, giving a GM in Chapter 11 more sway in making decisions about its dealer network.

It’s “very possible” a bankrupt GM could seek to move up the termination date for the targeted dealers or add dealerships to the target list, said Michelle Krebs, senior industry editor with Edmunds.com.

When Chrysler LLC filed for bankruptcy in late April, it named 789 dealerships it planned to drop and set June 9 as the cutoff date. Chrysler LLC is not buying back dealers’ unsold vehicles and parts but has pledged to help arrange the transfer of those items to other dealerships.

Would consumers still buy cars and trucks from a bankrupt GM?

That was a top concern when the bankruptcy threat surfaced for Chrysler and GM. The Obama administration pledged the government would back the warranties of newly purchased GM and Chrysler vehicles to quell consumers’ fears.

It is difficult to pinpoint just how much Chrysler’s bankruptcy filing has hurt its sales, Krebs said, given the industry’s poor overall sales climate.

As for GM, “some customers don’t even know which brands belong to General Motors,” she said. But if bankruptcy becomes a reality, she added, GM dealers likely will field more questions from informed customers about warranties and service protections.

The Center for Automotive Research in Michigan studied Chrysler’s bankruptcy and GM’s potential filing. It distinguished between a process finished within 60 to 90 days, and a drawn-out, more damaging process.

“A prolonged hibernation by GM would put an unbearable financial strain on many suppliers and dealer franchises,” the report said.

6. The government

You own an auto company. What do you do now?

The Obama administration — and by default, taxpayers — must answer that question now that the federal government is about to take big stakes in two of the nation’s storied industrial companies and their joint financing arm. Based on the latest bankruptcy and bailout plans, the government will hold 72.5 percent of GM, 8 percent of Chrysler and 35 percent or more of GMAC Financial Services, the car loan business.

Ideas for what to do with those shares are colored by both politics and investment philosophy, and they’re sure to be debated.

Some economists and financiers believe President Obama should dump the stock almost immediately, to whatever buyer the government can find.

Others say the administration should find a partner, maybe a savvy investor such as Warren Buffett or an equity firm such as Oaktree Capital to operate the businesses for a generous share of any profits on the condition that the government gets its money first.

And some believe Obama should just stick the shares deep into a desk drawer and let the next president worry about an exit strategy. GM and Chrysler will either fail again or become corporate home runs. Only time will tell.

The administration says significant government involvement in GM ends with its efforts to reconstitute the company’s board of directors, which would happen as part of an expected bankruptcy filing by Monday.

White House Press Secretary Robert Gibbs reiterated Friday that Obama did not want to run auto companies.

That’s the right approach, said David Cole, chairman of the Center for Automotive Research.

“Our government doesn’t have a clue about what manufacturing is or how to manage it,” Cole said.

If the Obama administration resists any inclination to meddle in the operations of these companies, taxpayers have a chance to recoup a substantial amount of money they poured into the auto industry, Cole said.

7. The future

Just how quickly GM can move through the bankruptcy process is the next question.

Experts say Chrysler’s case is progressing more quickly and smoothly than expected, but add that GM’s case is larger and more complex.

Resolving GM’s case quickly will benefit the manufacturer as well as the overall economy, Graber said.

“Until the bankruptcy is settled, there’s a lot of uncertainty out there,” he said.