A few days ago, RHJ International, the Belgium-based industrial holding company interested in Opel, was moping. They said, apparently, they were not wanted anymore, were “kicked out of the bidding process.” GM and Germany were only talking Magna and maybe China’s BAIC. Guess who’s back in the game?
TTAC commentator Detroit-Iron writes:
I am in the process of buying a new car (despite Steven Lang’s admonitions). I would like to get a 2009 after the 2010’s come out, maybe a Legacy or Ralliart. My problem is that there is zero information on the specific month that a given manufacturer is going to release the 10s. I can understand the manufacturers and dealers wanting to keep that info under wraps considering the inventory but I would think that a journalist or consumer advocate would have it, but I can’t find anything.
Porsche finally has a written offer from the Sheik of Qatar, if the Frankfurter Allgmeine‘s sources are not mistaken. It sounds pretty official: “We have a written offer of the Qatar Investment Authority which details their engagement in the Porsche Holding SE and their purchase of our options for Volkswagen stock,” said a Porsche spokesperson to the FAZ. Currently, the both sides are in the bargaining phase: How much or how little will they pay?
In general, today’s cars don’t put us in mortal peril (by themselves) or strand us miles from home. They don’t require any special driving or mechanical skills. As always, progress has come at a cost: it’s eliminated the character-building experiences that helped guys of my g-g-g-generation become “car guys.” Yup, I come from a time without cell phones, G.P.S. navigation, OnStar, and vehicles that can breeze through 100,000 miles with little to no fear of meltdown. A time when cars offered a shorter shelf but more human – machine interaction. When car guys could look under the hood, see a problem and correct it. On the spot. I’m not bragging, so don’t put me down. Not yet, anyway.
“A rapid emergence from bankruptcy creates the highest probability of avoiding the catastrophic and expensive meltdown in GM auto sales that virtually all industry observers predicted,” Harry Wilson of the Presidential Task Force on Autos tells Automotive News [sub]. Note the use of “auto sales.” Because bankrupt automakers don’t sell cars, right?
À l’impossible nul n’est tenu. The “impossible” that ain’t likely to happen: domestic car makers recapturing the lion’s share of the American new car market. According to Credit Suisse, when the sales figures for June drop, New Chrysler, current Ford and Old GM combined are likely to account for around 45 percent of new car sales in the Land of the Free. Fans of the forthcoming Fiat 500, new Ford Fiesta and Chevrolet Spark note: CS reckons it would be worse if the overall percentage of truck sales (vs. car sales) didn’t increase from 44 to 47 percent. Put that in your EPA and smoke it. Bullet points after the jump.
Saturn dealers ignore the plea. Or, so reports the Wall Street Journal. Word is that GM has asked Saturn to keep the Pesnke-fuelled optimism to a minimum “lest it overshadow the Saturn brand name.” After all, the deal isn’t expected to wrap up until Q3 of this year. But The General might as well be whistling into the wind. “We were on death row,” Saturn Marketing Director Kim McGill tells the WSJ. The brand is in “remission,” thanks to Mr. Penske, but “is not yet totally cured” is she adds, for emphasis. Which makes GM corporate the cancer? Someone’s gotta take the rap for the 58 percent drop in sales (and counting . . . June’s results should come this week). But is Samsung (or???) gonna make buyers glad the Opel era is over? Not that it will be any time soon. And GM is right about one thing: the deal ain’t done yet.
Automotive News [sub] reports that finals rules for America’s own scrappage scheme will be released on or around July 23rd. The notice comes with a warning to dealers that they are legally responsible for any trade-ins they structure prior to that date. Violators of the program’s rules could face a $15K fine per illegal transaction. And just to add to the mounting concerns about the effectiveness of scrappage schemes, consider the top-10 beneficiaries of the UK’s scheme, via Autoexpress. Hyundai/Kia is the big winner there, although of the vehicles on that list only the Yaris and Fit are sold in the US. Will US automakers benefit from this attempted subsidy considering their weakness in the budget compact segment? Don’t count on it . . .
Automotive News [sub] indulges in the optimism that dare not speak its name, courtesy of the omnipresent Center for Automotive Research. “A happier GM? Billions in costs disappear,” runs AN‘s headline. And then comes the equivocation [emphasis added]:
During its reorganization, General Motors should be able to shed about $12.5 billion in annual costs — paving the way for possible profits, higher product spending and improved supplier health once U.S. vehicle sales recover to more normal levels.
Inspiring stuff! Why, if these “shoulds” and “possibles” come true, CAR research shows that “GM could even eliminate almost $3,000 per vehicle in incentive spending, adding an additional $8 billion in savings when compared with the pre-bankruptcy GM.” It’s already a stretch to believe that GM can hold steady at a 10m SAAR, given its long-term market share losses, but eliminating incentives? Why not a flying, carbon-neutral Camaro?
So, GM is walking away from its half-share in the Fremont, CA, NUMMI plant. That much is clear. But what happens next? The Prius rebadge rumor lives on, but the signs are beginning to point towards a Tacoma rebadge. After all, GM has announced its intention to shut down its Shreveport, LA, plants by 2012. Which means an end to Colorado production there, and a giant sucking sound where GM’s small truck offering used to be. Will GM rebadge the Taco? And if so, why not keep the 50 percent stake in NUMMI? Make some sense of this, please.
Bloomberg is reporting that GM CEO Fritz Henderson will meet with Toyota President Akio Toyoda this August, and that a GM rebadge of the Prius could be on the agenda. “Two people familiar with the plan” confirm the Prius angle, and with the death of the Pontiac Vibe, GM certainly has to figure out what it will do with its NUMMI capacity which it shares with Toyota. “Having a stronger line-up is an urgent matter for GM,” says Yoshihiro Okumura of Chiba-gin Asset Management Co. “Demand will continue to shift to small cars.” But neither automaker will even confirm that plans for an executive meeting of the minds is on the table. Moreover, as Jim Hall of 2953 Analytics points out, “Toyota is not normally in the practice of giving away the crown jewels.” On the other hand, GM has recently canceled its only hybrid car, the Malibu Hybrid, and the sale of Saturn to Penske will further cut into its hybrid offerings.
UPDATE: Our Frank Williams points out a GM press release that just hit the wires which says “As part of its long-term viability plan, General Motors has decided that its ownership stake in the New United Motor Manufacturing Incorporated (NUMMI) joint venture with Toyota will not be a part of the ‘New GM.’” The plot thickens.
Er, bought. According to the Freep, the Michigan Economic Growth Authority put together the $779 million tax credit package which secured Orion Assembly’s future as the home of the Chevy Aveo’s replacement. A 25-year, 100 percent tax abatement from the municipality of Orion Township (worth some $100 million) didn’t hurt either. Nor did Oakland County’s $136.5 million in retraining money. GM will drop $600-$800 million retooling the plant, “saving” some 1,200 jobs at Orion and another 200 at nearby Pontiac Stamping. But this decision wasn’t a simple dollars-and-cents deal, according to the the parties involved. Oh, no.
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