On October 13th of last year, when TTAC’s Bailout Watch clocked in at a mere 115 entries, GM’s then-CEO Rick Wagoner and board members Erskine Bowles and John Bryan approached the Treasury for a “temporary” bailout. Not that we knew it at the time. “In this period of continued uncertainty in the markets, you really can’t rule out anything,” said GM spokesfolks at the time. “Stand by for another big public investment in a failing firm,” warned TTAC. As subsequent events proved, the rush to bailout had already begun. Funny then, that we’re only now learning some of the most crucial details of the chaotic maneuvering of late 2008, thanks to a Detroit News investigation. Though the industry’s disastrous hearings before congress nearly derailed the deal, the initial strategy of approaching the White House would prove to be the key to the eventual bailout. In fact, President Bush was ready to provide $25b to GM, Chrysler, GMAC and Chry-Fi on December 19, only to have talks with the two finance firms break down. Instead, GM and Chrysler were given $9.4b and $4b respectively, with GMAC getting $7b 10 days later and Chrysler receiving $1.5b in January.

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According to the German tabloid Express, Düsseldorf antique car dealer Michael Fröhlich has found Hitler’s car, a blue Mercedes 770K. Fröhlich started searching after a request by a Russian oligarch. He tracked the car to Austria, to where it had been sold for 2000 Reichsmark after the war. From there, the car went to the car museum of the Imperial Palace in Las Vegas. It was sent back to Germany into the collection of a loaded owner of a brewery in Munich. It finally ended up with a collector in Bielefeld. The collector had 5 more of the Nazi cars, one of them formerly Joachim von Ribbentrop’s daily driver.
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It’s been year since we blogged Chinese press reports that China’s SAIC might buy GM. It turned out to be one of many Chinese rumors that followed. We became the target of hate mongering—some idiots even accused us of driving down GM’s and Chrysler’s stock price. Duh, buyout rumors usually drive prices up. At the time, the GM stock was worth at least a little money: the market cap of GM was less than Mattel.  Months later, the stock was worthless. GM and Chrysler went bankrupt. Instead of the Chinese owning GM and Chrysler, the American taxpayer ended up holding the barf bag.

It took a year and six days to dawn on CNN Money that a Chinese-owned GM might not be such an outlandish idea after all. “A Chinese-owned GM, it could happen,” headlines CNN Money today.
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Think the US is drowning in cheap Chinese goods? Think again. Production is rapidly going South. According to corporate consultant AlixPartners, Mexico has leapfrogged China to be ranked as the cheapest country in the world for companies looking to manufacture products for the U.S. market. India is now No. 2, followed by China and then Brazil.

A number of Chinese car manufacturers have tried to use NAFTA’s soft underbelly as an entry into North America. Zhongxing, FAW, Geely, ChangAn and more announced plans to Hecho en México. One by one, they have been shelving the plans. Cheap production is one thing. Lack of customers another. This summer, FAW cancelled plans for a Mexican manufacturing plant. Before, Geely and Zhongxing had said “bu hao” and packed up.

China’s ChangAn was thought to have the most robust stomach for Mexican food. Looks like they also lost their appetite.
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Think everything will be hunky-dory by, well, 2012? (Watch the  movie.) Fitch Ratings thinks the U.S. auto industry won’t get back on its feet anytime soon. Worse, the industry may be caught in an “airline-style” cycle of repetitive bankruptcies because of weak sales and a glut of production capacity. It is unusual for a U.S. airline (and many elsewhere) to not be in bankruptcy or not have been at some point.

Amongst the rating agencies, Fitch is the only halfway good one. They were the lone voice that had warned against the dangers of the collateralized debt obligations that brought the world to the brink of disaster.

In a report cited by Reuters, Fitch says that high fixed costs, the lengthy periods required to develop new products and chronic overcapacity will leave the industry “littered with failures—plants, product lines, brands and companies.”
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As congress nears the end of the 2009 legislative session, culled GM and Chrysler dealers are pushing hard for the rapid passage of the Automobile Dealer Economic Rights Restoration Act. Meanwhile, nearly two dozen members of the Senate Commerce Committee from both parties are calling on GM and Chrysler to resolve outstanding disputes with culled dealers in hopes of defusing the situation by non-legislative means.

Given the federal government’s ownership stake in Chrysler and GM, it is our shared obligation to ensure all impacted dealers are treated as fairly as possible. We continue to urge you to take all actions necessary to uphold the assurances you provided earlier, as well as to achieve a mutually agreeable and timely outcome to the negotiations between Chrysler, GM and the dealers.  Chrysler and GM’s unprecedented bankruptcy has greatly impacted dealers, consumers, employees, small businesses, and communities across the country. It is crucial that outstanding issues be resolved as expeditiously and efficiently as possible to provide the least amount of hardship to Chrysler, GM and the dealers.

GM’s response to the senatorial call out? “Those discussions are still underway,” according to spokespeople, who refused to characterize the discussions for Reuters. Meanwhile, two examples of possible mitigating action by GM and Chrysler are not off to good starts.

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The AP reports that GM is suing supplier JTEKT North America Inc. of Plymouth, MI for faulty steering systems used in 2005 model year and later Cobalt, G5 and HHR models. GM’s suit alleges the JTEKT steering systems exhibited “excessive gear backlash,” causing a variety of noises that the General has spent $30m fixing under warranty so far. “JTEKT contends the components all met the specifications and testing requirements that GM gave it,” says the supplier’s lawyer. “The issues do not affect the operator’s ability to control the vehicle. This is a noise issue.” GM admits that the issue does not affect safety, but claims total repair costs could continue to rise as more vehicles receive upgrades under warranty. Current Cobalts and derivative models have received upgrades, although the AP does not specify when they took place. Keep an ear out for this problem if you’re considering a used Cobalt.

Last week’s fuel filler door clue for the Blazer was a bust. Everyone piled in on it, right from the start. But I’m going to give the win to CyCarConsulting, because Hank limited the time frame too much by saying it was an early-mid nineties Blazer. OK, this week, we need some different parts to look at, like under the hood. Calling all driveway mechanics; you’ve got the advantage here. Now where’s that can of starting fluid?

Comedian Frankie Boyle once said “So the best tennis player in Britain is Scottish? I’m not up to speed on my Nostradamus but isn’t that one of the harbingers of the apocalypse or something?”. Well, here’s another unlikely scenario, manufacturing jobs flowing INTO the U.K. The BBC report that Dutch luxury car maker, Spyker, is calling it a day in Zeewolde, The Netherlands and moving all manufacturing to Coventry, West Midlands, UK. Spyker warned that 45 out of the 135 jobs would be at risk during the transfer, although, the headquarters would stay in The Netherlands. The main reason behind this shift is that Spyker want to be closer to its main parts supplier, CPP Manufacturing LTD. Victor Muller, Spyker Cars chief executive, said “With approximately half of our vehicles’ parts and components sourced in the UK, and virtually all key suppliers being located there, moving closer to our suppliers and engineering partners will result in substantial savings and tangible efficiency improvements.” While all those reasons are sound, could another big reason for the move be the UK pound nearly reaching parity with the Euro? Who cares? We’re just grateful for the jobs. Dank u.

I have driven a Spark around Michigan and have had some (GM executives) out for Saturday afternoon driving. We’ve cruised Woodward. North America has been an on-and-off thing for (the Spark). At the present time, though, it is very much on. Most of the world’s minicars were not designed for North America. The safety and repairability standards are different for side, rear, front crash and rollovers, as are emission standards and other things. They are difficult to meet if they weren’t planned for in the original engineering build. We can meet the U.S. standards. We can even package the Spark for Big Gulp cupholders

GM’s Jack Keaton [via Wards Auto] on the Chevrolet Spark (neé Daewoo Matiz Creative) and the many modifications needed to ready the 1.0/1.2-liter A-segment hatchback for the US market. Including making the cupholders large enough to hold a soft drink cup that’s nearly double the displacement of the Spark’s engine. The 6′ 4″ Keaton swears the Spark’s front seat is comfortable for him, and that he “didn’t mind” the back seat on a recent 35 mile drive.

Never one to shy away from expensive options, Porsche has announced that beginning in January 2010, a lithium-ion starter battery will be optional in the 911 GT3, GT 3 RS, and Boxster Spyder. Porsche is the first automaker to offer a li-ion SLI (starting, lighting ignition) battery, and given its cost, €1,904 (US$2,900), it may stay that way for a while. The new pack weighs 6 kg (13 lb), which is 10 kg or 22 (lb) lighter than a conventional 60 Ah lead battery.  That works out to $132 per pound saved, based on European pricing. US pricing has not yet been announced. That sounds like a bargain compared to some of Porsche’s other pricing shenanigans. Ask the fellas in the paint booth to leave off the masking tape on a certain number of exterior and interior pieces to make them body colored, and they’ll ask you a mighty $13,545 for their (non)effort. Only a company that has the cojones to do that would to try to take over VW. I digress. More battery lightness after the jump: (Read More…)

When buying a car, what do people really want to know about its reliability? Often: what are the odds it will turn out to be a lemon? And does it have a good shot at requiring no repairs at all?

Consumer Reports and J.D. Power have never answered these questions. They’ve only provided vague dot ratings that indicate how a car compares to the average for all cars. Even TrueDelta, which has been providing car models’ average repair frequencies, and not just dots, has not been directly answering these questions. Instead, car buyers have had to infer their odds of getting a lemon from the average repair frequency.

With the latest update to TrueDelta’s Car Reliability Survey results, released today, this will no longer be necessary. This update includes two new statistics: “Nada-odds” and “Lemon-odds.” From a car model’s Nada-odds, car buyers can learn how many cars out of a hundred required no repairs at all—nada—in the past year. And from its Lemon-odds they can learn how many out of a hundred had to go to the repair shop three or more times in the past year.

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A judge yesterday forced the settlement of a traffic camera company-backed lawsuit with the city of College Station, Texas over the public’s November 3 vote to ban red light cameras. Although terms of the deal have not been released, the city council voted 4-0 on November 11 to abide by the results of the election, leaving American Traffic Solutions (ATS) with no hope of continuing its ticketing program without a costly legal battle.
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General Motors made one point very clear, 100 percent clear, the restructuring plan could only be achieved when European member states with Opel plants give some financial help. So the plan works only with state aid. The idea that General Motors can finance this on its own was not shared by General Motors, this possibility does unfortunately not exist

EU Industry Minister Guenter Verheugen reveals to Automotive News [sub] that GM does indeed seem to be trying to limit the amount of US taxpayer money spent on its $4.9b rescue of Opel. GM’s Opel fixer Nick Reilly explains “we have indicated that we will inject some GM funds into that requirement too. That is quite difficult because we are also going through a restructuring of our U.S. operations and other parts of the world.” We’ve already seen loans for jobs floated in the UK, where Reilly came up just short of offering to save Vauxhall jobs for government restructuring loans on a quid-pro-quo basis. And GM will have to continue walking that fine line, as EU competition rules forbid member states from offering financial support in exchange for jobs, especially if the saved jobs come at the expense of jobs in another EU member state. But Germany’s leadership was humiliated by GM’s decision to drop the sale of Opel to Magna, and has already ruled out funding an Opel restructuring that would keep the automaker under GM control. Will Belgium, Spain and the UK be able to come up with enough money to make the restructuring happen? Or will GM simply be forced to dip deeper into its taxpayer-funded escrow account? GM’s plan will be announced this week, and we’ll be watching.