GM and the German government could decide by the end of the week who will take over Opel, Germany’s deputy economics minister Jochen Homann said to Reuters. That’s no improvement.
Find Reviews by Make:
Latest auto news, reviews, editorials, and podcasts
Wall Street Journal had a little post-BOD meeting chinwag with New GM’s federally-appointed Chairman of the Board. Clearly, Edward E. Whitacre Jr.’s busy not kicking ass and not taking names. Whitacre told the WSJ that “GM’s business plan needs to be ‘tweaked.’ Among areas he cited as needing rapid improvement are advertising, revenue and net income.” Do you have any idea how hard it was not to substitute the word “nipples” for “business plan”? Anyway, “Gaining market share is ‘right there at the top’ of his agenda for Chief Executive Frederick ‘Fritz’ Henderson, Mr. Whitacre said. ‘You clearly don’t want to be in a position of losing market share.'” Thanks for the [unintentional] hat tip to the U.S. taxpayer, but didn’t Eddy get the memo about GM bankrupting itself in the single-minded pursuit of market share? No, he didn’t. Make the jump for the most worrying corporate jingoism since, well, all the other GM BS.
I admit it. Freebies are awesome. Whether it’s a free portion of dim-sum in exchange for car advice, or a mowed lawn in exchange for storing industrial machinery at my auction holding yard. I relish the word free. To paraphrase Gordon Gecko, “Free is good!” and I’ll gladly Sawyer my way through the daily grind in pursuit of it. But there’s always a catch.
Not selling power, mind you. In fact demand is so high for the new Prius that Toyota would like to increase production past its 500k/year projections. Too bad its battery supplier, Panasonic, can’t keep up. “Battery bottleneck,” howls Automotive News [sub], before admitting that Toyota has been building towards a million battery per year capacity. A year ago Toyota said they would reach that mark by 2011, now they are saying Summer 2010. Besides, what’s the hurry? “In terms of the Toyota lineup, I’d say [the Prius] is probably in the midlevel of profit,” reminds Toyota senior managing director Takahiko Ijichi. And all those batteries require more harmony between man, machine and nature. I mean nickel mines.
The Government should urgently re-evaluate the planned discontinuation of the Scrappage Scheme in order to avoid a sudden, pronounced and damaging fall in business.
So says Adrian Rushmore of Glass’s Automotive Business Intelligence in a company press release (via theautochannel.com). But . . .
Which means importing this 415 hp, 415 lb-ft, AWD Ford FPV F6 E from Australia is a bad idea, too. Right?
The Ssangyong Riot is not a new South Korean compact car. 500 fired workers and 33,000 liters of flammable fluids are creating an explosive mix in a Ssangyong factory in Pyeongtaek, Gyeonggi Province, South Korea. The factory was raided by police commandos today, although the paint shop (a.k.a. structure fire waiting to happen) has not yet been stormed. “Creditors agreed that it is better to liquidate assets of Ssangyong before the company’s asset value falls further,” head of SSsangyong’s creditor suppliers Choi Byeong-whoon tells the WSJ. Union spokesfolk acknowledge that a raid on the paint shop is coming, saying “we will respond to it, bracing ourselves for death.” Death before Rodius production. How fitting.
Wall Street Journal reports that GM will be allowed to carry-forward $16 billion in net losses from “Old GM,” creating a massive tax shelter. Normally this isn’t allowed to happen as the tax code has specific provisions to prevent firms from buying other firms strictly for their tax losses. Under normal conditions, tax losses die with the old firm when it completes its bankruptcy proceedings. Not so with GM, which sought preservation of tax losses as part and parcel of its 363 sale. “The result seems to retain the cake while eating it,” says Duke law professor Jeffrey Coyne. “They get to sell quickly and without the many procedural protections because this is not a plan. They get to keep the [net operating losses] using a provision that requires the transfer to happen as part of a plan.” And yet another hidden bailout sneaks through, unlikely to ever appear in a final accounting of the cost of rescuing GM.
1: Ford Focus
2: Toyota Corolla
3: Honda Civic
4: Toyota Prius
5: Toyota Camry
6: Ford Escape
7: Hyundai Elantra
8: Dodge Caliber
9: Honda Fit
10: Chevrolet Cobalt
[via CNN Money]
Curbside Classics takes you back to 1971 for a virtual comparison test of six small cars, based (and partly borrowed) from a C/D test.
There it is, a golden yellow Vega, seductive and infinitely irresistible, hanging from the tree of automotive disappointment. Its serpent maker found plenty of smitten takers (especially among the motor press), because the bitter truth imparted was apparently in a time-release potion: “The best handling car ever sold in America” (Road &Track). Motor Trend’s COTY. C/D readers voted it the best economy car three years in a row. And it won this C/D six small car comparison. I (mentally) bit too, having spent idle hours in 1971 with a Vega catalogue speccing a yellow Kammback GT exactly like this one. But sure enough, the sweetness of that first bite evaporated all too quickly: the apple was rotten at the (engine) core. The Vega was GM’s Watergate/Waterloo, the beginning of its inevitable end. And yet here I am forty years later, totally smitten, seriously considering biting the apple again.
One takeaway: CARS is good because it gets people into more fuel efficient cars, but the highway fund is running out because people are driving more fuel efficient cars. Also, apparently bolstering Ford sales is a major rationale for extending C4C. Y’know, after the whole “taking CO2 out of the air” thing. Speaking of which, former clunker detractor Sen Dianne Feinstein is on board for an extension, telling Automotive News [sub] “the original intent of the clunkers program was to encourage people to buy more fuel-efficient vehicles, and the data so far tells us that’s exactly what’s happening,
The WSJ [sub] reports that $3.5 billion of GMAC’s nearly $4 billion in second quarter losses are the result of one-time reincorporation costs, however a significant government investment also helped hide the losses. And is leading GMAC towards full-on nationalization. Per the WSJ‘s report:
The Treasury Department said in May it would swap $884 million of its existing $5 billion preferred-stock investment for common stock, giving the U.S. government a 35.4% equity stake in the lender. This stake could increase to more than 50% if GMAC, amid potential mounting losses and meager capital levels, converted the government’s investments into common equity.
The loss also comes despite GMAC’s floating of $3.5 billion in bonds backed by the FDIC’s Temporary Liquidity Guarantee Program. “As long as they can keep the federal government’s support in place, they’ll be in fine shape,” one bond-rater tells Bloomberg. “They’re a ward of the state.”
“When I first started in this job thirty years ago, police work was never about revenue enhancement,” Utica Police Chief Michael Reaves told the Detroit News. “But if you’re a chief now, you have to look at whether your department produces revenues. That’s just the reality nowadays.” Nothing produces bizarre behavior quite as reliably as an inappropriate economic incentive, whether we’re talking about the infamous “Sec 179” SUV tax deduction or every Aerosmith album after, and including, “Permanent Vacation.” Is it any surprise, therefore, that most police departments have, over time, shifted their focus away from crimes that don’t pay them in favor of those that do? Murder, rape, theft, vandalism, assault—all offenses that require considerably more effort than apprehending a 44-in-a-35, and none of them containing the kind of guaranteed municipal vigorish that can be garnished from a hapless motorist.
Germany hasn’t lost its newfound appetite for new cars. July registrations weren’t quite up by 40 percent as they were in June and in May. But a plus of 29.5 percent compared to the same month in the prior period is nothing to sneeze at. Still powered by Abrwackprämie, the trend to smaller cars continues its trajectory. Sales of Mini-sized cars rose 144.1 percent, subcompacts grew 67.5 percent. Anything larger: Vergiss es. Who’s the big winner?
Recent Comments