Boston.com reports that Massive Taxes’ Governor is pledging to freeze toll charges throughout The Bay State. Before you get out your huzzahs, see: above. “Governor Deval Patrick said today he is looking at a Hummer tax—adding higher registration fees for gas-guzzling cars [ED: presumably SUVs will be rounded-up and shot] and offering discounts for those that do less harm to the environment.” The battle lines are drawn across entirely predictable boundaries, with common sense going out for a cup of Clover (at the taxpayer’s expense).
Now that Chrysler and GM have submitted their “viability plans,” the Congressional corridors of power have been eerily silent on the subject. Oh sure, the White House Press secretary said something patriotic about preserving this, that and the other thing. And the presidential clusterfuck committee charged with sorting this shit out is meeting even as I obscene. But I was expecteding a lot more public political positioning on Motown’s second round of trough snuffling. Never mind. I reckon Chrysler and GM will get their/our money and soldier on. I also predict the feds will direct Cerberus to toss the keys to Chrysler to GM. Political expediency—the need not to “throw in the towel” on any aspect of the U.S. economy—makes ChryCo inviolate. So why not lump all of Detroit’s “troubled assets” together and create a federally controlled—sorry, “supervised” American Leyland? It’s such a horrendous idea on so many levels it just has to happen. Or not. What say you?
GM’s Jill Lajdziak has written a letter (PDF) to Saturn dealers and customers warning that the General is actively pursuing a spin-off for its “different kind of car company.” Explaining that Saturn Distribution Corporation is “already an independent subsidiary,” Lajdziak says that Saturn dealers would be able to source GM products until 2011, and “if successful, SDC at that point would source products from other manufacturers.” Meanwhile, sit tight and enjoy the ride. “GM will support the continued availability of Saturn parts and service as needed,” says Lajdziak. So while Saturn struggles along under the toxic stench of rejection by GM, let the speculation begin! Will a German government-backed Opel take on the distribution net? Will an upstart Chinese firm see this as a cheap entry to the American market? Or is 2011 the end of the road for Roger Smith’s experiment?
A New Zealand resident who wants a red light running warning citation sent to a stranger or an enemy only needs to call a toll-free phone number. On Tuesday, the Manukau City Council unveiled its program that allows anyone to contact the police and accuse someone of an intersection traffic violation. “We’re asking the community to join the council in sending a message to these drivers that it’s not on,” Manukau City Council member David Collings said. “If people see drivers running red lights they should dial 0800 STOP 4 RED.”
Reuters reports that Chrysler Canada has been charged with a $500m CD ($400m USD) tax lien as a result of a tax liability reassesment. According to the document filed in Canadian federal court, the Canada Revenue Agency notified Chrysler Canada in 2002 that it owed “substantial increases” in taxes “targeting the pricing of automobiles and parts that crossed the border between Chrysler Canada and its Detroit parent” for three years starting in 1996. The document does not reveal the amount that Chrysler owes the Canadian government, but the $500m CD lien was filed against Chrysler’s Brampton, Ontario, operations. The lien is though to be the largest ever filed by the Canadian government, and likely represents an even larger tax liability than the lien amount. Chrysler is seeking shelter from the assesment in the Canada-US Tax Treaty, and according to reports, the court dispute has been shelved while the various governments negotiate a bailout for the auto sector. Needless to say, another half-billion in liabilities doesn’t exactly do wonders for Chrysler’s viability.
Accounting firm Grant Thornton LLP caught our eye with a press release (via PRNewswire) warning the auto industry of possible “going concern opinions” as auditors complete fiscal year-end reporting. “Going concern opinions” are an auditor’s statement in SEC Form 10-K annual reports that there is substantial doubt about the entity’s ability to continue as a going concern. “It’s important for the public, the supply base and all of the parties involved in restructuring the auto industry not to overreact if they start seeing ‘going concern’ opinions,” says Kimberly Rodriguez, co-leader of Grant Thornton’s global automotive team and a principal in the firm’s restructuring practice. “We’re in uncharted waters and auditors face extremely difficult decisions.” Translation?
Yet again, a manufacturer is releasing an image which shows a bit of a car to generate excitement at the prospect of seeing . . . the rest of the car. Wasn’t there a board game like this, where you had to guess the whole image as little pieces were revealed? Well, I find the hide-and-seek, slow-reveal automotive press release shtick an inherently infantile practice. Resisting the urge to blame Autoblog for this outbreak of electronic peek-a-boo, thrilled as they must have been with the 235 “teaser” shots provided by FoMoCo in the run up to the entirely predictable 2010 Mustang, I will not resist the urge to call this technique the autoblogospherical equivalent of dickless porn. Do I really care what a new fender vent looks like?
Looks like President Obama’s team has a loose grasp on the realities of the U.S. automotive market, as in who builds what where. Either that or a firm grip on what the public needs to hear to sign-off on the roughly $100b’s worth of taxpayer money headed in Motown’s direction, pissed away trying to resurrect the dead and forestall the inevitable. I mean, preserving an important part of America’s industrial base and protecting America’s middle class.
Ingvar, Swedish member of TTAC’s Best and Brightest, translates a report in today’s Aftonbladet:
“Aftonbladet can disclose today that Secretary of Industry Maud Olofsson fasttracked GM into the Europan Investment Bank. But GM said no. A source says: GM wasn’t interested in saving Saab.
In the late fall, Maud Olofsson had talks with GM Europe boss Carl-Peter Forster. Olofsson offered GM government loan guarantees if they turned to the European Investment Bank. But his response was lukewarm. It takes too much time to go through EIB, was his answer.
But Olofsson didn’t give up. In early december, she contacted EIB and asked them if they could fast track GM’s eventual case. The answer was positive. But when GM was told, they were only making excuses. There was obviously no interest from GM in pursuing the case, they only kept stalling, a source says.
Between holidays, the Swedish government called in consultants to review the numbers for GM and Saab. They shook their heads in despair, there was no reality in the numbers, a source says. The advice they gave: Forget about Saab.”
Sorry about the pun (referring to the yearly sales rate), but Automotive News [sub] nailed the headline, and I couldn’t just repeat it without a little TTACitude. Sometimes, though, the simple truth is all there is. The fact that America’s largest publicly traded dealership group has cut new vehicle orders by 60 percent is… stunning. It means that that the U.S. new car market is dead in the water. Federal bailout or no, someone’s going to take a dirt nap. Not that Mike Jackson thinks so. The AutoNation CEO reckons U.S. new car sales have stabilized at a rate of 10 million per year, and expects that number to climb over 11 million by the end of the year. What’s more, the formerly pessimistic Jackson has looked at Chrysler and GM’s new viability plans and put Smash Mouth’s “I’m a Believer” on his iPod. “I felt the outline of the direction they gave back in November was too optimistic on the sales side and not deep enough on the cuts side. These plans are much more realistic and it’s the right approach.” So another one bites the rust. Or something like that.
An 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. WAS is being filed from Beijing until further notice.
Increasing indications that GM plans to cut Opel loose: North Rhine-Westphalia’s Premier, Jürgen Rüttgers, had a chin wag with GM’s CEO, Automobilwoche [sub] reports. Rick Wagoner told Rüttger there are no plans to close any German plants, including the one in Bochum, which is in Rüttger’s state. “Currently.” News flash! Wagoner expressed his interest in spinning-off Opel. Rüttgers told Rick that GM would have to keep the German plants open to qualify for German government money. How the spin-off is going to work still is anybody’s guess.
Saab may go bankrupt this week: GM’s Saab will start insolvency procedures as early as this week, das Autohaus reports, citing Swedish news reports. Sweden’s Economy Minister has already said that this would be the proper way to go.
Breathe. Remember this when you drive the Cadillac CTS-V. No matter what happens, continue to breathe, lest you fall victim to what us aviators call G-LOCing, or G-Force Loss-of-Consciousness. Steady, rhythmic breaths will help your body cope with the stresses induced by a four-door sedan capable of hurtling your fragile, carbon based body into speeds that challenge the Theory of Relativity. Entering hyperspace, where the gravity wells of passing stars actually start to affect the navigation system of the CTS-V, you might forget this simple fact, pass out, and crash the American built sports sedan that beats its German competitors into submission.
[Editor’s Note: This is the second of a four-part series by Dr. Rob Kleinbaum. Read the first part here.]
The scholars Lawrence Harrison, Samuel Huntington and their colleagues have addressed the fundamental question of whether culture “matters” in how societies develop and make a compelling case that it matters a great deal. They have also outlined the specific traits that lead a society to progress or prevent it from doing so and their work provides a rigorous way to think about culture that is based on substantial evidence. These traits seem applicable to a private enterprise, especially one that is larger and older than many countries.
The first rule is that everybody at the auction is your friend. This doesn’t mean you back slap or kiss ass (though many do this quite well). But I like to say that the three currencies in the auto auction business are conversation, collusion and company. Simply put, you converse and collude with those you hang out with in the hope that when it’s your time of need, they leave you the hell alone.
Well, they didn’t kill the Corvette, but GM’s iced its performance tuning division. Automotive News [sub] reports on the car-nage.
GM today disbanded High Performance Vehicle Operations, which is based at the company’s suburban Detroit technical center, and redeployed its engineers, said spokesman Vince Muniga.
“All high-performance projects are on indefinite hold,” Muniga said. “The engineers are moving into different areas of the organization, and they will work on Cadillacs, Buicks, Chevrolets and Pontiacs.”
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