Well, the first day at the 2009 North American International Auto Show wasn’t such a bust in the end. I began the day by attending the Intro and North American Car of the Year Awards. During the intro talk the Detroit show sought to demonstrate that it was still relevant by trotting out senior executives from the auto companies that didn’t opt to skip this year’s show. Among the execs from GM, Ford, Toyota, Honda, VW, and so forth was… Henrik Fisker. “Which one of these is not like the others…” started running through my head. Pretty good for a guy who reskinned SL’s and 8’s until he figured out it was better to ride the green gravy train. But that’s the way Detroit rolls these days.
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Hey, Reuters calls it the Detroit Auto Show. And it is an auto show in Detroit, no matter what the official organizers call it. And outside said event, United Auto Workers (UAW) employees protested the possibility that the union would comply with federal requirements on the $13.4b loan which saved GM from Chapter 11. “The group of some 50 or more workers marched up and down outside the conference center in chilly but sunny weather, chanting such slogans as “Bush says cut back, we say fight back” and holding signs including “No millionaire left behind” and “Out of a job yet? Keep buying foreign.” And what’s with the MSM insistence on repeating the myth that the UAW’s ’07 contract contained “landmark givebacks on wages and health benefits”? Anyway, “The concessions that Bush wants us to make [that we’re not going to make and will remove from the loan agreement with Obama’s help anyway] are just a slap in our faces,’ said Tammy Jones, a furnace worker at Chrysler’s Hamtramck axle plant in Detroit.”
The day after threatening to extend its production shutdown, Chrysler has officially announced it’s hitting-up Uncle Sugar for another $3b– on top of the $4b recently transferred to its account. At the same time, it’s asking for an as-yet-unspecified amount of U.S. Treasury “investment” in Chrysler Financial. As duly appointed guardians of the public trust, the Treasury Department “declined to discuss the talks.” “We’re in touch with the automakers and their financing sources and continue to evaluate their financing needs,” Treasury spokeswoman Brookly McLaughlin said on Sunday. Speaking to reporters at the don’t call it the Detroit Auto Show, ChryCo CEO Bob Nardelli was equally tight-lipped. According to The Detroit News, Boot ’em Bob refused to say how much Chrysler Financial was seeking, but said he hoped “it would provide the kind of support for us in a similar fashion that GMAC was able to provide to GM.” So, what, another six billion? By Friday? Before the automakers try and make the case that they can pay the money back? The raid on the public purse continues.
“My god, I hope that a [federally appointed, $17.4b loan guarding] car czar does not get into the product strategy of the companies,” Ford CEO Alan Mulally said at a dinner with journalists last night (our invite got lost in the mail again). “The product strategy has to be led by the companies.” Since when? Did Big Al miss the memo on the latest Corporate Average Fuel Economy (CAFE) standards, and Congress decision to support California’s even higher tailpipe regs? Reading between the lines of his post-prandial pronouncements, perhaps not. “Mulally said he’s encouraged by president-elect Obama’s understanding of the challenges facing the industry. ‘I’ve been very pleased with the fact that it seems like he really understands that dealing the economy is a very, very high priority…. To have a policy where we’re trying to jam products out that people don’t want doesn’t make any sense at all.'” Very, very as in “can we talk about those federal standards again?” Very, very as in ditch CAFE for higher gas taxes? “We’re not presumptuous enough from the automobile industry frankly that we should lay out the energy strategy of the United States.” Shall we file that one under “beggars can’t be choosers” or “methinks he doth protest too much”?
The news is flying thick and fast out of Detroit this week, as the annual conclave at the don’t call it The Detroit Auto show puts hundreds of journalists in close proximity to corporate newsmakers and spinmeisters. Automotive News [AN, sub] is doing the do. First up: Toyota’s admission that its “Saved by Zero” didn’t save the automaker from a humiliating December; trucks sank by 50 percent and they lost critical U.S. market share. So ToMoCo’s reaching deeper into its deep pockets.”The shift that you’ll see in January from December is more consumer cash and less APR and lease support through our dealers,” Toyota USA Prez Jim Lentz told AN. Jimbo didn’t offer any specifics, but AN rightly points out that Priora are stacked up like cordwood. “One of the largest sellers of Priuses in the country, Earl Stewart Toyota in North Palm Beach now has about 70 on the lot that it can’t get rid of. ‘Any kind of Prius anybody wants — any color, any anything — I’ve got it,’ Stewart says. ‘And if I don’t have it I can get it because there are several hundred in the port. Dealers don’t want them.'” Note: “According to Edmunds.com, Toyota had the biggest percentage boost in incentive spending in December at an average $1,995 per sale. That was up 87 percent from what the brand spent in December 2007.” The implications of all this are pretty clear…
Plenty of industry watchers predicted that Chrysler wouldn’t restart production after the company extended its Christmas shutdown by two weeks, to January 19. As that date approaches, ChryCo’s CEO has let it be known that the ailing American automaker may not make autos again until… later. Bob Nardelli told reporters at the North American International Auto Show today that the company has a responsibility “to make sure we’re not jamming dealers” to buy cars. That’s not how Bill Rosado, owner of a Chrysler-Dodge-Jeep dealership in Milford, Pa., sees it. Bill told The Wall Street Journal that he’s actively resisting the company’s requests to add more stock to his already-crowded lot. “We’re not ordering any cars in spite of the pressure they give us. We are going to sit tight with what we have,” Mr. Rosado said. “We don’t see any peak coming up where all of a sudden Chryslers are going to be desired.” True dat.
Time to update “the future of car?” Yup. GM’s Car Czar has admitted that Pontiac has a new motto: “Pontiac is toast.” Automotive News [sub] reports that Bob Lutz has admitted that GM is trimming Pontiac’s line-up to five vehicles– if you count the Solstice hardtop as a separate model. Which we don’t. That leaves Pontiac with four vehicles: the doomed Australian-sourced G8, the G5, the Toyota co-production Vibe and the dead-in-the-water “we don’t need no stinkin’ trunk space” Solstice. Maximum Bob’s admission that Pontiac is being strategically reviewed to death comes hard on the heels of GM NA Prez Troy Clarke’s assertion that GM will “follow through with plans to shrink to four core brands.” That would be Buick, Chevrolet, Cadillac and GMC; ditching HUMMER, Saab, Pontiac and… Saturn. “‘We’ve entered into a very, very open and candid dialogue with our Saturn retailers,” Clarke said. Saturn, launched 19 years ago, has been successful in terms of brand attributes, he said. But ‘it just hasn’t been a good business for us… We need some breakthrough options here. We can’t continue brands that have no prospect of earning their way.'” It took them how long to figure this out? And, by the way, whose fault is that?
Of course, that’s a bit blunt for corporate types. Ford design chief J Mays gives us the Ford-approved terminology for the automaker’s decision to forgo rear wheel-drive (RWD) for its passenger vehicles: “It’s out of the cycle plan,” J tells Automotive News [AN, sub]. “We’ve got other priorities at the moment. We’re going down a path right now that is all about fuel efficiency, and we’ve got a lot to do about that. So we’re not talking about rear-wheel drive.” AN provides the potted history of the layout’s extinction. “A year ago, Ford CEO Alan Mulally and product chief Derrick Kuzak confirmed that the new Ford and Lincoln rwd sedans would be coming. By midyear, Kuzak said Ford was rethinking the program but hadn’t discontinued it. Analysts had expected U.S. sales of the rwd cars to begin with the 2013 model year. The platform was to be shared with a large car developed for Australia.” And now, nothing. TTAC’s Best and Brightest will debate the wisdom of abandoning RWD. Suffice it to say, Lincoln. Oh, and the Hyundai Genesis.
Not only does Richard Colliver admit that ’07’s sales were a bubble– a bubble that has permanently popped– but the executive vice president of Honda America says the bailout billions thrown at banks, aspiring banks and automakers hasn’t had any impact on the credit availability underpinning the U.S. new car market. Colliver also told Reuters that HoMoCo’s given up forecasting ’09 sales. “We’re not even forecasting because whatever we forecast, we would be wrong. If you look at the last 120 days, if that trend continues then we’re looking at a significant reduction (from 2008).” So Honda’s battening down the hatches, cutting inventory to 65 to 70 days of supply in the next three months (from the current 100 days). At the same time, Honda’s planning on boosting its leasing penetration from 23 percent to 27 percent of total U.S. sales. As for the impact of Motown’s meltdown on Honda…
Fans of English royalty will both recognize the seminal moment in the courtship of Prince Charles and Lady Diana. During an official interview with David “I’m not a Dickens character either” Dimbleby, the obsequious reporter dared ask Charlie Boy and Lady Di if they were in lerve. “Of course,” the future Mrs. Windsor replied. To which Charlie famously added “Whatever love is.” The story reminds me of today’s pronouncement by Ford scion, ex-Ford CEO, current Ford Chairman of the Board Bill Ford when asked if FoMoCo will join GM and Chrysler by lining-up for a mega-suckle on Uncle Sugar’s tit. “Only if the world implodes as we know it.” Whatever “implodes” means. Maybe we should ask Barney Frank.
I’m sorry. I couldn’t resist. But c’mon; who came up with the idea of naming the “100 lucky people get to drive the Mexican-built U.S. market Fiesta before regular folks just like the MINI EV except perhaps not quite as exciting for the press or anyone else for that matter” website fiestamovement.com? Did one of the other Farley brothers take over for Jim down at The Blue Oval? Apparently not: “Getting serious about the small-car business is a big change for Ford,” Jimbo told Automotive News [sub.] Anyway, do YOU have what it takes to drive a stylish econobox free for six months? In other words, can you make a two to five-minute video that Ford can use for its nationwide campaign, saving themselves a million in advertising agency fees? [come on after the jump] Here’s something odd: Jim Farley says annual American sales for the Fiesta– on sale next year— could range from 30k to 70k units, depending on gas prices. Correct me if I’m wrong, but that’s nowhere near enough throughput to get Ford out of trouble.
The Detroit News [scroll down] is blogging the heck out of the don’t call it The Detroit Auto Show. As always (we can only hope), GM Car Czar Bob Lutz provides the requisite non sequiturs. The DetN’s Snell asked Maximum Bob about the prospect of another, more alpha (in the HUMMER sense) Car Czar, soon to be assigned by Congress to keep watch on the $13.4b of taxpayer money loaned to MB’s employer. Like the idea? He loves it! “We’ve never had a go-to person in Washington to pour out our hearts to,” Lutz said. “To have a person, a presidential appointee, intimately involved in the industry to review plans and have a dialogue with, I think is a very beneficial institution. I almost wish we had this before.” Almost, but not quite? But don’t worry, Maximum Bob reckons GM will “meet the requirements we signed up for” with the help of the new Cadillac SRX, Chevrolet Equinox and yes, Buick LaCrosse. Of course, that’s not the whole plan. “GM is betting gas prices will rise once the economy recovers and pent-up demand for new vehicles in unleashed. ‘That’s what we’re counting on,’ Lutz said.”















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