Max Auto Updates - 21/04/2010

Toyota recalls 2010 Lexus GX 460



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Lexus has announced plans to recall the 2010 GX 460, one week after Consumer Reports issued a "do not buy" warning.

The recall will consist of a software update to the electronic stability control (ESC) program. Worldwide, approximately 10,400 vehicles are affected.

As you may recall (no pun intended), Consumer Reports found the rear of the GX would "slid out until the vehicle was almost sideways before the electronic stability control system was able to regain control." They slapped the sport-ute with a rare "do not buy" rating because "in real-world driving, that situation could lead to a rollover accident, which could cause serious injury or death." This prompted Lexus to halt sales of the GX, until engineers in Japan could duplicate the problem.

Oddly enough, the GX recall was announced on the same day Toyota agreed to pay a record fine of $16.4 million dollars (12.2 million euros) for the pedal-gate fiasco. As we have previously reported, the National Highway Transportation Safety Administration (NHTSA) could levy additional fines if Toyota failed to comply with all their disclosure obligations.

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Luca di Montezemolo to step down as Fiat Chairman



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Luca Cordero di Montezemolo has announced he will step down as chairman of Fiat.

While the company declined to explain his departure, 62-year old di Montezemolo left shortly before Fiat unveiled their 2010-2014 business plan.

It is speculated that Fiat's vice chairman, John Elkann, will replace him. This makes sense considering that Elkann is the chairman of Exor S.p.A, a family-owned holding company, which owns 30 percent of Fiat.

Despite his resignation, di Montezemolo will stay on Fiat's board and remain chairman of Ferrari.

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GM to pay $5.8 billion bailout loan balance early



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GM will repay $5.8 billion in loans from the U.S. and Canadian governments as early as today. This will square GM's loan-based debt with the two governments, though the U.S. Treasury will continue to own over 60% of the automaker while the Canadians own 12%.

This is due to the U.S. government's conversion of $43 billion out of $50 billion in bailout funds into equity. The Canadian government traded $8 billion into a stake in GM. $4.7 billion will go to the Americans, with $1.1 billion headed to Ottawa.

General Motors is making the repayment roughly two months ahead of schedule, with a formal announcement expected on Wednesday when GM chief Ed Whitacre visits a factory in Fairfax, Kansas. Whitacre may also announce an expansion of the Kansas facility, with added investment and an increase in hiring.

GM is attempting to create a wave of public and investor confidence in the long-suffering automaker. The company is working out plans to sell stock in an initial public offering, and a better reputation will help launch the stock at a higher price point. Once this happens, the U.S. and Canadian governments will be able to sell off their ownership in the automaker in the hopes of getting their money back.

The American manufacturer lost $3.4 billion in the last three months of 2009, though this was better than many analysts had expected.