The USA was not the only market where there was positive news from Ford and General Motors.  Both car companies said they had record years in China.  GM sold over 2.5 million cars in China, while Ford weighed in with sales of over 500,000.  GM gained 8% year over year while Ford went up 7%.

GM attributed a good portion of their success to having a varied product line.  They said they released 12 new models in China in 2011.  They also invested heavily in manufacturing capacity, to capitalize on increased demand.

Ford also announced they’re planning on investing in research in Silicon Valley.  They’re opening their first ever research lab in the area in order to find ways the valley’s famed technology can help their business grow in 2012 and beyond.

Ford, which does not wish to be done by General Motors, said they will introduce 15 new models to China this year.  Ford also said they’re adding to capacity, expecting to add a total of four new production plans in 2012.

General Motors Co. (NYSE:GM, PINK:MTLQQ) said it will pay its European division employees about $1.4 billion in the event it doesn’t follow-through on its commitments to invest billions in new cars and trucks there through 2014, according to a regulatory filling, reported the Wall Street Journal.

The company said they expect to have a final deal with European labor unions by the end of September, 2010.

The company is clearing the path for its inevitable return to the public markets.

General Motors Co. is likely to file paperwork next week that will describe its plan to sell shares to the public, said a person familiar with the matter on Friday.

Currently, General Motors does not have a stock symbol because shares of the company are not publicly traded following the company’s bankruptcy.

When the company offers its Initial Public Offering later this year, it will then get a stock symbol, based on what exchange the company lists its shares on.

Before General Motors went into bankruptcy it pushed many of its bad assets into a new entity called Motors Liquidation Company.

That company trades on the Pink Sheets with the stock symbok of MTLQQ. Please be very aware, that stock symbol has nothing to do with the new General Motors.

The question of how to keep GM alive is becoming increasingly complex as expense rise and losses mount. So far Uncle Sam has already lent the company $13.4 billion. Last week GM said they’d need at least $30 billion more to keep operational. Even with this giant influx of money, there’s no guarantee GM will stay afloat.

Rick Wagoner, a master of the obvious, said that 2008 “was an extremely difficult year for the U.S. and global auto markets, especially the second half.”

Not only that, Wagoner said he doesn’t expect things to get much better the rest of the way this year.

“These conditions created a very challenging environment for GM and other automakers, and led us to take further aggressive and difficult measures to restructure our business,” he said. “We expect these challenging conditions will continue through 2009.”

2008 ended with an 11 percent decline in GM sales. The company sold a total of 8.35 million cars worldwide.

GM stated that they might be downgraded by auditors. They expect to receive a “going concern” notice from auditors who are expected to decide whether the company can move forward, with or without government help.

Almost all metrics by which GM could be judged are down. Revenue for the latest quarter dove from $46.8 billion to $30.8 billion. The net loss went from $722 million to $9.6 billion.

“If we don’t get our second installment of the funding we’ll run out of cash, it’s that’s simple,” said Fritz Henderson. “We’ve been finalizing what we need to do. We anticipate receiving it. But it’s critical that we receive it.”

The last payment for GM is scheduled to be paid out in mid-February, but those funds are contingent upon the government receiving a detailed business proposal from the company that explains how they plan on turning things around.

If the money doesn’t arrive soon, the whole company will go under. I wonder how many tears (other than from workers and suppliers) the world would really shed in this case.

GMAC has long been the financing arm of General Motors and government regulators feared that losing GMAC would further threaten the health of General Motors. The government also put a massive cash infusion into General Motors in the past seven days.

GMAC is strictly obligated to make payments on the interest. If they fail to do so for six consecutive quarters, the Federal Government will replace two of their board members with two G-men.

GMAC also loses some exclusive financing deals they’ve had with General Motors. So far there’s no guess on how that would hurt future profitability. Right now profits are off in the future, as both GM and GMAC fight for survival. Car sales worldwide have slowed, and in particular they’ve stalled out in the mature markets of the USA, Japan, and Europe.

I think it’s safe to say we’ll many incentives being offered to anyone who can get approved for credit. With the Federal Funds rate as low as it is, the government is doing everything to jump start the beleaguered consumer credit market.

Whether it will be enough remains to be seen.

The U.S. Treasury is expected to transfer $9.3 billion to General Motors and $4 billion to Chrysler, but Mark Zandi, chief economist with Moody’s Economy.com, predicts that over the next few years taxpayers will pay a total of $75-$125 billion to keep the Big Three out of bankruptcy.

Even though the companies are receiving money, it doesn’t mean they’ve lived up to the requirements of the bailout. In fact, the UAW isn’t going along with the re-structuring that’s required as part of the deal.

The current amount of money paid to GM today ($9.3 billion) is only thought to be enough to keep them alive through February. Without a major increase in auto sales, which seems unlikely in the coming few months, most analysts are already expecting they’ll keep coming back for more government cheese. Some say the bailout of the U.S automotive industry will probably cost taxpayers at least $100 billion.

Chrysler LLC said it would extend the traditional two-week winter break at all U.S. factories to at least a month, CNNMoney reported. Ford Motor Co. said Wednesday it would stop producing cars at 10 plants for an extra week in January.

GM announced last week it would temporarily close 20 factories and lower production by 250,000 vehicles in the first quarter of 2009.

The bailout of the auto industry is still being debated and is dominating the latest business news. The executives of the Big Three all claim they can’t make it through the month without government aid.

As they all cut back on production and shutter their factories, you can’t help but wonder if they’ll ever make it back to their former glory.

Adding to the sell pressure today for GM is a downgrade by Goldman Sachs (NYSE:GS). Remarkably enough, GM’s new market cap is less than the company’s market cap was in the 1950s, before current CEO Rick Wagonner was born. Not many CEOs can say that, especially employed ones.

Worse yet, GM stock this year is down an abysmal 54%. Few companies around are experiencing the type of disintegration that General Motors is in 2008.