U.S. Labor Department proposes exemption to allow new health plan for General Motors retirees to acquire company securities

The U.S. Department of Labor's Employee Benefits Security Administration (EBSA) today announced a proposed exemption that, if granted, would allow the General Motors Co. (GM) to transfer company securities including common stock, preferred stock and a $2.5 billion promissory note, to a health plan established for the company's retirees. The retiree health plan will cover approximately 700,000 retirees and dependents when it becomes effective on Dec. 31, 2009.

GM is the successor company that purchased substantially all of the assets of General Motors Corp. (the old GM), which filed for bankruptcy on June 1, 2009. GM is headquartered in Detroit, Mich.

The large transfer of employer securities to the plan violates the Employee Retirement Income Security Act (ERISA). ERISA prohibits certain plans from holding large percentages of plan assets in the form of employer securities. The law gives the department authority, however, to grant exemptions that protect the interests of plan participants and beneficiaries.

The exemption would allow the securities transfer, permit GM and its health plans to reimburse each other for benefit payments mistakenly paid by the wrong entity during the transition to the new plan, and permit GM to recover mistaken deposits to the plan.

A major condition of the proposal is the appointment of an independent fiduciary to represent the plan with regard to GM securities transactions. The independent fiduciary will determine in advance of taking any action regarding the securities that the action is in the interests of the plan and its participants and beneficiaries. The proposed exemption also requires the review of benefit payments by an independent third party administrator and auditor for each of the plans and an objective dispute resolution process. In addition, the proposal set time limits for return of mistaken deposits and an objective dispute resolution process.

The proposed exemption is scheduled to be published in the Sept. 18, 2009, edition of the Federal Register. Comments on the proposal and any requests for a public hearing should be submitted to gm@dol.gov or by fax to 202-219-0204. Paper-based comments should be sent to the Office of Exemption Determinations, Employee Benefits Security Administration, Room N-5700, U.S. Department of Labor, 200 Constitution Ave. N.W., Washington, D.C. 20210, Attention: Application Number L-11568.

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GM Retirees Call for Congressional Protection of Benefits

/PRNewswire/ -- Following denial by the federal bankruptcy court of the General Motors Retirees Association application for a benefits committee to protect GM salaried retirees, GMRA is now asking the U.S. Congress to act immediately in defense of the benefits these GM retirees earned through decades of labor and loyalty to GM.

"We at GMRA are deeply disappointed by the failure of the bankruptcy court to allow us to take reasonable steps under Section 1114 of the Bankruptcy Code to protect the health and security of all GM retirees," said John Christie, GMRA President. "The court, in our opinion, did not do what was necessary to permit all parties to be treated fairly."

"While the GMRA leadership will consider all the legal options available to us, we now look squarely to the Obama administration and to the U.S. Congress to make certain there is a fair process and outcome for all GM retirees," said Christie. "GM retirees always expected to sacrifice as part of GM's restructuring, but one group of retirees shouldn't bear the bulk of that burden. Surely our elected officials can intervene to protect the sick and elderly from poverty when these people worked hard and played by the rules."

The majority of all General Motors retirees have been represented by the United Auto Workers in negotiations with the GM leadership and bondholders on pension, healthcare, and other benefits.

However, over 122,000 salaried retirees and their surviving spouses were not part of the UAW agreement and have had no representation in discussions about the new GM. These non-union, salaried retirees were engineers, project managers, clerks, and other employees. Many earned annual salaries equal to or less than the wages earned by union employees.

For the non-UAW retirees, who live throughout the United States, the current GM proposal would reduce certain benefits by two-thirds, including the outright elimination of dental, vision, and long-term disability coverage. The retirees would see significant increases in premiums, co-payments and deductibles for health care.

The non-UAW retirees also would face an immediate reduction of life insurance benefits following the emergence of the new GM from bankruptcy. In some cases retirees would lose $70,000 or more in life insurance benefits.

"For people living on a fixed income, the benefit losses proposed by GM are breathtaking," said Karen DeOrnellas, Director of Communications for GMRA. "These retirees are old. Many are sick or disabled. In almost all cases they cannot make this money back or return to work."

GM retirees have written GMRA to say the latest proposals for benefit losses will make them choose between paying for prescription drugs and paying for food, electricity, and housing. Many will be unable to replace lost life insurance, jeopardizing the ability of their spouses to remain in their homes.

"We want a reorganized GM to succeed, but bankruptcy shouldn't push tens of thousands of retirees and their families into poverty or endanger their health when those people did nothing wrong," said DeOrnellas.

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Invest in America Offers Incentive for Credit Union Members’ Car Purchase

(BUSINESS WIRE)--On Wednesday, January 7, representatives of General Motors and Chrysler Corporations announced the expansion of the “Invest in America” pilot discount purchase programs to credit union members. These programs are being made available to the members of the nation’s 7,900 credit unions. GM’s “Credit Union Member Discount Program” extends to March 31, 2009, and Chrysler’s “Credit Union Member Cash” rebate program extends through June 30, 2009.

With a certificate and proof of membership, a credit union member can receive a discount of 4.5% off the MSRP in addition to other available discounts on most General Motors products. With proof of credit union financing, a member can receive a rebate of $500 to $1,000 as specified for most vehicles from Chrysler (dealer participation is optional). The details of both these programs can be found at www.lovemycreditunion.org.

Although obviously impacted by levels of employment and general economic conditions, credit unions remain well capitalized and ready to lend to their members. Credit unions have continued to make automobile loans, mortgage loans, and loans for many other purposes to members throughout the recent economic struggles. Credit unions continue to be an available source of low-cost loans and capital, as well as providing the opportunity for members to participate in these discount auto purchase programs.

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Thanks to the Tennessee Credit Union League for the heads up on this great news.

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GMAC Receives $5.0 Billion Investment from the U.S. Treasury

/PRNewswire/ -- GMAC Financial Services today announced that it has sold $5.0 billion of GMAC's preferred membership interests and warrants to the U.S. Department of the Treasury as a participant in the Troubled Assets Relief Program established under the Emergency Economic Stabilization Act of 2008. The sale was completed today.

GMAC also announced that General Motors Corp. (GM) and an affiliate of Cerberus Capital Management contributed to GMAC the $750 million subordinated participations in the $3.5 billion senior secured credit facility, as amended, between GMAC and Residential Capital, LLC in exchange for new common equity of GMAC. In addition, GMAC announced that GM and an affiliate of Cerberus Capital Management entered into agreements to purchase $1.25 billion of new common equity. The U.S. Treasury and GM intend to enter into an agreement for the Treasury to fund GM's share of the new common equity.

GMAC also announced that the conditions to its previously announced separate private exchange offers and cash tender offers have been satisfied and that GMAC has accepted all of the validly tendered GMAC old notes and ResCap old notes. The GMAC offers and the ResCap offers are expected to settle promptly.

GMAC received approval of its bank holding company application from the U.S. Federal Reserve Board on Dec. 24, 2008. As a bank holding company, GMAC has improved access to funding to provide financing to consumers and businesses. In particular, the company intends to act quickly to resume automotive lending to a broader spectrum of customers to support the availability of credit to consumers and businesses for the purchase of automobiles.

About GMAC Financial Services

GMAC Financial Services is a global finance company operating in and servicing North America, South America, Europe and Asia-Pacific. GMAC specializes in automotive finance, real estate finance, insurance, commercial finance and online banking. As of Dec. 31, 2007, the organization had $248 billion in assets and serviced 15 million customers. Visit the GMAC media site at http://media.gmacfs.com/ for more information.

Forward-Looking Statements

This press release contains various forward-looking statements within the meaning of applicable federal securities laws, including the Private Securities Litigation Reform Act of 1995, that are based upon our current expectations and assumptions concerning future events, which are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated.

The words "expect," "anticipate," "initiative," "plan," "intend," "may," "would," "could," "should," "believe," or the negative of any of those words or similar expressions is intended to identify forward-looking statements. All statements contained in or incorporated by reference into this press release, other than statements of historical fact, including, without limitation, statements about our plans, strategies, prospects and expectations regarding future events and our financial performance, are forward-looking statements that involve certain risks and uncertainties.

While these statements represent our current judgment on what the future may hold, and we believe these judgments are reasonable, these statements are not guarantees of any events or financial results, and our actual results may differ materially due to numerous important factors that are described in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2007, as updated by our subsequent Quarterly Reports on Form 10-Q, and our Current Reports on Form 8-K. Many of these risks, uncertainties and assumptions are beyond our control, and may cause our actual results and performance to differ materially from our expectations. Factors that could cause our actual results to be materially different from our expectations include, among others, the settlement date of the GMAC offers and the ResCap offers and the success, or lack thereof, of the transactions and other initiatives described in this press release. Accordingly, you should not place undue reliance on the forward-looking statements contained or incorporated by reference in this press release. These forward-looking statements speak only as of the date on which the statements were made. We undertake no obligation to update publicly or otherwise revise any forward-looking statements, except where expressly required by law.

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Ford Motor Company Welcomes Action to Provide Emergency Funding to GM and Chrysler

/PRNewswire-FirstCall/ -- Ford Motor Company (NYSE:F) said today that it welcomes action by the Administration to provide emergency funding for General Motors Corp. and Chrysler LLC.

"As we told Congress, Ford is in a different position. We do not face a near-term liquidity issue, and we are not seeking short-term financial assistance from the government," Ford President and CEO Alan Mulally said. "But all of us at Ford appreciate the prudent step the Administration has taken to address the near-term liquidity issues of GM and Chrysler. The U.S. auto industry is highly interdependent, and a failure of one of our competitors would have a ripple effect that could jeopardize millions of jobs and further damage the already weakened U.S. economy."

Ford recently submitted to Congress its comprehensive business plan, which details the company's plan to return to pre-tax Automotive profitability by 2011. In the plan, Ford said the transformation of its North American automotive business will continue to accelerate through aggressive restructuring actions and the introduction of more high-quality, safe and fuel-efficient vehicles -- including a broader range of hybrid-electric vehicles and the introduction of advanced plug-in hybrids and full electric vehicles.

"Ford has a comprehensive transformation plan that will ensure our future viability -- as evidenced by our profitability in the first quarter of 2008," Mulally said. "While we clearly still have much more work to do, I am more convinced than ever that we have the right plan that will create a viable Ford going forward and position us for profitable growth."

Ford is asking for access to a line of credit of up to $9 billion in bridge financing, but reiterated that it hopes to complete its transformation without accessing a government loan.

"For Ford, a line of credit would serve only as a critical backstop or safeguard against worsening conditions, as we drive transformational change in our company," Mulally said.

Ford reiterated that it is continuing aggressive actions to reduce costs and improve Automotive gross cash to fund its product-led transformation plan, despite the continued weakness in the global automotive market and economic environment. Ford said it is more committed than ever to deliver more of the safe, affordable, high-quality, fuel-efficient vehicles that consumers want and value. The company's plans include:

-- Delivering best-in-class or among the best fuel economy with every new vehicle introduced.

-- Investing approximately $14 billion in the U.S. on advanced technologies and products to improve fuel efficiency during the next seven years.

-- Introducing industry-leading, fuel-saving EcoBoost engines on today's vehicles for up to 20 percent better fuel economy and up to 15 percent fewer CO2 emissions versus larger-displacement engines.

-- Bringing to market by 2012 a family of hybrids, plug-in hybrids and battery electric vehicles.

-- Upgrading the Ford, Lincoln, Mercury lineup in North America almost completely by the end of 2010.

-- Bringing six European small vehicles from global B-car and C-car platforms to be built in Ford's North America plants.

-- Retooling three North American truck plants to produce small, fuel efficient vehicles.

-- Building on vehicle quality that is now on par with Honda and Toyota - and that consistently is being recognized by important third-parties like J.D. Power and Associates' Initial Quality Study - driven by Ford's disciplined and standardized processes for every product.

-- Building on vehicle safety leadership - with the most U.S. government 5-star safety ratings of any auto company and recently moving past Honda for the industry's most IIHS "Top Safety Picks" - plus new smart safety features, such as the industry-first MyKey technology that limits top speed and audio volume for teens and the first forward crash-avoidance system for mainstream vehicles.

-- Supporting Ford's products with a lean, flexible global manufacturing system on par with leading Japanese and European facilities.

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