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Open letter from GM’s Union Leaders:
“Renaissance” plan for Europe is not viable. It will finish off the European GM brands and companies and includes unacceptable risks of litigation—the alternative is the spin off of the European operations
Twenty-eight massive serpents were found in an open pit coal mine in Colombia, by a team led by Jason Head of the University of Toronto at Mississauga. Luckily for the researchers (unluckily for the producers of Jackass), the snakes had been dead for nearly 60 million years. Titanoboa cerrejonensis, could have swallowed my old gen-1 Saturn or a Mazda Miata. Snakes can devour beasts that are roughly as massive as they are, and the 42-45 foot long snake weighed around 2,500 lb. fully grown, roughly equal to the aforementioned machines. Or 500 lb. more than a Lotus Elise. At almost five times the weight of the green anaconda, the world’s heaviest living snake, Titanoboa’s diameter would have been greater than the height of said Elise.
“Consultant” is the new way to say “unemployed.” But, from time to time, it can be quite lucrative to consult on various vague enterprises. Such was the case a few years ago when I found myself with the urge and the ability (temporary, alas) to add something truly outrageous to my personal Island of Misfit Cars. A racing buddy of mine mentioned to me that Spyker was bringing their “demo car” through Detroit. There might be a deal or two to be had. And that’s how I found myself opposite-locking a $296k car across two lanes of Troy, Michigan’s “Big Beaver Road” at the top of second gear, idly contemplating my personal liability in any potential collision while my corporate babysitter clawed feebly at his door like a kitten kneading its mother’s stomach.
With municipal budgets tight across the state of Colorado, members of the General Assembly are looking to offer relief. The Colorado state Senate Transportation Committee voted 4-3 on Thursday to boost the cost of a speed camera ticket from $40 to $75. The measure, Senate Bill 143, also extends the reach of photo ticketing to include nearly any road that runs through the state.
Last May, the state authorized the use of freeway photo radar which allows the placement of automated ticketing machines on high-speed roads by erecting a sign that says “work zone.” The bill introduced by Colorado state Senator Bob Bacon covers most of the remaining roads within the state by allowing photo ticketing on any road with a speed limit of 50 mph or less. Combined with the higher fees, the revised program is expected to generate millions in additional revenue. The Senate committee voted to direct this money into funding accounts labeled “traffic safety.” The bill must now be considered by the full Senate.
To all General Motors Dealers:
On Tuesday, Feb. 17, GM will submit an updated viability plan to the U.S. Treasury. The document will outline a significant restructuring of the company, along with demonstrating that we have a detailed plan for long-term, sustainable success as a viable, global enterprise.
Because this plan submission is of vital interest to you, I wanted to make you aware of some key activities regarding the plan submission:
Hedge funds are busy seeking painful revenge on Porsche. According to the Financial Times, they “have gained more ammunition for their legal complaints against Porsche after the German sports carmaker revealed it had made almost $514M by placing bets on several German blue-chip shares, in addition to last year’s controversial trades in Volkswagen options.” Why is this tidbit consequential? Because Porsche had always maintained that all they had in mind was the innocent takeover of Volkswagen.
In 2008, Porsche had higher profits than sales. They made a profit of €6.8B from VW option trades and about €1B from selling sports cars. Last October, Porsche disclosed that it controlled, through direct holdings and options, 74 percent of Volkswagen. This catapulted the VW share price above the €1000 mark and inflicted large losses on hedge funds and other investors that had placed bets on a falling VW share price.
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.
Hell, no, let us go: On Monday, GM’s European labor leaders called for GM to jettison their Opel/Vauxhall brand. According to Reuters, the unions would prefer an independent Opel/Vauxhall, rather than face what they called “potentially fatal cost-cutting.” A statement on the labor force’s website left no doubt that the long knives were out. “The spin-off of Opel/Vauxhall . . . and the spin-off of (Swedish brand) Saab is the only reasonable and feasible option for General Motors which would not destroy the European operations and its European assets and could avoid lawsuits.” German state and central governments appear to be supportive of the plan.
The fix is in. Even before GM pressed “send” on their viability plan to Congress—justifying their additional call on the public purse—the Obama administration has decided to offer the ailing automaker the second tranche of a Bush-initiated $17.4B federal loan. That’s $4B to you and me. Literally. Reuters reports that “an aide” signaled the pre-approval approval. The Houston Chronicle carries a Bloomberg story that repeats the claim, citing “a person familiar with the plan.” If this story checks out, it’s a slap in the face of accountability; for both GM AND our elected representatives. Yes, the second check was scheduled for payment, but the timing and the disconnect is still startling. Here’s some more money, now let’s have a look at that plan for profitability by 2011. Oh and if we don’t like it, we’ll call the loan and down you go. In truth, no matter which way this goes, we’ll never see that money again. Nor the money after that.
The United Auto Workers (UAW) contracts are facing unprecedented public scrutiny. It could have something to with the fact that it’s now OUR money the automakers are pissing away—sorry, “lavishing upon” union members. Or it could be that the normally passive—sorry, “pro middle class” MSM’s smells blood in the union boss’ water. In any event, here’s one for working class heroes: free legal advice. The Freep: “Established in 1978, the UAW Legal Services Plan provides ‘personal legal services,’ to about 725k workers, spouses and retirees from several companies, according to the program’s Web site. It is the largest pre-paid legal services program in the country. Before I give the jumpers the inside dope (in a non Michael Phelps kinda way), you wanna guess how much 290 attorneys cost the Big 2.8 et al.? Seriously, you gotta guess. ‘Cause the Freep doesn’t even estimate the cost. Blood boiling? Ready for the jump then . . .
After swimmer Michael Phelps won a drawer full of Olympic gold, he signed a deal with Kellogg’s to promote Frosted Flakes. Stupid move. Tens of millions of parents know that Frosted Flakes make their kids bounce off the friggin’ walls. Part of this healthy breakfast, my ass. All Phelps had to do was align himself with brands selling healthy living and he could have smoked the finest Maui Wowee, in Maui, for the rest of his life. Anyway, Phelps got caught doing bong hits. A smart handler would have used the opportunity to strengthen the Phelps brand. “Michael is obsessed with fitness. He doesn’t drink alcohol or smoke cigarettes. He regrets using an illegal herbal drug for relaxation. He is now exploring yoga and other alternatives. He encourages his millions of fans to learn from his mistake, as he has.” Let the Mary Jane debate begin! Anyway, Phelps signed a million dollar deal with Mazda to promote the brand in China. (Huh?) When the swimmer got busted, they somehow convinced him to make this entirely bogus, po-faced apology. It manages to make both Phelps AND Mazda look stupid. Yes?
That’s TTAC Ken Elias earlier today in Bailout Watch 394. And lo, it did come to pass. Just hours later, Automotive News reported: “General Motors is expected to identify more than $1 billion in savings from additional plant closings and factory work-rule changes when it files a viability plan with the US Treasury on Tuesday, said a source familiar with ongoing stakeholder negotiations.” And no, it wasn’t Ken. Of course, Elias goes on to say big whoop. “[It’s] not enough to right a ship that’s losing $2B+ a month in cash flow.” Somehow that perspective didn’t make it into the AN piece. Still, the article’s well worth a read—if only for a laugh. Ladies and gentlemen, we have a new (yet old) straw man to set alight: True North.
Holy Mother of Malaise! As the bad news keeps coming for Detroit, the reactions are becoming increasingly agressive. And now word comes from the Detroit News that US automakers are “taking a cue from their Japanese competition” by reducing the number of trim options on their vehicles. “The industry has way too many brands, too many models, too much choice, to be efficient,” Mike Maroone, president and COO of AutoNation, tells the DetN. The import approach of limiting options to trim levels “may not serve every niche but it’s a much more efficient business model.” But despite Detroit’s apparent acceptance that less complexity is a good thing, they still lag behind. Sure, Ford has cut the number of available configurations for the new Fusion from 2,600 in 2008 to 104 in 2009. But GM has only “streamlined” its Malibu and Cobalt to four main trim levels, while Chrysler can brag only of trying to cut its Sebring configurations down to 1,000 versions. On the engine simplification front, Ford is out ahead of its Detroit rivals as well.
My almost-three-years-old Acura TSX has been developing an annoying cosmetic problem: the plastic bumpers and sill trims have slowly but surely been turning a different color from the rest of the car. We live in a mild climate and I work from home, so the vast majority of the time that car sits protected in a garage out of the way of the sun’s UV rays. Even so, the sheet metal is still blue-silver while the plastic bits are turning a pale green. Argh, I know that over time it is just going to keep getting worse, and my warranty is almost up (45k miles down out of 48k).
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