Rumors are flying that Chrysler is in talks with a second Chinese manufacturer. They already have an agreement with Chery to rebadge subcompacts for Mexico and South American markets markets and develop a subcompact for the U.S. (all under the Dodge brand). Now Reuters says they're looking into an alliance with Great Wall. Great Wall builds small SUVs, a small CUV and pickup trucks with some of the coolest model names going: the Wingle (say "Great Wall Wingle" fast three times) and the Socool. Obviously, Chrysler doesn't need more SUVs or CUVs. However, Chrysler hasn't had a small pickup since the rebadged Mitsubishi pickup they sold in the previous century. With sales of the Dakota "midsized" pickup in the cesspool, and big truck sales circling the toilet, they could be looking at Great Wall to provide a small truck– a vehicle Chery can't supply. So if the rumors turn out to be true (and inside sources say they are), the next small Dodge truck could come from the People's Republic of China. And pave the way for… the end of domestic car production.

And so the United Auto Workers (UAW) strike at American Axle (AA) now enters its second month, without any imminent prospects of resolution (i.e. a GM payout). As Buffalo's Business First points out, "The upper hand clearly goes to (American Axle management) which has $350 million in cash on the balance sheet, does not need to supply GMT900 pickup truck axles for quite some time and has recently begun producing axles for the GMT900 SUV in its Mexican facility." Even so, the strike has shuttered 28 GM plants, and there's no way AA  could ramp-up to supply all of the truck-making factories from South of the Border. And while GM may be happy to watch its oversupply of SUVs and trucks melt away, there's a limit to how long they can afford the resulting termination of their cash flow. And now it seems that the AA strike is spreading in an entirely unwanted direction: Chevrolet Cobalt production at Lordstown. (Say what you will about the car– and God knows you have– but it's The General's second best selling car at over 200k p.a.) The Tribune Chronicle reports that "United Auto Workers Local 1112 President Jim Graham said the 2,400-worker factory could stop building the Chevrolet Cobalt small cars anytime between Friday and April 4 when it runs out of a [AA-made] part to make brakes that are used by nearby supplier Automodular." There's a 53-day supply of Cobalts on the ground, but no question: that's gonna leave a mark.

We haven't reported on the Plastech bankruptcy for some time. Well, they're still bankrupt. burning their way through a $45.15m line of credit (up $10m since we last checked). And they're still making parts for Chrysler, who is none-too-pleased about their inability to remove the tooling to make the plastic parts for the cars that they can't sell. Of course, you already know the big winner in this fiasco: the lawyers. Automotive News [AN, sub] reports that "The New York law firm Skadden, Arps, Slate, Meagher & Flom LLP on Tuesday, March 25, billed Plastech $1,002,674.50 in legal fees and $54,486.82 in expenses during the supplier's first month of Chapter 11 bankruptcy court proceedings, according to documents filed in U.S. Bankruptcy Court in Detroit." More specifically, "Skadden Arps billed Plastech for 1,835.05 hours of service at an average rate of $546.40 an hour. The $54,486.82 in expenses covered travel, printing, research and messenger fees, as well as meals for the Skadden Arps legal team." As AN points out, Skadden Arps is drinking small beer. "Supplier Federal-Mogul Corp., which emerged from more than six years of bankruptcy proceedings at the end of 2007, spent about $700 million, or $9.3 million a month, on bankruptcy related [legal] expenses." 

With the deadline for $354m in federal matching funds for New York City congestion charging (CG) looming (April 7), the New York Times ongoing support for the plan is approaching fever pitch. In the ironically titled Op Ed "Moment of Truth on Congestion Pricing," the Old Gray Lady argues that "The only way to ensure the [City's mass transit] system will continue to work is to move forward on congestion pricing." In the lead up to this "do or die" conclusion, the Times' rhetoric [once again] flies in the face of the facts. "What it [the M.T.A.] needs is a reliable source of income. As London and Stockholm have discovered, congestion pricing could provide that— and cleaner air and less gridlock." Anyway, "the M.T.A. has developed detailed plans for that money, including providing express buses to the outer boroughs where resistance is strongest." Nice. And what about poor people who have to drive into the City? "One sensible proposal would allow those drivers to apply for rebates on their applications for the Earned Income Tax Credit." Fortunately for opponents of the NYC CG, the Governor who supported the plan didn't confine his enthusiasm for prostitution to his political career. 

CAW President Buzz Hargrove has been in a feisty mood lately. After telling all of Detroit where it can stick two-tier wages, Hargrove got personal with Cerberus Capital Management, owners of Chrysler LLC. Bloomberg reports that Hargrove is irate at the three-headed hedge fund over promises its president made while seeking support for its purchase of Chrysler. Cerberus President Steve Feinberg had "promised that they weren't going to slice and dice and sell,'' Hargrove said in an interview. But with Chrysler cutting tens of thousands of jobs and slashing its model line, the CAW leader smells betrayal. "We were misled," says Hargrove, "(Feinberg's) trying to cut his way to profitability, as opposed to grow(ing) the business… (he) has never met with us since then to explain the shift in thinking." Of course, most people don't expect private equity groups like Cerberus to operate accountably, and strip-and-flip rumors have been plentiful since the Cerberus takeover. So what finally made Hargrove think that Cerberus wouldn't make good on its promises? The axing of Chryslers Pacifica CUV. Thats right, Hargrove calls the cancellation is "very concerning" because the crossover segment is hot at the moment and "they discontinued it without having a replacement." Anyone think Buzz ever looks at the sales numbers?

Yesterday's gasoline discussion proved quite fruitful and I'd like to stick with it, albeit it with a turn from the political to the pocketbook. And what could be more political? Mom's birthday is right around the corner and my girlfriend picked out some beautiful flowers for her. I bought them. Glancing over the bill, I noticed this nugget: "Courier Fuel Surcharge: $1.93." Say what? More galling, this hidden surcharge wasn't mentioned at any point in the flower purchasing process. So, is this ripoff an outlier, or is this just the way it's going to be?

With the Olympics set to thrust The People's Republic of China into the world spotlight, the dictatorship's rulers have been attacking "environmental issues." Green Biz News reports the latest step in what the Chinese Communist Party terms "the scientific model of development:" a massive auto-parts recycling program. Three manufacturers and 11 parts suppliers have "agreed" to recycle engines, transmissions and electrical generators. The China Association of Automobile Manufacturers estimates that four million old cars will be junked each year by 2010. They maintain that refurbished parts from dead cars cost only 60 percent of new components. Meanwhile, in the U.S., parts recycling companies like LKQ are making big money (even without government intervention). As automotive profits become harder to find in a sagging economy, reuse and recycling is getting a major shot in the proverbial arm. See how that works?

As much as I like the idea of a hydrogen fuel-cell/nuke-plant-powered future, there's a lot of miles left in ye olde internal combustion mill. For instance, if you replaced mechanically-motivated valves with electronically operated ones, you'd increase both power and mileage. And if you could somehow get the power of a two-stroke engine without constantly burning oil and piston rings or needing a carburetor, why you'd be popping wheelies like a Yamaha RZ 350! Ricardo says yes we can. Their "2/4SIGHT" is a single bank from a V6 set-up to run as two-stroke/four-stroke. Allegedly, it seamlessly switches between two- and four-stroke cycles as power demand increases and decreases. In theory, a 2.1-liter V6 [theoretically] would thus produces 265hp and 339 ft.-lbs. of torque at 2,500 rpm, 27 percent fuel savings and lower carbon emissions. Sadly for now, 2/4SIGHT uses a whole raft of high-tech solutions (boost, injection, intake and exhaust valves are all variable for each cylinder); it's not ready for prime time. We'll keep you posted.

The Age reports that the last of the great V8 Interceptors… Hold on, that's not it. Right. The last Australian-built Mitsubishi will roll off the line at Tonsley Park this Thursday, ending 28 years of production Down Under. Since it took over a Chrysler plant in 1980, Mitsu has built over a million cars in Australia. Production peaked back in 1997, when the Japanese automaker built 58,391 Magna sedans for domestic and export markets. Mitsubishi imports have seen strong demand, but the domestically-built 380 sedan will soon be sleeping with the fishes. Although Mitsu's laying off a thousand workers, it's not a post-apocalyptic scenario. They're receiving what's being called "the best-ever redundancy package in the automotive industry:" up to two years of severance pay. 

The AP reports that Toyota is tackling slow Japanese sales with a new, 200-store and restaurant, auto-themed mall. The Tressa mall in Yokohama features car-shaped shopping carts, a model car store and musical robots. The mall's "anchors:" massive Toyota showrooms. A Toyota subsidiary has been operating an automall in Gifu prefecture since 1999. Despite the marketing razzmatazz, the root problems for Toyota– and Japanese car sales in general– remain. An analyst with Mizuho Investors Securities says that Japanese OEMs have ignored the competitive domestic market for too long in favor in favor of higher profits abroad. Atsushi Kawai says the neglect has created a cultural resistance to the enormous hassles of Japanese car ownership. "Domestic sales are a total disaster now," says Kawai. "A car used to symbolize a dream. People used to work hard to buy a car. These days, nobody is saying that. No one thinks a car is cool anymore."

"Uh oh." That's the unofficial line out of Ford Australia today in response to FoMoCo's announcement that they're developing a rear wheel-drive (RWD) platform in America. Officially, the Australians have responded with "it's too early to speculate." Ford OZ already has a RWD platform underpinning the Falcon. Thanks to a lack of engineering foresight (i.e. international beancounting), the Falcon can't be built as a left hand drive car for the U.S. market. Since the dollar is weak and engineers plentiful, Ford chose to keep the new platform's development stateside. The Australians are hitting the Pepto-Bismol over [entirely justifiable] concerns that all of Ford's RWD operations would be relocated to the U.S., denying the Blue Oval's Australian subsidiary a chance to design the next Falcon– or much of anything else, really. Roughly a thousand engineers' jobs are at stake. 

Ford invited journalists over to check out its "virtual assembly" technology. (Our invitation was lost in cyber-space.) The Detroit Free Press came, saw and geeked out, leading off their breathless coverage with "If you want to know why Ford Motor Co.'s quality is improving so much…" But what exactly is this strange and mystical technology which makes otherwise credible journalists into so many ad copy writers? Combining motion-capture and computer modeling technologies, Ford "builds" model factories and inhabits them with avatar workers who virtually assemble vehicles. By analyzing how production operates virtually, Ford engineers can streamline and simplify the process. The result: better ergonomics and fewer injuries for production workers, improved production efficiency and quality improvements. AND the computer modeling allows Ford to develop production processes faster, so it can bring new products to market in less time. (Where? What?) Ford is so proud of their sim factory it boasts that productivity master Toyota is curious about the technology. Then again, ToMoCo knows that the map is not the territory. 

Stop me when this sounds familiar. Canadian Auto Workers (CAW) boss Buzz Hargrove says his brotherhood is "committed to get at the costs" that Canada one of the the world's most expensive places to build cars. Yes, well weakening Canada's currency is quite an ambitious undertaking. And "getting at" costs is one thing; reducing them another. The Globe and Mail reaffirms that Hargrove's legendary intransigence tough stance continues. Buzz' boyz won't agree to the North American template, that sees significant wage and benefits reductions for car assembling newbies. Buzz figures "It's my last set of negotiations and my legacy is not going to be that the sons and daughters of current workers that were hired over 20 years ago are going to come in at the same rate in 2008 as their parents did in '86 or '87." To that end AOL Money Canada reports Buzz' boyz are strike-ready if the two-tiered wage thang becomes a sticking point. Did I say "if?"

Fiat has been talking-up a stateside launch for Alfa Romeo, and even suggested manufacturing in the US or Mexico. Now Fiat CEO Sergio Marchionne tells the Financial Times that his company is seeking suitable partners for North American production. "Nobody making anything in Europe is going to make profits in the US," says Marchionne, indicating that the losses on imported cars would be acceptable as long as a production partner could be found. Although the Financial Times makes much of Detroit's recent downsizing of North American operations, and stresses that The Big 2.8 have "overcapacity," other reports indicate that BMW is also a likely candidate for a FIAT partnership. For now, Marchionne is staying mum on the partner search, but makes it clear that BMW is on their radar… as competition. "We need to replicate the [BMW-owned] Mini phenomenon in the US," says the Fiat CEO. And yes, he does mean by bringing the popular Fiat 500 to the states. Toppolino!

I made my first pilgrimage to AMG in 2001. Arriving unannounced, I was relegated to longing stares through a chain link fence at rows of serious looking automobiles. I eventually bought an SL55 AMG. I loved its ability to terrify unsuspecting passengers. But it always struck me as an engine in search of a chassis. And better steering. And brakes. In fact, it was a steroid injected boulevardier. And now, the SL63 AMG.