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DATE News (chronologically)
01/08/13
automotive
Government buying more cars from 'Government Motors'
General Motors Co. (otherwise known as Government Motors) surpassed Ford Motor Co. in federal-government sales for the first time since receiving a U.S. bailout as Ford’s prices rose faster, according to General Services Administration data.

GM directly sold 19,404 vehicles to the U.S. government in the fiscal year ending Sept. 30, a 3.6 percent increase from 2011, according to data obtained under a Freedom of Information Act request to the GSA, which coordinates most vehicle purchases. Sales at Ford, which didn’t need a U.S. bailout, fell 43 percent to 10,734.

Automakers’ business with the federal government, while less than 1 percent of U.S. sales for any carmaker, took on a symbolic significance after the $80 billion U.S. bailout of GM and the predecessor to Chrysler Group LLC U.S. in 2009. The rescue sparked criticism from Republicans that the U.S. might show favoritism to the companies in which it had a stake.

Total government-fleet sales were 3 percent of GM’s business last year, Kurt McNeil, vice president for U.S. sales and service, said on a Jan. 3 conference call.

The U.S. government said in December it plans to sell its remaining stake in GM, which was 32 percent of the company’s shares before a $5.5 billion buyback the automaker announced Dec. 19. The government exited Chrysler in June 2011.

Competitive bidding

Annual competitive bidding changes which manufacturer gains an advantage and “drives volume to the lowest priced vehicles,” Dan Cruz, a GSA spokesman, said in an e-mail. GM’s average price per vehicle rose about 1.9 percent for fiscal 2012, compared to a 12 percent increase at Ford, according to the GSA data.

“Agencies purchase the low-priced vehicle as equipped with only a few exceptions,” Cruz said. “No preference is ever given to a specific manufacturer.”

The GSA paid an average of $26,103 per vehicle, the data showed. In September 2012, the average sticker price for a retail model was $33,066, Edmunds.com said.

GSA purchases from Chrysler fell 11 percent to 9,468 cars and trucks as sales to the federal fleet dipped about 8.6 percent to 50,114, the data showed. In 2009, as GM and Chrysler emerged from bankruptcy, the government bought 89,380 units. The U.S. auto industry sold 14.5 million cars and trucks last year.

The GSA coordinates about two-thirds of U.S. government vehicle purchases.

Cutting back

The GSA decreased its spending last year and bought fewer cars and trucks compared with the previous year. It bought $1.3 billion worth of vehicles in fiscal 2012 compared with $1.36 billion in 2011, $1.55 billion in 2010 and $1.95 billion in 2009.

GM had $409.2 million in sales to the agency last year, to $241.3 million for Ford.

“Agencies purchase the number of vehicles they need in a given year to meet their mission requirements and based on the needs of their current fleet inventory,” Cruz said.

Ford was the top seller in the two fiscal years after GM and Chrysler got their 2009 rescues. Before fiscal 2010, GM had held the sales lead since at least 2005.

GM’s Malibu sedan was the top-selling model to the U.S. government last year, with 4,341 sold. The government paid an average of $15,778 for its Malibus, according to the data, compared with the retail sticker price of $22,110.

The company’s larger Impala sedan and Tahoe SUV were in the top 10. Chrysler had two top-10 vehicles, the Dodge Grand Caravan minivan and Ram 1500 pickup.

Ford dealers

GM wasn’t helped by the U.S. government being its largest shareholder and must bid against all other manufacturers, said Heather Rosenker, a Washington-based spokeswoman.

“We are proud of the service our trucks and cars provide to the nation,” Rosenker said in an e-mail.

GM ceded its 77-year crown as the world’s largest automaker from 2008 to 2010 to Toyota Motor Corp. While Toyota lost it to GM in 2011 when an earthquake halted the flow of parts to factories around the world, the Japanese automaker is poised to regain it for 2012 based on sales through November.

Ford’s sales through the GSA are higher than they appear because some purchases through dealers were listed separately in the agency’s database, Christin Baker, a Washington spokeswoman for Ford, said in an interview.

Focus, pickups

Brasada/Northside Ford in San Antonio sold 2,724 vehicles to the U.S. government last year, the fifth-highest for any seller, according to GSA. The dealership is one of about a half dozen that sell hundreds of modified trucks and vans to the government each year.

“Ford continues to compete with our full lineup of vehicles of quality, green, safe, smart vehicles,” Baker said.

Two Ford pickups -- the F-250 and F-350 -- were top-20 vehicles that the GSA purchased through a dealer, the data shows. Ford’s top seller to the government was the compact Focus, with the F-150 in fifth place.

GM’s return to the top spot at Ford’s expense will be criticized by some people who opposed the bailouts, even if it’s unwarranted and not all that important to revenue, said Rebecca Lindland, an industry analyst with IHS Automotive.

The government is “buying these cars because they need them, not because of anything to do with Government Motors,” she said. [Yeah, right!] Autonews/Bloomberg

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