DETROIT - General Motors Co. will reinstate 661dealerships it sought to drop from its sales network.

GM executives said Friday that the dealerships — more than half of those seeking to stay with the automaker — will receive letters giving them the option to remain open. GM said it would not have enough time to negotiate with all 1,100 dealerships that appealed the automaker's decision to close them within a four-month window imposed by the federal government.

"By doing this we save a lot of time, energy and dollars," said Jim Bunnell, GM general manager of network support, saying the company wished to avoid a "very large arbitration process."

As part of its restructuring, GM last year told about 2,000 dealerships it would not renew their franchise agreements once they run out in October 2010. But the dealerships have said GM treated them unfairly, and last month Congress passed a law requiring an appeals process for the dealers.

GM's decision to keep the additional showrooms open effectively shrinks the number of appeals it has to contend with. Arbitration hearings for the dealers who didn't get offers but still want to stay with GM will begin later this month.The cuts to GM's 6,000-dealer network were designed to compensate for much lower demand for cars and trucks, but some dealers have argued that lots that are still profitable are at risk, and that the automaker hasn't offered enough details about how it's choosing which businesses to shutter.

‘Lesser of the two evils’
GM would not offer any details on Friday about which dealerships it was reinstating and where they are located. It said it chose the 661 based on a variety of criteria, including sales and other business factors.

The company said it hoped to have every letter of intent with dealerships by Monday. At that point, dealers have 10 days to respond and 60 days to meet a set of criteria that would allow them to stay with GM.

A spokeswoman with Chrysler Group LLC, which has cut 789 dealers, said the company was preparing a statement in response to questions about whether they also intended to reinstate dropped dealerships. Chrysler showrooms slated for closure are also appealing to stay open, though it remained unclear how many.

Michael Boudreau, an auto industry turnaround expert with O'Keefe & Associates, said GM likely saw the reinstatement of the dealers as the "lesser of the two evils" versus the costs of litigating their termination.

"It's not exactly what they wanted to do, and it's always I think a little embarrassing when you have to make changes based on an arbitration process, but they've had to adjust and move forward," he said.

Boudreau added that the decision could have ripple effects.

"The Chrysler dealers are taking a close look at this," he said.

Dealers encouraged
Tammy Darvish of the Washington-area Darcars chain, which has three dealerships slated for closure, said she was encouraged by GM's decision.

"If they are genuinely, truly sincere, it's overwhelmingly heartwarming," Darvish said of the company's offer to allow dealers to demonstrate their eligibility to remain open.

But as of Friday, Darvish said she didn't know if her franchises are among those being reinstated. She said she plans to go into arbitration if they are not.

Congress-brokered talks between dealer groups and the automakers began in September. But those talks stalled over disputes about the review process for targeted dealerships and other issues. Looming over the fight has been the threat of federal legislation to deal with the closures. Lawmakers warned that if a deal wasn't reached, that legislation would move forward.

The White House has opposed the legislation over concerns that it could hurt GM's and Chrysler's efforts to rebound from their government-led bankruptcies. 

Source: MSNBC

WASHINGTON - Some Toyota owners say they are still having trouble with unintended acceleration after their recalled cars were repaired, and the Transportation Department said Wednesday it is looking into their complaints.

David Strickland, the administrator of the National Highway Traffic Safety Administration, said in a statement the agency is reaching out to consumers about the complaints "to get to the bottom of the problem and to make sure Toyota is doing everything possible to make its vehicles safe."

"If Toyota owners are still experiencing sudden acceleration incidents after taking their cars to the dealership, we want to know about it," Strickland said.

The government has received a limited number of acceleration reports from the Toyota owners whose floor mats or gas pedals have been fixed but the fresh complaints raise new questions about whether Toyota's remedy will solve the problem. Toyota and the government are investigating potential electrical problems as part of the Japanese automaker's recall of more than 8 million vehicles worldwide.

NHTSA has linked 52 deaths to crashes allegedly caused by Toyota's acceleration problems. The company has blamed mechanical causes or drivers pressing the wrong pedal and repaired about 1 million vehicles, but has said it is looking into electronics as a potential cause.

Toyota did not immediately comment on the new complaints.

Stewart Stogel, 49, said his 2009 Camry accelerated to about 15 mph on a street near his home on Saturday, five days after a dealership trimmed the gas pedal and installed new brake override software as part of the floor mat recall. The car didn't stop for several seconds even though he pressed on the brakes. Stogel said he barely avoided a wall and nearly went down an embankment.

"At first the brakes didn't engage at all," said Stogel, a freelance journalist. "Just as I approached Terrace Avenue, the wheels were able to get some traction, and all of the sudden the engine did disengage."

Stogel said the car had accelerated two previous times, and both times Stogel said he took it to dealerships to be checked. In one case it was inspected by a Toyota corporate technician who could find nothing wrong, he said.

After the latest incident, Stogel called his dealer, who told him to return with the car. He also left a message with Toyota Motor Sales U.S.A. President Jim Lentz. On Tuesday, Stogel's dealer called and asked him to return with the Camry so Toyota engineers can inspect it.

Carolyn Kimbrell, 59, a retired office assistant, said her 2006 Toyota Avalon accelerated last weekend as she pulled up to her mailbox near her home — about a week after the car had been fixed. Kimbrell had just returned from a shopping trip to the mall with her 9-year-old granddaughter.

Kimbrell's car dealer on Feb. 20 inserted a small piece of metal into the gas pedal mechanism to eliminate friction that was causing the pedal problems. The dealer is scheduled to provide a separate fix to prevent the accelerator pedal from becoming trapped in the floor mat. But now Kimbrell said she wonders if the company's fix will solve the problem.

"It just scares you," Kimbrell said. "If I had been trying to stop at a busy intersection, that would have been bad."

The recalls have prompted three congressional hearings, hurt Toyota's safety and quality reputation and generated death and injury lawsuits. Federal prosecutors in New York are conducting a criminal investigation into the recalls and the Securities and Exchange Commission is probing what the automaker told investors.

Toyota on Tuesday said its U.S. sales fell 9 percent in February but it would offer repeat buyers two years of free maintenance to help rebuild customer loyalty.

During congressional hearings, Toyota executives said all new models sold in the United States will have the override system by 2011 and many recalled vehicles will be retrofitted with the brake override as a precaution. Toyota said it has fixed about 1 million recalled vehicles.

Source: MSNBC

DETROIT - General Motors Co.'s February sales rose 11.5 percent thanks to new models and pent-up demand from fleet buyers. It was unclear how much the Detroit automaker benefited from Toyota's safety woes.

GM on Tuesday said sales of its Buick, Chevrolet, Cadillac and GMC brands climbed 32 percent. GM plans to keep those four brands and is phasing out Pontiac, Saturn and Hummer. It has sold Saab.

The company said much of the sales increase was due to sales of new crossover wagons such as the Chevrolet Equinox, which jumped 133 percent, and the Cadillac SRX, which saw sales more than quadruple. Sales to rental car companies and other fleet buyers also were strong, as companies began buying again after cutbacks last year. Fleet sales generally mean lower profits to automakers than retail sales to individuals.

Retail sales for GM's four core brands edged up 7 percent. Surging crossover sales also helped Japan's Subaru, which said its U.S. February sales jumped 38 percent to 18,098 led by the Outback crossover and Legacy sedan. Both vehicles got a redesign for the 2010 model year. Sales of its Impreza sedan and Forester SUV were flat. How much GM and other automakers gained from Toyota Motor Corp.'s recalls remained a question. February was the first full month since Toyota's Jan. 26 decision to halt sales of eight popular models in the U.S. because of safety concerns. Those cars went on sale again as dealers repaired them, but Toyota's image suffered from the recall of millions of vehicles and last week's congressional hearings on its safety record. Analysts were expecting Toyota to see a double-digit drop in sales for the month.

Other automakers are reporting U.S. sales on Tuesday. Honda Motor Co., Hyundai Motor Co., Kia Motor Co. and Ford grabbed the most sales from Toyota in February, according to Jesse Toprak, vice president of industry trends and analysis at TrueCar.com, an auto pricing site. Most automakers offered deals to Toyota customers who traded in their vehicles or raised incentives in February to compete for those buyers.

Source: MSNBC

Six new models made our Top Picks this year: the Chevrolet Silverado and Traverse, Mazda5, Nissan Altima, Subaru Forester, and Volkswagen GTI. This marks the first time in six years that two domestic models earned spots or that a European car made the list.

Two of last year's picks, the Toyota Highlander and RAV4 SUVs, were passed over this year. At the time of publication, sales of certain versions had been halted. We have suspended our recommendation until a potentially unsafe part that could cause unintended acceleration is fixed.

Our Top Picks are the best all-around models in their categories, based on their performance, reliability, and safety. They are chosen from the more than 280 vehicles we've recently tested and must meet our criteria in three areas:

Road Test

Each must rank at or near the top of its category in our overall test score, which is based on more than 50 tests and evaluations.

Reliability

Each must have an average or better predicted-reliability Rating, based on the problems CR subscribers reported in our latest Annual Auto Survey.

Safety

Top Picks must perform adequately in overall safety if tested by the government or the insurance industry. (For some models, we do not have enough crash-test data to assign an overall safety Rating.) In addition, electronic stability control, a proven lifesaving safety feature, must be readily available. All of our Top Picks provide standard ESC and curtain air bags.

Each model's report card shows its Rating in each area, if available. Prices are the suggested retail amount for our tested cars.

Family Sedan: Nissan Altima

The Altima has been one of our top-rated family sedans for years, and a freshening for 2010 made it better. It now gets improved gas mileage and provides standard ESC in all trim lines. The Altima offers an appealing balance of comfort and performance, while getting some of the best fuel economy in its class: 26 mpg overall for four-cylinder models and 24 mpg with a V6. The cabin is roomy, well finished, and quiet. And the secure handling, comfortable ride, and spirited acceleration make the car enjoyable to drive. The four- cylinder model earned an above-average reliability Rating, while the V6 model is average. Price: $23,970 to $30,335.

Small Sedan: Volkswagen GTI

Freshened for 2010, the GTI is the sporty version of the Volkswagen Golf (formerly called the Rabbit). This impressive package is exhilarating to drive and easy to live with. It delivers the agile handling, spirited acceleration, and responsive steering of a true sports car, along with a decent ride, a well- finished interior, and the cargo-carrying practicality of a hatchback. Good fuel economy of 27 mpg overall is another plus, although premium fuel is required. Price: $27,504.

Small SUV: Subaru Forester

The Forester provides one of the most carlike driving experiences of any SUV. It combines agile handling with the most comfortable ride in its class. Passengers are treated to a spacious cabin, with a roomy rear seat and excellent visibility. The 2.5X provides an impressive 22 mpg overall with an automatic, 24 mpg with a manual. And the turbocharged 2.5XT delivers effortless acceleration and 20 mpg, but it takes premium fuel. The 2.5X has had excellent reliability, while the 2.5XT 's is average. Price: $20,972 to $28,860.

Best Car Overall: Lexus LS 460L

The LS scored an outstanding 99 out of 100 in our road test, making it our highest-rated vehicle. This large cruiser pampers its passengers with a comfortable ride and luxurious driving environment, including a roomy, well-crafted, and exceptionally quiet interior. It offers a plethora of electronic amenities, including an optional self-parking system. Yet, its controls are easy to use. Although the LS isn't exactly fun to drive, its efficient 380-hp V8 and eight-speed automatic transmission deliver smooth, brisk acceleration and a relatively good 21 mpg overall, the same as a Honda Accord V6. All-wheel drive and a hybrid version are available. Price: $76,572.

Family SUV: Chevrolet Traverse

The Traverse stands out as an impressive overall package with a quiet, spacious cabin that can comfortably seat up to eight adults and leave room for cargo. It provides a pleasant ride, communicative steering, and responsive handling. Our Traverse returned 16 mpg overall, which is respectable for its size. Rear visibility isn't great, but clever convex side mirrors and an optional rear-view camera help. The GMC Acadia is a twin of the Traverse, but its reliability is below average. Price: $39,920.

Sports Sedan: Infiniti G37

The G sedan, which joins our list for the fourth straight year, is one of the highest-rated sedans we've tested, with a score of 95 out of 100. It provides an appealing combination of agile handling, blistering acceleration, a refined powertrain, a fairly comfortable ride, and a high-quality, luxurious interior. The G37 is as inviting to drive on a twisty road as it is on the highway. But compromises include a snug cabin and small trunk. Rear-wheel drive is standard; all-wheel drive is optional. Coupe and convertible versions are also available. Price: $37,225.

Family Hauler: Mazda5

The Mazda5 microvan offers a lot of practicality in a compact, affordable package. With three rows of seats and sliding rear side doors, it combines the convenience of a minivan with the maneuverability and stingy fuel economy—24 mpg overall—of a wagon. The interior is airy, with good fit and finish. Plus the Mazda5 is fun to drive, with a nimble feel and a comfortable ride. The addition of standard ESC for 2010 improved its emergency handling. If you need more room, consider the Honda Odyssey minivan. Price: $23,805.

Green Car: Toyota Prius

The Prius received a redesign for 2010. It's still the most fuel-efficient car in our Ratings, getting 44 mpg overall. That distinction helped it earn our pick in this category for the seventh straight year, the longest of any current model. In addition, the Prius is a pleasant car to drive, with a roomy interior, a steady ride, hatchback versatility, and excellent reliability and crash-test results. The 2010 redesign also gave it a more solid feel and a dedicated EV mode that allows it to run longer on electric power at low speeds, an advantage mainly in slow, congested traffic. Price: $23,150-$26,950.

Pickup Truck: Chevrolet Silverado 1500

The Silverado 1500 returns as our top choice after a year off. The crew-cab 4WD model is a well-rounded pickup with a roomy cabin, generous payload capacity, decent ride quality, available full-time 4WD, and, on higher-end models, very good interior fit and finish. The GMC Sierra is a twin of the Silverado. The reliability of last year's pick, the Chevrolet Avalanche, dropped to below average in our latest Annual Auto Survey, keeping it from repeating. Price: $37,235.

Source: Yahoo

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DETROIT - General Motors Co. will wind down its iconic but tarnished Hummer brand after Chinese regulators rejected a $150 million bid by an obscure Chinese machinery maker to buy the money-losing SUV line.

GM had been trying to complete the deal by the end of February after reaching a definitive agreement in October to sell Hummer to Tengzhong, a little-known heavy machinery company based in Sichuan province.

The collapse of the deal represents another setback for GM, which had been working to shed unprofitable brands and focus on its four core brands — Chevrolet, Cadillac, Buick and GMC — after emerging from bankruptcy in July.

Closure of Hummer would put about 3,000 jobs at stake, including manufacturing workers, dealers, staff members, and other areas, GM spokesman Nick Richards said. The brand has 153 U.S. dealers.

A brand that grew out of the U.S. military multipurpose vehicle known as the Humvee produced by AM General, Hummer was lauded early on for a tough image but became synonymous with gas-guzzling excess when consumers became more interested in high oil prices and environmental responsibility.

Regulatory hurdle
GM bought the Hummer brand from AM General in 1999 and went on to produce several civilian models.

"We have considered a number of possibilities for Hummer along the way, and we are disappointed that the deal with Tengzhong could not be completed," John Smith, GM vice president of corporate planning and alliances, said in a statement.

"GM will now work closely with Hummer employees, dealers and suppliers to wind down the business in an orderly and responsible manner," Smith said.

NewsTengzhong, in an emailed statement to Reuters, said it and GM have decided to terminate the agreement after failing to win Chinese regulatory approval within the proposed time frame.

"Tengzhong worked earnestly to achieve an acquisition that it believed to be a tremendous opportunity to acquire a global brand at an attractive price," the company said.

Industry experts and sources with knowledge of the situation told Reuters Tengzhong had faced questions in China over how a little-known heavy machinery maker with no international experience could buy and turn around a struggling foreign brand like Hummer.

Many also said that regulators might balk at letting a Chinese firm acquire a U.S. brand known for making gas-guzzling vehicles at a time when China was emphasizing the development of more environmentally friendly technologies.

The privately owned Tengzhong was formed in 2005 through several mergers and has fewer than 5,000 employees.

Third failed sale
GM said it will continue to honor warranties and provide service support and spare parts to current Hummer owners.

This marks the third sale of a GM brand that has fallen through or been abandoned by the automaker, which was restructured in bankruptcy last year, backed by some $50 billion in U.S. taxpayer funding.

A tentative deal reached by GM to sell its Saturn brand to Penske Automotive Group Inc. also collapsed at the end of September, just before it was expected to close.

GM also scrapped a plan to sell its Germany-based Opel unit to a group led by Magna International last year.

The wind-down of Hummer is expected to take several months and GM will continue to entertain viable offers early in the process, Richards said.

GM has not built any new Hummers at its plant in Shreveport, La., since mid-January and currently has about 2,500 vehicles in dealer inventory.

The Shreveport plant continues to build the GMC Canyon and Chevrolet Colorado mid-sized trucks.

GM put Hummer up for sale initially in summer 2008, a full year before the automaker fell into a government-supported bankruptcy reorganization in which it planned to divest Hummer, Saturn, Saab and a controlling stake in Opel.

Hummer's U.S. sales have plunged to just above 9,000 last year from nearly 56,000 in 2007. About two-thirds of its sales have been in the United States and one-third internationally.

Source: MSNBC

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YONKERS, New York - Consumer Reports has named Honda and Subaru best all-around vehicle makers in its annual auto issue, marking the fourth consecutive year Honda won top marks from the influential magazine.

The ratings are based on the magazine's average road test scores and predicted reliability scores.

Chrysler fared the worst in the pack, though Consumer Reports recommended one of its vehicles, the Ram pickup. It did not recommend any Chrysler vehicles last year.

Honda and Subaru, both Japanese car makers, tied for first with an overall score of 77 out of 100 points in Consumer Reports' ranking.

They were followed by Toyota and Hyundai. Nissan and Volkswagen tied for fourth with a score of 72.

Source: MSNBC