Forex trading characteristics

There is no unified or centrally cleared market for the majority of FX trades, and there is very little cross-border regulation. Due to the over-the-counter (OTC) nature of currency markets, there are rather a number of interconnected marketplaces, where different currencies instruments are traded. This implies that there is not a single exchange rate but rather a number of different rates (prices), depending on what bank or market maker is trading, and where it is. In practice the rates are often very close, otherwise they could be exploited by arbitrageurs instantaneously. Due to London's dominance in the market, a particular currency's quoted price is usually the London market price. A joint venture of the Chicago Mercantile Exchange and Reuters, called Fxmarketspace opened in 2007 and aspired but failed to the role of a central market clearing mechanism.

The main trading center is London, but New York, Tokyo, Hong Kong and Singapore are all important centers as well. Banks throughout the world participate. Currency trading happens continuously throughout the day; as the Asian trading session ends, the European session begins, followed by the North American session and then back to the Asian session, excluding weekends.

Fluctuations in exchange rates are usually caused by actual monetary flows as well as by expectations of changes in monetary flows caused by changes in gross domestic product (GDP) growth, inflation (purchasing power parity theory), interest rates (interest rate parity, Domestic Fisher effect, International Fisher effect), budget and trade deficits or surpluses, large cross-border M&A deals and other macroeconomic conditions. Major news is released publicly, often on scheduled dates, so many people have access to the same news at the same time. However, the large banks have an important advantage; they can see their customers' order flow.

Currencies are traded against one another. Each pair of currencies thus constitutes an individual product and is traditionally noted XXXYYY or YYY/XXX, where YYY is the ISO 4217 international three-letter code of the currency into which the price of one unit of XXX is expressed (called base currency). For instance, EURUSD or USD/EUR is the price of the euro expressed in US dollars, as in 1 euro = 1.5465 dollar. Out of convention, the first currency in the pair, the "base" currency, was the stronger currency at the creation of the pair. The second currency, counter currency or "term" currency, was the weaker currency at the creation of the pair. Currencies are occasionally incorrectly quoted with the pairs inverted e.g. EUR/USD but this is incorrect. The "/" acts the same as the divide mathematical operator and derives the actual exchange rate. e.g. an amount of $140,000 equates to €100,000. $140,000/€100,000 = $/€ = USD/EUR = a rate of 1.4 hence EURUSD or USD/EUR. See Exchange_rate

The factors affecting XXX will affect both XXXYYY and XXXZZZ. This causes positive currency correlation between XXXYYY and XXXZZZ.

On the spot market, according to the BIS study, the most heavily traded products were:

• EURUSD: 27%
• USDJPY: 13%
• GBPUSD (also called cable): 12%

and the US currency was involved in 86.3% of transactions, followed by the euro (37.0%), the yen (17.0%), and sterling (15.0%) (see table). Volume percentages for all individual currencies should add up to 200%, as each transaction involves two currencies.

Trading in the euro has grown considerably since the currency's creation in January 1999, and how long the foreign exchange market will remain dollar-centered is open to debate. Until recently, trading the euro versus a non-European currency ZZZ would have usually involved two trades: EURUSD and USDZZZ. The exception to this is EURJPY, which is an established traded currency pair in the interbank spot market. As the dollar's value has eroded during 2008, interest in using the euro as reference currency for prices in commodities (such as oil), as well as a larger component of foreign reserves by banks, has increased dramatically. Transactions in the currencies of commodity-producing countries, such as AUD, NZD, CAD, have also increased.

Forex retail foreign exchange brokers

Retail traders (individuals) are an explosively growing part of this market, both in size and importance. Currently, they participate indirectly through brokers or banks. Retail brokers, while largely controlled and regulated in the USA by the CFTC and NFA have in the past been subjected to periodic foreign exchange scams. To deal with the issue, the NFA and CFTC began (as of 2009) imposing stricter requirements, particularly in relation to the amount of Net Capitalization required of its members. As a result many of the smaller, and perhaps questionable brokers are now gone.

There are two main types of retail FX brokers offering the opportunity for speculative currency trading: Retail brokers who employ the "Agency Broker" model and Market-Makers who employ the "Broker as principal or specialist" model. "Agency Brokers" serve as 'your representative' in the broader FX market, by seeking the best prices for your orders, and then typically pass your orders through to some other market-maker, bank or dealer, after applying a small mark-up. Market-Makers, by contrast, typically play the role of 'final resting stop' for your orders by choosing to simply fill them immediately and then manage the resulting risk themselves. No one model is better than the other, and both have various benefits, advantages and drawbacks.

Nonetheless, it is not widely understood that some retail brokers (market makers) typically trade 'against' their clients (via the broker as "principal" model rather than the "agency" broker model) and frequently take the other side of their customers' trades. This may sometimes create a potential conflict of interest and give rise to some of the unpleasant trade-execution experiences some traders & customers have had. A move toward NDD (No Dealing Desk) and STP (Straight Through Processing) has helped to resolve some of these concerns and restore trader confidence, but cautious optimism is still advised.

The earliest Retail FX brokers were CMC Markets, SAXO Bank (Formerly MIDAS), FXCM (formerly Shalish Capital Markets) GFT (Global Forex Trading) MG Forex (AKA "Money Garden"), eForex.com, and Matchbook FX, which was notable because it was the 1st and only FX broker that pursued a user-price driven ECN model, rather than a Dealer/Market Maker model.

Forex hedge funds as speculators

About 70% to 90% of the foreign exchange transactions are speculative. In other words, the person or institution that bought or sold the currency has no plan to actually take delivery of the currency in the end; rather, they were solely speculating on the movement of that particular currency. Hedge funds have gained a reputation for aggressive currency speculation since 1996. They control billions of dollars of equity and may borrow billions more, and thus may overwhelm intervention by central banks to support almost any currency, if the economic fundamentals are in the hedge funds' favor.

Forex central banks

National central banks play an important role in the foreign exchange markets. They try to control the money supply, inflation, and/or interest rates and often have official or unofficial target rates for their currencies. They can use their often substantial foreign exchange reserves to stabilize the market. Milton Friedman argued that the best stabilization strategy would be for central banks to buy when the exchange rate is too low, and to sell when the rate is too high—that is, to trade for a profit based on their more precise information. Nevertheless, the effectiveness of central bank "stabilizing speculation" is doubtful because central banks do not go bankrupt if they make large losses, like other traders would, and there is no convincing evidence that they do make a profit trading.

The mere expectation or rumor of central bank intervention might be enough to stabilize a currency, but aggressive intervention might be used several times each year in countries with a dirty float currency regime. Central banks do not always achieve their objectives. The combined resources of the market can easily overwhelm any central bank. Several scenarios of this nature were seen in the 1992–93 ERM collapse, and in more recent times in Southeast Asia.

Forex commercial companies

An important part of this market comes from the financial activities of companies seeking foreign exchange to pay for goods or services. Commercial companies often trade fairly small amounts compared to those of banks or speculators, and their trades often have little short term impact on market rates. Nevertheless, trade flows are an important factor in the long-term direction of a currency's exchange rate. Some multinational companies can have an unpredictable impact when very large positions are covered due to exposures that are not widely known by other market participants.

Forex banks

The interbank market caters for both the majority of commercial turnover and large amounts of speculative trading every day. A large bank may trade billions of dollars daily. Some of this trading is undertaken on behalf of customers, but much is conducted by proprietary desks, trading for the bank's own account. Until recently, foreign exchange brokers did large amounts of business, facilitating interbank trading and matching anonymous counterparts for small fees. Today, however, much of this business has moved on to more efficient electronic systems. The broker squawk box lets traders listen in on ongoing interbank trading and is heard in most trading rooms, but turnover is noticeably smaller than just a few years ago.

Forex market participants

Unlike a stock market, the foreign exchange market is divided into levels of access. At the top is the inter-bank market, which is made up of the largest commercial banks and securities dealers. Within the inter-bank market, spreads, which are the difference between the bid and ask prices, are razor sharp and usually unavailable, and not known to players outside the inner circle. The difference between the bid and ask prices widens (from 0-1 pip to 1-2 pips for some currencies such as the EUR). This is due to volume. If a trader can guarantee large numbers of transactions for large amounts, they can demand a smaller difference between the bid and ask price, which is referred to as a better spread. The levels of access that make up the foreign exchange market are determined by the size of the "line" (the amount of money with which they are trading). The top-tier inter-bank market accounts for 53% of all transactions. After that there are usually smaller banks, followed by large multi-national corporations (which need to hedge risk and pay employees in different countries), large hedge funds, and even some of the retail FX-metal market makers. According to Galati and Melvin, “Pension funds, insurance companies, mutual funds, and other institutional investors have played an increasingly important role in financial markets in general, and in FX markets in particular, since the early 2000s.” (2004) In addition, he notes, “Hedge funds have grown markedly over the 2001–2004 period in terms of both number and overall size” Central banks also participate in the foreign exchange market to align currencies to their economic needs.

Forex market size and liquidity

The foreign exchange market is the largest and most liquid financial market in the world. Traders include large banks, central banks, currency speculators, corporations, governments, and other financial institutions. The average daily volume in the global foreign exchange and related markets is continuously growing. Daily turnover was reported to be over US$3.2 trillion in April 2007 by the Bank for International Settlements. Since then, the market has continued to grow. According to Euromoney's annual FX Poll, volumes grew a further 41% between 2007 and 2008.

Of the $3.98 trillion daily global turnover, trading in London accounted for around $1.36 trillion, or 34.1% of the total, making London by far the global center for foreign exchange. In second and third places respectively, trading in New York accounted for 16.6%, and Tokyo accounted for 6.0%. In addition to "traditional" turnover, $2.1 trillion was traded in derivatives.

Exchange-traded FX futures contracts were introduced in 1972 at the Chicago Mercantile Exchange and are actively traded relative to most other futures contracts.

Several other developed countries also permit the trading of FX derivative products (like currency futures and options on currency futures) on their exchanges. All these developed countries already have fully convertible capital accounts. Most emerging countries do not permit FX derivative products on their exchanges in view of prevalent controls on the capital accounts. However, a few select emerging countries (e.g., Korea, South Africa, India) have already successfully experimented with the currency futures exchanges, despite having some controls on the capital account.

FX futures volume has grown rapidly in recent years, and accounts for about 7% of the total foreign exchange market volume, according to The Wall Street Journal Europe (5/5/06, p. 20).

Foreign exchange trading increased by 38% between April 2005 and April 2006 and has more than doubled since 2001. This is largely due to the growing importance of foreign exchange as an asset class and an increase in fund management assets, particularly of hedge funds and pension funds. The diverse selection of execution venues have made it easier for retail traders to trade in the foreign exchange market. In 2006, retail traders constituted over 2% of the whole FX market volumes with an average daily trade volume of over US$50-60 billion (see retail trading platforms). Because foreign exchange is an OTC market where brokers/dealers negotiate directly with one another, there is no central exchange or clearing house. The biggest geographic trading centre is the UK, primarily London, which according to IFSL estimates has increased its share of global turnover in traditional transactions from 31.3% in April 2004 to 34.1% in April 2007. The ten most active traders account for almost 80% of trading volume, according to the 2008 Euromoney FX survey. These large international banks continually provide the market with both bid (buy) and ask (sell) prices. The bid/ask spread is the difference between the price at which a bank or market maker will sell ("ask", or "offer") and the price at which a market taker will buy ("bid") from a wholesale or retail customer. The customer will buy from the market-maker at the higher "ask" price, and will sell at the lower "bid" price, thus giving up the "spread" as the cost of completing the trade. This spread is minimal for actively traded pairs of currencies, usually 0–3 pips. For example, the bid/ask quote of EUR/USD might be 1.2200/1.2203 on a retail broker. Minimum trading size for most deals is usually 100,000 units of base currency, which is a standard "lot".

These spreads might not apply to retail customers at banks, which will routinely mark up the difference to say 1.2100/1.2300 for transfers, or say 1.2000/1.2400 for banknotes or travelers' checks. Spot prices at market makers vary, but on EUR/USD are usually no more than 3 pips wide (i.e., 0.0003). Competition is greatly increased with larger transactions, and pip spreads shrink on the major pairs to as little as 1 to 2 pips.

Forex

The foreign exchange market (currency, forex, or FX) trades currencies. It lets banks and other institutions easily buy and sell currencies.

The purpose of the foreign exchange market is to help international trade and investment. A foreign exchange market helps businesses convert one currency to another. For example, it permits a U.S. business to import European goods and pay Euros, even though the business's income is in U.S. dollars.

In a typical foreign exchange transaction a party purchases a quantity of one currency by paying a quantity of another currency. The modern foreign exchange market started forming during the 1970s when countries gradually switched to floating exchange rates from the previous exchange rate regime, which remained fixed as per the Bretton Woods system.

The foreign exchange market is unique because of

• its trading volumes,
• the extreme liquidity of the market,
• its geographical dispersion,
• its long trading hours: 24 hours a day except on weekends (from 20:15 UTC on Sunday until 22:00 UTC Friday),
• the variety of factors that affect exchange rates.
• the low margins of profit compared with other markets of fixed income (but profits can be high due to very large trading volumes)
• the use of leverage

As such, it has been referred to as the market closest to the ideal perfect competition, notwithstanding market manipulation by central banks.^{[citation needed]} According to the Bank for International Settlements,^[2] average daily turnover in global foreign exchange markets is estimated at $3.98 trillion. Trading in the world's main financial markets accounted for $3.21 trillion of this. This approximately $3.21 trillion in main foreign exchange market turnover was broken down as follows:

• $1.005 trillion in spot transactions
• $362 billion in outright forwards
• $1.714 trillion in foreign exchange swaps
• $129 billion estimated gaps in reporting

Grand Prix motor racing

Grand Prix motor racing has its roots in organised automobile racing that began in France as far back as 1894. It quickly evolved from a simple road race from one town to the next, to endurance tests for car and driver. Innovation and the drive of competition soon saw speeds exceeding 100 miles per hour (160 km/h), but because the races were held on open roads there were frequent accidents with the resulting fatalities of both drivers and spectators.

Grand Prix motor racing eventually evolved into formula racing, and Formula One can be seen as its direct descendant. Each event of the Formula One World Championships is still called a Grand Prix.

Other categories

• Autocross
• Autograss
• Banger racing
• Board track racing
• Demolition derby
• Dirt speedway racing
• Dirt track racing
• Drifting
• Folkrace
• High Performance Drivers Education
• Hillclimbing
• Ice racing
• Legends car racing
• Midget car racing
• Monster truck
• Pickup truck racing
• Rallycross
• Road racing
• Short track motor racing
• Slalom
• Sprint car racing
• Sprinting
• Street racing
• Time Attack
• Truck racing
• Wheelstand Competition

Historical racing

As modern motor racing is centered on modern technology with a lots of corporate sponsors and politics involved, historical racing tends to be the opposite. Because it is based on a particular era it is more hobbyist oriented, reducing corporate sponsorship and politics. Events are regulated to only allow cars of a certain era to participate. The only modern equipment used is related to safety and timing. A historical event can be of various different motorsport disciplines. Notably some of the most famous events of them all are the Goodwood Festival of Speed and Goodwood Revival in Britain and Monterey Historic in the United States. Championships range from "grass root" Austin Seven racing to the FIA Thoroughbred Grand Prix Championship for classic Formula One chassis.

While there are several professional teams and drivers in historical racing, this branch of auto sport tends to be contested by wealthy car owners and is thus more amateur and laid back in its approach.

Kart racing

Although often seen as the entry point for serious racers into the sport, kart racing, or karting, can be an economical way for amateurs to try racing and is also a fully fledged international sport in its own right. World-famous F1-drivers like Michael Schumacher or Fernando Alonso and most of the typical starting grid of a modern Grand Prix took up the sport at around the age of eight, with some testing from age three. Several former motorcycle champions have also taken up the sport, notably Wayne Rainey, who was paralysed in a racing accident and now races a hand-controlled kart. As one of the cheapest ways to go racing, karting is seeing its popularity grow worldwide.

Go-karts, or just "karts" - seem very distant from normal road cars, with diminutive frames and wheels, but a small engine combined with very light weight make for a quick machine.

Off-road racing

In off-road racing, various classes of specially modified vehicles, including cars, compete in races through off-road environments. In North America these races often take place in the desert, such as the famous Baja 1000. In Europe, "offroad" refers to events such as autocross or rallycross, while desert races and rally-raids such as the Paris-Dakar, Master Rallye or European "bajas" are called "cross-country rallies." many people have died while trying to win the world cup.

Sports car racing

In sports car racing, production versions of sports cars and/or grand tourers, and sports prototype cars compete within their respective classes on closed circuits. The races are often conducted over long distances, at least 1000 km, and cars are driven by teams of two or three drivers (and sometimes more in the US), switching every few hours. Due to the performance difference between production-based sports cars and purpose-built sports prototypes, one race usually involves several racing classes. In the US the American Le Mans Series (ALMS) was organized in 1999, featuring GT1, GT2, and two prototype classes, LMP1 (Le Mans Prototype 1) and LMP2. Manufacturers such as Audi and Acura/Honda field or support entries in the Prototype class. Another series based on Le Mans began in 2004, the Le Mans Endurance Series, which included four 1000 km races at tracks in Europe. A competing body, Grand-Am, which began in 2000, sanctions its own endurance series the Rolex Sports Car Series.

Famous sports car races include the 24 Hours of Le Mans, the 24 Hours of Daytona, 24 Hours of Spa-Franchorchamps, the 12 Hours of Sebring, and the 1,000-mile (1,600 km) Petit Le Mans at Road Atlanta.

Drag racing

In drag racing, the objective is to complete a given straight-line distance, from a standing start, ahead of a vehicle in a parallel lane. This distance is traditionally ¼ mile (400 m), though 1/8 mile (200 m) has become popular since the 1990s. The vehicles may or may not be given the signal to start at the same time, depending on the class of racing. Vehicles range from the everyday car to the purpose-built dragster. Speeds and elapsed time differ from class to class. Average street cars cover the ¼ mile in from 10 to 15 seconds whereas a top fuel dragster takes 4.5 seconds or less, reaching speeds of up to 530 km/h (330 mph). Drag racing was organized as a sport by Wally Parks in the early 1950s through the NHRA (National Hot Rod Association). The NHRA was formed to discourage street racing.

Launching, a top fuel dragster will accelerate at 4.5 g (44 m/s²), and when braking parachutes are deployed the deceleration is 4 g (39 m/s²), more than the Space Shuttle experiences. A top fuel car can be heard over 8 miles (13 km) away and generates a reading of 1.5 to 2 on the Richter scale.

Drag racing is two cars head-to-head, the winner proceeding to the next round. Professional classes are all first to the finish line wins. Sportsman racing is handicapped (slower car getting a head start) using an index (a lowest e.t. allowed), and cars running under (quicker than) their index "break out" and lose. The slowest cars, bracket racers, are also handicapped, but rather than an index, they use a "dial-in". Bracket racing has been viewed as the main cause of the loss of public interest in drag racing. People don't understand why the slower car wins or why somebody needs to hit the brakes to avoid going too fast. Many local tracks have also complained that bracket racers will also go out of their way to spend as little as possible while at the track by bringing their own food, beverages, fuel and supplies thus, making it more difficult for tracks to make money on these events. This causes gate prices to rise and tracks losing interest in having such events.

Targa Racing (Targa Rally)

Targa is a tarmac-based road rally which is run all around the world. This began with the Targa Florio. There are many races including Targa Tasmania held on the island state of Tasmania, Australia, run annually since 1992. The event takes its name from the Targa Florio, a former motoring event held on the island of Sicily. The competition concept is drawn directly from the best features of the Mille Miglia, the Coupe des Alpes and the Tour de Corse. Other events around the world include the Targa Newfoundland based in Canada, Targa West based in Western Australia, Targa New Zealand and other smaller events.

Rallying

Rallying, or rally racing, involves two classes of car. The modified Group A, but road legal, production-based cars and the Group N Production cars compete on (closed) public roads or off-road areas run on a point-to-point format where participants and their co-drivers "rally" to a set of points, leaving in regular intervals from start points. A rally is typically conducted over a number of "special stages" of any terrain, which entrants are often allowed to scout beforehand at reduced speeds compiling detailed shorthand descriptions of the track or road as they go. These detailed descriptions are known as "pace notes." During the actual rally, the co-driver reads the pace notes aloud (using an in-helmet intercom system) to the driver, enabling them to complete each stage as quickly as possible. Competition is based on lowest total elapsed time over the course of an event's special stages, including penalties.

The top series is the World Rally Championship (WRC), but there also regional championships and many countries have their own national championships. Some famous rallies include the Monte Carlo Rally, Rally Argentina, Rally Finland and Rally GB. Another famous event (actually best described as a "rally raid") is the Paris-Dakar Rally. There are also many smaller, club level, categories of rallies which are popular with amateurs, making up the "grass roots" of motor sports.

Stock car racing

Stock car racing, is hugely popular in the USA. It is the most popular form of racing in the United States

Usually raced on oval tracks stock cars may resemble production cars but are in fact purpose-built racing machines which are built to tight specifications.

The largest stock car racing governing body is NASCAR. NASCAR's premier series is the Sprint Cup Series, its most famous races being the Daytona 500 and the Brickyard 400. NASCAR also runs several feeder series. The Nationwide Series, and Camping World Truck Series (a pickup truck racing series) conduct races across the entire continental United States. The NASCAR Canadian Tire Series conducts races across Canada and the NASCAR Corona Series conducts races across Mexico. NASCAR also governs several smaller regional series.

NASCAR also governs the Whelen Modified Tour. Modified cars are best described as hybrids of stock cars and open-wheel cars. They are heavily altered from stock, with powerful engines, large tires, tubular chassis and light bodies. The Whelen Modified tour is NASCAR's oldest series.

There are also other stock car governing bodies, such as Automobile Racing Club of America and United Speed Alliance Racing.

In the UK, British Stock car racing is also referred to as "Short Circuit Racing". This takes place on shale or tarmac tracks - usually around 1/4 mile in length. The governing bodies for the sport are the Oval Racing Council (ORC) and BriSCA. Both bodies are made up of individual stadium promoters. There are around 35 tracks in the UK and upwards of 7000 active drivers. The sport is split into three basic "divisions" - distinguished by the rules regarding car-contact during racing.

Full Contact formulas include Bangers, Bombers and Rookie Bangers - and racing features Demolitions Derbies, Figure of Eight racing and Oval Racing

Semi Contact Formulas include BriSCA F1, F2 and Superstox - where bumpers are used tactically.

Non-contact formulas include National Hot Rods, Stock Rods and Lightning Rods.

UK Stock car racing started in the 1950s and grew rapidly through the 60s and 70s.

One-make racing

One-make, or single marque, championships often employ production-based cars from a single manufacturer or even a single model from a manufacturer's range. There are numerous notable one-make formulae from various countries and regions, some of which – such as the Porsche Supercup and, previously, IROC – have fostered many distinct national championships. Single marque series are often found at club level, to which the production-based cars, limited modifications, and close parity in performance are very well suited. Some of the better-known single-make series are the SEAT Cupra Championship, John Cooper Mini Challenge, and Clio Cup, and at a more modest budget, Ginettas, Caterhams, BMWs, and MX5s. There are also single-chassis single seater formulae, such as Formula Ford, Formula Saab, Formula BMW, and defunct Formula Vee, usually as "feeder" series for "senior" race formula (in the fashion of farm teams)

Production car racing

Production car racing or known in the US as showroom stock, is an economical and rules restricted version of touring car racing, mainly to restrict costs.

Many series follow the Group N regulation with a few exceptions. There are several different series that are run all over the world, most notably, Japan's Super Taikyu and IMSA's Firehawk Series which ran between the 1980s to 1990s all over the United States.

Touring car racing

Touring car racing is a style of road racing that is run with production derived race cars. It often features exciting, full-contact racing due to the small speed differentials and large grids.

The major touring car championships conducted worldwide are the V8 Supercars, British Touring Car Championship, Deutsche Tourenwagen Masters, and the World Touring Car Championship. The European Touring Cup is a one day event open to Super 2000 specification touring cars from Europe's many national championships. Another European series is the FIA GT Championship, which features the Spa 24 Hours on their schedule.

The Sports Car Club of America's SPEED World Challenge Touring Car and GT championships are dominant in North America. America's historic Trans-Am Series is undergoing a period of transition, but is still the longest-running road racing series in the U.S. The National Auto Sport Association also provides a venue for amateurs to compete in home-built factory derived vehicles on various local circuits.

Single-seater racing

In single-seater (open-wheel) the wheels are not covered, and the cars often have aerofoil wings front and rear to produce downforce and enhance adhesion to the track. In Europe and Asia, open wheeled racing is commonly referred to as "Formula", with appropriate hierarchical suffixes. In North America, the "Formula" terminology is not followed (with the exception of F1). The sport is usually arranged to follow an "international" format (such as F1), a "regional" format (such as the Formula 3 Euro Series), or a "domestic", or country-specific format (such as the German Formula 3 championship, or the British Formula Ford).The best-known variety of single-seater racing, Formula One, involves an annual World Championship for drivers and constructors In North America, the cars used in the National Championship (currently the IndyCar Series, and previously CART) have traditionally been similar though less sophisticated than F1 cars, with more restrictions on technology aimed at controlling costs.

Other international single-seater racing series are the A1 Grand Prix (unofficially often referred to as the "world cup of motorsport"), and the GP2 (formerly known as Formula 3000 and Formula Two). Regional series include Formula Nippon and Formula V6 Asia (specifically in Asia), Formula Renault 3.5 (also known as the World Series by Renault, succession series of World Series by Nissan), Formula Three, Formula Palmer Audi and Formula Atlantic. In 2009, the FIA Formula Two Championship brought about the revival of the F2 series. Domestic, or country-specific series include Formula Three, Formula Renault, Formula Ford with the leading introductory series being Formula BMW.

Single seater racing is not limited merely to professional teams and drivers. There is a large amateur 'club racing' scene catering for those who want to race single seaters against similar people all over the world. In the UK the major club series are the Monoposto Racing Club, BRSCC F3 (Formerly ClubF3, formerly ARP F3), Formula Vee and Club Formula Ford. Each series caters for a section of the 'market', with some primarily providing low cost racing whilst others aim for an authentic experience using the same regulations as the professional series (BRSCC F3).

There are other categories of single-seater racing, including kart racing, which employs a small, low-cost machine on small tracks. Many of the current top drivers began their careers in karts. Formula Ford once represented a popular first open-wheel category for up-and-coming drivers stepping up from karts and now the Formula BMW series is the preferred option as it has introduced an aero package and slicks, allowing the junior drivers to gain experience in a race car with dynamics closer F1. The Star Mazda Series is another entry level series.

Students at colleges and universities can also take part in single seater racing through the Formula SAE competition, which involves designing and building a single seater car in a multidisciplinary team, and racing it at the competition. This also develops other soft skills such as teamwork whilst promoting motorsport and engineering.

In 2006, producer Todd Baker was responsible for creating the world's first all-female Formula racing team. The group was an assemblage of drivers from different racing disciplines, and formed for an MTV reality pilot which was shot at Mazda Raceway Laguna Seca.

In December, 2005 the FIA gave approval to Superleague Formula racing which debuted in 2008 whereby the racing teams are owned and run by prominent sports clubs such as AC Milan and FC Porto.

Corporate restructuring

After gaining market share in the late 1990s and making enormous profits General Motors stock soared to over $80 a share. However, in 2000, twelve successive interest rate hikes by the Federal Reserve led to a severe stock market decline following the September 11, 2001 attacks, caused a pension and benefit funds crisis at General Motors and many other American companies. General Motors' rising retiree health care costs and Other Post Employment Benefit (OPEB) fund deficit prompted the company to enact a broad restructuring plan. Although GM had already taken action to fully fund its pension plan, its OPEB fund became an issue for its corporate bond ratings. GM had expressed its disagreement with the bond ratings; moreover, GM's benefit funds were performing at higher than expected rates of return. Then, following a $10.6 billion loss in 2005, GM acted quickly to implement its restructuring plan. For the first quarter of 2006 GM earned $400 million, signaling a turnaround had already begun even though many aspects of the restructuring plan had not yet taken effect. Although retiree health care costs remain a significant issue, General Motors' investment strategy has generated a $17.1 billion surplus in 2007 in its $101 billion U.S. pension fund portfolio, a $35 billion reversal from its $17.8 billion of underfunding.

In February 2005, GM successfully bought itself out of a put option with Fiat for $2 billion USD (€1.55 billion). In 2000, GM had sold a 6% stake to Fiat in return for a 20% share in the Italian automaker. As part of the deal, GM granted Fiat a put option which, if exercised between January 2004 and July 2009, could have forced GM to buy Fiat. GM had agreed to the put option at the time, perhaps to keep it from being acquired by another automaker such as Daimler AG competing with GM's Opel and Vauxhall marques. The relationship suffered, and Fiat had failed to improve. In 2003, Fiat recapitalized, reducing GM's stake to 10%.

In February 2006, GM slashed its annual dividend from 2.00 to $1.00 per share. The reduction saved $565 million a year.

In March 2006, GM divested 92.36 million shares (reducing their stake from 20% to 3%) of Japanese manufacturer Suzuki, in order to raise $2.3 billion. GM originally invested in Suzuki in the early 1980s.

On March 23, 2006, a private equity consortium including Kohlberg Kravis Roberts, Goldman Sachs Capital, and Five Mile Capital purchased $8.8 billion, or 78% of GMAC's commercial mortgage arm. The new entity, in which GMAC will own a 21% stake, will be known as Capmark Financial Group.

On April 3, 2006, GM announced that it would sell 51% of GMAC as a whole to a consortium led by Cerberus Capital Management, raising $14 billion over three years. Investors also include Citigroup's private equity arm and Aozora Bank of Japan. The group will pay GM $7.4 billion in cash at closing. GM will retain approximately $20 billion in automobile financing worth an estimated $4 billion over three years.

GM sold its remaining 8% stake in Isuzu (which had peaked at 49% just a few years earlier) on April 11, 2006, to raise an additional $300 million. 12,600 workers from Delphi, a key supplier to GM, agreed to buyouts and an early retirement plan offered by GM in order to avoid a strike, after a judge agreed to cancel Delphi's union contracts. 5,000 Delphi workers were allowed to flow to GM. On June 28, 2007, GM agreed to sell its Allison Transmission division to private-equity firms Carlyle Group and Onex for $5.1 billion. The deal will increase GM's liquidity and echoes previous moves to shift its focus towards its core automotive business. The two firms will control seven factories around Indianapolis but GM will retain management of a factory in Baltimore. Former Allison Transmission president Lawrence E. Dewey will be the new CEO of the standalone company.

On February 12, 2008 GM announced its loss of $39 billion, the biggest loss of any U.S. automaker. GM has offered buyouts to all its UAW members.

In March 24, 2008, GM reported a cash position of $24 billion, or $6 billion less than what was on hand September 31, 2007, which is a loss of $1 billion a month. A further quarterly loss of $15.5 billion, the third-biggest in the company's history, was announced on August 1, 2008.

On November 17, 2008, GM announced it would sell its stake in Suzuki Motor Corp. (3.02%) for 22.37 billion yen ($230 million) in order to raise much needed cash to get through the 2008 US economic crisis.

Flexible-fuel vehicles in Brazilian market

GM's largest overseas subsidiary is General Motors do Brasil, which started producing flexible-fuel vehicles since its inception in the Brazilian market in 2003. Like other Brazilian flex-fuel vehicles, GM's flex fuel cars and light-duty trucks are optimized to run on any mix of E20-E25 gasoline and up to 100% hydrous ethanol fuel (E100). GM launched its first flex fuel in June 2003, the Chevrolet Corsa 1.8 FlexPower, just two months after the first flex car was launched by another Brazilian carmaker

GM do Brasil also introduced the MultiPower engine in August 2004 which was capable of using natural gas (CNG), ethanol and gasoline (E20-E25 blend) as fuel, and it was used in the multifuel Chevrolet Astra 2.0 model 2005, aimed at the local taxi cab market. The Brazilian GM Powertrain unit also developed the EconoFlex technology, used for the first time in the Chevrolet Prisma 1.4, which allows the flex fuel engine to maximize fuel economy and power.

Due to the success and rapid consumer acceptance of the flex versions, GM sold 192,613 flex vehicles and 135,636 gasoline-powered automobiles in 2005, jumping to 501,681 flex-fuel vehicles while only 949 cars and 6,834 light trucks powered by gasoline were sold in 2007, and reaching new car sales of 535.454 flex fuels in 2008, representing 97 percent of all cars and light duty trucks sold in that year.

Flexible-fuel vehicles in North American market

GM produces several flexible-fuel vehicles that can operate on E85 ethanol fuel or gasoline, or any blend of both. Since 2006 GM started featuring a bright yellow gas cap to remind drivers of the E85 capabilities, and also using badging with the text "Flexfuel/E85 Ethanol" to clearly mark the car as an E85 FFV.

GM is the North American leader in E85 flex fuel vehicles, with over 3 million FlexFuel vehicles on the road in the U.S. As of 2009, GM offers 18 ethanol-enabled FlexFuel cars and trucks in the US, and produce more than one million new FlexFuel vehicles. GM's goal is to have half of their annual vehicle production be E85 or biodiesel capable by 2012.

Despite the significant amount of flex fuel vehicles sold in the US and Canada, the percentage of users actually using ethanol has been very low as many owners are not aware they owned an E85 flex or not enough E85 fueling stations are available nearby, except for the Corn Belt states, where there is a great concentration of E85 stations, as most corn ethanol is produced there. A 2005 survey found that 68% of American flex-fuel car owners were not aware they owned an E85 flex. Several critics have argued that GM and the other American automakers have been producing E85 flex models motivated by a loophole in the CAFE (Corporate Average Fuel Economy) requirements, that allows for a fuel economy credit for every flex-fuel vehicle sold, whether or not in practice these vehicles are fueled with E85. This loophole might have allowed the car industry to meet the CAFE targets in fuel economy just by spending between USD 100 to USD 200 that it cost to turn a conventional vehicle into a flex-fuel, without investing in new technology to improve fuel economy, and saving them the potential fines for not achieving that standard in a given model year.

All-electric vehicles

The process of obtaining the EV1, GM's first electric vehicle, was difficult. The vehicle could not be purchased outright. Instead, General Motors offered a closed-end lease for three years, with no renewal or residual purchase options. The EV1 was only available from specialist Saturn dealerships, and only in California and Arizona. Before reviewing leasing options, a potential lessee would be taken through a 'pre-qualification' process in order to learn how the EV1 was different from other vehicles. Next came a waiting list with no scheduled delivery date.

In June 2006 the documentary Who Killed the Electric Car? was released, criticizing among others, GM for being responsible for the demise of the EV1. Several weeks before the debut of the movie, the Smithsonian Institution announced that its EV1 display was being permanently removed and the EV1 car put into storage. GM is a major financial contributor to the museum, but both parties denied that this fact contributed to the removal of the display.

General Motors has responded to complaints about the scrapping of the EV1 program and they dispute the existence of any conspiracy surrounding its demise. An entry was posted on the GM blog FastLane in 2006 in which GM defended its decision by saying that it was unable to guarantee the vehicles could continue to be maintained in a safe operating state.

GM alleges that during the four years available to the public, only 800 EV1's were released. Over $1 billion was spent on the EV1 program, with a great portion used for consumer incentives and marketing. With a waiting list of 5,000 applicants, only 50 individuals actually were willing to accept a lease on the EV1. Suppliers ceased production of replacement parts due to the low demand for the EV1. This made repairs and continued safety of the vehicles difficult. The EV1 was designed as a developmental vehicle and was never intended for serial production.

GM responded to allegations made in the film through a blog post by Dave Barthmuss, who said "Sadly, despite the substantial investment of money and the enthusiastic fervor of a relatively small number of EV1 drivers — including the filmmaker — the EV1 proved far from a viable commercial success. Barthmuss notes investments in electric vehicle technology since the EV1: Two-Mode Hybrid, plug-in hybrid, and fuel cell vehicle programs. The filmmakers suggested that GM did not immediately channel its technological progress with the EV1 into these projects, and instead let the technology languish while focusing on more immediately profitable enterprises such as SUVs. Contrary to this suggestion, as Barthmuss points out, GM is bullish on hydrogen:

According to GM, not all of the EV1's were destroyed. Many were donated to research institutions and facilities, along with museums. Some are still owned by General Motors themselves, and are kept at their technical design center in Warren, Michigan, and can occasionally be seen on the road within a closed area of the tech center.

On September 16, 2008, as part of its 100th anniversary celebration, GM unveiled the "production" version of the Chevrolet Volt at the GM headquarters in Detroit.

General Motors has announced that it is building a prototype two-seat electric vehicle with Segway. An early prototype of the Personal Urban Mobility and Accessibility vehicle—dubbed Project P.U.M.A. -- will be shown off in New York a day ahead of the press previews for the 2009 New York International Auto Show.

Alternative fuels and electric vehicles

General Motors is both active in environmental causes and, as a major industrial force, implicated in ecologically harmful activity. The company has long worked on alternative-technology vehicles, and has recently led the industry with ethanol burning flexible-fuel vehicles that can run on either E85 (ethanol) or gasoline. The company was the first to use turbochargers and was an early proponent of V6 engines in the 1960s, but quickly lost interest as the muscle car race took hold. They demonstrated gas turbine vehicles powered by kerosene, an area of interest throughout the industry, but abandoned the alternative engine configuration in view of the 1973 oil crisis. In the 1970s and 1980s, GM pushed the benefits of diesel engines and cylinder deactivation technologies with disastrous results due to poor durability in the Oldsmobile diesels and drivability issues in the Cadillac V8-6-4 variable cylinder engines. In 1987 GM, in conjunction with Aerovironment built the Sunraycer which won the inaugural World Solar Challenge and was a showcase of advanced technology. Much of the technology from Sunraycer found its way into the Impact prototype electric vehicle (also built by Aerovironment) and was the predecessor to the EV1.

GM supported a compromise version of the CAFE standard increase from 27 mpg to 35 mpg, the first such increase in over 20 years.

Auto racing

General Motors has an extensive history in numerous forms of racing. Vehicles of most, if not all, of GM's brands have been represented in competition, with perhaps Chevrolet being the most prominent. In particular, the Chevrolet Corvette has long been popular and successful in international road racing. GM also is a supplier of racing components, such as engines, transmissions, and electronics equipments.

GM's Oldsmobile Aurora engine platform was successful in the Indy Racing League (IRL) throughout the 1990s, winning many races in the small V-8 class. GM has also done much work in the development of electronics for GM auto racing. An unmodified Aurora V-8 in the Aerotech, captured 47 world records, including the record for speed endurance in the Motorsports Hall of Fame of America. Recently, the Cadillac V-Series has entered motorsports racing. GM has also used many cars in the American racing series NASCAR. Currently the Chevrolet Impala is the only entry in the series but in the past the Pontiac Grand Prix, Buick Regal, Oldsmobile Cutlass, Chevrolet Lumina, Chevrolet Malibu, and the Chevrolet Monte Carlo were also used.

In touring cars (mainly in Europe) Vauxhall is a key player and former champion in the British Touring Car Championship (BTCC) series and competes with a Vauxhall Vectra in Super 2000 spec, although have announced plans to withdraw at the end of 2009. Opel used to participate in the DTM series and also in the 1980s in the World Rally Championship and other Rally Series with Group B Spec Opel Manta's before this category of Rallying was banned. Chevrolet competes with a Chevrolet Cruze in the FIA World Touring Car Championship (WTCC). Tempus Sport and RML also complete with a privately run Lacetti in the BTCC.

In Australia, there is the prestigious V8 Supercar Championship which is battled out by the two main rivals of Holden & Ford. The current Holden Racing Team cars are based on the Holden Commodore and run a 5.0-litre V8-cylinder engine producing 635+ BHP (approx 467 kW Power). These cars have a top speed of 294 km/h (182 mph) and run 0-100 km/h in 3.8 seconds. The Holden Racing Team is Australia's most successful team in Australian Touring Car History. In 2007 the Drivers championship was won by the very closely linked HSV Dealer Team.

Timeline of 2008/2009 decline

• October 10, 2008: GM considered exchanging its remaining 49% stake in GMAC to Cerberus Capital Management for Chrysler LLC, potentially merging two of Detroit's "Big Three" automakers. Acquisition talks involving Chrysler were cancelled, however, before November 7, 2008, as part of a broader response to the increasing urgency of GM's own cash flow problems. That was a result of Chrysler's senior bank debt currently trading at less than 50 cents on the dollar and because Chrysler's other owner – Daimler, formerly DaimlerChrysler – recently revalued its 19.9% Chrysler stake down to zero, which may or may not reflect its value in a potential sale.

• December 12, 2008: General Motors stated that it was nearly out of cash, and may not survive past 2009. The U.S. Senate voted and strongly opposed any source of government assistance through a bailout bridge loan (originally worth $14 billion in emergency aid) which was aimed toward helping the struggling Big Three automakers financially, despite strong support from President George W. Bush and President-elect Barack Obama, along with some mild support from the Democratic and Republican political parties.

Prior to the U.S. Senate's announcement, General Motors announced that it had hired several lawyers to discuss the possibility of filing for bankruptcy, with Chapter 11 bankruptcy being one of the options discussed. GM stated that "all options are on the table" for the company. Chrysler LLC, which is owned by Cerberus Capital Management, in a similar financial situation, warned that it, too, was nearly out of cash and might not survive much longer.

• December 18, 2008: President Bush announced that an "orderly" bankruptcy was one option being considered for both General Motors and Cerberus-owned Chrysler LLC. Sources said that setting up this type of "orderly" bankruptcy would be complicated because it would not only involve talks with the automakers, but also the unions and other stakeholders would have to be involved.

• December 19, 2008: President Bush approved a bailout plan and gave General Motors and Chrysler $13.4 billion in financing from TARP (Troubled Assets Relief Program) funds, as well as $4 billion to be "withdrawn later."

• As of February 14, 2009: General Motors was considering filing for Chapter 11 bankruptcy under a plan that would assemble all of their viable assets, including some U.S. brands and international operations, into a new company. Less than a week later, its Saab subsidiary filed for bankruptcy protection in Sweden.

• March 5, 2009: GM's independent public accounting firm (Deloitte & Touche) issued a qualified opinion as part of GM's 2008 annual report that stated "[these conditions] raise substantial doubt about its ability to continue as a going concern." A qualified going concern audit letter like this is only issued by the auditors when the company is in extreme financial distress and it is likely that it may file for bankruptcy protection.

• March 12, 2009: GM's CFO Ray Young said that it would not need the requested $2B in March noting that the cost-cutting measures are starting to take hold.

• March 29, 2009: GM's Chairman and CEO, Rick Wagoner, agreed to immediately resign his position as part of an Obama administration automotive restructuring plan. Wagoner was replaced by Fritz Henderson. In announcing that plan, on March 30, 2009, President Obama stated that both GM and Chrysler may need to use "our bankruptcy code as a mechanism to help them restructure quickly and emerge stronger. He also announced that the warranties on cars made by these companies would be guaranteed by the U.S. Government.

• March 31, 2009: President Barack Obama announced that he would give GM 60 additional days to try and restructure their company and prove their viability. If they succeeded, Washington would provide General Motors with additional bridge loans. However, if GM could meet the requirements set by the White House, a prepackaged bankruptcy is probable. President Obama reiterated that GM will be part of the future even if bankruptcy is necessary.

• April 22, 2009: GM stated that it will not be able to make their June 1, 2009 debt payment.

• April 24, 2009: GM announced that they will be scrapping the Pontiac brand in an effort to invest more money into their major brands (Buick, Cadillac, Chevrolet, and GMC).

• May 4, 2009: German Economy Minister Karl-Theodor zu Guttenberg said Fiat (among others) might be interested in the GM European unit.

• June 1, 2009: GM filed for Chapter 11 Bankruptcy, the fourth largest filing in the United States history after Lehman Brothers, Washington Mutual, and Worldcom.

GM in the 21st century

In the late 1990s, the U.S. economy was on the rise and GM and Ford gained market share producing enormous profits primarily from the sale of light trucks and sport-utility vehicles. From 2000 to 2001, the Federal Reserve in a move to quell the stock market, made twelve successive interest rate increases. Following the September 11, 2001 attacks, a severe stock market decline caused a pension and benefit fund underfunding crisis. GM began its Keep America Rolling campaign, which boosted sales, and other auto makers were forced to follow suit. The U.S. automakers saw sales increase to leverage costs as gross margins deteriorated. Although retiree health care costs remain a significant issue, General Motors' investment strategy has generated a $17.1 billion surplus in 2007 in its $101 billion U.S. pension fund portfolio, a $35 billion reversal from its $17.8 billion of underfunding.

In 2004, GM redirected resources from the development of new sedans to an accelerated refurbishment of their light trucks and SUVs for introduction as 2007 models in early 2006. Shortly after this decision, fuel prices increased by over 50% and this in turn affected both the trade-in value of used vehicles and the perceived desirability of new offerings in these market segments. The current marketing plan is to tout these revised vehicles extensively as offering the best fuel economy in their class (of vehicle). GM claims its hybrid trucks will have gas-mileage improvements of 25%.

In the middle of 2005, GM announced that its corporate chrome emblem "Mark of Excellence" will begin appearing on all recently introduced and all-new 2006 model vehicles produced and sold in North America. The move is seen as an attempt by GM to link its name and vehicle brands more closely.

In 2005, GM promoted sales through an employee discount to all buyers. Marketed as the lowest possible price, GM cleared an inventory buildup of 2005 models to make way for its 2006 lineup. While the promotion was a temporary shot in the arm for sales, it did not help the company's bottom line. GM has since changed its marketing strategy to a no haggle sticker policy in which all vehicle prices are lowered, but incentives are reduced, if not eliminated.

The electric car

In 1990, GM debuted the revolutionary "Impact" concept car at the Los Angeles Auto Show. It was the first car with zero-emissions marketed in the US in over three decades. The Impact was eventually produced as the EV1 for the 1996 model year. It was available through dealers located in only a few regions (e.g., California, Arizona, Georgia). Vehicles were leased, rather than sold, to individuals. In 2003 GM decided to cease production of the vehicles. All EV1's were either destroyed or donated to museums or universities.^{[citation needed]}

Compacts arrive

The decade of the 1960s saw the creation of compact and intermediate classes. The Chevrolet Corvair was a flat 6-cylinder (air cooled) answer to the Volkswagen Beetle, the Chevy II was created to match Ford's conventional Falcon, after sales of the Corvair failed to match its Ford rival, and the Chevrolet Camaro/Pontiac Firebird was GMs counter measure to the Ford Mustang. Among intermediates, the Oldsmobile Cutlass nameplate became so popular during the 1970s that Oldsmobile applied the Cutlass name to most of its products in the 1980s. By the mid 1960s, most of GM's vehicles were built on a few common platforms and in the 1970s GM began to use nearly identical body panel stampings, differing only in internal and external trim items.^{[citation needed]}

The 1971 Chevrolet Vega was GM's launch into the new subcompact class to compete against the import's increasing market share. Problems associated with its innovative aluminum engine led to the model's discontinuation after seven model years in 1977. During the late 1970s, GM would initiate a wave of downsizing starting with the Chevrolet Caprice which was reborn into what was the size of the Chevrolet Chevelle, the Malibu would be the size of the Nova, and the Nova was replaced by the troubled front-wheel drive Chevrolet Citation. In 1976 Chevrolet came out with the rear-wheel drive sub compact Chevette. It was a well built car but couldn't compete with the Japanese imports in overall quality and standard features.^{[citation needed]}

Company overview

General Motors currently employs approximately 266,000 people around the world. General Motor's global headquarters is the Renaissance Center located in Detroit, Michigan, United States. In 2007, 9.35 million GM cars and trucks were produced in 19 different countries. GM is the majority shareholder in GM Daewoo Auto & Technology Co. of South Korea and has had many collaborations with the world's various automakers. This includes product, powertrain and purchasing collaborations with Suzuki Motor Corp. and Isuzu Motors Ltd. of Japan, advanced technology collaborations with Toyota Corporation and BMW AG of Germany and vehicle manufacturing ventures with several of the world's automakers including Toyota, Suzuki, Shanghai Automotive Industry Corporation. of China, AvtoVAZ of Russia, Renault SA of France, and most recently, UzAvtosanoa of Uzbekistan. GM also had collaborations with Fiat S.p.A (see GM/Fiat Premium platform) and Ford Motor Company. To this day, GM retains various stakes in many different automakers.

According to at least one automotive columnist, as GM seeks aid from European governments in 2009 while acknowledging it has no alternative plan, and admits it is willing to surrender control of its operations in Europe to enable an infusion of cash, the "de facto deglobalization" of GM is in progress.

The domain name gm.com attracted at least 7 million visitors annually by 2008.

General Motors Corporation (GM)

(OTCBB: GMGMQ/Pink Sheets: GMGMQ) is a U.S. automaker based in Detroit, Michigan. It is the world's second-largest after Toyota, ranked by 2008 global unit sales. GM was the global sales leader for 77 consecutive calendar years from 1931 to 2007. It manufactures cars and trucks in 34 countries. GM employs 244,500 people around the world, and sells and services vehicles in some 140 countries. In 2008, 8.35 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Opel, Vauxhall, Holden, Pontiac, Saab, Saturn and Wuling.

In late 2008 GM, along with Chrysler, received loans from the United States, Canada, and Ontario governments to avoid bankruptcy resulting from the late-2000s recession, record oil prices, mismanagement, and fierce competition (see also automotive industry crisis of 2008–2009). On February 20, 2009, GM's Saab division filed for reorganization in a Swedish court after being denied loans from the Swedish government. On April 27, 2009, amid ongoing financial problems and restructuring efforts, GM announced that it would phase out the Pontiac brand by the end of 2010 and focus on four brands in North America: Chevrolet, Cadillac, Buick, and GMC. It also announced that the resolution (sale) of its Hummer, Saab, and Saturn brands would take place by the end of 2009. GM had previously eliminated the Oldsmobile brand earlier in the decade for similar reasons.

As of April 24, 2009 (2009 -04-24)^[update], GM has received US$15.4 billion in loans from the US Treasury Department under the Troubled Assets Relief Program (TARP). GMAC, a financing company held 49% by GM, has received US$5 billion in loans under the same program, while GM has received an additional US$1 billion loan to buy more equity in GMAC. General Motors Canada, 100% owned by GM, has received a combined loan commitment of C$3 billion from the Canadian and Ontario governments.

General Motors filed for a government-assisted Chapter 11 bankruptcy protection on June 1, 2009, with a plan to re-emerge as a smaller and less debt-burdened organization in several months. The chapter 11 petition was filed in the federal court in Manhattan, New York. The filing reported US$82.29 billion in assets and US$172.81 billion in debt. As ranked by total assets, the bankruptcy is the fourth-largest in U.S. history, following Lehman Brothers Holdings Inc., Washington Mutual and WorldCom Inc.

history

Although Nicolas-Joseph Cugnot is often credited with building the first self-propelled mechanical vehicle or automobile in about 1769 by adapting an existing horse-drawn vehicle, this claim is disputed by some[citation needed], who doubt Cugnot's three-wheeler ever ran or was stable. Ferdinand Verbiest, a member of a Jesuit mission in China, built the first steam-powered vehicle around 1672 which was of small scale and designed as a toy for the Chinese Emperor that was unable to carry a driver or a passenger, but quite possibly, was the first working steam-powered vehicle ('auto-mobile'). What is not in doubt is that Richard Trevithick built and demonstrated his Puffing Devil road locomotive in 1801, believed by many to be the first demonstration of a steam-powered road vehicle although it was unable to maintain sufficient steam pressure for long periods, and would have been of little practical use. In Russia, in the 1780s, Ivan Kulibin developed a human-pedalled, three-wheeled carriage with modern features such as a flywheel, brake, gear box, and bearings; however, it was not developed further. François Isaac de Rivaz, a Swiss inventor, designed the first internal combustion engine, in 1806, which was fueled by a mixture of hydrogen and oxygen and used it to develop the world's first vehicle, albeit rudimentary, to be powered by such an engine. The design was not very successful, as was the case with others such as Samuel Brown, Samuel Morey, and Etienne Lenoir with his hippomobile, who each produced vehicles (usually adapted carriages or carts) powered by clumsy internal combustion engines. In November 1881 French inventor Gustave Trouvé demonstrated a working three-wheeled automobile that was powered by electricity. This was at the International Exhibition of Electricity in Paris. Although several other German engineers (including Gottlieb Daimler, Wilhelm Maybach, and Siegfried Marcus) were working on the problem at about the same time, Karl Benz generally is acknowledged as the inventor of the modern automobile. An automobile powered by his own four-stroke cycle gasoline engine was built in Mannheim, Germany by Karl Benz in 1885 and granted a patent in January of the following year under the auspices of his major company, Benz & Cie., which was founded in 1883. It was an integral design, without the adaptation of other existing components and including several new technological elements to create a new concept. This is what made it worthy of a patent. He began to sell his production vehicles in 1888.
In 1879 Benz was granted a patent for his first engine, which had been designed in 1878. Many of his other inventions made the use of the internal combustion engine feasible for powering a vehicle. His first Motorwagen was built in 1885 and he was awarded the patent for its invention as of his application on January 29, 1886. Benz began promotion of the vehicle on July 3, 1886 and approximately 25 Benz vehicles were sold between 1888 and 1893, when his first four-wheeler was introduced along with a model intended for affordability. They also were powered with four-stroke engines of his own design. Emile Roger of France, already producing Benz engines under license, now added the Benz automobile to his line of products. Because France was more open to the early automobiles, initially more were built and sold in France through Roger than Benz sold in Germany. In 1896, Benz designed and patented the first internal-combustion flat engine, called a boxermotor in German. During the last years of the nineteenth century, Benz was the largest automobile company in the world with 572 units produced in 1899 and because of its size, Benz & Cie., became a joint-stock company. Daimler and Maybach founded Daimler Motoren Gesellschaft (Daimler Motor Company, DMG) in Cannstatt in 1890 and under the brand name, Daimler, sold their first automobile in 1892, which was a horse-drawn stagecoach built by another manufacturer, that they retrofitted with an engine of their design. By 1895 about 30 vehicles had been built by Daimler and Maybach, either at the Daimler works or in the Hotel Hermann, where they set up shop after falling out with their backers. Benz and the Maybach and Daimler team seem to have been unaware of each other's early work. They never worked together because by the time of the merger of the two companies, Daimler and Maybach were no longer part of DMG. Daimler died in 1900 and later that year, Maybach designed an engine named Daimler-Mercedes, that was placed in a specially-ordered model built to specifications set by Emil Jellinek. This was a production of a small number of vehicles for Jellinek to race and market in his country. Two years later, in 1902, a new model DMG automobile was produced and the model was named Mercedes after the Maybach engine which generated 35 hp. Maybach quit DMG shortly thereafter and opened a business of his own. Rights to the Daimler brand name were sold to other manufacturers. Karl Benz proposed co-operation between DMG and Benz & Cie. when economic conditions began to deteriorate in Germany following the First World War, but the directors of DMG refused to consider it initially. Negotiations between the two companies resumed several years later when these conditions worsened and, in 1924 they signed an Agreement of Mutual Interest, valid until the year 2000. Both enterprises standardized design, production, purchasing, and sales and they advertised or marketed their automobile models jointly—although keeping their respective brands. On June 28, 1926, Benz & Cie. and DMG finally merged as the Daimler-Benz company, baptizing all of its automobiles Mercedes Benz as a brand honoring the most important model of the DMG automobiles, the Maybach design later referred to as the 1902 Mercedes-35hp, along with the Benz name. Karl Benz remained a member of the board of directors of Daimler-Benz until his death in 1929 and at times, his two sons participated in the management of the company as well. In 1890, Emile Levassor and Armand Peugeot of France began producing vehicles with Daimler engines and so laid the foundation of the automobile industry in France. The first design for an American automobile with a gasoline internal combustion engine was drawn in 1877 by George Selden of Rochester, New York, who applied for a patent for an automobile in 1879, but the patent application expired because the vehicle was never built. After a delay of sixteen years and a series of attachments to his application, on November 5, 1895, Selden was granted a United States patent (U.S. Patent 549,160) for a two-stroke automobile engine, which hindered, more than encouraged, development of automobiles in the United States. His patent was challenged by Henry Ford and others, and overturned in 1911. In Britain there had been several attempts to build steam cars with varying degrees of success with Thomas Rickett even attempting a production run in 1860. Santler from Malvern is recognized by the Veteran Car Club of Great Britain as having made the first petrol-powered car in the country in 1894 followed by Frederick William Lanchester in 1895 but these were both one-offs. The first production vehicles in Great Britain came from the Daimler Motor Company, a company founded by Harry J. Lawson in 1896 after purchasing the right to use the name of the engines. Lawson's company made its first automobiles in 1897 and they bore the name Daimler. In 1892, German engineer Rudolf Diesel was granted a patent for a "New Rational Combustion Engine". In 1897 he built the first Diesel Engine.[9] Steam-, electric-, and gasoline-powered vehicles competed for decades, with gasoline internal combustion engines achieving dominance in the 1910s. Although various pistonless rotary engine designs have attempted to compete with the conventional piston and crankshaft design, only Mazda's version of the Wankel engine has had more than very limited success

Gasoline

Gasoline engines have the advantage over diesel in being lighter and able to work at higher rotational speeds and they are the usual choice for fitting in high-performance sports cars. Continuous development of gasoline engines for over a hundred years has produced improvements in efficiency and reduced pollution. The carburetor was used on nearly all road car engines until the 1980s but it was long realised better control of the fuel/air mixture could be achieved with fuel injection. Indirect fuel injection was first used in aircraft engines from 1909, in racing car engines from the 1930s, and road cars from the late 1950s. Gasoline Direct Injection (GDI) is now starting to appear in production vehicles such as the 2007 (Mark II) BMW Mini. Exhaust gases are also cleaned up by fitting a catalytic converter into the exhaust system. Clean air legislation in many of the car industries most important markets has made both catalysts and fuel injection virtually universal fittings. Most modern gasoline engines also are capable of running with up to 15% ethanol mixed into the gasoline - older vehicles may have seals and hoses that can be harmed by ethanol. With a small amount of redesign, gasoline-powered vehicles can run on ethanol concentrations as high as 85%. 100% ethanol is used in some parts of the world (such as Brazil), but vehicles must be started on pure gasoline and switched over to ethanol once the engine is running. Most gasoline engined cars can also run on LPG with the addition of an LPG tank for fuel storage and carburettor modifications to add an LPG mixer. LPG produces fewer toxic emissions and is a popular fuel for fork-lift trucks that have to operate inside buildings.

Production

he large-scale, production-line manufacturing of affordable automobiles was debuted by Ransom Olds at his Oldsmobile factory in 1902. This concept was greatly expanded by Henry Ford, beginning in 1914.

As a result, Ford's cars came off the line in fifteen minute intervals, much faster than previous methods, increasing productivity eight fold (requiring 12.5 man-hours before, 1 hour 33 minutes after), while using less manpower. It was so successful, paint became a bottleneck. Only Japan black would dry fast enough, forcing the company to drop the variety of colors available before 1914, until fast-drying Duco lacquer was developed in 1926. This is the source of Ford's apocryphal remark, "any color as long as it's black".^[13] In 1914, an assembly line worker could buy a Model T with four months' pay.

Portrait of Henry Ford (ca. 1919)

Ford's complex safety procedures—especially assigning each worker to a specific location instead of allowing them to roam about—dramatically reduced the rate of injury. The combination of high wages and high efficiency is called "Fordism," and was copied by most major industries. The efficiency gains from the assembly line also coincided with the economic rise of the United States. The assembly line forced workers to work at a certain pace with very repetitive motions which led to more output per worker while other countries were using less productive methods.

In the automotive industry, its success was dominating, and quickly spread worldwide seeing the founding of Ford France and Ford Britain in 1911, Ford Denmark 1923, Ford Germany 1925; in 1921, Citroen was the first native European manufacturer to adopt the production method. Soon, companies had to have assembly lines, or risk going broke; by 1930, 250 companies which did not, had disappeared.

Development of automotive technology was rapid, due in part to the hundreds of small manufacturers competing to gain the world's attention. Key developments included electric ignition and the electric self-starter (both by Charles Kettering, for the Cadillac Motor Company in 1910-1911), independent suspension, and four-wheel brakes.

Ford Model T, 1927, regarded as the first affordable American automobile

Since the 1920s, nearly all cars have been mass-produced to meet market needs, so marketing plans often have heavily influenced automobile design. It was Alfred P. Sloan who established the idea of different makes of cars produced by one company, so buyers could "move up" as their fortunes improved.

Reflecting the rapid pace of change, makes shared parts with one another so larger production volume resulted in lower costs for each price range. For example, in the 1930s, LaSalles, sold by Cadillac, used cheaper mechanical parts made by Oldsmobile; in the 1950s, Chevrolet shared hood, doors, roof, and windows with Pontiac; by the 1990s, corporate drivetrains and shared platforms (with interchangeable brakes, suspension, and other parts) were common. Even so, only major makers could afford high costs, and even companies with decades of production, such as Apperson, Cole, Dorris, Haynes, or Premier, could not manage: of some two hundred American car makers in existence in 1920, only 43 survived in 1930, and with the Great Depression, by 1940, only 17 of those were left.

In Europe much the same would happen. Morris set up its production line at Cowley in 1924, and soon outsold Ford, while beginning in 1923 to follow Ford's practise of vertical integration, buying Hotchkiss (engines), Wrigley (gearboxes), and Osberton (radiators), for instance, as well as competitors, such as Wolseley: in 1925, Morris had 41% of total British car production. Most British small-car assemblers, from Abbey to Xtra had gone under. Citroen did the same in France, coming to cars in 1919; between them and other cheap cars in reply such as Renault's 10CV and Peugeot's 5CV, they produced 550,000 cars in 1925, and Mors, Hurtu, and others could not compete. Germany's first mass-manufactured car, the Opel 4PS Laubfrosch (Tree Frog), came off the line at Russelsheim in 1924, soon making Opel the top car builder in Germany, with 37.5% of the market.

Sports car racing

The Audi R8 was one of the most successful sports prototypes ever made, seen here at Road Atlanta.

In sports car racing, production versions of sports cars and/or grand tourers, and sports prototype cars compete within their respective classes on closed circuits. The races are often conducted over long distances, at least 1000 km, and cars are driven by teams of two or three drivers (and sometimes more in the US), switching every few hours. Due to the performance difference between production-based sports cars and purpose-built sports prototypes, one race usually involves several racing classes. In the US the American Le Mans Series (ALMS) was organized in 1999, featuring GT1, GT2, and two prototype classes, LMP1 (Le Mans Prototype 1) and LMP2. Manufacturers such as Audi and Acura/Honda field or support entries in the Prototype class. Another series based on Le Mans began in 2004, the Le Mans Endurance Series, which included four 1000 km races at tracks in Europe. A competing body, Grand-Am, which began in 2000, sanctions its own endurance series the Rolex Sports Car Series.

Famous sports car races include the 24 Hours of Le Mans, the 24 Hours of Daytona, 24 Hours of Spa-Franchorchamps, the 12 Hours of Sebring, and the 1,000-mile (1,600 km) Petit Le Mans at Road Atlanta.

Drag racing

In drag racing, the objective is to complete a given straight-line distance, from a standing start, ahead of a vehicle in a parallel lane. This distance is traditionally ¼ mile (400 m), though 1/8 mile (200 m) has become popular since the 1990s. The vehicles may or may not be given the signal to start at the same time, depending on the class of racing. Vehicles range from the everyday car to the purpose-built dragster. Speeds and elapsed time differ from class to class. Average street cars cover the ¼ mile in from 10 to 15 seconds whereas a top fuel dragster takes 4.5 seconds or less, reaching speeds of up to 530 km/h (330 mph). Drag racing was organized as a sport by Wally Parks in the early 1950s through the NHRA (National Hot Rod Association), the largest motorsports sanctioning body in the world. The NHRA was formed to discourage street racing.

Launching, a top fuel dragster will accelerate at 4.5 g (44 m/s²), and when braking parachutes are deployed the deceleration is 4 g (39 m/s²), more than the Space Shuttle experiences. A top fuel car can be heard over 8 miles (13 km) away and generates a reading of 1.5 to 2 on the Richter scale.

Drag racing is two cars head-to-head, the winner proceeding to the next round. Professional classes are all first to the finish line wins. Sportsman racing is handicapped (slower car getting a head start) using an index (a lowest e.t. allowed), and cars running under (quicker than) their index "break out" and lose. The slowest cars, bracket racers, are also handicapped, but rather than an index, they use a "dial-in". Bracket racing has been viewed as the main cause of the loss of public interest in drag racing. People don't understand why the slower car wins or why somebody needs to hit the brakes to avoid going too fast. Many local tracks have also complained that bracket racers will also go out of their way to spend as little as possible while at the track by bringing their own food, beverages, fuel and supplies thus, making it more difficult for tracks to make money on these events. This causes gate prices to rise and tracks losing interest in having such events.