Ever wonder how General Motors is holding onto its top talent? 

After a traumatic bankruptcy and series of federal bailouts, the company still owes billions of dollars to the U.S. and Canadian governments. It lost $1.2 billion in its latest quarter, and only sees a slight uptick in auto sales next year.    

The days of banner-year profits and bonuses must seem far off for GM’s executives and finance staff.  GM’s Chairman has already said pay caps imposed on companies by the U.S. government’s pay czar make it tough to hire executives.

While other job opportunities are obviously limited in Detroit, and they may have nowhere better to go in the industry,  the company’s plans for a 2010 IPO has emerged as a key staff retention tool, one of its top executives said on Tuesday.

In comments to the Financial Executives International Current Financial Reporting Issues conference in New York, Nick Cyprus, vice president, controller and chief accounting officer at GM said:

“I have a tool that my peers don’t have. We have an IPO coming up in the next half-a-year to a year or whatever it takes. That’s a great tool, too. Getting the experience of taking General Motors public again is not only a great tool from an experience perspective and resume builder, but it’s also a great experience in that if things work out well there are potential wealth opportunities. In essence, the taxpayers get paid back and people who have delivered get an opportunity to make some money.”

GM  is planning to arrange a revolving line of credit in preparation for an eventual IPO, which would probably be one of the biggest in 2010 if it is able to keep up with its time schedule.

If you were a GM employee, or an investor for that matter, how excited would you be about this IPO?

Announcing a third-quarter operating loss, the government-owned automaker said it would begin paying down its $6.7 billion debt to the U.S. government ahead of schedule. Most financial experts would agree that paying off debt is a good thing.

The government extended almost $50 billion in financing to GM but agreed to convert most of that into a 61 percent equity stake in the automaker. A congressional oversight panel said the government was unlikely to recover all of the financing it provided GM.

Banks that paid off their government bailouts early were able to shrug the pay czar off their backs and return to the time-honored practice of paying their executives whatever they pleased. It’s unclear whether GM will be able to do the same once it pays off the government. After all, taxpayers will still be majority shareholders after all debts are paid. Ken Feinberg may well wind up with a desk at GM’s HR office.

So why pay this money back before it is due? It’s not as if the prepayment is being funded from genuine earnings. In effect, GM is using money borrowed from taxpayers to pay them back. With expectations so low, and markets gradually accepting that the worst may be behind it, is this trip really necessary?

Maybe it’s time to add a new weapon to the old M&A arsenal of poison pills, dawn raids, and white knights — the corporate blog. You could call it the WordPress Hug.

Late on Monday, Cisco’s Ned Hooper used the company’s blog to insist it had offered “a very good price” for Tandberg, after some shareholders of the Norwegian videoconferencing company said the price was too low. (See his full post here.)

The “Driving Conversations” blog of General Motors Europe has also been a source of news on the long-running (and now abandoned) talks to sell Opel, hosting posts from GM’s chief negotiator, John Smith. (See some of his posts on the topic here.)

So could blogging become a major channel of communication on M&A transactions? Big corporations have enthusiastically adopted it for other uses- for example, “Randy’s Journal”, a Boeing blog, has a following in the industry and among aeroplane enthusiasts.

But it is hard to believe this trend would be welcomed by some financial regulators — like the UK’s Takeover Panel, which banned advertising during takeover battles more than 20 years ago.

Mergers and acquisitions activity may be predicted to increase over the next year but in the short-term it may provide another reason for deals to be postponed. Just ask General Motors.

Other deals news in the media on Thursday:

* An investment company controlled by the Shanghai city government will own a majority stake in a planned Disney theme park that won key government approval this week, the People’s Daily reported on Thursday.

* Scripps Networks (SNI.N) is close to an agreement to acquire a majority stake in the Travel Channel from Cox Communications, the nation’s third-largest cable company, the DealBook blog reported on Wednesday.

* British real estate developer Quintain Estates and Development (QED.L) is set to launch a 180 million pound ($296.5 million) rights issue on Thursday, the Daily Telegraph reported.

* In the latest twist in a takeover battle running since January, Canadian fertilizer maker Agrium Inc (AGU.TO) is planning to make a final offer for CF Industries Holdings Inc (CF.N) on Thursday, the Wall Street Journal said, citing people familiar with the matter.

General Motors may soon get the long-delayed green light to sign over carmaker Opel to Canada’s Magna. EU antitrust regulators have no plans to block Magna’s acquisition of GM’s European arm, a European Commission spokesman said in Brussels, easing fears the transaction could run out of gas in debate over German state aid to the mostly German-staffed company.

Magna hopes to conclude the deal within weeks of signing a contract. That should be that, right? Well, hardly. For one thing, Spanish workers at Opel’s plant at Figueruelas have voted to strike in protest at cuts included in the Magna package. And European politicians say GM and the Opel Trust should have the option of reopening the bidding process.

But the jilted other bidder, RHJ, says it is no longer interested in doing a deal, so going back to the auction block is probably a nonstarter. And with European auto titan Volkswagen saying sales will likely stay stalled next year, the political will to get a deal done is about all Opel has going for it right now. The company is poised to run out of cash by mid-January.

Chinese carmakers are seeking to step into the gaps left by U.S. companies in Europe -- but while acquisitions may give them access to badly-needed technical know-how, global brands and exposure to new markets, the question is whether they have learnt from past failures.

With China now the world's largest car market, it's no surprise that Chinese carmakers -- which have few if any really solid brands within their home market -- want to start making more of a mark.

In theory, foreign acquisitions offer a quick way to do so. Meanwhile the credit crunch has thrown world-renowned but now distressed car marques such as Volvo, Opel or Saab onto the block at what look like rock-bottom prices.

The worry is that Chinese carmakers haven't always found it plain sailing abroad. SAIC Motor Corp is still feeling the pain of buying into Ssangyong Motor Co of Korea. Ssangyong has struggled to compete as South Korea's smallest carmaker, failing to develop new models and running out of cash. A debt-for-equity swap threatens to slash the Chinese company's holding in the South Korean carmaker from just over 50 percent to around 10.

Chinese companies have had more success when they have simply acquired technology and taken it back to China. SAIC had much more success when it bought Britain's MG Rover. In that case, SAIC closed most of the UK manufacturing and used the know-how to launch a mid-range sedan called the Roewe. This has proved successful in China.

It looks as if Chinese manufacturers are trying to emulate SAIC's Rover experiment rather than its Ssangyong adventure.

Although Chinese carmakers looked at Opel, they backed away from trying to buy it outright. Geely Automotive has now stepped forward as a possible partner for Opel's new owner, Canadian car company Magna. But it looks as if its role may be more as that of a supplier of manufacturing capacity than an outright owner of the brand.

In the case of Saab, Beijing Automotive Industry Corp (BAIC) has agreed a deal with supercar manufacturer Koenigsegg to help fund its purchase of the iconic Swedish company.

BAIC is shelling out 275 million euros ($406 million) and, according to a source close to the deal, will fund future development costs at Saab. The hope is that the Chinese carmaker's involvement could dramatically increase the number of cars Saab is able to produce and sell in China, while still preserving Swedish jobs.

Most Chinese carmakers have been wary of making a major step outside their own market. Chery Automobile, Hunan Changfeng Motors Co and others have all kicked the tyres of various European or U.S. auto brands but walked away. It still seems that they are wary of trying to manage large foreign manufacturing operations -- perhaps for good reason having seen how difficult it is even for indigenous managers.

The cherry picking approach -- tapping into brands and technology without full ownership -- probably makes more sense, especially at a time when prices are low. The key question is whether the Chinese can lift the brands they pick up off the scrapheap. BAIC will be hoping that, like Rover, Saab can find a new lease of life on the streets of Beijing.

“Think about it. If you are a member of the union right now, you’re spending all your time negotiating about health care. You need to be spending some time negotiating about wages, but you can’t do it,” he said.

In fact, the UAW locked itself into a contract limiting wages and changes to health care, without the ability to negotiate with a threat of strike, until 2015. These stands were agreed to by the union at the prodding of the Obama administration, which demanded that union autoworkers accept lower wages — as a condition to the bailout that saved Lordstown — to match non-union workers at Toyota plants in Kentucky and Honda plants in Ohio.

Even so, Lordstown is something of a success story for both the UAW and GM, and Obama’s remarks were punctuated with enthusiastic applause.  After winning deep concessions from the UAW in 2007, GM agreed to invest $500 million to retool the plant to make a new fuel-efficient small sedan, the Chevy Cruze.

Obama had nice things to say about the Cruze, which GM expects to get more than 40 miles-per-gallon in highway driving.

“I just sat in the car,” Obama said of the Cruze. “I asked for the keys. They wouldn’t give me the keys. I was going to take it for a little spin. But it was nice sitting in there. It was a roomy car.”

Consumers will not get the keys to a new Cruze, either, until the middle of next year when it arrives in showrooms. In the meantime, Lordstown is stuck building the Cobalt, a budget-minded Chevy and vestige of the “old GM.” 

Consumer Reports in its October edition branded the Cobalt as one of the five “cruddiest cheap cars” on the market.

(Writing by Kevin Krolicki. Reuters photo by Larry Downing.)

Once upon a time, when $1 million was big money, General Motors spent millions on an advertising campaign on three U.S. television networks featuring the sing-along slogan, “Baseball, hot dogs, apple pie and Chevrolet.”

Powered by the link between Chevrolet and other American loves, GM’s share of U.S. auto sales was 35 percent in 1980. In 2009, GM’s share of the American auto market is a mere 19 percent, as it struggles with a backlash from an unpopular federal bailout and bankruptcy.

Chevrolet is hardly as American as apple pie anymore, but Chevrolet and GM will soon launch an aggressive marketing campaign to change deep-set perceptions of American consumers that GM cars and truck are inferior to imports like Toyota and Honda. The campaign, which will feature new company chairman Ed Whitacre and the slogan, “May the best car win,” will challenge notions of inferior products and will be waged on a myriad of television networks and print publications, but will also employ the Internet.

It will be an uphill battle. Perceptions are hard to change.

“This has been a problem for a long time for GM,” said David Cole, who heads the Ann Arbor, Michigan-based Center for Automotive Research. “It’s always the case that perception lags reality — no matter which direction you are heading in. The Japanese companies faced this for years.”

In the early 1970s, the mention of a Japanese car including today’s global sales leader Toyota and of the highly rated Honda , brought snickers from Americans. “Made in Japan,” was a punchline for jokes by American comedians, which reinforced the perception of poor quality.

But within a couple of decades, helped by sharp increases in U.S. gasoline prices in 1973 and 1981, Japanese cars became known for quality and for producing models that got great gas mileage.

GM relinquished the leading global automaker mantle to Toyota last year, mostly because of the perception of poor quality autos developed over several decades. This notion was supporeted by surveys and road tests done by groups like Consumer Reports.

Recently, GM brands Chevrolet, Buick, Cadillac and GMC Trucks have gotten improving marks from reviewers.

In June, J.D. Power and Associates said its surveys showed that Chevrolet and Ford had almost wiped out the gap with Toyota in new car quality. To back up its faith in its products, GM will next week introduce a 60-day money-back guarantee for its new cars and trucks. It is part of what GM vice chairman Bob Lutz called a “barrage” of advertisements.

Lutz said that while readers of auto publications may be aware of the narrowing quality gap, most American consumers will be much harder to convince that GM has caught up with the likes of Honda and Toyota.

“This is a big bet on the power of communication and effective advertising in changing public perception,” GM Vice Chairman Bob Lutz said.

A web site set up in advance of the GM ad campaign underscores the hurdle it faces with consumers. The site — www.thebestcarwins.com — invites visitors to rank vehicle brands for fuel economy, safety and quality.

As of Thursday evening, leaders of the survey in the five categories were:

Fuel efficiency - Toyota

Safety - Volvo

Quality - Honda

Performance - BMW

Best car - BMW

Just when the baroque machinations surrounding the sale of GM’s European unit seemed like they couldn’t get any murkier, one bidder has taken on the heroic initiative to announce it has won agreement with GM for a deal. Our interview with Siegfried Wolf, the Co-CEO of Canada’s Magna, had the ring of finality to it, but GM has already said it was in agreement with the other bidder, Belgian private equity firm RHJ. The German government is quiet for now, having already said it supports Magna.

According to Magna, GM management agreed in principle to sell it and Sperbank, its Russian partner, a 55 percent stake in Opel. Shortly after the interview ran, GM helped to keep the waters muddy, saying its board will discuss Opel options once it has a financing plan in hand that European governments will support. It did confirm that Magna and Sberbank had presented GM with a revised draft agreement, which it will review over the next few days. If nothing else, the interview appears to tip the balance a bit, but given all the bumps in the road this deal has hit, investors can be forgiven for wanting to wait for the official word.

RHJ International, a bidder for Opel, told a German newspaper it might consider selling Opel back to GM after it does its private equity triage on the European carmaker. “Let us be pragmatic. It won’t work without General Motors,” Leonhard Fischer, RHJ’s CEO, told Frankfurter Allgemeine Sonntagszeitung. It reported Fischer was explicitly not ruling out the option of selling Opel to GM after RHJ had completed its restructuring of the ailing carmaker.

As far as German Chancellor Angela Merkel is concerned, Canada’s Magna is the preferred partner for Opel. The GM Opel Works Council this morning is demanding greater say in the sale of the company. Specifically, it said GM should not be able to buy back a stake in the company. It also flexed a bit of muscle, saying if it doesn’t get a greater say over who ends up owning Opel, it won’t play ball on achieving structural cost savings.