Followers of the Motown meltdown may have detected a strong whiff of mafioso about the whole enterprise. Did I say enterprise? That sounds a bit too industrious, even though the automakers have been working hard to turn $7 million worth of your hard-earned taxes into about $35 billion in additional bailout bucks. On the other hand, we have the term “criminal enterprise.” As in you pay me my money or I’m gonna hurt you. If you still don’t pay, I’m gonna NSFWing kill you. (Organized crime may be organized but it’s not terribly clever.) To wit [via Automotive News]:
Chrysler LLC said today it may close its plants in Canada unless it gets sufficient labor concessions as well as government aid and resolution of a tax dispute.
In case you were thinking the recent CAW agreement with GM shows the way out of that particular part of ChyrCo’s Mexican standoff (also a NAFTA member!), Co-Prez “Tommy Gun” LaSorda’s got news for you, after the jump.
Volvo is a step closer to salvation, while Saab is a step closer to damnation.
According to Germany’s Handelsblatt, the European Investment Bank (EIB) has approved a €445M loan to Volvo, after the Swedish government gave a guarantee for 90 percent of the loan. This cash injection should buy Volvo some time to restructure and to pretty-up for a sale. According to Financial Times, Ford has begun seeking indicative bids for Volvo. The sale process is expected to last until late in the year. Three people involved in—or briefed on—the sale say Volvo has drawn tentative interest from at least three Chinese carmakers. Talks have also been held about forming a Swedish-led investor consortium amid concerns among some in Sweden’s motor industry about the possible leakage of intellectual property to China.
Totally different (downright ugly) picture at Saab.
TOKYO (MarketWatch) — Toyota Motor Corp. (7203.TO) plans to release a cheaper version of its Prius hybrid car later this year in a bid to compete with Honda Motor Co.’s (7267.TO) more reasonably priced Insight hybrid, the Asahi Shimbun reported Thursday. The paper said that the new Prius will be priced around Y2.05 million, whereas Toyota’s cheapest model of the fuel-efficient vehicle now sells for between Y2.3 million and Y3.4 million.
On business in Vegas last week I came across a smokin deal on an ’06 M Roadster and in a moment of spontaneity I signed the dotted line. I was then confronted with a 1200 mile drive in an unfamiliar car. Since I arrived in Vegas by plane, I was without my usual road trip conglomeration of hose clamps, duct tape, and other essential tools. With the return airline ticket canceled, armed with a Diet Pepsi and a $50 Radio Shack radar detector, I set off to the Midwest. The S54 engine chewed up 1200 miles of asphalt and returned 25.6mpg. Not bad for over 100hp per normally aspirated liter. Would I have tried that in the 23 year old BMW M636CSI I bought last fall from FL? Nope. That car arrived on a truck. What an incredible bonding experience to bring your new car home on a long trip. Now it was my intent to bring this car back to a less saturated market and sell it for a small profit. But now I’ve kinda got a thing for her. Have you had a memorable new car bonding experience?
Senator Corker must be so proud of himself. He held Ford’s feet to the fire . . . oh, no, wait, Ford didn’t bother with that meeting. Anyway, today Ford is crowing [via AP] that its revised UAW contract gets close enough to wage parity with the transplants to call it a done deal. Which is kind of strange, because Ford’s accounting puts the all-in costs under the newest deal at $55/hour compared to the $48-$49 number people toss around for the transplants. Hmmm, maybe I’ll try that kind of “close enough” math when I pay my bills. Ford’s spin-meisters could have pointed out that nobody outside the transplants really knows what they are paying, but they didn’t. Absent a published union contract, all we can do is guess.
The boss men at Legacy Ford Lincoln Mercury Toyota of Scottsbluff, Nebraska, have arranged a personal economic stimulus program; by running off with 81 cars and trucks valued at over $2.5 million (before or after rebates?). Lacking a “Tales from the Dark Side” section, the AP put the story out as auto industry news. The missing Fords were trucked away on Saturday but the Toyotas had to wait their turn until Monday. By Wednesday, some of the missing vehicles already started popping up at auctions in Utah and Arizona. Floorplan banker Toyota Financial said: “If the dealer and the cars go missing there’s an issue.” Ya think? “Arrest warrants had been issued for owner Allen Patch, controller Rachel Fait and general manager Rick Covello, who are wanted on suspicion of theft.” Up until now, none of these clowns had an arrest record. Oddly enough, Legacy so far remains open for business. Personally I wouldn’t leave my ride there for service unless I wanted it to disappear. Meanwhile, rumors of a movie deal starring Robin Williams, Chevy Chase and Al Pacino run rampant.
Talk about ROI… The Washington Post reports that General Motors and Chrysler are using $7M of their $17.4B federal “loan” to lobby for their next snootful of bailout bucks.
In the last three months of 2008, just as slumping auto sales pushed the two Detroit carmakers closer to bankruptcy, GM spent about $3.9 million on lobbying, according to a review of its most recent disclosure forms. Chrysler and its parent company, Cerberus Capital Management, reported spending about $3.4 million.
The Post forgets to account for the lobbying parity between the artist formerly known as the world’s largest automaker and the Crisis Corporation. Lest we forget, Cerberus has another huge mouth to feed at your expense: GMAC. Which received a $6B bailout and a last minute waiver of the Fed’s rules for bank incorporation. And how, pray tell, do the automakers’ owners justify using your money to get more of your money?
The German government doesn’t seem to be in an awful hurry to bail out Opel. First, Berlin bitched about the quality of GM Europe’s rescue plan which was submitted last month. According to that plan, the German unit, along with its UK-based Vauxhall unit, would be partly spun off. Along with that, state aid to the tune of €3.3B ($4.2B) was requested. Berlin said the plan was interesting but mostly fluff. They demanded another one; it hasn’t arrived. No plan, no money.
And just in case a better plan would be forthcoming, Chancellor Angela Merkel set the bar a bit higher. “Before we decide (on aid), we must know important decisions in the United States; for example, how things proceed with Opel’s parent company General Motors, what independence General Motors can give Opel, what happens with Opel patents,” Merkel said, according to Reuters. That’s a whole bunch of important decisions to be taken before any money is being given. (Read More…)
My brother fixes industrial machinery for a living. The range of skills he needs– mechanical, electronic, hardware, software, CNC stuff, as well as troubleshooting abilities– makes that kind of work as technically demanding as just about any job there is. You can’t learn to do what he does in a university. So for-profit ventures like ITT Technical Institute, Universal Technical Institute, New Horizons computer training centers and others fill a needed role. It’s understandable also that during difficult economic times those schools would market themselves aggressively to people looking for new career opportunities. There’s a fine line, of course, between providing educational opportunity and exploiting people’s desperation about the economy.
The Freep reports that the newest UAW deal is similar to the recently-approved Ford deal in terms of economics, but is “drastically different” in other areas. How drastically? There are”no mandatory physical examinations in the UAW GM agreement,” according to the Freep’s union source. Also, “with regard to employee placement, other parts of the agreement are different to better fit the UAW GM culture.” Which doesn’t exactly sound encouraging. The Freep wanted to know more (don’t we all), but when asked, “A GM spokeswoman declined to comment. A UAW spokesman didn’t respond to questions.” Great. But it’s probably not worth losing sleep trying to discover the details (not that we wouldn’t love to have someone send us a copy). Locals won’t have the opportunity to approve the contract modifications until GM completes its debt restructuring anyway. Which has been dragging on for months now with no end in sight. If the locals even approve the deal which, based on Ford’s 58 percent approval showing, is hardly a foregone conclusion.
Do we want to place bets on how soon Chrysler will shift its sales strategy back towards fleet sales? Unfortunately for Americas struggling automakers, $565M in low-profit sales probably isn’t enough to make much of a difference to anyone’s bottom line. Especially considering that the expenditure is set to take place over the next ten years. On the other hand, AT&T is only replacing about 15,000 vehicles, meaning the average price per vehicle is budgeted at about $37K, which is pretty decent for fleet costs. So who will benefit? Ford, hybrids and natural gas, says Automotive News [sub]. The Telecom giant plans on buying about 8,000 compressed natural gas (CNG) vehicles from Ford, and will fill out its portfolio with hybrid and “other advanced technology power system” vehicles. Sorry, ChryCo!
Straightline tries its hand at funny with predictably lame results. They must have missed this. And this. And this. In fact, they must have missed the fact that sportscars are the only halfway viable EVs out there. Yeesh.
Or die trying given the late unpleasantness of all things economic. But the model that Euroda, a group of 4,000 Opel/Vauxhall dealers, is attempting is innovative enough to attract some attention. Under the arrangement, member dealers would donate €150 per vehicle sold over the next three years. Euroda would use the estimated €400m to buy a minority stake in Opel/Vauxhall, which cannot secure support from European governments without better long-term viability plans. Euroda seems to be acknowledging the symbolic nature of the effort, telling Automotive News [sub] that even taking a minority stake sends “a clear signal of support” to the government, worker and customer stakeholders.
U.S. News and World Report is reporting to the world the news that US car dealers are working a new angle: buy one, get one free (BOGOF). OK, a buck.
Seattle NBC-affiliate KING5 reports on one such offer from Washington’s Bill Pierre Ford. “General manger Curt Bush dreamed up the unique promotion. If you buy a super duty truck at a sticker price of $50,000, you get a Ford Focus for $1.” If the Fords don’t interest you, Pierre’s dealership network is doing the same thing with Chevrolet products. “On Pierre’s Chevy lot next door, you can buy a Tahoe and get an Aveo for $1.”
But the tactic is not unique to Washington state. Reno, Nevada CBS-affiliate KTVN found a similar offer in their area. “At Reno Mazda-Kia, if you buy a 2008 Sorrento at full price, you can get a Spectra for $1,” they report. “The price tag for the Sorrento is about $28,000.”
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