Tata's prospective purchase of Jaguar and Land Rover from Ford is reportedly foundering on Tata's insistence on price guarantees for Ford engines. The Detroit News quotes sources "close to negotiations" (as opposed to?) as saying Ford is unlikely to agree to any such guarantees in light of price increases in key commodities. Garel Rhys, director of the Centre for Automotive Industry at Cardiff University, calls Tata's request "absurd, and they know it." BUT Rhys reckons it's in Tata's interest to drag-out the purchase process while it secures financing. And, perhaps, a better price. With no other offers tabled for the two FoMoCo "premier" brands, the Blue Oval Boyz have little choice but to duke-it-out with Tata. Ford's "Wish We'd Gone from Sir Anthony Bamford" deal has already been pushed past two informal deadlines. Ford now says an agreement with Tata Motors is expected "mid year." 

Bloomberg reports that Hyundai's been hit hard by rising steel prices. Apparently, China's Olympic building boom is causing localized shortages and driving up prices. Rising raw materials costs cut especially deep for the value-minded Hyundai brand, who can ill-afford the hike. "The higher prices come at a difficult time,'' says Mirae Asset Securities analyst Kim Jae Woo. "Hyundai won't be able to pass on the higher costs to customers as the slowing global economy is already damping auto demand.'' Steel prices are expected to continue rising for the considerable future; raising an interesting challenge to the strategy of manufacturing in east Asia. Although low labor costs have made the region popular among budget automakers (e.g. GM's Daewoo), China's economic boom is putting increased pressure on commodity prices. In the cutthroat global automotive industry, there's nowhere to hide.

When we last left our hero, I was dodging post-wine tasting Buicks and Caddys in a hair-brained sprint to Los Angeles before the sun went down. My steed was a sparkle-blue 1981 Corvette with non-functioning headlights. Until this point, I’d been lollygagging along in the right lane. I assumed that the ‘Vette’s engine would crap-out on me if I gave it the boot. But the fear of getting caught with no lights– and then watching the DEA strip the car to the frame– forced my foot to the firewall.

Toyota President Katsuaki Watanabe has once again acknowledged ToMoCo's recent quality issues. The AP reports that Watanabe attributes the company's product-related failures to its rapid rise to global dominance. The growth has taken its toll in various areas, ranging from development and design to production, suppliers and maintenance. Watanabe says time pressures and the shortage of experts has exacerbated their quality control problems. What's more Watanabe admitted that Toyota is suffering from some of the symptoms of "big company disease:" arrogance born from success. Putting the pro in proactive, Toyota's CEO said some unspecified products are being delayed to ensure the "total quality" on which Toyota's reputation depends. The automaker is going over every problem, "tracking root causes, analyzing and coming up with ways to prevent a recurrence." 

The Telegraph reports that a new "showroom tax" will add between $500 and $2k to the price of new cars in Britain, depending on their level of carbon emissions. Oh wait, and add nearly $1k in annual taxes thereafter. Chancellor of the Exchequer Alistair Darling says the tariff are educational; a way for consumers to understand the environmental cost of their purchase. But these measures are not simply targeting "Chelsea Tractors," the luxury SUV's that haunt London's wealthiest neighborhoods. Middle-class family haulers such as the Ford Mondeo Estate and Renault Espace would be hit hard as well. Critics point out that the measures are as disingenuous as they are patronizing. An anonymous spokesman for The Society of Motor Manufacturers and Traders says "Trying to force people out of high-value cars has no environmental merit and will be seen as a smokescreen for revenue raising." And then what?

Last January, Transport Minister Lawrence Cannon said that Canada will match California's fuel-consumption benchmarks for new cars and light trucks. (Quebec and Manitoba have pledged to adopt them while Ontario warns that its automakers can't possibly meet them.) The Canadian Press reports that Transport Canada is studying the trade-off between fuel-economy and safety. Even before the results are know, Canada's greens are up in arms. Clare Demerse, senior policy analyst at the Pembina Institute: "I would hope that the government would not, in any way, use this kind of research… as an excuse not to go the more aggressive vehicle efficiency standards." George Iny, president of the Automobile Protection Agency: "If you could reduce some of the presence of those large-type vehicles, unyielding full frames, you would be improving vehicle safety most likely." Why let the facts get in the way of PC public policy?

Reuters reports Honda has published a driver's guide for women in Japan that includes info on, among other things, how to pump their own gas, how to safely transport the kids, how to park, and advice for aging female drivers. Honda says the pamphlet "erases all your fears about driving." When asked if this meant Honda thinks women are worse drivers than men, the company's PR flack replied "We don't think so. There are some specific cases of women drivers, and we focus on those cases." There are specific cases of men who drive like idiots too, but HoMoCo doesn't seemed all that bothered about that, now do they? It makes us wonder if Honda will be introducing an Accord La Femme.

A new report concludes that California's rough roads are "creating additional operating costs for drivers due accelerated vehicle deterioration, additional maintenance needs and increased fuel consumption." The Road Information Program (TRIP) pegs the financial damage at more than $650 per driver per year– compared with $413 nationally. San Diego's "street-maintenance failings" cost the average motorist some $684 a year. It's even worse in the City of Angels; bad roads in LA cost automobilists a whopping $778 per year. TRIP says 23 percent of America's major metropolitan roads "feature pavement in poor condition." In California, it's as high as 65 percent. To help the media fulfill its "this sucks and it's getting worse" meta meme, TRIP claims that "Travel on urban roads is increasing, and travel by large commercial trucks is growing even faster than travel by cars." No word when California will go for a double whammy– fix the roads and save the planet– by raising gas taxes.

TTAC's no apologist for any automaker. And we're big fans of the editorial equivalent of the arched eyebrow. But we call foul over Motor Trend 's coverage of Toyota's decision to extend its warranties on Tacoma pickups sold between 1995 and 2000 due to problems with rust. The mag's online scribe Andrew Streiber reports the facts– well, edits the press release slightly– with studied impartiality. "Though Toyota says the problems have been limited to trucks in states where salt is used to de-ice roads in winter, the company is extending rust-perforation warranty coverage to all 1995-2000 Tacomas regardless of location. The coverage will last 15 years from the original date of sale with no mileage cap. Owners who think they may have a rust problem can simply visit a dealer for a free inspection, and if damage is found Toyota will either repair or repurchase the truck (they decide)." But Streiber can't resist finishing with a cheap shot. "Given the well-publicized problems in early examples of the new Tundra, it's still another blemish on their reputation for quality the company didn't need." Note to MT: if the domestics had adopted a similar approach to similar problems, they wouldn't be in the mess they're in. 

American Axle (AA) and the United Auto Workers (UAW) are still talking– but only over the phone. Formal (as in FTF) negotiations ended on Monday. According to American Axle, that's when "the UAW sent its negotiators home." The UAW said they left the table because discussions were "still pretty much a one-way street [and] the company really hadn't changed their position at all." Talks are supposed to resume today, but a resolution is not expected. The Indianapolis Business Journal quotes labor law professor David Gregory, who reckons both the UAW and AA are in it for the long haul. "This has got the makings of a protracted strike. It's already a serious strike, but this could go into April." If that happens, GM will be in a world of hurt, as will a lot more of their other suppliers. It seems The General is using the strike to reduce bloated truck inventories, but the plan could backfire if either the UAW or AA refuse an eventual GM bailout. Watch this space.

Faced with a decision between a tax grab (a.k.a. closing a loophole) and environmentally-oriented political correctness, the UK government decided to take the money and run. Business Car (BC) reports that the UK's Chancellor of the Exchequer will shit can [paraphrasing] the current biofuel duty differential, That's the bit of the budget that subsidises E85 by up to 20p per litre. BC has no doubts about the decision's impact on the darling of America's corn growers, calling it "the death knell for E85 biofuel as a viable fuel in the UK." Minister Darling (true story) threw the bio-fuel boys a bone, creating the Renewable Transport Fuel Obligation. The new boondoggle calls for all road transport fuels to contain 5.75 percent biofuel by 2010, well behind America's corn-fed 10 percent mandate.

In the latest installment of Tesla Motor's Mythbusters, the erstwhile EV maker's Director of Energy Storage Technologies says that Tesla's lithium-ion batteries are eco-friendly. That's because they're "manufactured in Japan, a country with very strict environmental laws." Kelty then lists all the nasty stuff their battery pack doesn't contain (leaving out dead kittens and powdered rhinoceros horn). In short, Tesla's Li-ion cells contain no toxic materials and "by law, could be disposed of by putting them in a landfill." Before that, Kelty recommends using the efficiency-challenged batteries "as a power source for off-grid backup or load leveling." Once the cells die, they'll be shipped off to Toxco's recycling plant in British Columbia. The copper cobalt will be sold for recovery, the slurry "sent off as non hazardous effluent for proper disposal" and the "fluff" (mostly plastic) "trucked back to the U.S. border and properly disposed" (in landfills). Kelty proudly points out that Tesla's disposal process "does not involve any smelters." He doesn't say how much smelting is needed to produce the battery pack but hey, we appreciate the info.

If you were laboring under the impression that GM's European division was in the pink– after racking-up $4b in losses between 2000 to 2006– forgeddaboutit. [NB: freshly-minted GM COO Fritz Henderson was Chairman of GM Europe from 2004 to 2006.] Reuters reports that the Euro-turnaround has stalled– with an entirely predictable response. General Motors Europe is cutting 5k manufacturing jobs– about a tenth of its European workforce– as "the top U.S. car maker aims to stem steep losses in declining main auto markets." And if you think the United Auto Workers are tough (i.e. expensive to bribe), check out the European works council's response. "We want guarantees that there will be no plant closures in west Europe until at least 2020," Jean-Marc Ruhland demanded. And if that sounds familiar, so should the excuses. GM's Euro Prez Carl-Peter Forster said his employer's low profitability was "not confined to Opel but was an industry-wide problem among volume carmakers in Europe due to price pressure as Asian manufacturers exported cheap cars to the continent." America's tanking, Europe's struggling. Can the rest of the world buoy the corporate mothership? If so, for how long? 

Last week, we reported GM CEO Rick Wagoner's bonanza: a $2.2m salary re-raise, 165,563 shares, 500k stock options and 75k restricted stock units. We now learn that Wagoner's heir apparent, newly-appointed COO and heir-apparent Fritz Henderson, received a 36.6 percent raise. That takes the former Beancounter-in-Chief to $1.8m per year (plus bonuses, unspecified stock options, pensions, cars for life, etc.). The Wall Street Journal reports that GM Car Czar Bob "California rules" Lutz also got his chance to shake the GM money tree. Lutz gets a 17.6 percent re-raise, taking him to $1.55m plus bonuses and stock options worth over $1m. GM would't say what other top executives will be financially blessed, but spokesmouth Tony Cervone claimed GM suits are paid "based on their performance." If that rankles, just think what these guys would have made if they hadn't sold the family silver, lost billions of dollars and sacrificed once valuable U.S. market share.

Talk about the rush hour fender-bender from Hell. The Khaleej Times reports that over 150 cars piled up on the Abu-Dhabi to Dubai highway yesterday, in the worst wreck in the country's history. Authorities report four deaths and 317 injuries in the crash, which also involved 12 buses. About two dozen cars caught fire, triggering a massive rescue operation and snarling traffic for hours. Officials say that foggy conditions and rush hour congestion contributed to the disaster, pointing out that the close quarters driving of commuters makes such pileups more likely. Armed Forces personnel and helicopters were called in to clear up the crash zone, a task made all the more difficult by bad weather and the presence of 12 destroyed buses. Be careful out there!