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G.M. C.E.O. Squelches Opel Rumors

July 27, 2011 by Leave a Comment

DETROIT – General Motors is not interested in selling its European unit, Adam Opel A.G., the carmaker’s chief executive said Wednesday, countering widespread speculation.

“I will say this: Opel is not for sale,” the executive, Daniel F. Akerson, said. Mr. Akerson, speaking to reporters at a Detroit assembly plant after a ceremony to open contract talks with the United Automobile Workers union, declined to elaborate on G.M.’s plans for Opel.

Two weeks ago, G.M. lashed out at the chief executive of rival automaker Volkswagen A.G., Martin Winterkorn, accusing him of fanning rumors about an Opel sale. A German newspaper quoted Mr. Winterkorn as saying a Chinese carmaker, rather than the Hyundai Motor Company, would probably be interested in buying Opel. Two German magazines also published reports in June that G.M. might be looking to sell Opel, possibly to Volkswagen.

“Opel has been part of the G.M. family since 1928 and remains important to the company,” G.M. said in the statement July 13 that criticized Volkswagen. “G.M. is pleased with Opel’s solid progress over the last year in turning around its business, and the company continues to invest in outstanding products for the European market.”

But the statement stopped short of saying that Opel, which has struggled during the downturn in Europe’s economy, was not on the market, allowing talk of a potential sale to linger.

G.M. made a deal in 2009 to sell Opel to a consortium headed by the Canadian parts supplier Magna, but the board of directors installed after it emerged from bankruptcy protection canceled the sale, which had been backed by the German government and labor unions. The deal to sell Opel was reached at a time when G.M. was streamlining is operations and selling or shutting divisions that were losing money or not critical to its core business.

Since then, G.M. has been implementing an ambitious restructuring plan at Opel aimed at making the division profitable in 2012 through a 20 percent reduction in capacity and the elimination of 8,300 jobs.

G.M. is introducing an Opel version of the Chevrolet Volt plug-in hybrid car, called the Ampera, in Europe this summer as part of its effort to rejuvenate the division.

Bill Vlasic contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=b93c877945efb2be6f1c1b16b18bd612

Filed Under: Business News Tagged With: ,

U.S. to Sell Its Chrysler Stake to Fiat

June 3, 2011 by Leave a Comment

President Obama plans to announce the deal during a visit to a Chrysler plant in Toledo, Ohio, on Friday.

“As Treasury exits its investment in Chrysler, it’s clear that President Obama’s decision to stand behind and restructure this company was the right one,” the Treasury secretary, Timothy F. Geithner, said in a statement. “Today, America’s automakers are mounting one of the most improbable turnarounds in recent history — creating new jobs and making new investments in communities across our country.”

The deal on Thursday and Fiat’s purchase last week of 16 percent of Chrysler for $1.3 billion, value Chrysler at a little more than $8 billion. The Treasury owns 6 percent of Chrysler, on a fully diluted basis.

Chrysler last week also repaid the $7.5 billion it owed to the United States and Canada.

The sale of Treasury’s stake is subject to regulatory approval and expected to close in one to three months, said two people with direct knowledge of the transaction’s details but who were not authorized to speak publicly about the matter. It will give Fiat majority ownership of Chrysler, which emerged from bankruptcy protection a little more than two years ago.

In addition to buying Treasury’s shares, Fiat also agreed to buy options held by the American and Canadian governments to purchase Chrysler shares held by a United Automobile Workers union trust fund for $5 billion. Treasury will receive $60 million for the options, and $15 million will go to Canada.

The governments were not interested in buying more shares of Chrysler, according to the people who spoke on condition of anonymity. Fiat would then be able to acquire the vast majority of Chrysler outside of an initial public offering.

After the deal closes, Chrysler will have repaid $11.2 billion of the $12.5 billion it received from Treasury in 2008 and 2009 to prevent its collapse.

A report by the White House National Economic Council this week projected that the government will fail to recoup about $14 billion of the $80 billion it put into rescuing the auto industry.

Article source: http://feeds.nytimes.com/click.phdo?i=d1b32f54de400067949ed79a304f88ad

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Wealth Matters: After Recession and Scandals, Private Residence Clubs Start to Resurface

April 16, 2011 by Leave a Comment

Rich Keith, a pioneer in the private residence club industry, has started the Lifestyle Asset Group, which he hopes will eventually have 200 members and 24 homes. The houses, he said, will have an average value of $2.5 million and be owned debt-free, and the members and the homes will be divided equally between the East and West Coasts.

At the same time, Jeff Potter, chief executive of Exclusive Resorts, one of the best-known destination clubs and backed by Steve Case, the co-founder of AOL, said that the first quarter of this year was its best quarter ever for sales or upgrades of memberships.

Even as the market for second homes started to rebound, sales remained sluggish in the so-called second-home alternative market, a catchall phrase for a varied industry in which groups collectively own properties for their members to use several weeks a year. What makes these different from time-share properties is the flexibility to book the days and weeks you want and the amenities that take the properties to the level of luxury homes, not fancy hotel rooms.

Sales of fractional and private residence club properties fell 38 percent from 2009 to 2010, to $530 million, according to a report published by Ragatz Associates, a real estate consultant. At the height of the bubble in 2007, sales topped $2 billion. But the same report found that 71 percent of resorts said sales had either increased or been steady in the second half of 2010 compared with the first half.

The problem is that the industry has been marred by scandal. One of the bigger players, Ultimate Escapes, filed for bankruptcy protection last year, and others, including Exclusive Resorts, have long waiting periods for people who want to sell their shares.

But that has not deterred aficionados from sticking with them.

By his own estimate, Mark Tavill, a Sacramento entrepreneur who sold his check-cashing business in 2006, will probably lose all of the $300,000 he paid to be a member of Private Escapes, a company started by Mr. Keith that was acquired by Ultimate Escapes in 2009. But that has not stopped Mr. Tavill from being one of the first to buy into Mr. Keith’s new project.

“It didn’t sour me on these types of vacation experiences, but I’m certainly not going to hand my money over to someone else to have them do what they want with it,” said Mr. Tavill, who also owns a second home near Lake Tahoe.

Mr. Keith said that he was no longer involved with Ultimate Escapes when it went under and that Private Escapes was only 8 percent of the company. But he said the experience had taught him the value of owning the properties outright.

The allure of any real estate purchase is a blend of financial sense and romance. So which one is winning out here?

HISTORY The industry, according to David Disick, a lawyer and president of the Fractional Consultant, started with cabins in the 1940s.

“You and a couple of buddies would buy a cabin in New Hampshire and you’d share everything,” Mr. Disick said. “That morphed into condos and that morphed into condo hotels. That morphed into timeshares to chop up the pieces more. And that morphed into fractionals because people wanted more than a week and the phrase timeshare got a bad name.”

In their last iteration, he said, fractional properties become private residence clubs. These are different from destination clubs, where you have a membership but not an actual stake in the properties. Given the number of names, it is no wonder that consumers can get confused.

“All of these things are timeshares in a legal sense,” Mr. Disick said, using a term the high-end industry shuns.

UPSIDES The big upsides are the exotic locations, the size of the properties and the hotel-like amenities. Financially, the pitch has always been based on comparable costs.

Article source: http://feeds.nytimes.com/click.phdo?i=38ca53164aee5f844a54ac48e184c8c0

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Bucks: What to Do if You Can’t Pay Your Taxes

April 7, 2011 by Leave a Comment

What if you’re strapped for cash and can’t pay the full amount due at the bottom of your I.R.S. Form 1040?

You can ask the Internal Revenue Service for extra time to pay — and can even apply for an installment plan, to pay off the debt over several years. But it’s questionable whether that’s a smart move.

The government tacks on failure-to-pay penalties, enrollment fees and interest charges that compound monthly, and they can add up to as much as 25 percent of the tax owed. In fact, the I.R.S. itself suggests that it’s often better for filers to pay their balance up front with a cash advance from a credit card or a bank loan, because the repayment amount would be smaller.

It’s not just the penalties that make being indebted to the federal government unattractive, said Jina Etienne, taxation director at the American Institute of Certified Public Accountants. In a worst-case scenario — in which, say, your financial situation worsens and you end up filing for bankruptcy protection — credit card debt may be erased, but federal tax bills generally cannot. If you pay late on your credit card, you’ll probably be charged a late fee. But if you miss an installment owed to the I.R.S., it can trigger “aggressive” collection efforts, like placing a lien on your home or garnishing wages.

“Who has more power?” she asked, the government or your bank?

Shorter extensions from the I.R.S. for smaller amounts may make sense. If you owe, say, $2,000 and you know you will have the money in a month or two, you can ask the I.R.S. for a one-time delay of up to 120 days. There’s no enrollment fee for that arrangement. If you pay by the agreed-upon date and have a valid reason for paying late — like you lost your job, or suffered some other hardship — the agency may waive the penalties and interest. “It doesn’t hurt to ask,” Ms. Etienne said.

The main point to keep in mind is to file your tax return, even if you can’t pay the tax owed (you’ll avoid separate penalties the I.R.S. assesses for not filing). And call the I.R.S. to discuss your situation. Many people are reluctant to do so, Ms. Etienne said, but engaging the agency is always better than ignoring it. “Burying your head in the sand will always make it worse,“ she said.

Have you ever sought an extension to pay your taxes? Would you be comfortable paying the I.R.S. over time?

Article source: http://feeds.nytimes.com/click.phdo?i=853294e056ae002967c4c7a4afba3a6b

Filed Under: Your Money Tagged With: , ,
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