Suddenly, automakers aren’t so sure anymore about all that pent-up demand that will bring back U.S. car sales back to their old glory… The big recovery has been postponed for a year or more.
But how much pent-up demand is there, really? According to Edmunds’ analysis of 12 Factors To Watch In The Industry’s Second Half, only about half of the sales lost between 2008 and 2010 were not lost forever to used cars, the inability to get credit and the “new austerity.” As a result, they calculate about 4.3m units of demand is “pent up.” But there’s a question of how accurate that estimate is, and beyond that there’s another question: what happens once the pent-up demand has been blown through?
Withe the Detroit Free Press reporting that combined Q2 profits for the Detroit automakers could hit $4b, the quadrennial negotiations with the UAW which opened today with a meeting between Chrysler and the union could be a tough slog. And because the profit outlook is mixed, with GM and Chrysler likely to improve profitability and Ford likely to see a drop in net takings, the long-standing tradition of “pattern bargaining” could come to an end. Ford currently pays about a dollar more per hour than GM and about $2 per hour more than Chrysler (which is partially owned by the UAW’s VEBA trust fund), and Ford also shoulders more of workers’ health care costs than its cross-town rivals. And UAW president Bob King admits
Being really blunt about it, when you don’t represent the overwhelming majority of an industry, which we don’t any more, then you can’t do pattern bargaining
Already unfairly disadvantaged by the UAW (Ford is the only Detroit-based automaker without a no-strike contract) and facing falling profitability, Ford is telling the union not to expect wage increases. But does that mean the union’s only choice is to bring GM and Chrysler up to Ford’s pay and benefit levels?
A Washington-based spokesman for the automaker, Greg Martin, said the effort is to make sure policy makers “are aware of GM’s contribution to our nation’s economic and competitive strength.”
GM has a broader story than just profits and sales, he said.
“GM has started an ad campaign in select Washington publications because there’s more to GM’s resurgence than just increased sales and profitability,” Martin said. “GM is also an auto company investing heavily in America’s future, creating new jobs and inventing solutions and technologies that will make a real difference in energy and safety.”
But the waves of coming auto-related regulations may not actually have motivated the ad so much as the fact that the government is likely to sell off its remaining 26% share in GM by the end of the year (if not by the end of the Summer), and they’re facing an $11b loss at current stock prices. By emphasizing that the auto bailout created a positive corporate citizen rather than just a newly-profitable company, GM likely hopes to convince the government that the political downsides of taking a big loss on The General was ultimately worth it. And that’s an important PR step in the short term as well, as CAFE negotiations are giving rise to bailout-tinged rhetorical attacks on the automaker. For example, Ralph Nader tells the Freep
We give GM billions of dollars, and what do taxpayers get in return? Opposition to a policy that will clearly save them money and give them better cars,
[Editor’s note: Part One of Steve Lang’s updated guide to used car buying can be found here]
Schedule the test drive for a time when there’s no rush. If it’s bad weather, reschedule. Take a little notebook, write a quick check list based on this article, and make notes. When you approach the car’s owner, be friendly, polite and courteous. Do NOT try to “beat them down” to get a better deal. While you have every right to ask direct questions, you have no more right to insult their car than one of their children.
OK. So I used to work for Ford and am now gainfully employed by them (again). My dilemma is as follows:
I am rolling on a Z24 cavalier that I bought brand new in 2001. It has 160K on the clock and the only thing I can see that’s wrong with it is a AC compressor that’s been on limp mode since 2007 (bearing), bad drum brakes due to my laziness (LMAO – SM), and interior fan’s lowest two resistors being shot. The twin cam has a bad coil as it misses at idle, but I could care less. The car’s exterior filth has literally out lasted my marriage.It’s been a hell of a financial savings for me. But we all know the twin cam dream won’t last much longer.
I temporarily moved to SC and blew my car savings load on a 100% rust free 1984 lincoln continental turbo diesel. I repainted it and have slaved over some wiring nightmares on it. I’ve got 6K invested in the thing. And I need a new mode of transportation. Foolish purchase, I know… but if you would look at the clean, rust free body, and sit in that Corinthian plush leather seats whilst romping on the gas to behold two dual plumes of diesel particulate whooshing in the rear view, you’d understand.
Has Honda been gazing longingly at the new crop of Kia crossovers? From the pulled-back, smoked headlights to the sharp Hofmeister kink in the C-pillar, this “concept” version of the forthcoming 2012 Honda CR-V looks like it’s been stealing cues from Peter Schreyer’s sharp-looking lineup. Which is not to say the design is wholly unoriginal: the grille protruding into the headlights is one cue that I’ve seen precisely nowhere before. And lest we draw too many conclusions from this “near production” design, let’s just remember that the real thing won’t debut until later this fall.
Dare to suggest that a strong CAFE standard won’t ruin any automaker, and you’ll be overwhelmed by deafening cries of “what about the market,” “think of consumer choice,” and “don’t you tell me what to drive.” Now, I’ve made it very clear that I’m not a huge CAFE fan, but the fact of the matter is that since nobody is leading a charge for a gas tax (least of all the industry that says it would be a good thing) it’s the only option on the table. Which leaves just one question: why regulate fuel economy at all? There are all kinds of arguments against regulating fuel economy, but most stem from a desire to “let the market do its thing.” That’s an argument I’m highly sympathetic towards, but it doesn’t necessarily require that the government but out and let the era of cheap, thirsty trucks roll on unabated. What maybe, just maybe, if the market actually wants more fuel economy? Well guess what campers… according to research by IHS Global Insight [via Automotive News [sub], the market does want more fuel economy.
Good morning! Two years after GM reneged on the Opel sale to Magna and Sperbank, the Times of London has the big scoop. GM cancelled the sale of Opel because the buyers wanted the right to sell its factories to a Russian state-owned car maker, says the Times, citing U.S. diplomatic cables revealed in Wikileaks. Really? You don’t say! We are shocked! (Read More…)
BMW’s forthcoming “i” series of high-efficiency vehicles will launch as a two-vehicle brand, spanning the gap between high-end hybrid supercar (i8) and small, premium, rear-drive electric hatchback (i3). So, how can BMW style two such divergent vehicles in such a way that both fit into the same brand? That’s the subject of this video, which previews some of the design cues that mark these cars as BMWs, but also as “i-cars.” And if you’ve forgotten what an “i car” is (something BMW doesn’t want anymore than people forgetting what an “M Car” is), hit the jump for a brief video refresher… (Read More…)
With Opel planning to pull itself into the black within the year, the brand’s thoughts are turning from survival to “luxuries” like a flagship model planned for around 20k units starting in the 2016-2017 timeframe. Codenamed “TOL” for “Top Of Line,” the sedan will be designed to highlight one of GM’s many alt-drivetrain technologies, but according to Automotive News [sub], nobody yet seems sure which. Opel labor rep and recent champion of the brand’s forthcoming products Klaus Franz explains:
Already with the our Ampera electric vehicle, we have shown what we are able to do and enjoy an advantage of two to three years compared to the competition
But with the TOL is planned for 2016, Opel may have to dig deep to jump out ahead of the market, which is why a fuel cell-powered electric drivetrain is being considered (also, after decades of FCV research, GM has to build a production model someday). And if the eventual product has a truly ahead-of-its-time drivetrain, and looks as good as last year’s Flextreme Concept (above), this flagship could be an exclamation point on Opel’s turnaround. Unfortunately, neither of these things are a given…
Driving with extreme care can be evidence of a crime, according to a ruling Thursday by the Wisconsin Court of Appeals. Motorist Kevin J. Burch was driving his pickup truck through West Salem at 12:44am when a police officer took notice. The officer watched as the truck slowed to a near stop at an intersection, even though there was no stop sign. At the next block, Burch again came to a full stop before proceeding. There was no other traffic nearby. The officer had taken a “drunk driving course” and found the driving suspicious — especially since he said it was “bar time.” The officer conducted a traffic stop.
Today is the day when the Japanese majors announce domestic and global data for June and the half year. A little more than three months ago, a massive earthquake, followed by a devastating tsunami, paralyzed much of Japan’s infrastructure. It could not have come at a more inopportune time. The Japanese auto industry was already suffering from weak markets at home and abroad, paired with a rising yen that destroyed profits from exports. Three months later, how big was the hit? (Read More…)
The Index of Effluency, the top prize of LeMons racing, goes to the team that accomplishes a feat far beyond the apparent capacity of their horrible, never-belonged-on-a-racetrack “race car.” Sometimes the IOE goes to a team that climbs way the hell up into the standings in a moderately terrible car (e.g., the Exhibition of Slow Tercel EZ grabbing 10th overall in Texas)… and sometimes it goes to a team that somehow keeps an apocalyptically terrible car on the track all weekend and finishes well inside the top third of the field. We have no idea how such a thing could be possible, but the Speedycop and the Gang of Outlaws 1980 Pontiac Bonneville donk managed 16th place out of 52 entries this weekend. (Read More…)
With perhaps the biggest margin of victory in 24 Hours of LeMons history, the Scuderia Limoni Alfa Romeo Milano took the win on laps at the Boston Tow Party and Overhead Cam-Bake by 96 laps over the second-place Near-Orbital Space Monkeys Mustang. It was a textbook performance for the second-ever Alfa Romeo LeMons victor: no black flags, no mechanical problems, almost no driver changes or fuel stops. (Read More…)
This handy pocket chart (print out and laminate), brought to you courtesy of the Freep, shows you the good and bad parts of the Detroit Metro when it comes to driving under the influence. We supply it in extra large, because- well, you know.
As you can see, in Detroit proper, the consequences of getting caught over the limit are pretty benign.
North of 8 Mile Road, matters get dicey. And the map tells only half of the story. (Read More…)
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