Not many in Colorado, according to the Colorado Springs Gazette, which reports that the Motor Trend Certified Advantage [yes, really] network is joining Sears in mopping up culled dealers. What GM’s pump-em-up video leaves out: the fine print explaining how the new-look dealership renovations will be paid for.
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Posts By: Edward Niedermeyer
Toyota CEO Akio Toyoda will give the following prepared statement in his testimony before the House Oversight Committee tomorrow [via WOKV].
Thank you Chairman Towns.
I am Akio Toyoda of Toyota Motor Corporation. I would first like to state that I love cars as much as anyone, and I love Toyota as much as anyone. I take the utmost pleasure in offering vehicles that our customers love, and I know that Toyota’s 200,000 team members, dealers, and suppliers across America feel the same way. However, in the past few months, our customers have started to feel uncertain about the safety of Toyota’s vehicles, and I take full responsibility for that. Today, I would like to explain to the American people, as well as our customers in the U.S. and around the world, how seriously Toyota takes the quality and safety of its vehicles. I would like to express my appreciation to Chairman Towns and Ranking Member Issa, as well as the members of the House Oversight and Government Reform Committee, for giving me this opportunity to express my thoughts today.
We are delighted – Saab’s future is now secure. From today we will be concentrating all of our efforts into reviving Saab and transforming it into a sustainable and profitable company with the confidence to be bold. We will reinforce the emotional experience between Saab drivers and their cars and we will focus on Saab’s historical strengths in the fields of independent thinking, aircraft heritage, ecological performance and motorsport.
Through this acquisition we add approximately 15 euros per share in equity and 60 euros of assets. With a well funded business plan in place we are looking forward to working with Saab’s management on the realization of that plan and bringing exciting new products to our customers. Real Saabs, Saab Saabs.
Spyker CEO Victor Muller celebrates the official transfer of ownership of Saab [full release in PDF format here]. GM’s release can be found here.
Although the Chinese government takes much of February off for New Year festivities, GM’s deal to sell HUMMER to Sichuan Tengzhong has exactly one week left before a self-imposed deadline for completion arrives. The deal is being held up by China’s Commerce Ministry which has publicly said that it wants the Chinese auto industry to consolidate and become “greener,” two goals that are severely at odds with Sichuan Tengzhong’s HUMMER aspirations. Now, the Financial Times reports that Tengzhong may be trying to pull an end-around on the Chinese government by pursuing a purchase via an offshore investment vehicle. This would (in theory) evade the requirement for the Commerce Ministry’s approval. In reality … (Read More…)
Automotive News [sub] reports that the one-time advisor to Rick Wagoner and GM’s director in charge of the UAW’s VEBA account’s 17.5 percent stake in the automaker has been promoted to Vice Chairman in charge of corporate strategy and business development. He will be replacing John Smith, a 59 year-old GM “lifer” (he joined the company in 1968) who led negotiations for GM’s Saab-Spyker and Opel-Magna deals. Smith will stay on until the end of this year as an advisor to CFO Chris Liddell. That Smith would leave GM after the failed Opel sale and the less-than-entirely-satisfying Saab-Spyker deal isn’t surprising, and as a well-compensated advisor to CEO Ed Whitacre and a rising star at GM, Girsky is an equally unsurprising replacement (despite his failure to rescue Saturn). And though Girsky brings experience gained as a labor advisor and a Morgan Stanley analyst, he’s got his work cut out for him. GM’s brand sales have been largely unsuccessful so far, Opel is in an unfunded turnaround limbo, and a recent India-market alliance with SAIC was less than perfect for GM’s long-term prospects. Girsky’s got a lot going for him compared to the typical GM insider, but with mounting long-term, structural issues facing The General, there aren’t any easy options facing him in his new capacity.
The House Energy and Commerce Committee kicks off the week’s Toyota-related festivities on Capitol Hill today, with the first round of hearings scheduled for 11 am Eastern. Testifying will be Toyota Motor America’s Jim Lentz, Transportation Secretary Ray LaHood, Southern Illinois professor and ABC’s ghost hunter David Gilbert, Safety Research and Strategy’s Sean Kane, as well Eddie and Rhonda Smith, who reportedly experienced uncontrollable sudden acceleration in a Lexus ES350. The E&C Committee has a live webcast available here, or you can watch on C-Span 3. The Detroit News’s David Shepardson is live-tweeting from the press events on the Hill leading up to the hearing.
Tomorrow is the main event, when CEO Akio Toyoda appears before the House Oversight Committee along with TMA President Yoshimi Inaba.
Ever since Toyota’s recent problems hit “frenzy” level on our mainstream media monitoring system, speculation has been rampant that some mysterious electronic problem was at the root of the unintended acceleration scandal. We’ve been wary of jumping on the “ghost-in-the-machine” bandwagon, for a number of reasons, chief among which is the fact that it seems to be the product of an inability to explain specific instances of unintended acceleration, rather than hard evidence. Given that unintended acceleration occurs at the intersection of man and machine, good old-fashioned human error is an easier assumption than mystery software errors. Given the worrying results of our Toyota gas pedal analysis, we’ve been content to explain the situation on a combination of pedals, mats and human error. But now ABC News may just have the first positive evidence of an electronic problem that could explain the mystery behind Toyota’s unintended acceleration problem. Dave Gilbert of Southern Illinois University has found that it’s possible to cause unintended acceleration without it triggering an error code that might give some kind of clue as to its cause. Combined with our finding that Toyota actively conceals data from its black box data recorders (out of line with standard industry practice), this could be some of the first positive evidence that there’s more to the “ghost in the machine” theory than mere panic-driven speculation.
For an industry under ever-increasing pressure from government emissions standards, start-stop technology (which shuts off engines under idling conditions) seems like an easy route to improved fuel efficiency. Cheaper and less complicated than a true hybrid system, a number of automakers from BMW to Kia are proliferating start-stop technology across their product lines without hybrid-like price premium. Since this technology represents a relatively easy, incremental efficiency upgrade, we’ve wondered why it hasn’t been made available stateside, where hybrids are making up a growing proportion of sales. Detroit’s executives seem to think it’s a good idea, and Mazda has even gone so far as to complain that EPA test results refusing to show the Japanese test-cycle’s 7-9 percent improvement is the main factor preventing it from bringing more stop-start equipped vehicles to the US. But there’s another issue preventing stop-start from becoming standard issue industry-wide, and it’s actually remarkably obvious.
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The social media blog Mashable has an interesting theory: Toyota’s recall woes might actually be good (gasp) good for the brand. To back up this astonishing claim, they offer two premises, based on online social media data:
The first is that the increased number of conversations about Toyota are building greater awareness for the brand even though many of the mentions may be negative. While this may seem unusual, the fact that people are talking about the brand a lot more and sometimes in a neutral light (not just negatively) is increasing its exposure. More people are talking about Toyota than any other brand these days. And they’re talking about the recalls, but also the fixes being provided by the dealerships too. And some of the consumers are probably coming to the defense of the brand too. Maybe there is some truth to the adage that there’s no such thing as bad publicity after all.
Fiat is acknowledging a “a collapse in orders” as Italian scrappage rebates expire, and as a result, all six Italian Fiat plants will close for two weeks [via the BBC]. The move is being justified as a break from past overproduction, with Fiat spokesfolks claiming “we’re only building to demand.” Though that might help CEO Sergio Marchionne justify his $6.5m paycheck, it couldn’t come at a worse time. Fiat is putting 30,000 employees out of work for the next 14 days, just as it faces widespread protests over the closure of its Sicilian Termini Imerese plant. With the Italian government (and even the Pope) condemning Marchionne’s decision to cut the perpetually money-losing plant, this unplanned vacation will give workers plenty of time to agitate and organize further resistance. Not that Marchionne could have avoided it. Italy’s consumer subsidies for new cars were keeping demand artificially high, and the Italian government was hoping it could offer their renewal in exchange for a Fiat commitment to the Imerese plant. But as the Wall Street Journal [sub] opines, Europe’s scrappage-swollen market has to come down to earth at some point. Just as Fiat has to rid itself of some of its terminally underperforming Italian capacity, at some point. And, as usual, there’s no time like the present.
Even if Toyota hadn’t antagonized the ruling party, its congressional hearings would have been a posture-fest anyway. Congress can’t do much about Toyota’s recent behavior besides name, shame and tell the NHTSA to do a better job next time. Sure, the lights and cameras of congressional theater might get Akio Toyoda to sweat a little, but with an ever-increasing number of civil suits pending, criminal investigations are the real cause for concern. A New York federal grand jury has subpoenaed “certain documents related to unintended acceleration of Toyota vehicles and the braking system of the Prius,” reports the LA Times. Both Toyota and its US sales division were also targeted by an SEC subpoena, requesting similar documents, including details of the company’s disclosure policy. If either of these criminal cases move forward, those pending civil suits could grow a much more powerful set of legs.
UAW members protest a Modesto, CA Toyota dealer, as part of the union’s wider effort to punish Toyota for its decision to shut down the NUMMI factory in nearby Fremont [via the Modesto Bee]. “We are not telling people not to buy Toyota products,” explains one worker. “We’re telling people that Toyota needs to be a responsible corporation and keep jobs in California.” And though there couldn’t be a better time to blame Toyota for just about anything, the NUMMI plant was closed because GM ditched the joint venture during its bankruptcy and government bailout. Toyota, like GM, was faced with overproduction in the US market, and because GM had pulled out of NUMMI, the plant was an obvious candidate for closure. So really, these protesters would have some sinister version of GM’s logo on their sign if they were really interested in fairly assigning blame for the NUMMI shutdown. However, their UAW pension fund owns 17.5 percent of GM, so simply blaming Toyota is a lot more convenient. Especially since Toyota is already attracting so much well-deserved (if wholly-unrelated) negative media attention.
State Farm has been a thorn in Toyota’s side since congress geared up to investigate its recall problems. First, the insurance firm disclosed that it had warned the NHTSA of the prevalence of unintended acceleration (UA) in Toyota models back in 2007, then this past weekend, it clarified that it had actually warned the NHTSA of problems back in 2004. All this has added to the perception that Toyota somehow bought the NHTSA’s cooperation in concealing its UA problem, a perception that is accelerating tensions leading up to Akio Toyoda’s capitol hill testimony. Ironically, Toyota took measures to fight its image as a lobbyist-happy Washington manipulator by… hiring more lobbyists. Unfortunately for Toyota, the Legal Times blog reports that one of its recently-hired K-street reinforcements (Quinn Gillespie) had something of a conflict of interest that QG spokesfolks describe as:
another, long-standing client of the firm was in a position adverse to Toyota in connection with certain matters relating to the company’s recall of some of its vehicle lines
A quick look at QG’s client list reveals only one likely candidate: State Farm Insurance. As a result of the conflict, Quinn Gillespie has terminated its deal with Toyota. According to regulatory filings, Toyota paid QG $30,000 for six weeks of work, during which time it lobbied on “issues related to the vehicle recall, as well as proposed reform of the financial regulatory system.”
Ah, political spectacle. When Detroit’s CEOs took the stand at congressional hearings over a year ago, the main browbeating bullet point wasn’t the decades of mismanagement and greed, but the fact that Messrs. Wagoner, Mullaly and Nardelli had taken separate corporate jets to the festivities. The lesson: convenient focal points for anger always trump the complexity of a substantive dressing-down. And as congress gears up to grill Toyota’s CEO, the Japanese automaker has given congress just the thing to sharpen its collective knife against: an honest opinion. One document [via Politico PDF here] briefing Toyota USA boss Yoshi Inaba for the hearings, reveals that Toyota believe the current administration is “activist” and that “not industry-friendly.” True or false, this document sets up an adversarial relationship between Toyota and the majority party going into the hearings. Which would be bad enough if Toyota hadn’t also handed over evidence, already leaked by the Oversight committee, indicating that it balances recall costs against risks and lobbies the government in its own interest. On its own, this evidence might be merely embarrassing, but having slighted the Democrats, news that Toyota treats recalls like a business has become prima facie evidence in the (increasingly political) case against the Japanese automaker.
The Colorado House’s passage of HB-1049 [PDF here], a bill requiring restitution for dealers culled during the Chrysler and GM bankruptcies, has drawn a $60,000 “no” campaign from General Motors. The Denver Post reports that GM’s ad campaign, which features lines like “we must keep driving forward to repay our government loans,” and “don’t let special interests stick taxpayers in reverse,” has riled up local lawmakers more than ever, drawing such timeless put-downs as: “they must be spending tax dollars on Botox to say that with a straight face.” The bill would require OEMs compensate culled dealers for signs, parts, dealer upgrades and more, as well as offer them the right of first refusal for any new area dealerships.
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