Fiat shares opened up 7 percent at 4.64 Euros, following a newspaper report on a plan to merge with PSA, Reuters reports. The Il Sole 24 Ore newspaper said Italian investment bank Mediobanca has drawn up a report together with a strategic consultant on merging the two companies, and that Fiat Chief Executive, Sergio Marchionne, had yet to decide if or when to present the plan to the board.
A few hours later, Reuters came out with the story that Fiat’s board is not considering a plan to merge with another car maker. How could they, if Sergio is still sitting on it? Fiat then put out a statement saying that they are still interested in collaborating with other car makers to cut costs and enter new markets: “No proposal for a merger with another automotive group is currently under consideration. It is a known fact that Fiat frequently examines opportunities for agreements of various types which would offer it operational synergies and access to new markets.” And what’s Paris saying to the advances? (Read More…)
When I read in Auto, Motor und Sport about a concept car that looks great, claims 110 mpg (city) and a top speed of 210 mph, I was intrigued. But skeptical too, of course. Since the boffins at the UK’s Frazer-Nash Research (and not just some garage geniuses) are behind the “Namir” Rotary-engine hybrid dream car, I thought it would be worth a call. So, I spoke with company Director, Gordon Dickson. Why Wankel? “A rotary engine is extremely compact and is also extremely energy-efficient at its RPM sweet spot. The Namir is a serial hybrid, meaning there is no mechanical connection between the combustion engine and the four electric motors, so it’s easy to keep the 814cc Wankel engine within its sweet spot. We have already employed this technology in our Metrail system.”
As a condition of its government-funded restructuring, GM was supposed to wrangle concessions from its unions and bondholders. So far, the General has struck out with the major bondholder committee and the UAW, and has only had its agreement with the Canadian Auto Workers to crow about. But now that agreement appears to be in peril, as Reuters reports that Chrysler and Ford are rejecting the terms of the GM CAW restructuring. “The current agreement with GM is unacceptable and we have to break the pattern,” Chrysler’s Robert Nardelli told Canada’s House of Commons. “We believe the recently negotiated agreement between General Motors Canada and the Canadian Auto Workers will not keep Ford’s Canadian operations competitive in today’s global economy,” concurs Ford Manufacturing Maven Joe Hinrichs. While GM claims that its CAW deal brings labor costs in Canada in line with US transplants, Nardelli claims “the union agreement with GM, if applied to Chrysler, would not eliminate even half the labor cost gap Chrysler Canada has with its Asian competitors in Canada.”
One of the first things you learn in the auto industry is that if you run your plant at less than 80 percent of capacity, your plant and your career are in deep trouble. If that adage holds true, then the world is in for a world of hurt.
At the moment, most automakers are believed to be running their plants at less than half capacity in an effort to reduce inventories, which have been piling up since last fall, says the Nikkei [sub]. They either get used to it; or close a lot of plants. (Read More…)
Given GM’s well-proven love for inflating the importance of even the tiniest achievements, you’d think they would muster up something a little more, uh, celebratory than this. After all, they could be slurping up $2B of treasury money (but aren’t). For now. And all they’ve got to celebrate the moment is Ray Young joylessly repeating coporate pablum while looking like he recently took a sip from the wrong grail. Get some sleep guys!
A decision issued last month by the Appellate Division of the Superior Court in Sacramento County, California would invalidate at least eighty percent of red light camera tickets in Sacramento—if drivers were to bring their case to court and contest their citations. A three judge panel found the photo system did not generate evidence sufficient to convict local motorist David Graham, 38, of running a red light. “Sometimes you can fight city hall,” said Graham. “Now those bozos will have to give me back every penny of the $371 they bilked me for the ticket.”
GM intends on increasing vehicle production in the second financial quarter, from 380k to 550k. I know: it’s a major WTF moment. There is no evidence whatsoever that the U.S. new car market is headed for recovery. If anything, the opposite is true, what with home foreclosures and unemployment rising like steam from a New York City manhole. Not to mention the headline of The Detroit News story wherein this information resides: “GM Dealers Balk at Ordering New Vehicles.” The article reports that GM’s orphaned HUMMER, Saturn and Saab dealers aren’t ordering any more vehicles (duh), and current inventory levels at the other stores are, to use the old Bentley power output description, “adequate.” No wonder GM spokesman Chris Lee said “that [production] number could be adjusted.” Still, you’d kind of hope GM PR could do better than that, what with more than a decade of spinning bad news into gold (for the executives anyway). And so they do . . .
Yesterday, we mentioned that GM Europe Chief, Carl-Peter Forster, must have missed his daily dose of Prozac. He had sounded a bit depressed when he said that there were “interested parties but no formal talks” in regards to a partial sale of Opel. Today it turns out that this was the understatement of the week. Opel is the wallflower of the industry. One by one, those alleged “interested parties” hold their nose and say a muffled “no thanks.” The German Autohaus chronicles the list of rebuffs:
I was perusing MSNBC a short while ago, and noticed something that I thought TTAC might like to post. Ford now has a market cap four times that of GM’s. (Ford’s is 4.9 billion, GM’s is down to just over 1 billion). Ford’s stock is also now worth more than GM’s, which isn’t surprising, but hasn’t really happened before.
As Ken Elias pointed out a while back, the beginning of the end will come when GM is de-listed from the Dow and then the stock exchange. As far as life-sustaining bailouts are concerned, March 31st is the drop-dead date. A pre-pack would take longer, so . . . I bet Ken a steak dinner GM will get their/your/our money. I don’t think I’ll be picking up the tab. For the dinner.
Walked into a HUMMER dealership lately? The poster child for everything wrong with the automotive industry went from a vibrant, stylish lounge for conspicuous consumption to a somber, museum-like tribute to modern architecture and failed business models. It’s a sad combination of soaring heights and eerie, uncomfortable silence. This also describes the Hummer H3T Alpha to the proverbial T: the brand’s failed promises of functionality and fashion for a premium price culminate into the worst product rollout of the 2009 model year.
So what if you’re a sub? Not a TTAC sub, of course, because guess what? The corporate mothership has heard your pleas and seen sense. The “sub or die” mandate has been withdrawn for the time being. More info on that tomorrow. Meanwhile, the Brits love affair with hating the cars they love continues.
Automotive News reports that GM CEO Rick Wagoner tagged-along with 69 other working stiffs to hear President Barack Obama put his entire hope-and-change spiel in a single, pre-written sentence.
“We must build this recovery on a foundation that lasts — on a 21st Century infrastructure and a green economy with lower health care costs that creates millions of new jobs and new industries; on schools that prepare our children to compete and thrive; on businesses that are free to invest in the next big idea or breakthrough discovery,” Obama said in remarks released by the White House.
Uh-oh. Isn’t that whole “next big thing” thing the thing that allowed GM to avoid making the hard decisions that would have prevented its $30 gazillion dollar call on the public purse?
As someone who lived in the UK for 18 years, I was shocked to discover that Philadelphia’s mayor is named Nutter. Michael Nutter. I’m sorry, but the chances of anyone of that name being elected to public office in The Land of Hope and Glory are less than the chances that GM and Chrysler will pay back their federal loans early. OK, ever. So, anyway, WHYY reports on Mayor Nutter’s attempts to curb a good chunk of the the city’s taxpayer-funded fleet. Literally.
All recessions recede. Eventually. In the case of this recession, it may be the car driving us out of the economic bog. Pent up demand could soon stoke the car market and relieve the general dearth of demand putting downward pressure on the economy. You can see it in our turnover ratio: the total number of registered vehicles in the U.S. divided by the sales rate. As of this quarter it’s 23.9 percent. That’s the highest ever, because it’s ridiculous. Americans are not planning to replace their vehicles once a generation. It can’t be done. My father tried it and the salt-covered roads of upstate New York put holes in that plan. Rust always wins.
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