We’ve given you the heads-up on the federal government’s plans to favor domestic automakers with “stimulus sales.” And so it has come to pass. The U.S. General Services Administration (GSA) reports—eight days after the fact—that they’ve ordered 17,205 “fuel efficient vehicles” at a cost of $287 million. Breaking it down: Uncle Sam bought 2,933 Chryslers ($53 million); 7,924 Fords for ($129 million); and 6,348 General Motors vehicles ($105 million). Does it strike anyone as odd that FoMoCo gets the largest contract? Not-so-secret hat tip for NOT taking bailout bucks, while competing against those who have? Or just a reflection of the fact that the Crown Vic rules! Which reminds me: by NOT revealing the exact models ordered, one has to wonder about the depth of the GSA’s commitment to greening-up the fed’s fleet. On this point, the press release is suitably vague, and yet completely revealing . . .
We are an equal opportunity auto news provider. Don’t like the news that China’s sales exploded by 55 percent in May? No problem! Go to Russia! In May, Russian car sales tanked by nearly 60 percent, Automobilwoche [sub] reports. The former great hope for car growth and member of the BRIC (Brazil, Russia, India, China) states turns into a basket case. It’s down to BIC now to re-ignite growth. Ooops, Brazil’s first-quarter GDP shrank 1.8 percent, so let’s make that a bIC. Back to Russia’s implosion: Who’s to blame?
I’m a Jeep owner, a Jeep historian and a Jeep enthusiast. I’ve published more than a dozen Jeep articles. I’ve attended dozens of Jeep Jamborees and Camp Jeep events. I’ve driven a Jeep down the Rubicon Trail from start to finish, twice. So it pains me to write about the Jeep Jinx. But the facts are inarguable: virtually every company that’s owned the Jeep brand has fallen on hard times.
Kawasaki Heavy Industries and Japan’s National Institute of Advanced Industrial Science and Technology have co-developed a nickel-hydrogen battery that recharges in less than 10 seconds, the Nikkei [sub] reports. That should get your plug-in EV or hybrid back on the road much faster than getting a tank of gas, a coffee and a doughnut. The new battery’s performance barely declines even after 1,000 quick charges, the developers say. That’s the good news. The bad news:
After a short, suspense filled couple of laps under the yellow, the US Supreme Court has dropped the green flag on the Chrysler-Fiat deal. The New York Times sums up the court’s view that “the Indiana funds ‘have not carried the burden’ of proving that the Supreme Court needed to intervene.” Also, earlier today, the Chrysler dealer slaughter was also given the go ahead when Judge Gonzalez approved that aspect of the deal. So, that pretty much closes this chapter of the saga. The deal is going down as planned by Fiat and the US Treasury. Now the really hard part begins.
As GM stares down the barrel of bankruptcy—oh wait, they’re already bankrupt. My bad. You see, I was reading Ed Welburn’s rant on GM’s FastLane blog. Eddy’s pissed-off at Gerald Sindell’s “Open Letter to GM CEO Fritz Henderson,” which says GM’s designs reek of “Older white guys wearing suits to the office in Detroit, except for one woman and one black guy.” As the one black guy in question, Welburn’s on the warpath. Hence my confusion. I mean, with GM in C11 and all, you think the head of design would have something better to do than accuse the media of race baiting—even if it is. Which it isn’t. To steal a line from another legendary zombie, can we talk?
Roger Penske has got to be a busy guy these days. His purchase of Saturn is a characteristically audacious move that is simultaneously compelling and terrifying. Penske’s Saturn dealers will sell current GM products until they reach the end of their lifetimes. “Concurrent with that, we’ll go around the world to see what products could be brought into this country,” Penske tells Edmunds Inside Line. The “World Market” approach seems to do away with much of the industry’s basic understanding of branding, but Penske insists that aerodynamics, fuel efficiency, safety and styling will continue to be the defining characteristics for new Saturn products.
That’s the question motivating an alternative plan for the government’s “investment” in GM drafted by Sen. Lamar Alexander. Under Alexander’s plan, the Treasury secretary would be required to distribute the government’s GM and Chrysler stock to the 120m or so Americans who submitted tax returns for 2008. “This is the fastest way to get the stock out of the hands of Washington and back into the hands of the American people who paid for it,” said Alexander. The proposal, which Alexander plans on attaching to the current tobacco regulation bill would:
• Prohibit the Treasury from using any more TARP funds to bailout GM or Chrysler.
• So long as the government holds stock in these companies, require that the Secretary of the Treasury and his designee have a fiduciary responsibility to the American taxpayer to maximize the return on that investment.
• Not later than one year after each company emerges from bankruptcy, require that the Treasury distribute its common stock holdings in that company evenly to every American who paid taxes on April 15.
The Original Equipment Suppliers Association is requesting an additional $8-$10 billion in TARP money, reports Automotive News [sub]. Because the first round worked so well. But two factors nearly guarantee that the request will be approved: first, the recent announcement that ten banks will be able to pay back some $68 billion in TARP money and second, the forthcoming resumption of production at GM and Chrysler when they emerge from bankruptcy. Oh yeah, and the fact that practically no TARP requests have been denied so far.
Automotive News [sub] reports that the National Auto Dealers Association has given its (unofficial) stamp of approval to GM’s revised dealer agreement. The document, under which GM’s remaining dealers will operate, has not been made public, although we encourage dealers to share their information at our contact form. GM’s previous agreement had drawn heavy criticism at last week’s congressional hearing on GM and Chrysler’s dealer culling plans. “I especially commend GM for its flexibility and its willingness to make substantive clarifications and modifications to address dealer concerns,” NADA Chairman John McEleney said in the statement. “We believe GM has made a very good-faith effort, given the unprecedented circumstances facing GM and the industry.”
Sergio Marchionne’s statement that “we would never walk away” from the Chrysler deal may not be having quite the effect he wanted. After all, the entire justification for the Government cramdown of bondholders and “auction with one bidder” sale to Fiat is that Chrysler will unravel if the the sale isn’t implemented post-haste. In a new filing to Supreme Court (PDF via SCOTUSBLOG), the Indiana funds argue that:
The Debtors (and the United States) have advanced the position throughout this case, including in its papers filed with this Court, that the section 363 Sale at issue here had to close before June 15 or Fiat would exercise its right to withdraw and the entire transaction would collapse. The courts below relied on such arguments and testimony in moving this case forward at an unprecedented pace . . . Whether or not these arguments and testimony were ever true, the Indiana Pensioners respectfully submit that the risk of termination by Fiat if the transaction does not close by June 15 no longer provides a basis for driving the timing of these proceedings.
Automotive News [sub] is reporting that former chairman and CEO of AT&T, Edward Whitacre Jr., has been selected as the chairman of the “New GM.” Whitacre is an industrial engineer by training and previously served on the boards of ExxonMobil and Burlington Northern Santa Fe. Whitacre and interim chairman Kent Kresa will serve on GM’s board along with current members Philip Laskawy, Kathryn Marinello, Errol Davis Jr., E. Neville Isdell and CEO Fritz Henderson. Six other current GM board members will retire by the time GM’s asset sale is approved, four of whom will be replaced by a selection process now underway. Two more directors will be selected by the Canadian government and the UAW VEBA trust. The reconstituted GM board will seat 13 directors.
Recent Comments