Back in 2006, I sold a frugal friend a Volvo. He paid $2500 for the conservatively driven 1995 Volvo 940. It had all the records. Top quality tires. Volvo OEM components. A true cream puff for the true enthusiast. As fellow classic Volvo aficionados, we actually kept up with each other over the years. Him for advice and updates. Me because I enjoy the company. Unfortunately, two years and 45k miles later, his wife used a telephone pole to permanently customize the front end. The insurance company cut him a check for the original purchase price. With that money, he could have easily bought a car from a smorgasbord of good used cars in today’s market. But he didn’t… here’s why.

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Reuters (and everyone else) reports that GM is suing bankrupt parts maker Cadence Innovation to recover the bits it needs to build/launch the new Chevrolet Camaro. Both more and less specifically, Cadence makes consoles, door panels and “other parts.” GM wants all of it, bad. So they’re suing, asking a Delaware Court for permission to access Cadence’s factory to recover the necessary tooling and parts to craft their Canadian retro-muscle car. “Even one day’s disruption in supply of certain Component Parts could cause a shutdown of GM assembly operations,” The General’s lawsuit proclaims, using German capitalization to emphasize the seriousness of their demands. A refusal to do so would end up “disrupting not only GM’s business, but the operations of countless suppliers, dealers, customers, and other stakeholders.” Countless? That’s a lot, right? And once they’re being both vague and alarmist, GM said the damages from Cadence’s refusal to surrender machines and parts “would be substantial, but difficult, if not impossible to calculate.” GM reckons it needs the parts-making machines by January 12th. Or a plague of locusts will descend upon the earth and boils will fester on muscle car collectors’ butts. But there’s more to this story than first meets the, uh, eye…

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One of the uncomfortable facts about the automobile industry: its pay rates have been exceptionally high almost from day one. That said, just how much of a factor worker wages (and the cost differences that go with them) have to do with Motown’s meltdown is debatable. One thing’s for sure: the United Auto Workers (UAW) refusal to re-negotiate their current contract– repeated within two hours of the President’s cramdown conditional bailout bonanza– puts it squarely in the firing line for both sides of the “debate.” When trying to understand their seemingly suicidal recalcitrance, history is our guide.

Imagine your sell someone a house. It’s hard to imagine, I know, but humor me. You settle on a million. You sign. Papers are shuffled, titles researched. Three months later, at the closing, you get a check for $780K. Imagine there’s nothing you can do. Your lawyers are shrugging their shoulders. $220K poof, gone. The same happens every day in international trade. Welcome to the strange world of world currencies. You sell something in Euro, Yen, Won or Rupees. You ask: “How much is that in real money?” And a few days later, it’s all changed. Such is the life of a global automaker.

A short overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. For the next two weeks, WAS will be filed from Tokyo.

Japanese car sales down 30 percent: Japan is looking at “the worst December on record for auto sales,” the Nikkei (sub) writes. Only 161K autos (excluding minicars) were registered by Thursday evening. Unless a miracle happened on Friday, Japanese “sales of new cars are on track to drop almost 30 percent in December,” says the Nikkei. Sales dropped 5 percent in September, 13 percent in October, and 27 percent in November. For all of 2008, Japanese auto sales are expected to come in 7 percent lower. That would be the fifth consecutive yearly decline of the Japanese domestic auto market.

Fuji Heavy and Toyota getting cozier. Fuji Heavy, manufacturer of the Subaru, plans to join up with Toyota in the development of electric vehicles, Fuji Heavy President Ikuo Mori told The Nikkei (sub.) Fuji Heavy’s prototype electric vehicle is powered by a lithium ion battery from an alliance of Nissan Motor and NEC. They want to broaden their base of battery suppliers, and the partnership between Toyota and Panasonic would be among possible choices. Toyota holds a 16.5 percent stake in Fuji Heavy.

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A recent TV ad extols the wonders of the Cadillac CTS. Suddenly, the image zooms backwards and flips around to become a sparkling GM logo. “The CTS is made by General Motors,” the narrator intones. “Surprised?” I sure was. I mean, I understand the intended subtext: See? We’re not a total basket case. But as my father would say, if you’re so smart how come you’re not rich? Students of this series know that GM has plenty of answers to that question. The only thing neophytes should clock: none of these answers involve the phrase “we fucked up.” That and the fact that GM wants you to believe that their turnaround depends on building more cars like the Cadillac CTS. Uh-oh.

“Hoover” as in the English expression for vacuum or suck-up– not the U.S. President at the helm when American slid into [what became known as] The Great Depression. Anyway, that brings Uncle Sugar’s contribution to the Detroit cause to $66.2b: $25b for retooling loans, $17.4b for direct-to-manufacturer bailout bucks and $23.8b for GMAC aid. OK, I’m exaggerating. Bloomberg reports that GMAC is “only” in line for $6.3b in cash money. The rest– $17.5b– will arrive in the form of federally guaranteed debt, under the Temporary Liquidity Guarantee Program. If you remove that choice morsel from the recipe for, what was it again? Oh right: turnaround. Recovery. That sort of thing. Then it’s a mere $48.7b. So far. GMAC still faces a midnight deadline to swap debt for equity to qualify as a bank, but it shouldn’t be much of a problem, given that the Fed has pre-approved the bank transformation process under its “emegency powers.” As far as GMAC’s future management is concerned, Bloomberg scribe David Mildenberg doesn’t “get it.” If Red Ink Rick Wagoner can hold onto the reins of power at GM, what’s the bet GMAC Chairman Ezra Merkin, “whose funds invested in Bernard Madoff’s alleged $50 billion Ponzi scheme,” will keep on keeping on?

After Taiwan’s Yulon Motor pays a symbolic Taiwan dollar for the 49 percent stake General Motors holds in their local joint venture Yulon General Motors, GM will give them the keys, and say bye-bye for good, reports the Dow Jones News Wire via CNN Money.

Yulon, like many other car companies, needs cash. GM doesn’t have it, so they decided, to heck with Taiwan, it’s not worth the hassle, we’re outta here. Or in the more proper words of F.J. Pan, the CEO of the former joint venture: “Yulon General Motors needs a fund injection to cover losses and develop business, and General Motors has cash flow problems, so they said they don’t plan to inject funds,”

For long, Yulon was more known for flooding the island with rebadged Nissans. In 2004, Yulon split itself in two entities to allow a dalliance with another joint venture partner.

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The 1960s was the golden age for convertibles: Lotus Elans, MG Midgets, Austin Healey Sprites, Triumph TR6s, Chevy Corvettes and others. By the mid-70s, market forces, safety regulations and horrific build quality conspired to kill the open seat convertible. Ten years later, when large convertibles started to make a comeback. In 1989, Mazda’s California design team issued forth an Elan-evoking drop-top– without the leaky oil and the wonky electrics. In the next ten years, Mazda sold nearly 500k Miatas. To celebrate the model’s tenth anniversary, Mazda created a special Anniversary Edition (10AM) model based on the then-new second generation car (codenamed NB).

Successful GM, Chrysler Dealership
Location: Mississippi > Confidential
Industry: Auto Related > Auto Dealers
Financials
Asking Price: $1,500,000
Cash Flow: $776,677
Cash Flow Comments: EBITDA
Real Estate: $2,000,000 (Not Included in Asking Price)
Seller Financing: Maybe
Business Summary
This is a very well established dealership that continues to have strong profits and sales. The area is growing and strong economically with job growth. Strong service department and parts sales departments are very profitable and enjoy a great reputation. One owner is willing to continue to operate as a minority partner. Only serious inquiries please.
About the Business
Year Established: 1955
Facilities: Great
Market Outlook and Competition: Strong
About the Sale
Management Training and Support: Yes
Reason For Selling: Retirement of majority owner

I mean, milestone. I mean, it would be petty and vindictive of me to suggest that Chevrolet’s Project Driveway program was/is an enormous waste of GM’s precious development money. If we are to have a hydrogen economy– and why wouldn’t we (other than the cost of rebuilding a trillion dollar-plus infrastructure from the ground up)– we’re going to need fuel cell vehicles to, uh, get around. So you can’t help but applaud the fact GM now has more than 100 hydrogen fuel cell Chevy Equinox on the road, which have logged a combined total of 500k miles. “The vehicles are performing very well and we are learning a great deal about fuel cell robustness and how to make this program work for real customers,” Marybeth Stanek, GM’s director of fuel cell commercialization, opines [via press release]. “The amount of data we’ve collected over the past year is very valuable to us, and gives us insight into this important automotive technology.” Yes, yes. What exactly have we learned? *crickets chirping* Hey! Jay Leno has one! Been driving it since April. Or, you know, parking it in one of his aircraft hangers.

*  Finalist 2009 North American Truck of the Year (with 2009 Ford Flex for Car of the Year)
* Detroit News Truck of the Year
* Motor Trend 2009 Truck of the Year Award™
* 2009 Best Redesigned Vehicle from Kelley Blue Book’s kbb.com
* Top honors as “Truck of Texas” as well as “Best Luxury Pickup” for the 2009 F-150 King Ranch from Texas Auto Writers Association
* “Best Overall Half-Ton Pickup” from PickupTrucks.com
* “Automotive Excellence” award in the Workhorse Category from Popular Mechanics
* “Top Safety Pick” from the Insurance Institute for Highway Safety for its standard safety technology: Safety Canopy side curtain air bags and AdvanceTrac with Roll Stability Control
* “Residual Value” award from Automotive Leasing Guide (ALG) for retaining the highest percentage of its original price among 2009 full-size light duty pickups at the end of a conventional three-year lease, based on ALG projections
* Motor Trend’s Truck Trend Top 5 Trucks from Specialty Equipment Market Association (SEMA) for 2009 Ford F-150 Heavy Duty DeWalt Contractor Concept
* “Accessory-Friendly Truck” Design Award from SEMA

It’s ALWAYS Christmas in D.C.! Indiana democrat Senator Evan Bayh would like to say hello to the New Year with $1.63b worth of grants to American automotive battery makers. “For a fraction of what the federal government has spent to bail out Wall Street, we can create the next generation of high-mileage vehicles,” Bayh pronounced, neglecting to mention the $38.4b the feds have allocated to the domestic auto industry as of late– which doesn’t include the tens of billions headed to the newly-created GMAC bank. Local angle? You betcha! “Indiana can lead the way with cutting-edge technology being made right here within our borders,” Senator Bayh’s statement said. “Our state can help America move past Band-Aid solutions and help ensure the long-term viability of the domestic automobile industry.” That’s kind of low-key– given the level of PC bluster surrounding the incoming adminstration’s push for “green jobs.” Take two…

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UK carmudgeon Jeremy Clarkson remains under fire for misrepresenting the Tesla Roadster in his Top Gear test. Initially, when Jezza and his boys were caught pretending that the Roadster had run out of juice by pushing the Roadster into their off-track facility, they claimed dramatic license. If you don’t work for Tesla and live by the words “That’s Entertainment!”, it’s no biggie. But as Teslagate spreads into the MSM, Clarkson’s prevarications grow increasingly… tedious. First, the Torygraph presents Tesla’s side of the story, via spokesperson Rachel “Heart of Darkness” Konrad [sic]: “Never at any time did Clarkson or any of the Top Gear drivers run out of charge. In fact, they never got below 20 per cent charge … they never had to push a car off the track because of lack of charge or a fault. It’s unclear why they were filmed pushing one into a garage in the video.” Unclear my ass. Sigh. Even when they’re right, Tesla can’t help but weasel. But Clarkson’s cantankerous reply was worse.

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