Europe’s auto capacity is staggeringly underutilized, as political pressure to protect jobs stacks overcapacity upon overcapacity. Analysts lay out the gory details at Automotive News [sub]: Global Insight says European production capacity is currently at 59 percent, while PriceWaterhouseCoopers figures excess production is 6.8 million vehicles. Assuming an average production of 300,000 units per plant, over 20 of Europe’s 100 major auto plants will have to go to bring supply back in line with demand. Though Saab’s seemingly imminent closure should take a first step towards a European coming-to-terms with its unreformed auto industry, the Opel deal is starting to look like an opportunity that GM could be too state-aid-dependent to take advantage of.
Ford expects to resume profitability in 2011, and the consensus forecast is for per-share earnings of $1.13. The implied price/earnings multiple of 8.6 times doesn’t sound too demanding. But as Chris Ceraso of Credit Suisse points out, it translates to a margin of earnings before interest, tax, depreciation and amortization of nearly 10%, something Ford hasn’t enjoyed since the late 1990s.
Parts suppliers in Japan had near death experiences when they opened their Nikkei [sub] this morning. Parts suppliers in China and the rest of the world suffered heart and respiratory problems when the news of Toyota’s latest plan hit the news-wires. (Read More…)
Ok, this may be way too easy and obvious. But in keeping with CC Dead Brands Week, I couldn’t resist. So if you know it, just say it gently; no CAPS or Bold necessary (just kiddin’). Last week’s steamy Bobcat was one of the tougher stumpers; but Hank, one of our repeat winners, came through again with the win.
Despite the flood of clumsy eulogies and “don’t worry about the Saab dealer, he owns a Porsche shop” stories making their way into the local media (usually a good sign of a sure thing), Saab may still have some kind of chance at survival (in some form). According to Spyker spokesfolks [via AFP],
Spyker has been in contact with GM today and continues to develop its proposal for the purchase of Saab. Spyker has extended the validity of its proposal therefore until further notice
Merbanco claims to have a new offer as well, as Saabsunited.com reports that they are working with a Swedish consortium that “does not wish to be identified unless they are successful in the bidding.” GM has not issued a statement about Saab today, perhaps because the release writers were too busy with the announcements of a new CFO and the Chevy Equinox’s victory in an “Urban Truck Of The Year” competition.
Nature favors traveling in multiples; loners are at risk of death, or running down their energy sources, and unable to share their stored resources. To really appreciate the charge that traveling in twos can provide, make the jump (literally): (Read More…)
It’s been a while since we’ve heard the word “buyout” echoing out of Detroit, as 2008 marked the year in which auto industry employees finally started to be fired like everyone else: without a hefty severance kiss-off. Ford, on the other hand, did not get a shot at free house-cleaning in bankruptcy court, so it’s bringing back buyouts. According to Market Watch, the Blue Oval is offering blue-collar employees a $50,000 lump sum payment and a $25,000 voucher for a new vehicle or another $20,000 lump sum, as well as six months of health insurance coverage. There’s even an extra $40k for workers of “a certain age.” But this being Detroit, employee benefits are either feast or famine. While Ford’s workers are being offered cash for their jobs, the former Ford parts division Visteon announced today that it is seeking to dump pensions for 21,000 retirees in bankruptcy, following Delphi into yet another stealthy yet popular form of indirect automaker bailout.
While we at TTAC continue to cover the serious, the silly and the sublime from the world of cars in this holiday season, there’s a lot going on behind the scenes. We have a grip of new blog and editorial series in development right now, the first of which we’re debuting today: The Project Better Place Birthwatch. This series will be a collaboration between a new contributor here, Tal Bronfer, who will be monitoring and reporting on Better Place’s Israeli rollout, and Martin Schwoerer who will be covering Denmark’s collaboration with the EV dream company. True to TTAC’s mission, we’ve asked Messrs Bronfer and Schwoerer to dig deep into Better Place’s heady swirl of public funding, private companies, and new technology to critically explore the reality of Better Place’s reimagination of the automotive relationship. Because coverage of all things EV tends to be enthusiast- or hobbyist-oriented (read: strictly for the fanboys), the idea for this series is to look beyond Better Place’s green-tinted pitch and learn more about the true viability, costs, benefits and complications of the nascent EV infrastructure business. To ensure that we don’t miss any of the important questions, please take a moment to read Tal’s introduction to the fundamentals of Project Better Place, and let us know what questions you would like answered and what elements you would like to see explored as we take on this sprawling story.
How do you make the world a Better Place? If you ask Shai Agassi, president and founder of the eponymous American-Israeli Company, the answer lies in the development of an infrastructure that makes charging an electric car as simple as pulling over in a gas station. This deceptively simple idea has spawned an international project, which brings together automakers, governments, activists and scientists in a hugely ambitious attempt at creating the first localized electric vehicle charging infrastructures. With brand new technology, millions of tax dollars and the fate of at least one global automaker hanging in the balance, the evolution of Better Place is a crucial story in the rise of electric vehicles. But before we begin chronicling the build-up to this ambitious plan, we have to get back to the basics of EVs and their fundamental shortcomings. (Read More…)
N.B. In anticipation of Saab’s (inevitable) demise, we’re going to have Dead Brands Week at CC.
We’ll start off Dead Brands Week with a royal Rover triple bang, with this Sterling zombie corpse. When it comes to persistence (idiocy) in trying to flog dead corpses in the US, Rover absolutely takes the cake. It took three US deaths to finally convince Britain’s favorite maker of cars (and its government medium-wigs) to give up the ghost. The last attempt, Sterling, is the classic English car disaster story. Despite Rover’s intentions to avoid the usual pitfalls, by building an essentially reskinned Honda/Acura Legend, they still managed to create the ultimate rolling clap-trap English nightmare. (Read More…)
GM’s embattled finance department is getting new blood today, as The General has poached Microsoft’s Chris Liddell to take over as Chief Financial Officer. GM’s CFO position is being vacated by Ray Young, who was rumored to be on his way out as far back as last summer. Young will become a VP for international operations. The 51 year old Liddell has been Microsoft’s CFO since 2005, and is (irony of ironies) best known for reducing the software giant’s legendary cash position through buybacks and dividends. The Wall Street Journal estimates Liddell oversaw the return of $14b to Microsoft stockholders last fiscal year alone.
Chrysler have seen the Detroit Auto Show as a venue for excessively extroverted stunts. Previous years saw a Jeep dropping from the ceiling, leaping minivans and cowboys herding cattle outside the exhibit hall. Top Chrysler executives even traditionally poured drinks for visitors at its Firehouse bar. But with the economy coming of recession and Chrysler coming out a Chapter 11 reorganisation, CEO Sergio Marchionne feels that the extravagance needs to be severely curtailed, and according to Asiaone.com, he has put an embargo on press events. “We wanted to be respectful of everyone’s time. Mr. Marchionne is a very practical guy,” Chrysler spokesman Rick Deneau told AFP. “We didn’t have anything to show.” Well, besides a Lancia rebadged as a Chrysler, but who wants to draw a lot of attention to that?
In a delightfully surreal bit of news out of India, a man sued GM for claiming one of its SUVs had mountain goat-like capabilities when it couldn’t in fact navigate one foot-deep water. What, you might ask, is the SUV in question? The answer is just another amusing twist to this hilarious tale of marketing claims meeting cold, wet reality. Here’s a hint: it’s sold in the US, but not as a Chevrolet…
Unless all the reviews you’ve read about the 2010 Ford Mustang appear in publications like Mustang Monthly, you probably know that the car is (a) an evolutionary improvement of the hold-over SN197 chassis and (b) still far from perfect. After a conflicting afternoon with a beautiful Red Candy Metallic 2010 Mustang GT Convertible [not pictured], […]
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