A week ago, we predicted that Volkswagen, buoyed by stellar numbers, would soon swat nuisance Wiedeking once and for all. It didn’t take long. Ferdinand Piech, chairman of the supervisory board of Volkswagen and co-owner of Porsche, pulled out a big gun and put it to the head of Wendelin Wiedeking, CEO of Porsche (and theoretically Piech’s employee). Piech said (we are paraphrasing in the interest of brevity): “Say uncle by Monday. Or you’re dead.” Nice family.
Update: According to the speaker of the influential CDU Economics Council, there will be no decision about the future of Opel before the 27 September national elections. “Nothing will be decided before the elections, because nobody in the government wants to lose face because of this,” a council member said to Automobilwoche [sub]. The Opel Trustee figures that the latest date for a final, signed contract is mid September. If nothing is signed by then, the government money has run out and Opel is bankrupt.
The GM/Opel/Magna/Sberbank/GAZ group grope is in trouble. The writings are on all walls.
Opel is hemorrhaging more than €5 million per day, the Westdeutsche Allgemeine has learned. Opel spokesfolk said, it’s “only” €2.8 million. By mid September, the €1.5 billion bridge loan, underwritten by the German government, will be used up. There won’t be more money—that has been made as clear as can be. Time and money are running out. Why is Opel burning so much cash despite brisk sales? The Opel Tech Center has 7000 highly paid engineers. They work(ed) for all of GM. Bankrupt GM stopped all payments.
In the meantime, talks between GM and Magna hit one snag after another.
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If the tea leaves of Edmunds, J.D. Power, CSM Worldwide and Deutsche Bank are correctly aligned, June SAAR (a.k.a. “seasonally adjusted annualized sales rate”) could be slightly above 10 million, Bloomberg reports. Based on a nearly completed month, J.D. Power estimates the June SAAR at 10.1 million. Deutsche Bank sees the June SAAR rise to 10.2 mil, and thinks the second half of the year will average 11 mil units. CSM reckons June will come in at 10.3 million SAAR.
While Porsche has problems consummating the Volkswagen takeover, Volkswagen covets a smaller, but possibly juicy target: Suzuki. The German Manager Magazine has it on good authority that VW wants to get cozy with the Japanese maker of small cars. Buying, say, 10 percent of Suzuki would not be out of the question. Ulrich Hackenberg, head of VW’s R&D, had been in Hamamatsu, Japan. He came back impressed. “We are still in the sniff phase,” said a VW exec to Manager Magazine, no serious negotiations are being held—yet. Ferdinand Piech had praised Suzuki in May. Not that VW needs help building small cars. But they could need help where Suzuki is the market leader: In India, next to China the most promising growth market on the planet. Suzuki had a partnership with GM, but last year, all GM shares in Suzuki were turned into cash, so the coast is clear.
China’s National Development and Reform Commission (NDRC) is unhappy with Tengzhong buying Hummer. The agency “is likely to reject Sichuan Tengzhong’s bid to buy the Hummer brand from bankrupt General Motors Corp,” Chinese state radio said today according to Reuters. Chinese state radio, being Chinese state radio, usually doesn’t report stuff that runs contrary to Chinese government intentions.
Ford had 1,683 suppliers last year. By the end of this year, that number will be down to 850. This is what Tony Brown, Ford’s group vice president of global purchasing, told reporters, one of them from Reuters. Ford is worried about disruptions by supplier bankruptcies, which are a daily occurrence. Triage time: Ford wants to shore up the healthier ones and leave the not so healthy by the wayside.
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Chrysler Group LLC, the company built out of the alleged morsels of the old Chrysler has a problem: In order to make new cars it needs to have the old tools. A lot of those tools are at parts makers who are sitting on unpaid bills, old bankrupt Chrysler stuck them with. Payback for unpaid bills being a bitch, the parts makers don’t want to give up the tools.
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Als der Sauerkrautfresser der TTAC Mannschaft (der ausgerechnet in Peking wohnt) wurde ich gebeten, den Gewinner des Wasistdasverteufeltstedeutscheautowort-Wettbewerbs zu wählen. Ach, Entschuldigung, die Macht der Gewohnheit. Nun denn . . .
As the resident Kraut at TTAC (who resides in Beijing) I was asked to pick the winner of the German phrase contest, in which the most deserving contestant would walk away with his very own copy of the Taschenwörterbuch der Kraftfahrzeugtechnik.
While French workers take hostages, French companies do a little extortion: “PSA Peugeot Citroën has warned that its 2009 operating loss could reach €2bn if France does not renew its cash-for-bangers scheme, due to expire later this year,” the Financial Times reports. Without “cash-for-bangers,” as the Brits call their clunker culling program, Peugeot will scale down fourth-quarter production, anticipating an utterly awful 2010. Jobs will be lost, red ink will be all over the place. The FT rightly assumes that PSA’s “mutterings may be intended to press the French government to continue the plan.” Can the French possibly say non?
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Workers of French parts maker Raquet held three leading managers hostage at the Monthermé factory in the Ardennes. The workers called the kidnapping a protest against cutting 73 of a total of 187 jobs. After the leader of their prefecture agreed to talks, the managers were released shaken, but unharmed. Automobilwoche [sub] says that this kind of hostage taking has become commonplace in France since the onset of carmageddon. The kidnappings receive a Gallic shrug-off: “This barely elicits a reaction anymore amongst the populace.”
Kids, don’t try this at home.
In the left corner: One of the world’s top heavyweights. European Champion. Number two in the world league. In the right corner: A flyweight contender. Ranks at the bottom of the list. The guy in the right corner wants to knock out the one in the left. He surprised him, scored some hits. Now the big guy on the left is starting to get going.
The guy on the left just won a very rare trophy: Volkswagen’s chief financial officer Hans Dieter Poetsch said to Reuters that Volkswagen will have a “positive result” in the second quarter. As for 2009, Poetsch added that VW is also on track to having a “positive result for the full year.” A car maker that turns a profit?
Did you ever hold a 70’s vintage Volkswagen car catalog in your hands? You know, the ones without a picture of a car on the cover? Just “The Rabbit,” “Der Käfer,” “Le Golf?” One distinct color per model, that’s it? Yes, those were the handiwork of yours truly. You think car advertising is a killer job? It sure is, as this installment of the Autobiography of BS illustrates.
On Friday evening, a wild rumor whirred via the wires. It started at Germany’s usually well informed Manager Magazin, then spread to Reuters and Bloomberg: Daimler may be taking a stake in its Stuttgart neighbor, Porsche. Through Porsche, Daimler would own a part of Volkswagen.
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In my many years as a ghostwriter for a leading exec of Volkswagen, there was one joke that was always shot down. Early VW navigation systems gave you the voice prompt “die Route wird berechnet.” Which translates to “the route is being calculated.” It could also be understood as “I’ll charge you for the whip.” My one-liner that a new VW comes with a factory-standard dominatrix was always suppressed. I wonder why.
I was reminded of my dark past when I opened Automobilwoche [sub] today, only to read that BMW intends to turn their Minis into a gabfest on wheels. Carrying the moniker “mission control,” electronics will listen to the traffic on the car’s CAN bus, and then the gizmo will drown you with clever remarks.
Assume for a horrifying second that you are the chairman of the board of one of the world’s largest auto companies. You also own large chunks of a smaller auto maker. Your executive assistant brings in a letter from one of the top managers of that smaller automaker. The letter says you broke the law, you hurt the company, and he may hold you personally liable for the damage. To the tune of, oh, several billions. Euros. What would you do? Right. Send down security with a moving box and have the guy escorted to the factory gates. Ferdinand Piech, chairman of the board of Volkswagen, supervisory board member of Porsche, and one of the largest owners of Porsche received such a letter from Porsche CEO Wendelin Wiedeking. The letter arrived a month ago. Wiedeking still has a job. But the letter has been leaked to the press. The day before Wiedeking’s day of reckoning.
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