Former U.S. President George W. Bush urged the Obama administration to sell the government’s stakes in banks and carmakers “as quickly as possible,” arguing that only private companies can spark an economic rebound.

Government “has got to get out of the private sector, and therefore I hope our government gets out of the autos and the financials in which they have a stake,” Bush told members of the Montreal Board of Trade, an association of local business people, in a sold-out speech today. “Temporary measures must be temporary.”

U.S. taxpayers are “extremely unlikely” to earn any return on the $700 billion government program to invest in banks and other companies that was approved as the financial system teetered on the edge of collapse last year, a quarterly audit said yesterday. More in the jump...

In a report to Congress, the Troubled Asset Relief Program watchdog Neil Barofsky said that recouping the billions of dollars given to insurer American International Group Inc. and automakers General Motors Co. and Chrysler LLC “is far from certain.” He also said that $50 billion set aside for helping struggling homeowners lower their mortgage payments will yield “no direct return.”

Bush, in his remarks today, said that when his administration introduced TARP, “the whole system of capitalism was frozen, it was like a frozen corpse with a faint heartbeat.”

‘Here Is Some Blood’

“So we said, ‘Here is some blood. When you get on your feet, you can find cheaper money and give us back the taxpayer money with a nice return,” Bush said. “But these measures have got to remain temporary for us to recover.”

Treasury Secretary Timothy Geithner said Oct. 20 that the administration would end some of the biggest TARP programs in coming weeks, including the one that made capital injections into large banks.

“I don’t believe government can lead us out of the mess we are in,” Bush said. “The private sector is the only engine for economic growth.”

About 1,000 people paid between C$200 ($191) and C$400 each to attend Bush’s speech in a downtown Montreal hotel, according to the Board of Trade. Hundreds of people protested outside the building, with police arresting five of the demonstrators, according to a Canadian Broadcasting Corp. report.

Bush’s Fee

Speaking fees for Bush, 63, may exceed C$150,000 ($143,175), the Montreal Gazette reported in August. Christian Darbyshire, a partner at Calgary-based TinePublic Inc., which organized the event, declined to say today how much the former president was paid for his appearance.

Bush prefaced his remarks by saying they shouldn’t be construed as a criticism of President Barack Obama.

“I didn’t like it one bit when former Presidents criticized me,” he said. “I wish President Obama all the best. I love my country. I understand how tough the job is. He will have plenty of critics throughout his presidency, and I don’t intend to be one of them.”

On foreign relations, Bush urged the U.S. to continue its military mission in Afghanistan. Obama has been reviewing his strategy for the war there; former Vice President Dick Cheney, in a speech last night in Washington, said the White House was “dithering” in its deliberations.

Troop Decision

Among the decisions facing Obama is whether to add as many as 40,000 more U.S. military personnel to the 68,000 that will be in Afghanistan by the end of this year.

Under Bush, a NATO coalition led by the U.S. invaded Afghanistan in late 2001 and ousted the Taliban government that had harbored the al-Qaeda terrorists responsible for the Sept. 11 attacks. As part of Bush’s war on terrorism, a U.S.-led coalition invaded Iraq in early 2003 and drove out the government of the late Saddam Hussein.

“I am deeply concerned that if we abandon Afghanistan too soon, the extremists will find a safe haven and I feel pretty confident that they will hit us again,” Bush said. “A functioning democracy, a democracy that can defend itself and govern itself, that will happen sooner in Iraq than it will in Afghanistan.”

Bush also urged the U.S. Congress not to endanger the $1 billion-a-day U.S.-Canadian trading relationship and to repeal the “Buy America” provisions in the stimulus package passed in February that sparked calls for retaliatory measures in Canada. “Trade leads to wealth,” Bush said. “The ‘Buy America’ provisions are bad provisions in U.S. law and ought to be taken out.”

The stimulus measure requires that steel and manufactured goods purchased with the funds be made in the U.S. or in countries with whom the U.S. has a trade accord. Because of a provision in the North American Free Trade Agreement, Canada doesn’t qualify for projects in which the stimulus money is spent by state or local governments.

Source: Bloomberg

Still love Obama? How did this become acceptable? Cars.gov allows government to takeover your computer when you submit info on the clunker you're trading in. Nice of them!

Last week, General Motors formerly announced that it had filed for chapter 11 bankruptcy but the truth of the matter is that the struggling automaker’s downfall was predicted years ago and it has only managed to survive up until now on the back of government handouts. According to latest comments from former vice president Dick Cheney, the Bush administration was well aware of GM’s troubles and knew the automaker should have entered bankruptcy back when it was in power but decided to let the issue slide until after a new president was sworn in.

During an interview on Fox News last Tuesday, Cheney revealed that during his presidency George W. Bush did not want to be the one who “pulled the plug” on GM. More in the jump!

“I thought that, eventually, the right outcome was going to be bankruptcy,” Cheney said, referring to GM. “It had to go through such a dramatic restructuring to have any chance of survival that they had to be able to renegotiate labor contracts and so forth, and the president decided that he did not want to be the one who pulled the plug just before he left office.”

Cheney said that rather than acting on GM, the Bush administration “put together a package that tided GM over until the new administration had a chance to look at it.” This included the original $17.4 billion auto industry bailout package signed in by the Bush administration late last year, which was designed to give the incoming Obama administration some time to adjust and make preparations for the inevitable GM bankruptcy.

GM is expected to emerge from its ongoing bankruptcy in about 60 to 90 days as a separate New GM, of which 60.8% will be owned by the U.S. government. The restructured company will also be responsible for approximately $17 billion in total consolidated debt, as opposed to the $172 odd billion the old GM was servicing.

Source: Motor Authority

President Barack Obama will announce today that automakers must meet average U.S. fuel-economy standards of 35.5 miles per gallon by 2016, four years sooner than previously planned, a senior administration official said.

The plan adopts nationwide a standard proposed by California, setting the first-ever U.S. limit on greenhouse-gas pollution from vehicles.

Auto companies and California have signed off on the proposal, ending their feud over the state’s proposed rules. California’s Republican Governor Arnold Schwarzenegger and General Motors Corp. Chief Executive Officer Fritz Henderson are among those planning to attend Obama’s announcement.

“It launches a new beginning,” said David McCurdy, president of the Alliance of Automobile Manufacturers, in a statement. “The president has succeeded in bringing three regulatory bodies, 15 states, a dozen automakers and many environmental groups to the table.”

The Washington-based alliance represents 11 carmakers, including GM, Chrysler LLC, Ford Motor Co. and Toyota Motor Corp.

Source: Bloomberg

The White House said today that the government does not want to run General Motors Corp., despite GM's restructuring plan that would give the Treasury 51% of the company.

The swap of debt-to-stock proposed by GM today must meet the approval of the Obama administration, which has set a target of 90% acceptance from bondholders who own $27 billion in GM debt. The automaker warned that should it not reach that target, it would consider a bankruptcy where the government would buy much of GM's assets.

President Obama has said the administration did not want to manage an automaker, but the deal at GM and what's expected to be a similar proposal at Chrysler would give the U.S. government great say in both firms.

"This administration and this government have no desire to run an auto company on a day-to-day basis," White House spokesman Robert Gibbs told reporters. "It is not our desire to own or run one of the auto companies."

GM Chief Executive Fritz Henderson said today that while the Obama auto task force has pressed the company on its goals, its also relied on management to determine how those goals would be met.

Source: Freep

Preparations for a possible bankruptcy filing at General Motors have become "intense and earnest", according to a source familiar with the company's plans.

The source, who spoke on the condition of anonymity, said GM still hopes to win concessions from its creditors and unions that will allow it to avoid bankruptcy. But the June 1 deadline given to the company by President Obama and the Treasury Department to reach deals or go into bankruptcy has caused a pick-up in preparations, the source said.

"We're talking about what could be the largest industrial company to ever go bankrupt. The preparations better be intense and earnest," the source said. "The preparations are being made because there's a short time frame here."

GM owes about $28 billion to holders of its unsecured debt. It wants those creditors to agree to take an equity stake in the company in return for reducing that debt by at least two thirds.

An ad hoc committee representing GM bondholders have objected to this proposal due to the uncertain value of GM's stock going forward.

A person involved with that committee said Tuesday that the reports about bankruptcy preparations at GM did not change the creditors' views. This source added that there have been no formal talks between the bondholders and the company since Obama's deadline was set last week, but that the committee is eager to hold negotiations.

"We're very concerned about the state of the company and the possibility of bankruptcy," the source involved with the committee said. "We're still trying to work to try to get something done outside of bankruptcy, which is our hope."

Source: CNN

Henderson has been with General Motors since 1984 and as of yesterday, he is now the CEO of the struggling U.S. automaker. Fritz replaced Rick Wagoner who was asked to step down by the Obama administration over the weekend as a condition for General Motors to receive additional federal loans. Obama reminded us yesterday that Wagoner wasn’t asked to step due to his failure to lead.

“This is not meant as a condemnation of Mr. Wagoner, who has devoted his life to this company; rather, it’s a recognition that it will take a new vision and new direction to create the GM of the future,” Obama said in his speech.

Back to Fritz. Son of a Buick sales manager, Fritz holds a Master of Business Administration degree from Harvard Business School and a bachelor’s degree in business administration from the University of Michigan’s Ross School of Business.

Fritz has held a number of positions at GM with his first significant position being group vice president of Finance for GMAC. From 1997 to 2000, Henderson was vice president and managing director of GM’s Brazil operations. In Brazil, Fritz was known for introducing the (you’re going to love this) small and inexpensive Celta subcompact car and the Meriva minivan. In June 2000, Henderson became group vice president of GM Latin America, Africa and the Middle East and in 2002, he became president of GM Asia Pacific where he was responsible for expanding in Korea and China.

In 2004, Henderson was appointed to chairman of GM Europe and made is return to the U.S. in 2006 becoming vice chairman and CFO. In 2008, Henderson became GM’s president and Chief Operating officer.

Source: eGMCarTech

A person with knowledge of General Motors' plans says Rick Wagoner will step down immediately as chairman and chief executive of the struggling Detroit automaker.

The person asked not to be identified because Wagoner's plans have not been formally announced.

The move comes on the eve of President Obama unveiling his plan to reinvigorate the U.S. auto industry. Obama and other administration officials have said they would demand deeper restructuring from General Motors Corp. and Chrysler LLC before they would get any more government loans.

Both companies are living on a total of $17.4 billion in federal aid.

Source: AP

"We can let the jobs of tomorrow be created abroad or we can create them here in America and lay the foundation for lasting prosperity," Obama said on the second day of a campaign-style swing in California.

Obama said the money would be used to develop next generation plug-in hybrid electric vehicles and advanced battery components and would create tens of thousands of US jobs and reduce reliance on foreign oil.

He set a target of putting a million of the environmentally friendly vehicles on US roads by 2015.

The plan would also give a 7,500 dollar tax credit to people who buy plug-in hybrid vehicles, Obama said, as he toured a plant in southern California developing the new generation transport.

"The nation that leads on energy will be the nation that leads the world in the 21st century," Obama said. "That's why, around the world, nations are racing to lead in these industries of the future."

Source: Physorg

President Barack Obama reportedly plans to keep a campaign promise that will allow California and other states to set their own fuel economy and vehicle emissions standards. This will create a situation where carmakers will have to tailor vehicles to meet the standards of each individual state, a costly process for an industry that is already suffering financially.

Both American and foreign carmakers have waged a lengthy legal battle against the California Air Resources Board (CARB), which until now has been blocked from setting its own rules by the former Bush administration.

While the U.S. government has implemented its own fleet-wide fuel efficiency standard of 35mpg by 2020 for carmakers (plus an interim mandate of 31.6mpg by 2015), California is planning to implement its own ruling of 36.8mpg by 2016. The issue has been a major headache for carmakers as California represents the single biggest market for new vehicles in the whole of North America and to make matters worse 13 other states plan to copy the stricter mandate, reports the New York Times.

Such rules would lead to fuel economy targets that automakers and dealers warn would create a patchwork of state laws, drive up costs and limit sales.

The new memorandum planned by Obama will order the Environmental Protection Agency (EPA) to reconsider the Bush administration’s past rejection of the CARB application. While it stops short of directly ordering the Bush decision reversed, the agency’s regulators are now widely expected to do so after completing a formal review process.

Source: Motor Authority

With president-elect Barak Obama soon to be sworn in as the nation’s leader, a new presidential limousine was in call for and once again General Motors was assigned the task of building it. Nicknamed ‘The Beast’, the limo is based on a number of GM platforms and shares components with several different vehicles.

Its exterior is styled around the Cadillac DTS but underneath the sheet-metal the vehicle is built on a medium-duty truck chassis. The limo has recently been seen testing in prototype form alongside several GMC Topkick pickups, and according to onlookers the wheels and tires on the limo are almost identical to those on the trucks – 19.5in Goodyear Regional RHS tires.

The rest of the exterior includes parts from several Cadillac models, such as headlights from an Escalade, and the grille and taillights from an STS. The panels are comprised of dual-hardness steel, aluminum, titanium and ceramic material to help break up projectiles aimed at the car.

Other safety and high-tech features include 8in thick armor-plated doors (each weighing the same as a cabin door on a Boeing 757), an independent oxygen supply and advanced fire-fighting system located in the boot, pump-action shotguns, night-vision cameras and tear-gas cannons, Obama’s own personal storage of blood, Kevlar-reinforced tires that are puncture and shred-resistant, and special steel wheels that can drive without the tire attached.

All of this comes at a heavy-weight penalty, with top speed rated at 60mph and fuel-economy expected to be about 8mpg. Obama will first use the limo when he travels along Pennsylvania Avenue in Washington after his inauguration.

Source: Motor Authority

President-elect Barack Obama announced support Sunday for a short-term government bailout of the nation's carmakers that is tied to industry restructuring. He also accused auto executives of a persistent "head-in-the sand approach" to long-festering problems.

Obama said Congress was doing "the exact right thing" in drafting legislation that "holds the auto industry's feet to the fire" at the same time it tries to prevent its demise.

In an appearance on NBC's "Meet the Press" and later at a news conference, Obama at one point suggested some executives should lose their jobs.

Source: CNN Money