I have dual climate controll but the driver side blowes warm air all the time. The passenger side works fine. Is there a controller somewhere and how can i get to it?
http://www.freeautomechanic.com/airconditioning.html
There is a vaccuum door in the assemble that controls cold/warm air mixture. Either the door is stuck to the heat side or the diaphram is bad. Located:Behind the dashboard you will see on the assy a thing that looks like a pancake with a vaccuum line attached to it there is also a rod that you cant see going into the heater box.
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Saturday, May 15, 2010
Thursday, May 13, 2010
ignition help
can any one give me instructions on how to take out and put a new ignition in my 96 lincoln town car not chiped
Response:
The Ignition Switch (electrical) is located on the top of the steering column assy. So if you unbolt the column it will drop down enough to replace the switch. The Lock Cyclender Assy is different. Remove the Steering Wheel Lock Nut. Mark the Wheel and Shaft for alignment on reassembly. With a Steering Wheel Puller remove the Steering Wheel. Remove the Horn assy. Remove the Steering Wheel Lock Plate by depressing to remove the retaing clip. Remove the Turn Signal Switch assy and reveal 1 screw that holds the Lock Cylender in place. Reverse for assembly.
Response:
The Ignition Switch (electrical) is located on the top of the steering column assy. So if you unbolt the column it will drop down enough to replace the switch. The Lock Cyclender Assy is different. Remove the Steering Wheel Lock Nut. Mark the Wheel and Shaft for alignment on reassembly. With a Steering Wheel Puller remove the Steering Wheel. Remove the Horn assy. Remove the Steering Wheel Lock Plate by depressing to remove the retaing clip. Remove the Turn Signal Switch assy and reveal 1 screw that holds the Lock Cylender in place. Reverse for assembly.
Wednesday, May 12, 2010
GM said to weigh returning to auto-lending business
General Motors Co. may return to the auto-lending business more than three years after selling control of GMAC LLC, according to three people familiar with the company's plan.
GM may buy back the GMAC business, start a new finance company or form a partnership with banks and other lenders, said the people, who asked not to be identified because the plans are private. Having its own finance arm could increase the automaker's profit and give its dealers competitive leasing and loan offers.
CEO Ed Whitacre wants to establish an in-house lender before taking the Detroit-based automaker public again as soon as the fourth quarter of this year, said one of the people. GM repaid government loans last month, and having an initial public offering will allow the U.S. to reduce its 61 percent stake in the automaker.
“The IPO is going to be more of a success if they can sell more vehicles than they have been selling,” said Rebecca Lindland, an analyst at IHS Global Insight in Lexington, Mass. “They should be able to do that if they can be more aggressive in their financing. Having their own finance company would certainly help.”
Whitacre has his management team exploring all options, the people said. Acquiring Detroit-based GMAC, now known as Ally Financial Inc., would give GM a ready-made lending operation. To acquire those operations, the automaker would have to execute a deal with the U.S. Treasury, which owns 56 percent of GMAC.
Tom Wilkinson, a GM spokesman, declined to comment.
Automotive lending
GM would probably want to acquire only the automotive business, said Mark Wakefield, a director at turnaround firm Alix Partners, which is winding down the bankrupt old GM, now called Motors Liquidation Co.
GM probably wouldn't want GMAC's mortgage business, which was called ResCap until the company changed names, he said. It made $175 million in the first quarter after losing $17.3 billion from 2007 through 2009.
“The cleanest way to do this is to buy only the auto finance business and leave ResCap, Ally Bank and the commercial warehouse-lending business alone,” said Wakefield, who isn't directly involved in the matter.
An Ally spokeswoman, Gina Proia, called the potential acquisition of its auto-finance business by GM “speculation.”
“Our position is that if we are supporting our manufacturers and customers, then the relationship works,” Proia said.
GM sold 51 percent of GMAC to private equity firm Cerberus Capital Management LP in 2006 when the automaker ran low on cash and since has had to rely on outside lenders.
One complicating factor: If GM owns more than 10 percent, the lender would have to relinquish its bank holding company status and wouldn't have access to the Federal Reserve's discount window for cheap funds.
All parties would also have to work out a solution with Chrysler Group LLC, which has a contract with Ally for its dealers, Wakefield said.
Borrowing rates
A GM-owned finance arm would have to borrow on the open market to lend to car buyers and dealers. The funds could come at higher interest rates until GM proves that it is a sound investment, Wakefield said.
“It would take a while to convince the market that GMAC is safe and sound,” Wakefield said. “It will take a while to claw their way to a borrower rate that is competitive.”
Russ Shelton, owner of Shelton Pontiac Buick GMC Inc. in suburban Detroit, said dealers would welcome an in-house finance arm at GM.
“Probably the biggest missing piece for GM is financing,” Shelton said. “Getting a customer financed today is the hardest thing, even if they have good numbers. I think we could probably overcome some of that with a captive finance arm.”
GM may buy back the GMAC business, start a new finance company or form a partnership with banks and other lenders, said the people, who asked not to be identified because the plans are private. Having its own finance arm could increase the automaker's profit and give its dealers competitive leasing and loan offers.
CEO Ed Whitacre wants to establish an in-house lender before taking the Detroit-based automaker public again as soon as the fourth quarter of this year, said one of the people. GM repaid government loans last month, and having an initial public offering will allow the U.S. to reduce its 61 percent stake in the automaker.
“The IPO is going to be more of a success if they can sell more vehicles than they have been selling,” said Rebecca Lindland, an analyst at IHS Global Insight in Lexington, Mass. “They should be able to do that if they can be more aggressive in their financing. Having their own finance company would certainly help.”
Whitacre has his management team exploring all options, the people said. Acquiring Detroit-based GMAC, now known as Ally Financial Inc., would give GM a ready-made lending operation. To acquire those operations, the automaker would have to execute a deal with the U.S. Treasury, which owns 56 percent of GMAC.
Tom Wilkinson, a GM spokesman, declined to comment.
Automotive lending
GM would probably want to acquire only the automotive business, said Mark Wakefield, a director at turnaround firm Alix Partners, which is winding down the bankrupt old GM, now called Motors Liquidation Co.
GM probably wouldn't want GMAC's mortgage business, which was called ResCap until the company changed names, he said. It made $175 million in the first quarter after losing $17.3 billion from 2007 through 2009.
“The cleanest way to do this is to buy only the auto finance business and leave ResCap, Ally Bank and the commercial warehouse-lending business alone,” said Wakefield, who isn't directly involved in the matter.
An Ally spokeswoman, Gina Proia, called the potential acquisition of its auto-finance business by GM “speculation.”
“Our position is that if we are supporting our manufacturers and customers, then the relationship works,” Proia said.
GM sold 51 percent of GMAC to private equity firm Cerberus Capital Management LP in 2006 when the automaker ran low on cash and since has had to rely on outside lenders.
One complicating factor: If GM owns more than 10 percent, the lender would have to relinquish its bank holding company status and wouldn't have access to the Federal Reserve's discount window for cheap funds.
All parties would also have to work out a solution with Chrysler Group LLC, which has a contract with Ally for its dealers, Wakefield said.
Borrowing rates
A GM-owned finance arm would have to borrow on the open market to lend to car buyers and dealers. The funds could come at higher interest rates until GM proves that it is a sound investment, Wakefield said.
“It would take a while to convince the market that GMAC is safe and sound,” Wakefield said. “It will take a while to claw their way to a borrower rate that is competitive.”
Russ Shelton, owner of Shelton Pontiac Buick GMC Inc. in suburban Detroit, said dealers would welcome an in-house finance arm at GM.
“Probably the biggest missing piece for GM is financing,” Shelton said. “Getting a customer financed today is the hardest thing, even if they have good numbers. I think we could probably overcome some of that with a captive finance arm.”
Monday, May 10, 2010
problem with gas gauge on 95 Buick Lesabre
The other day I had an emergency and went about 95 mph to get where I needed to be, on the way my gas gauge started jumping a lot. It had around a quarter of gas and it jumps past full and down to empty and just keeps moving. The other day we replaced radiator because the head broke on it. could that have anything to do with it? What would I need to look at?
Response:
Your Fuel Gauge has a Fuse marked Gauges in your Fuse Panel and is also connected at the Fuel Pump Relay then 4 wires continue to the Fuel Cell. 2 wires go to the Gauge and the other 2 run the Fuel Pump. Check your connections under the hood but I believe you will find the short wire harness inside the fuel cell is making intermediate connections
Response:
Your Fuel Gauge has a Fuse marked Gauges in your Fuse Panel and is also connected at the Fuel Pump Relay then 4 wires continue to the Fuel Cell. 2 wires go to the Gauge and the other 2 run the Fuel Pump. Check your connections under the hood but I believe you will find the short wire harness inside the fuel cell is making intermediate connections
Saturday, May 08, 2010
I have a leak in the air conditioning
I have a GMC Jimmy "98" V6 Vortex engine with a leak in the air conditioning. I had it recharged last year and it lasted about 1 month. Do they have something like a radiator leak fix that I can use for the air or something else?
Response:
1) They used to tint (color) the freon when filling, and watch for leaks. That was years ago. Not aware of any type of stop leak that can be added to the freon. There are several places in the system that can develop leaks.
2) Advance Auto Parts carries a stop leak for almost everything including air conditioning. Now mind you I'm not recommending these products, just telling you they have them.
Response:
1) They used to tint (color) the freon when filling, and watch for leaks. That was years ago. Not aware of any type of stop leak that can be added to the freon. There are several places in the system that can develop leaks.
2) Advance Auto Parts carries a stop leak for almost everything including air conditioning. Now mind you I'm not recommending these products, just telling you they have them.
Thursday, May 06, 2010
brake lights come on and go off
I have a 2004 Malibu and the brake lights come on and go off while i'm driving Just wanted to know where the problem is.
Response:
That Dash Light "BRAKE" doesn't always indicate a problem. If your Parking Brake is loose this light may flash as you drive or even remain on. If this light ONLY comes on while Applying the Brakes THEN you have a problem of either adjustment/replacem ent or Air in the system. A GOOD Indicator is if you must "Pump Up" the Brakes. This Light is controlled by a Proportioning Valve and NOT Cheap and Rare to go Bad.
Response:
That Dash Light "BRAKE" doesn't always indicate a problem. If your Parking Brake is loose this light may flash as you drive or even remain on. If this light ONLY comes on while Applying the Brakes THEN you have a problem of either adjustment/replacem ent or Air in the system. A GOOD Indicator is if you must "Pump Up" the Brakes. This Light is controlled by a Proportioning Valve and NOT Cheap and Rare to go Bad.
Wednesday, May 05, 2010
Toyota wonders whether owners are misreading acceleration
Toyota's chief quality officer for North America thinks that some of the automaker's recall troubles come from doing a poor job of teaching customers about its cars at the dealership.
Steve St. Angelo -- tapped in March to head the task of repairing Toyota's image in the United States for quality -- thinks some Toyota owners may misunderstand their car's performance features.
“We're realizing that we haven't done a good job of educating our customers about our cars,” St. Angelo said in a phone conversation with Automotive News. “We must do a better job of educating them about the features, especially if they have anything to do with unintended acceleration.”
He said Toyota's radar cruise control system automatically slows down the vehicle if another car comes too close. But after the distance is clear, the car automatically returns to its previous speed -- a feature that could be confused with unintended acceleration, St. Angelo said.
Involve retailers
He said improving customer education will require the involvement of Toyota's U.S. retailers.
St. Angelo, also executive vice president of Toyota Motor Engineering & Manufacturing North America, has assigned 200 engineers to travel the United States responding to problems associated with the automaker's safety recalls over unintended acceleration. Those problems resulted in the global recall of 8.5 million vehicles and have damaged Toyota's brand reputation.
Company officials have apologized for the safety problems but originally resisted recalling the vehicles.
St. Angelo said the teams so far have inspected 500 Toyota vehicles in the field that are thought to have related problems. He did not reveal the specific results of the inspections.
He said the task force will continue after the recall problems are resolved.
‘Other issues'
“Once we stabilize these problems, the teams will begin looking at other issues out in the field,” St. Angelo said, without specifying what they would be.
He also said his task force has obtained 150 readout tools for Toyota's event data recorder -- the so-called black box -- for use around the United States and has given 10 to the National Highway Traffic Safety Administration.
Toyota was publicly chided late last year when it revealed that, while many of its vehicles are equipped with event data recorders that could shine light on why the vehicles might accelerate unintentionally, the company kept only one readout tool in the United States. Readout tools for other automakers' vehicles could not be used on Toyotas.
Critics pointed to the absence of the readout tools as evidence that Toyota's U.S. safety issues were managed in Japan, where managers were unresponsive to U.S. consumer concerns.
St. Angelo said its 150 U.S. readout tools are now more than adequate to analyze vehicle data locally.
Steve St. Angelo -- tapped in March to head the task of repairing Toyota's image in the United States for quality -- thinks some Toyota owners may misunderstand their car's performance features.
“We're realizing that we haven't done a good job of educating our customers about our cars,” St. Angelo said in a phone conversation with Automotive News. “We must do a better job of educating them about the features, especially if they have anything to do with unintended acceleration.”
He said Toyota's radar cruise control system automatically slows down the vehicle if another car comes too close. But after the distance is clear, the car automatically returns to its previous speed -- a feature that could be confused with unintended acceleration, St. Angelo said.
Involve retailers
He said improving customer education will require the involvement of Toyota's U.S. retailers.
St. Angelo, also executive vice president of Toyota Motor Engineering & Manufacturing North America, has assigned 200 engineers to travel the United States responding to problems associated with the automaker's safety recalls over unintended acceleration. Those problems resulted in the global recall of 8.5 million vehicles and have damaged Toyota's brand reputation.
Company officials have apologized for the safety problems but originally resisted recalling the vehicles.
St. Angelo said the teams so far have inspected 500 Toyota vehicles in the field that are thought to have related problems. He did not reveal the specific results of the inspections.
He said the task force will continue after the recall problems are resolved.
‘Other issues'
“Once we stabilize these problems, the teams will begin looking at other issues out in the field,” St. Angelo said, without specifying what they would be.
He also said his task force has obtained 150 readout tools for Toyota's event data recorder -- the so-called black box -- for use around the United States and has given 10 to the National Highway Traffic Safety Administration.
Toyota was publicly chided late last year when it revealed that, while many of its vehicles are equipped with event data recorders that could shine light on why the vehicles might accelerate unintentionally, the company kept only one readout tool in the United States. Readout tools for other automakers' vehicles could not be used on Toyotas.
Critics pointed to the absence of the readout tools as evidence that Toyota's U.S. safety issues were managed in Japan, where managers were unresponsive to U.S. consumer concerns.
St. Angelo said its 150 U.S. readout tools are now more than adequate to analyze vehicle data locally.
Tuesday, May 04, 2010
Dodge Caliber being probed for sticky pedal issue, U.S. says
Chrysler Group's 2007 Dodge Caliber cars are under federal investigation for unintended acceleration caused by a sticky pedal -- the same type of problem that led to a large Toyota recall this year.
The National Highway Traffic Safety Administration said it is investigating as many as 161,000 Calibers for an accelerator pedal that “can stick or bind and not return to the idle position when it is released.”
The safety agency has received five customer complaints but no reports of deaths, injuries or crashes.
Chrysler's own investigation has narrowed the population of suspect vehicles to 10,000 that were made during five weeks in March and April 2006, a company spokesman said.
Supplier issue?
The problem appears to be a mechanical one caused by parts made by CTS Corp., of Elkhart, Ind., Chrysler spokesman Nick Cappa said.
A NHTSA official said the automaker had been cooperative.
“The manufacturer is responsible for the performance of the car, and that's who we're investigating,” a NHTSA official said. “Chrysler has been cooperative.”
CTS also was blamed by Toyota Motor Corp. for its sticky gas pedals, which led to a January recall of 2.1 million vehicles.
The supplier denied the Toyota charge, noting that the automaker has recalled millions of other vehicles for unintended acceleration that were not equipped with CTS pedals.
CTS did not immediately respond today to a request for comment.
Electronic defects probed
In the wake of Toyota's worldwide recall of 9 million vehicles for unintended acceleration, NHTSA has been investigating the possible role played by electronic defects in triggering speed control problems across the auto industry.
Toyota's problems have been far more extensive -- and far more severe, with reports of dozens of deaths and injuries -- than the possible defects under investigation at Chrysler.
Chrysler said today that the sticky-pedal problem “is mechanical in nature and not a design or electronic issue.”
Cappa said Chrysler was able to narrow the problem population to 10,000 vehicles after being alerted to customer complaints by NHTSA on April 23 and then comparing complaints to warranty data.
On April 29, NHTSA opened a preliminary evaluation, the first stage of a formal investigation, the agency said on its Web site. This review can lead to an engineering analysis and, ultimately, a recall.
Four of the five complainants reported that they had found bushings -- bearings made of brass to allow the pedal to pivot -- on the driver's side floor, NHTSA said.
Without the bushings, the pedal arm “can become misaligned” and be prevented from returning to the idle position, the agency said.
Dodge vs. Toyota
The CTS pedals used in the Dodge Calibers are different from those used in the recalled Toyotas, a NHTSA official said.
Chrysler said that since 2003, the Caliber has been equipped with a brake override system that reduces power when both the brake and the gas pedal are depressed.
Most Toyota vehicles have not had a brake override system, which would be mandated under legislation to be discussed at a congressional committee hearing Thursday.
But some consumer complaints to NHTSA raise questions about the effectiveness of the Chrysler brake override system.
One complainant reported that while traveling at 65 mph, the Dodge Caliber accelerated suddenly to over 90 mph, a report on NHTSA's site said. Neither the brakes nor emergency brake could stop the car. It slowed only when the car was put in neutral, the driver said.
Another complainant said that while driving his Caliber at 15 mph, it “abnormally accelerated” to 75 mph. The driver reached over and lifted the pedal with his hand, he said.
One complainant expressed frustration with Chrysler's response to his reports and appealed to NHTSA to investigate.
“I am not getting any satisfaction from Chrysler; they continue to blow me off,” he said. “Please respond; no one else does.”
Monday, May 03, 2010
Pontiac owners are migrating to Chevrolet
Thirteen of Buick-GMC dealer Kim Borcherding's customers had Pontiac leases that ended in March, but none of them bought or leased another new vehicle from her.
Six of them bought an import. Three bought a Chevrolet, which Borcherding's Cincinnati store doesn't sell. One bought a used vehicle from her, and three bought out their leases.
Those were their only options if they wanted to stay her customers, Borcherding says. Her current inventory is “just nothing that is in their league,” she says, since the lowest priced new vehicle she has costs nearly $25,000.
Like most Pontiac owners, Borcherding's customers need moderately priced sedans not found in the current Buick-GMC showroom.
As a result, General Motors Co.'s retention efforts are shifting most of its former Pontiac owners to Chevrolet.
“They have nowhere else to turn because we don't have anything else to offer,” Borcherding says. “They're not going to wait forever.”
In the year leading up to GM's April 27, 2009, announcement that it would kill Pontiac, 37 percent of owners trading in a Pontiac bought a GM product, according to data from Edmunds.com. That percentage has stayed nearly flat at 36 percent.
But the preferred GM brand for repeat buyers has shifted. Before GM decided to eliminate Pontiac, the brand competed evenly with Chevrolet for Pontiac owners' next purchases, with each brand averaging 15 percent. And Pontiac won that battle in the months immediately following the death sentence.
But from Jan. 1 -- when GM's supply of Pontiacs had dwindled to 800 -- through March, one-fourth of Pontiac owners chose Chevrolet for their next purchase. To compare, Buick-GMC sales from Pontiac trade-ins have only increased to 10 percent this year, from 6 percent the year before the Pontiac verdict.
That's fine with some Buick-GMC dealers who either own Chevrolet stores down the street or never depended much on Pontiac sales. But for others, the loss of Pontiac and the shift to Buick-GMC's premium image has meant a drop in revenue. Their wait for less expensive sedans continues while Pontiac owners slowly slip away to the local Chevrolet dealer.
“None of them are buying a Buick-GMC because there's nothing really comparable in the Buick-GMC line,” says Mark Frost, general manager of Jim Ellis Buick-GMC outside Atlanta.
The GMC Terrain small crossover, starting at $24,995, including shipping, has the lowest starting sticker price in the brands' lineups, not counting pickups. The least-expensive car, the Buick LaCrosse, starts at $26,995, including shipping.
Dealers will have to wait until the 2012 model year to sell a less expensive sedan: the base version of the new Buick Regal. A premium-trim-level Regal is on its way to dealerships with a $26,995 price tag, and the base level will cost less than that.
Frost also manages a Chevrolet store, and 10 of the 14 Pontiac trade-ins he has seen since November have been for Chevrolets. His dealership group took over the Buick-Pontiac-GMC franchise a year ago, so it has never really depended on Pontiac sales. But he still advertises service to Pontiac owners through the updated “free agent” lists GM provides to all its dealers.
GM has also offered Pontiac owners four free oil changes and $1,000 off a new GM vehicle.
“The loyalty rates of Pontiac owners are in line with our expectations,” GM spokesman Tom Henderson says. He declined to give data on retention rates or efforts to keep Pontiac customers in the GM fold.
One dealer sees used cars as a way to retain Pontiac owners. New York dealer Mike Mullaney's Buick-GMC store doesn't have inexpensive new products for his Pontiac customers, so he's trying to put them in late-model used Pontiacs. That way, he hopes he can keep from losing his customers to the local Chevrolet dealer and maybe be able to offer them a smaller, less expensive Buick in a year or two.
Says Mullaney: “If we can maintain that customer for one more product cycle, we'll be in good shape.”
Six of them bought an import. Three bought a Chevrolet, which Borcherding's Cincinnati store doesn't sell. One bought a used vehicle from her, and three bought out their leases.
Those were their only options if they wanted to stay her customers, Borcherding says. Her current inventory is “just nothing that is in their league,” she says, since the lowest priced new vehicle she has costs nearly $25,000.
Like most Pontiac owners, Borcherding's customers need moderately priced sedans not found in the current Buick-GMC showroom.
As a result, General Motors Co.'s retention efforts are shifting most of its former Pontiac owners to Chevrolet.
“They have nowhere else to turn because we don't have anything else to offer,” Borcherding says. “They're not going to wait forever.”
In the year leading up to GM's April 27, 2009, announcement that it would kill Pontiac, 37 percent of owners trading in a Pontiac bought a GM product, according to data from Edmunds.com. That percentage has stayed nearly flat at 36 percent.
But the preferred GM brand for repeat buyers has shifted. Before GM decided to eliminate Pontiac, the brand competed evenly with Chevrolet for Pontiac owners' next purchases, with each brand averaging 15 percent. And Pontiac won that battle in the months immediately following the death sentence.
But from Jan. 1 -- when GM's supply of Pontiacs had dwindled to 800 -- through March, one-fourth of Pontiac owners chose Chevrolet for their next purchase. To compare, Buick-GMC sales from Pontiac trade-ins have only increased to 10 percent this year, from 6 percent the year before the Pontiac verdict.
That's fine with some Buick-GMC dealers who either own Chevrolet stores down the street or never depended much on Pontiac sales. But for others, the loss of Pontiac and the shift to Buick-GMC's premium image has meant a drop in revenue. Their wait for less expensive sedans continues while Pontiac owners slowly slip away to the local Chevrolet dealer.
“None of them are buying a Buick-GMC because there's nothing really comparable in the Buick-GMC line,” says Mark Frost, general manager of Jim Ellis Buick-GMC outside Atlanta.
The GMC Terrain small crossover, starting at $24,995, including shipping, has the lowest starting sticker price in the brands' lineups, not counting pickups. The least-expensive car, the Buick LaCrosse, starts at $26,995, including shipping.
Dealers will have to wait until the 2012 model year to sell a less expensive sedan: the base version of the new Buick Regal. A premium-trim-level Regal is on its way to dealerships with a $26,995 price tag, and the base level will cost less than that.
Frost also manages a Chevrolet store, and 10 of the 14 Pontiac trade-ins he has seen since November have been for Chevrolets. His dealership group took over the Buick-Pontiac-GMC franchise a year ago, so it has never really depended on Pontiac sales. But he still advertises service to Pontiac owners through the updated “free agent” lists GM provides to all its dealers.
GM has also offered Pontiac owners four free oil changes and $1,000 off a new GM vehicle.
“The loyalty rates of Pontiac owners are in line with our expectations,” GM spokesman Tom Henderson says. He declined to give data on retention rates or efforts to keep Pontiac customers in the GM fold.
One dealer sees used cars as a way to retain Pontiac owners. New York dealer Mike Mullaney's Buick-GMC store doesn't have inexpensive new products for his Pontiac customers, so he's trying to put them in late-model used Pontiacs. That way, he hopes he can keep from losing his customers to the local Chevrolet dealer and maybe be able to offer them a smaller, less expensive Buick in a year or two.
Says Mullaney: “If we can maintain that customer for one more product cycle, we'll be in good shape.”
Saturday, May 01, 2010
GM properly used escrow to repay U.S. loans, Treasury says
General Motors Co., which repaid $4.7 billion in U.S. loans last week, properly used escrowed cash for the payment, a Treasury Department official said in responding to complaints from a Republican senator.
GM used the escrowed funds created with government loans and overseen by the Treasury after determining the cash wasn't needed for “extraordinary” expenses, Herbert Allison, Treasury's assistant secretary for financial stability, said in a letter to Sen. Charles Grassley of Iowa.
Grassley, the top Republican on the Senate Finance Committee, on April 22 wrote to Treasury Secretary Timothy Geithner that GM's repayment “appears to be nothing more than an elaborate TARP money shuffle” because the money came from the U.S. Troubled Asset Relief Program.
Allison said Grassley was incorrect in saying the escrow account was held at the Treasury, when the funds were held by the automaker.
Allison's written response echoed the points made by a treasury spokeswoman last week.
“The bottom line is that the repayment was made on the dime of taxpayers across America, and it's misleading to say that GM repaid its TARP loans ‘in full, with interest, ahead of schedule, because more customers are buying' GM cars,” Grassley said in a statement on his Web site following Treasury's determination.
GM CEO Ed Whitacre last week met U.S. lawmakers, including House Speaker Nancy Pelosi, in Washington after announcing the repayment. Taxpayers own 61 percent of GM, a stake worth about $2.1 billion, as part of its 2009 bankruptcy financing.
The Treasury will start selling its GM shares when the automaker begins an initial public offering, Allison said.
GM used the escrowed funds created with government loans and overseen by the Treasury after determining the cash wasn't needed for “extraordinary” expenses, Herbert Allison, Treasury's assistant secretary for financial stability, said in a letter to Sen. Charles Grassley of Iowa.
Grassley, the top Republican on the Senate Finance Committee, on April 22 wrote to Treasury Secretary Timothy Geithner that GM's repayment “appears to be nothing more than an elaborate TARP money shuffle” because the money came from the U.S. Troubled Asset Relief Program.
Allison said Grassley was incorrect in saying the escrow account was held at the Treasury, when the funds were held by the automaker.
Allison's written response echoed the points made by a treasury spokeswoman last week.
“The bottom line is that the repayment was made on the dime of taxpayers across America, and it's misleading to say that GM repaid its TARP loans ‘in full, with interest, ahead of schedule, because more customers are buying' GM cars,” Grassley said in a statement on his Web site following Treasury's determination.
GM CEO Ed Whitacre last week met U.S. lawmakers, including House Speaker Nancy Pelosi, in Washington after announcing the repayment. Taxpayers own 61 percent of GM, a stake worth about $2.1 billion, as part of its 2009 bankruptcy financing.
The Treasury will start selling its GM shares when the automaker begins an initial public offering, Allison said.
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