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GM’s new 4.5L Duramax diesel engine promises a 25% increase in fuel economy while providing 310 hp and 525 lb-ft. The new oil-burning powerplant also needs to pass 50 state emissions while providing the efficiency customers are demanding. GM has already provided some details of the Duramax 4.5L, including that the new diesel is roughly the same size as the General’s compact small block V8, which means it can fit in more than just trucks and SUVs. The 4.5-liter also reduces the parts count with integrated aluminum cylinder head exhaust manifolds and an integral cam cover intake manifold. GM talked to Automotive News about new features of the lower half of the 4.5L Duramax, and they’re just as extensive as the top.

Microheat Inc., the company responsible for inventing and supplying General Motors with their HotSpot windshield cleaning system, has filed for Chapter 11 bankruptcy protection. The technology utilized heated liquid to clean the front glass of debris, ice, and snow. Unfortunately, a short circuit on a printed circuit board could overheat and lead to a fire (removing contaminants from much more than just the front windshield). As a result, GM recalled 944,000 vehicles and dropped Microheat, and their HotSpot product, from the lineup. Even with the system no longer offered on vehicles, things are cooking in court as GM is now seeking $20-25 million in damages to cover the cost of the recall. Without the assets to cover the charges, bankruptcy protection could only be expected. While GM’s HotSpot recall solves the overheating problem with a simple inline fuse, the new filing by Microheat only seems to be fueling the fire.

Our heads are still reeling from one of the most tumultuous financial weeks on record, and the auto industry was far from immune. But despite our best efforts to drown our concerns in Racer5 IPA, the hits keep coming, and this time it’s courtesy of the New York Times.

The Gray Lady is reporting that General Motors and Chrysler have been in talks about a possible merger for the past month, that “negotiations are not certain to produce a deal,” “would most likely still take weeks to work out” and that two unnamed sources say that the chances of the merger going through are “50-50.” Obfuscate much?

With GM’s stock prices ending the week below $5 a share and Cerberus – the private equity firm that owns Chrysler – grasping at the flimsiest of straws, including continued talks with Nissan/Renault, a merger of unequals is two parts disturbing and one part intriguing.

Cerberus’ people haven’t been returning phone calls and the only comment offered to the NYT from the General’s spokesperson, Tony Cervone, was, “Without referencing that specific rumor, as we’ve often said at GM officials routinely discuss issues of mutual interest with other automakers.” Broad, unclear and exactly what we’d expect.

The merger of GM and Chrysler would put Cerberus in charge of an “unspecified equity stake” in the corporation, making the two-headed General-Chrysler (or Chrysler Motors?) the world’s largest automaker, controlling over 35 percent of the U.S. vehicle market, causing rifts among brand faithful and offering more potential (vehicle) cannibalization than the Donner Party. Not to mention both automakers’ labor contracts, supplier dealers and slipping market share. Shocked? Don’t be. We give it a snowball’s chance on the Sun. Thanks to ALL who tipped in.

UPDATE: Official statement from Lori McTavish, Executive Director, Communications, Chrysler LLC:

Chrysler LLC as a matter of policy does not confirm or disclose the nature of its private business meetings. As we have said, the Company is looking at a number of potential global partnerships as it explores growth opportunities around the world. Beyond those partnerships already announced however, Chrysler has not formed any new agreements and has no further announcements to make at this time.

Since Buick, Pontiac and GMC dealers are in the process of consolidating their showrooms, many were likely hoping for a halo product that could draw customers into the showroom. Hey, wouldn’t a version of the upcoming Chevy Camaro badged as a Pontiac Trans Am revival do the trick? Maybe, but at the NADA conference this week, GM told these dealers that a Pontiac Trans Am is not going to happen. Blame the new, more stringent federal fuel economy regulations for killing off this cool idea. In fact, the new regs also mean that the automaker will be scaling back on transforming Pontiac into a rear-wheel-drive performance division. Though GM assured dealers that Pontiac will remain a car-only brand, the assurance that a debacle like the Aztec won’t happen a second time is little comfort to those who were hoping Pontiac would once again be the brand that builds excitement. And who says performance has to be totally sacrificed for fuel economy? New powertrains are being developed that make the most of the internal combustion engine’s efficiency, and a twin-turbo, direct-inject four-cylinder can make gobs of power while being much more efficient than an equally powerful V6 or even V8.

GM did inform Buick, Pontiac and GMC dealers that they would be getting 12 new or special-edition vehicles over the next 20 months. A special-edition GMC Sierra pickup called Pro Grade was mentioned, for instance. Still, the quashing of any hope for a new Trans Am means that the number of vehicles slated to share the Camaro’s rear-wheel-drive Zeta platform in the U.S. is dwindling. Only the Pontiac G8 and G8 ST car-based truck are confirmed, with Zeta-based rear-wheel-drive sedans for Buick and Chevy still up in the air. This means that without the ability to spread out costs across a number of new vehicles, the price of producing these vehicles will likely be high and passed on to the performance-minded consumer.

What’s another $25 billion between friends? That’s the argument General Motors, Chrysler and Ford’s Congressional lobbyists will be making in the next few months for a $50 billion loan from the federal government.

Originally, Detroit’s Big Three were after $25 billion in loans from the Feds, but after lawmakers authorized a loan in last year’s energy bill, the domestics now want Congress to grant loans up to $50 billion over the next three years.

The loans would carry an interest rate of around four to five percent, with $25 billion being available in the first year, another $15 billion in the second year and the final $10 billion in the third.

GM, Ford and Chrysler contend that the low-interest loans would be used to build more fuel-efficient vehicles, including hybrids and electrics, thus reducing the U.S.’s dependency on foreign oil, not to mention making all three automakers more competitive in a market that no longer favors big trucks and SUVs.

Mark Fields, Ford’s President of the Americas, likens the bailout loan to the recent financial support granted to Bears Stearns, Fannie Mae and Freddie Mac from the Feds, saying, “This is not about benefiting Wall Street. This is benefiting Main Street, the working men and women.”

Vägverket, the Swedish Road Administration, is reporting that General Motors used ten human cadavers for crash research. While it isn’t clear which GM vehicle hosted the corpses on their one-way trip into a wall, a spokesman for Vägverket said it was most likely the Saab brand. The spokesman was also quick to point out that all of the cadavers were people “who had donated their own bodies.” (Well, that is comforting to know!)

While cadavers were used in the earliest crash tests (first started in the late 1930s), most of us were under the assumption that fully-instrumented million-dollar synthetic crash test dummies, or computer simulations, had replaced human remains in current testing. Apparently, some folks at GM may have been thinking otherwise. As of today, neither General Motors or Saab have acknowledged any tests involving dead bodies, but our hunch says this issue hasn’t been laid to rest. Thanks for the tip, Will!

Word just came in from General Motors that the automaker will be reducing shifts at four different plants that produce its full-size trucks and SUVs in an effort to bring production “in line with market demand”. The output slowdown will begin on July 14th at GM’s Flint, Janesville and Pontiac assembly plants, which produce the Chevy Heavy-Duty Silverado, Tahoe, Suburban, Silverado and GMC Yukon, Yukon XL and Sierra. The Oshawa truck plant will also be affected starting Sept. 8th. All told, the shift reductions will nix 80,000 full-size pickups and 50,000 full-size SUVs from GM’s North American production capacity.

According to GM, both vehicles have lost ground in the market across the industry, with sales of full-size pickups dropping 15-percent and SUVs down 26-percent for the first quarter of 2008. This isn’t surprising considering the cost of fuel right now and the subsequent reduced demand for larger vehicles. GM didn’t provide specifics about how this would affect workers, only saying that it will “result in lower staffing requirements at all four plants,” and that the details “would be worked out over the next several weeks with the UAW and CAW.”

Naturally, GM felt the need to brighten up the lackluster announcement by highlighting that car and CUV sales are up. However, it hasn’t made a decision to boost output of either type of vehicle in lieu of said increased demand. Check out GM’s full press release after the jump.

[Source: GM, Photo by Scott Olson/Getty]

General Motors announced today that it recorded a net loss of $3.25 billion during the first quarter of 2008, but it looks worse than it is thanks to a $1.45 billion hit from its 49% stake in floundering GMAC. The two-month long American Axle strike also cost GM about $800 million, while further support of bankrupt supplier Delphi’s restructuring took $731 million from the corporate coffers. These “headline numbers” don’t look good, but GM’s performance in the area of actually selling cars wasn’t as bad as analysts expected, and the automaker’s stock actually rose after these earnings were announced.

GM continued to do well in the business of selling cars in regions like Europe, Asia and Latin America, but the North American market continued to underperform. In North America, GM lost $812 million on revenue from sales of $24.5 billion, compared to a loss of $208 million last year on $28.1 billion of revenue. Aside from selling fewer vehicles, GM also lost 100,000 units of production thanks to the American Axle strike, which helped its market share slip from 22.5% last year to 21.7% in Q1 2008. Clearly the news isn’t as good as it was, say, for Ford, but GM is virtually the only automaker being affected by the American Axle strike, and has a number of labor- and supplier-related issues to sort out before it can begin building a steady stream of its most popular models in North America.

[Source: GM, Automotive News - sub. req’d]

GM President Frtiz Henderson came squeaky clean about the state of GM’s brand portfolio, hurdles and losses. On the issue of too many brands, he admitted that the reason GM still has so many is that it is simply too expensive to kill any one of them. GM spent almost a billion large putting Oldsmobile to sleep, and with The General coming off a $3.25 billion Q1 loss, every half penny counts. In the mean time, GM will have to make do with its four new brand czars.
Henderson and CFO Rick Young also admitted that sales projections could be described as “rosy,” the word “Delphi” is beginning to rhyme with “albatross,” and that the intergalactic rise in gas prices has changed consumer buying habits “faster than we thought.”

Fritz summarized the situation with: “We have to adjust. We have to learn how to make more money in cars and crossovers and tighten our belts with regard to cost expenditures.” That’s not the writing on the wall, that is the wall itself. Thanks for the tip, throwback!

[Source: CNN Money]

GM has seen plenty of tough times over the past few years, and even the company’s top executives have felt the pinch. Executive pay was among the items cut as the General waded through multi-billion-dollar losses and immense market pressure, but after two years of cuts, the members of GM’s top brass are getting their old salaries back. Top boss Rick Wagoner’s base pay went as “low” as $1.1M but is now back to its 2003 level of $2.2M. Product czar Bob Lutz and money man Fritz Henderson also had their pay restored, and Fritz even got a raise to reflect his promotion to COO. Many of the pay cuts were voluntary in recognition of GM’s market struggles, but even with the cuts in base pay, overall executive pay packages are worth a lot more than just the salaries alone. Wagoner, for example, was paid $14.4M in 2007, while Maximum Bob came in at $6.9M.

[Source: Auto News (subs. req’d)]