Daily Edition: Mar. 24, 2006

Deal for Part of GMAC Done

General Motors Corp. said it has sold a majority interest in GMAC's commercial mortgage division in a deal valued at $9 billion, including $1.5 billion in cash. Another $7.3 billion in loans that the commercial mortgage unit owed GM were repaid at the closing.

The deal restores the commercial mortgage group's investment grade credit rating and could help GM's lagging efforts to sell off a majority interest in GMAC's remaining units, analysts suggested. The sale has been pending since August. Apparently the new buyers, which included private investors Kohlberg Kravis Roberts & Co., Five Mile Capital Partners, and Goldman Sachs Capital Partners, have been satisfied that regulators and creditors won't come hunting for them if GM is ever forced to file for court protection under Chapter 11 of the Federal Bankruptcy Code. As part of the deal, GMAC Commercial Holding also announced it has changed its name to Capmark Financial Group Inc. The new company was immediately assigned an investment-grade rating by Fitch Investment Services.

GMAC's credit rating lost its investment-grade status last year on the heels of continuing losses at GM. GM hopes selling a 51-percent stake in GMAC will both raise cash and boost the unit's credit rating back to investment grade. Analysts also said the deal was another step in the restructuring of GM, which got a boost this week when it got the green light from the United Auto Workers to offer buyouts to 126,000 union members employed by GM andDelphi. -Joe Szczesny

GM Keeps GMAC On The Block by Joseph Szczesny (3/20/2006)
Accounting issues dragging down company's Wall Street cred.

 

 

Spy Shots: '08 Cadillac STS

The Cadillac STS has a facelift in the works, likely for the 2008 model year. The big four-door gets a new, Escalade-inspired grille treatment, with a more detailed chrome treatment and a subdued mesh grille. The STS's new face looks much lighter and more expressive than the current model's - a subtle but effective update. New taillights ditch the full red lenses, in favor of styled LED lamps that complement the STS's chiseled lines.-KGP Photography

Spy Shots: '08 Cadillac STS by KGP Photography (3/23/2006)
A slimmer face for a sleek Euro beater.

 

Jaguar Sells

Browns Lane

The

Browns Lane

site that Jaguar had been seeking to sell has in fact been sold, to a company that makes manufactured buildings. Reuters reports that Jaguar, which is moving its headquarters and car museum to a new site from

Browns Lane

, did not reveal how much the site sold for. Jaguar did disclose that the new buyer will build a plant on the site for about $350 million. Browns Lane had been the site of Jaguar production since 1951; the aluminum-intensive XJ sedan and XK coupe now are built at Castle Bromwich.

 

Chrysler Turns Tables on Litigators

In a classic turnaround, DaimlerChrysler has demanded disbarment of a Texas lawyer whose reported misconduct included diddling a Dodge Neon supposedly to show its steering system was defective - in support of a bogus $2 billion product liability action.

According to DaimlerChrysler lawyer Steven B. Hantler, "Our company was the victim of one of the most outrageous examples of lawyer misconduct in Texas history. This lawyer prosecuted a lawsuit that he knew was based on fabricated evidence."

In 1998, three San Antonio lawyers sued DC and others in a case involving a Neon which rolled after the driver fell asleep, killing four passengers. Just before trial, Chrysler learned the Neon's steering system had been tampered with after the crash to make it appear it was defective. The plaintiff lawyers refused to provide "before" photographs to the court, and their investigator tried to bribe witnesses to lie that the driver had not fallen asleep.

When the fraud was revealed the judge dismissed the case and fined the lawyers nearly $1 million which, according to DaimlerChrysler, still remains unpaid. The trial judge referred the matter to the Texas Bar for disciplinary action, which resulted in one of the trio being disbarred after he fled the country, while the other two received less sanctioning than DC attorneys felt was justified. 

Accordingly, they have intervened with the Bar for further review of the remaining lawyers' status.

This is not the first time an auto company has fought back against misconduct by plaintiff attorneys or their allies. Several years ago, a contract trial lawyer defending General Motors sued the Center for Auto Safety for defamation by the CAS in post-trial statements concerning GM's defense of its trucks. The Center's insurance carrier settled for the full amount of the liability coverage held by CAS, $500,000. -Mike Davis

 

FROM THE SOURCE headlines from the latest press releases

PRNewswire

Teams on CBS's Emmy-winning reality show The Amazing Race have been traversing all over the world, overcoming Roadblocks in grueling conditions and relying on strangers to help them navigate. While trekking across foreign soil on select legs of the races over the years, teams have been racing in Mercedes-Benz cars to help them reach the pit stop. This week, for the first time, teams stopped at the Mercedes-Benz factory in Stuttgart, Germany - an opportunity that Mercedes-Benz has been offering its customers for over 40 years through its European Delivery Program.

 

Name	Symbol	Last	Change
Autobytel, Inc.	ABTL	4.60	+0.05 (+1.10%)
Autoliv Inc.	ALV	57.42	+0.17 (+0.30%)
AutoNation Inc.	AN	21.75	-0.05 (-0.23%)
ArvinMeritor Inc.	ARM	15.03	-0.37 (-2.40%)
American Axle & Mfr. Holdings Inc.	AXL	17.67	-0.37 (-2.05%)
Ballard Power Systems Inc.	BLDP	6.37	-0.02 (-0.31%)
BorgWarner Inc.	BWA	59.70	-0.50 (-0.83%)
Cummins Inc.	CMI	104.77	-2.23 (-2.08%)
Dana Corporation	DCN	0.66	0.00 (0.00%)
DaimlerChrysler AG (ADR)	DCX	55.68	-1.18 (-2.08%)
Dura Automotive Systems	DRRA	2.28	-0.06 (-2.75%)
Eaton Corporation	ETN	71.12	-0.71 (-0.99%)
Ford Motor Company	F	8.08	-0.07 (-0.86%)
General Motors Corporation	GM	22.00	-0.01 (-0.05%)
Gentex Corporation	GNTX	17.23	-0.28 (-1.60%)
Goodyear Tire & Rubber	GT	13.79	+0.04 (+0.29%)
Honda Motor Co. Ltd. (ADR)	HMC	30.49	-0.09 (-0.29%)
Johnson Controls Inc.	JCI	76.85	-0.59 (-0.76%)
Lear Corporation	LEA	17.44	-0.66 (-3.65%)
Magna International Inc.	MGA	75.22	-0.18 (-0.24%)
Motorola Inc.	MOT	22.03	+0.22 (+1.01%)
Nissan Motor Co. Ltd. (ADR)	NSANY	23.61	0.00 (0.00%)
Sonic Automotive Inc.	SAH	28.37	-0.02 (-0.07%)
Siemens AG	SI	90.54	-1.11 (-1.21%)
Sirius Satellite Radio	SIRI	5.14	+0.28 (+5.76%)
Toyota Motor Corporation (ADR)	TM	107.20	-1.77 (-1.62%)
TRW Automotive Holdings	TRW	23.47	-0.63 (-2.61%)
Tower Automotive Inc.	TWRAQ.PK	0.11	-0.01 (-8.33%)
United Auto Group Inc.	UAG	42.82	-2.07 (-4.61%)
Visteon Corporation	VC	4.51	-0.08 (-1.74%)
XM Satellite Radio Hold.	XMSR	21.40	+0.28 (+1.33%)