I think what I saw at Chrysler is what people felt when Iacocca was there. It’s a new level of energy and enthusiasm because there’s new leadership of people that know what they’re doing, of people that have been successful in the automobile manufacturing business.
Transportation Secretary Ray LaHood waxes eloquent about the New New Chrysler and its Iacoccian leader, Fiat’s Sergio Marchionne. Speaking at the Detroit Economic Club [via Automotive News [sub]] LaHood said Marchionne represents “the next generation of leaders for the American automobile industry.” But who’d have thought Detroit would have had to look outside of, well, Detroit for that? Luckily LaHood was able to ward off such awkward questions by simply stating that “Detroit is back.” Yeah, now that the Italians have taken over. Elsewhere in his Detroit visit, LaHood also pronounced “Taurus is back. Ford is back” after a test drive, confirmed that “high speed rail is not competition for cars,” and predicted Detroit would become a “Midwest cruise-ship capital.” TTAC is still trying to confirm rumors that Secretary LaHood has money on the Lions making the playoffs this year.
With so much attention focused on next-next-gen, alt-energy auto technology, we enjoy highlighting the incremental changes that are making good old internal combustion engines more efficient. The latest evolution to show up on our radar screen is BMW’s development of a host of measures [via Green Car Congress] which it hopes will someday reduce the inefficiencies of cold starts. Perhaps the easiest way of reducing low-temperature, high-friction starts is to encase the engine to slow down the engine cooling process (as well as insulating components that might otherwise need to be cooled). In fact, BMW has shown that with encapsulation, a 176 degree operating-temperature engine can keep its temperature as high as 104 degrees after 12 hours. But good luck trying to change your oil when your engine is surrounded by thermal materials.
At this point about 19 percent… We’ll finalize that, but I’m not interested in going down from that
GM’s Fritz Henderson in Automotive News [sub] on his “plans” for GM’s market share. As Evan Newmark dryly puts it over at the WSJ’s Mean Street blog, “if the Norwegians are giving out Nobel Prizes for aspirations and efforts, then surely Mr. Henderson is up for one.”
The guys at SpeedLux caught the Subaru version of the Toyobaru coupe practicing for the big dance at the Nurburgring. It sure isn’t as pretty as Toyota’s FT-86 concept, but Subaru’s brand faithful won’t let that get in their way. Of course there’s the minor detail that this is a mule, not a concept, but given Subaru’s perennial styling challenges, this might just be as good as it gets. Looks aside though, the shared boxer engine and Subaru-developed RWD driveline make it clear that the FT-86 will be the poser rebadge of the two coupes. Which is why it’s preening in Tokyo while the Subaru is running reps on the Norschleife. Here’s hoping we won’t have to stretch so far to determine the difference between Toyota and Subaru versions when they hit the market sometime in 2012-ish.
The AP [via Yahoo] reports that the FBI has begun using facial recognition software to dig through DMV photo archives searching for fugitives, causing new worries for privacy advocates. “Everybody’s participating, essentially, in a virtual lineup by getting a driver’s license,” the ACLU’s Christopher Calabrese explains. Drivers licenses, argues Calabrese are rapidly becoming more than, well, driver’s licenses. “Now you need them to open a bank account. You need them to be identified everywhere. And suddenly they’re becoming the de facto law enforcement database,” he says. State and Federal laws prohibit the FBI from collecting and storing DMV records as a law-enforcement database, so the pilot program in North Carolina is taking place within the state DMV with its full cooperation.
Cadillac has confirmed that TTAC’s very own Jack Baruth will be allowed to compete in Bob Lutz’s SuperSedan Shootout (also known as the Cadillac V Series Challenge). The race will consist of five hot laps in any production sedan, and will take place at the Monticello Motor Club in upstate New York. Sadly, because of the time-trial format, we will not be treated to awesome footage of Jack putting Maximum Bob into the wall with some trademark “avoidable contact.” Still, TTAC’s resident speed freak will have the opportunity to take on GM’s resident cranky old man (as well as other bloggers) in a face-off that’s been nine years of online confrontation in the making. The only problem at this point is that the bastards at Jalopnik have stolen our whip…
The Wall Street Journal reports GM could conclude its Opel division sale by as early as Thursday, after Fritz Henderson and German officials both signaled that talks were nearing an end. Magna and its backer Sberbank will put down €500m ($740m) for 55 percent of Opel, while Opel’s labor unions have agreed to €265m worth of cost savings. The German government aid package said to total €4.5b through 2015 has yet to be finalized, but this apparently will not affect the deal. The major issue still under negotiation is the potential job loss across Europe, as the EU has already warned Germany that it my not “buy” jobs with its aid package at the expense of other EU nations. Which means Spain, Belgium, Britain and Poland still have to play “shuffle the jobs.” Magna has said that Opel could shed as many as 10,500 jobs, including 4,000 in Germany. On the upside Opel’s unions are getting ten percent of New Opel, although their decision making power is another of the issues still being negotiated. GM fought long and hard to prevent the sale of Opel to Magna/Sberbank, but with the major obstacles to the deal overcome there’s little left to do but grin and sign the papers. And then sit back and watch as Opel’s technology is leveraged to create a modern (and heavily subsidized) Russian auto industry which will challenge Chevy’s position in the Eastern European markets.
It’s important to keep GM’s claims about market share and production volume in their proper context. Over the very long term, the graph above reveals the dynamic that should come first in GM’s calculations: a long-term decline in consumer trust and market share. This decline shows no signs of stopping, meaning GM’s 2009 market share of just under 20 percent is hardly a given going forward into 2010.
Thanks to KixStart for providing transcripts of the exchange on September sales that launched the current GM production goal controversy.
Chris Russo, Credit Suisse:
“I noticed in the comments, in prepared remarks and [others], there’s an increased focus on market share from your company, which can be good but which can also be dangerous, is this a shift in tone at the company is gm, do we have to learn about industry pricing, is GM, not having learned the lessons of the … going after market share at the expense of profit and price? Is there a new regime here?”
Spats between automakers and the Detroit press are a rare thing. But spats between GM and the Detroit Free Press? Let’s just say few things last longer in this world than lapdogs that nip. So GM is going after the Freep with a spray bottle for daring to suggest that a 2.8m unit production plan for 2010 might be reminiscent of old, bad GM. Apparently the Freep only got it wrong on one point: unfounded optimism, self-sabotage and disfunctional communication are still very much part of New GM. Oh yeah, and CAPS LOCK is along for the ride. Mike DiGiovanni, GM’s Executive Director of Corporate Planning and Alliances reponds at Fastlane
GM had indicated in a media call that it could produce upwards of 2.8 million units in North America — this is a number we COULD do…it’s not the number we necessarily WILL do. We only plan and report production estimates by quarter to reflect the current economic climate.
A major complaint about the current BMW M5 was that it traded its walk-softly-and-carry-a-big-stick cachet for muscle-bound advertisement of its steroidal abilities. The New York Times‘ reportage on the European tradition of badge deletion concludes that Americans simply don’t appreciate a good Q-ship the way they do on the continent. And the thesis is probably correct. When was the last time you saw a BMW that didn’t advertise its cubic centimeter displacement (or something like it) on its rear trunklid? Probably not since the last time you saw an out-of-place “M” or “AMG” badge on an obviously downmarket model. Fine, so the American super-sedan buyer wants some badge for their buck. It’s understandable. All I ask for is the option of making an M5 look indistinguishable from a grandfatherly 528. And BMW’s decision to downsize the M5 from a V10 to a turbocharged V8 makes the next M5 the perfect opportunity to do so. As the muted engine note in this video reveals, if nothing else, the option still exists.
“What do you think the percentage likelihood is that, if we give this deal a chance, it will succeed?” Rattner didn’t make the decision any easier. “Fifty-one per cent,” he said. “But, Mr. President, in my experience, deals get worse, not better, over time.”
Ryan Lizza recounts the decision to bail out Chrysler in his epic New Yorker piece on Larry Summers and the president’s economic team [via Kausfiles]. This exchange came after the economic council split 4-4 on the automaker bailout, and Rattner was identified as the tie-breaking vote. Is it safe to say now that nobody expects Chrysler to survive?
TTAC has a rule of thumb: if the Detroit Free Press is laying into GM, the trouble must be staggeringly unavoidable. And sure enough, the latest Freepian blast is the result of a predictably bad decision: cranking up production in the face of slack sales and a tough post-clunker market. GM’s decision to bump production by 45 percent next year has a host of analysts lined up to prognosticate profit-sapping incentives when The General finds that it’s building cars faster than people are buying them. “I don’t see what they’re thinking,” says a JD Power senior forecasting manager. “I’m seeing a little bit of shades of the old GM,” adds Edmunds’ Michelle Krebs. GM’s defense?
It’s clearly not the old GM because we don’t have overcapacity, which is what caused the problem before. If you look at the analysts’ own reports, we’re probably being conservative to middle of the road as to where the industry is going to be.
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