Automotive News [AN sub] reports that Chrysler is asking U.S. Bankruptcy Judge Phillip Shefferly to let the automaker take immediate possession of its tooling equipment from former supplier Plastech. If not, the automaker says the ensuing parts disruption will quickly spread from the four plants currently off-line to ALL of Chrysler's American production facilities. Plastech's lawyers opposes the motion, saying its business assets are protected by bankruptcy law. [TTAC previously reported that Chrysler had already taken possession of the tools; AN says Chrysler tried to do so on Friday, immediately after canceling the contract. And failed.] Chrysler's petition to recover the equipment will be heard tomorrow morning in a Detroit bankruptcy court. If the judge rules against Plastech, Chrysler could well file for C11 soon thereafter; it can't afford a three-week shutdown. 

It seems as if our concerns about a Chrysler supplier "run on the bank" scenario– whereby the company's suppliers would demand cash-on-the-nail for goods and services rendered, throwing Chrysler into bankruptcy– are not without foundation. TTAC's Deep Throat has been making some calls. There are rumblings amongst the automaker's financially unstable suppliers. Something along the lines of "If we're going down, we're all going down together." Chrysler has been hammering its suppliers on price for years. And then outsourcing anyway. The company's decision to cancel Plastech's contract hasn't made The Crisis Corporation any friends. (Chrysler CEO Bob Nardelli isn't exactly known for that skill.) DT says it could be the tipping point. If and when the run happens, Chrysler will go down in a matter of days. The good news? Ford and GM will get a significant sales boost just when they need it most.

Think The Big 2.8 have it rough with new federal Corporate Average Fuel Economy (CAFE) standards? The ex-chairman of Shell Oil is calling for the European Union to ban all cars that get less than 35mpg. Pistonheads reports that Sir Mark Moody-Stuart told the BBC that "nobody needs a car that does 10-15mpg." An Aston is OK, "but only if it did 50 – 60mpg." Sir Mark doesn't agree that increasing road and fuel taxes is a better way level the proverbial playing field; the wealthy shouldn't be allowed to pay their way out of their responsibility for climate change. Sir Mark did relent a bit on the subject of older cars. Under his "If I ruled the world" plan, sub-35 mpg motors would be allowed to "die off" as they're replaced by newer high-mileage vehicles. And if you think Sir Mark is just another sherry-addled Lord, keep in mind that the EU in general, the UK in specific and London in particular are doing everything they can to tax low mileage cars off the roads. Sir Mark's ban is simply the logical progression of an existing policy.

For four months, the Canadian dollar has been flirting with U.S. dollar parity. And yet the same vehicles cost more north of the border than south. As America’s NAFTA neighbor imports more and more American cars, basic theory holds that automakers would eventually cut Canadian prices to eliminate arbitrage. “Eventually” hasn’t happened. Just as it was back in October 2007, the Lincoln Navigator is still $28k cheaper in the U.S. than Canada. Why?

In January, GM Car Czar Bob Lutz stated that all of GM's new models "are getting a lot more non-GM and non-domestic conquests." As usual, the former marine aviator was flying by the seat of his pants. The numbers tell a different story. Automotive News [sub] compared fourth quarter '07 conquests to fourth quarter '05 for the redesigned Chevy Malibu and Cadillac CTS. In the last quarter '05, former Chevy owners accounted for 43.9 percent of Malibu sales. In the last quarter '07, the number rose to… 45.8 percent. The CTS sales stats also reveal that import buyers are lined-up none deep. In the fourth quarter of 2005, 30.1 percent of CTS buyers traded another Cadillac. In 2007, the number rose to… 42.2 percent. More specifically, Mercedes owners jumping ship for the midsized Caddy sedan ascended from 2.1 percent to 2.7 percent in 2007, and ex-Lexus owners increased from 1.2 percent to 2.3 percent. BMW owners stayed away. In 2005, 2.4 percent were BMW conquests; in 2007 that dropped to 2.3 percent.

Not to be alarmist (much), but TTAC has been saying for some time that the collapse of Detroit's domestic supply chain could force one or more of the automakers into bankruptcy. On Friday, Chrysler canceled its contract with Plastech Engineered Products (PEP) of Auburn Hills, MI. Plastech immediately filed for bankruptcy and stopped shipping parts to Chrysler. USA Today reports that a lack of plastic parts has forced the American automaker to suspend operations at four U.S. assembly plants: Sterling Heights, Mich. (Sebring and Avenger); Newark, Del. (Durango and Aspen); Toledo, Ohio (Nitro and Liberty); and Belvidere, Ill. (Caliber, Compass, Patriot). While Chrysler should be able to reestablish parts production (e.g. engine covers, grill panels, moldings, metal stampings, door panels, floor consoles), we hear that Chrysler's been slow paying all its suppliers. If suppliers see this move as a sign of things to come, they might reach the point where they demand cash up front– tipping Chrysler into bankruptcy. Watch this space. 

The unidentified GM spokesmouth quoted above is supposedly spinning the news that GM has decided to kill its rear wheel-drive (RWD) plans for Canada's Camaro factory. The move spikes the never-really-approved (but endlessly discussed) RWD Impala and Buick LaCrosse models, and the new V8 engine slated to power both models. As The Car Connection rightly points out, the platform change also raises serious questions about the Camaro's pricing and profitability. Those of you who've been following this saga will appreciate the fact that this is the fourth time GM's extra-Camaro RWD plans have been resurrected– and then terminated. That we know of. Once again, GM says the decision reflects the prospect of new, higher federal fuel economy standards. Canadian Auto Workers (CAW) President Buzz Hargrove was quick to point out that it had nothing to do with the fact that the Camaro factory is a high-cost union shop. “We anticipated that would be followed by other rear-wheel-drive vehicles, but the money they spent on the plant makes it a flex plant, so you can build both front-drive and rear-wheel-drive in the facility." Yes, well, there's been no announcement on that front. Nor is any expected– at least until after the CAW's contract negotiations are complete. Is this any way to run a railroad?

The days of "anyone with a pulse" financing are long gone. Or they could just be getting started. As more and more people with "indirect" loans (loans not made through a "captive" firm owned by an automaker) default, banks and credit unions are tightening the reins on auto loan applications. According to The Detroit News, in the third quarter of '07, the delinquency rate for indirect loans hit a 16-year high of 2.86 percent. With '08 not looking so great, beleaguered automakers may not wish to turn away customers simply because the banks won't loan them the money to buy a car they can't afford. So, do the carmakers assume the credit risk to move the metal? The question is especially vexing now that Cerberus now owns 80 percent of Chrysler, 100 percent of Chrysler financial and majority control of GM's GMAC finance unit. If GM tanks, Chrysler wins; but would Cerberus manipulate Chrysler Financial and GMAC to save Chrysler? And Ford's finance company is still a cash cow. Would FoMoCo maintain fiscal discipline at the expense of the corporate mothership? As the perfect storm continues to gather, the stakes– and the finance rates– have never been higher.

According to the LA Times, "Mayor Antonio Villaraigosa wants to eliminate most of the 229 vehicles in the city's executive motor pool, as well as cars from other fleets, to help close a $155-million shortfall." The Mayor's proposal would take 93 of the City Council's 108 cars off the public payroll. Redefining chutzpah and violating the borders of plausibility, Council members say the move would hurt LA's air quality; their city-financed wheels are low emissions vehicles, while their personal wheels are gas-guzzling SUVs and suchlike. So it's all for the children? Well… City Controller Laura Chick, a former council member, said elected leaders use the cars to entice talented deputies who are in demand around City Hall. "It's become a traditional perk," said Chick, who would get to keep her 2004 Toyota Prius Hybrid under the mayor's plan. The Times says the Mayor and the Council will reach a compromise on the matter. Meanwhile, the LA Police run 1,105 take-home cars. A debate for another time? Count on it. 

A number of media outlets are carrying the story that Tesla chairman Elon Musk's personal Roadster has finally made it across the Atlantic and into his waiting arms. Everyone is proclaiming this as the first delivery of a production Roadster. Yet Petrol Head reports that as Musk got his, he indicated "the first deliveries" would start in mid-March. In the meantime, the second car will go to Tesla founder Martin Eberhard. So what about it gang? Would you consider this transfer of a hand-massaged example with a temporary transmission to the head honcho as the official start of Tesla Roadster production? Should we end the Tesla Birth Watch series with this installment? Or should we wait until we actually see the cars getting into the hands of a paying customer?

You may recall that GM sold its stake in Subaru to… Toyota. Last spring's union between the two Japanese automakers is about to bear fruit. Motor Trend reveals that one of the first toys out of the Tubaru toy box will be a latter day reincarnation of the Toyota Celica. The new sports coupe will arrive both as a lower-priced rear-wheel-drive base model and a full-bore AWD model, complete with the Impreza STi's 300hp engine. The new Toybaru will be offered in two flavors: two-door coupe or three-door hatch. To keep the price duo-brand-compliant, the Soyota will be a high-volume model; you can expect to see it in a number of markets including the U.S. GM may rue the day it through Subie's shares into its cash conflagration. 

Despite previous public prevarication causing camera climbdowns, Connecticut Governor M. Jodi Rell is asking for funding for a pilot program of speed-detection cameras along a “treacherous” stretch of I95. "Those who choose to break the rules of the road need to learn the hard way," Rell said, showing her sympathy for drivers braving this treachery. In case you missed the point, Rell said she's “declaring war” on dangerous drivers. According to The Hartford Courant, the I-95 cameras would be the first such devices deployed on Connecticut highways. If the cameras raise susfficient new revenues for the cash-strapped state government– I mean, "reduces the number of speeders and traffic-related deaths," Rell says she'll expand the system throughout the Constitution State. Meanwhile, Rell's also hankering for 20 new state troopers for "increased traffic enforcement." According to the Gov., “The goal is to get ingrained into motorists' heads that they should not even consider breaking the law because there may be a state police car right around the corner to pull them over." Really? Just for thinking about speeding? Wow, that’s harsh.

The French haven’t had much influence on the car world for some time. Up until the last decade or so, their automobiles have been goofy little nuts-on-wheels from outer space– especially compared to machines from neighboring Germany, Italy or Japan, not to mention Detroit. But now we’ve got a Frog who’s in play worldwide. You want to talk about an internationalist? Carlos Ghosn was born in Brazil to Lebanese parents. The CEO who rescued both Nissan and Renault speaks six languages fluently and divides his time between Tokyo and Paris. If anybody understands the worldwide car biz, it’s Carlos Ghosn.

Who killed the electric car? That's easy: GM. What killed the electric car? Also a no-brainer: an operational range of 55 to 95 miles. From the moment Tesla Motors announced its all-electric Roadster, we've called for independent verification of their official range claims, which started at 250 miles, slunk to 220, and ended up in a real-world figure of 93 (still unofficial). Despite a rear-guard defense on the issue, Tesla's new CEO Ze'ev Drori ain't no dope. At a press conference to announce the historic fact that Elon Musk's personal Tesla Roadster had arrived from Europe, Drori pulled a GM: talking about the next next Big Thing. And here's the thing: Tesla will offer the formerly (theoretically) all-electric WhitesStar sedan as a hybrid, with a small gas engine powering an on-board generator a la Volt. Tesla says itheir sedan will hit the streets by 2009, stickering in the $50 to $70k range. After that, they'll focus their attention on an economy car. First things second, eh?

So, here it is. Click here for Audi's new Superbowl head. I mean, ad. It's a recreation of the scene from the Godfather wherein the Hollywood producer Jack Woltz refuses Don Corleone's request to cast Johnny Fontane (a.k.a. Frank Sinatra) in his new war film. Woltz wakes up with his favorite horse's head in his bed. In this case, the actor wakes up to a car grill and some greasy bits, courtesy of Audi and the new R8. OK, hang on here. If I read this right, the guy in the bed is a luxury car buyer who refuses to consider the R8 as his new luxury car. The fact that producer discovers a generic grill– not a Merc, BMW, Rolls, Bentley, whatever– is a MAJOR wimp-out from Audi. The fact that Audi is portrayed as a criminal enterprise that terrorizes its own [potential] customers is a MAJOR violation of the old adage "never insult the customer." And what does this do to "redefine" luxury? Nothing. We'll be talking to an expert on commercials tomorrow. But as far as I can tell, this Audi ad shows a lack of originality (ipso facto). Worse, it casts Audi, a German automaker, as a bunch of evil bastards. Still, nice car. I give it a D. Meanwhile, one wonders how much Audi paid TTAC reviewer Jay Shoemaker's boss to inflict this homage on a suspecting public.