By all means, keep Sterling Heights Assembly Plant open . . . just use it to build something other than Sebrings. [via The Freep]

Hybrid Kinetic (HK) Motors and its chairman, former Brilliance chairman Yung Yeung, have announced plans to build a massive car plant in Baldwin County, Alabama in order to begin production of its fuel efficient vehicles by 2013. The $1.5b plant will produce 300,000 units per year and employ 5,000 Alabamans when it comes online with eventual production planned at one million units per year, according to a release from the Alabama governor’s office. A “full report” from Alabama Live states:

All the HK Motors vehicles will feature a 1.5-liter engine, but despite the engine’s size, the hybrid power sources will allow it to generate up to 400 horsepower, according to C.T. Wang, chief executive of HK Motors.

They will get at least 45 miles per gallon, Wang said, and the plug-in vehicle planned by the carmaker can go 600 miles on a single charge.

OK, is this starting to sound a bit strange? It probably should. The exact same scenario is playing out in Mississippi, where another former Brilliance boss is also building a huge, mysterious auto factory in the face of massive auto production overcapacity. Guess what else the factories have in common?

[Fundraising] will rely heavily on the U.S. government’s EB-5 program, which trades U.S. visas for $1 million invested in the U.S., or $500,000 in rural and high-unemployment areas.

The Wall Street Journal reported today that Geely has offered Ford $2.5B for Volvo, making the Chinese automaker the “leading contender” for the Swedish brand. Leading? Are there other contenders we don’t know about? According to the WSJ, “the offer is higher than Ford or outsiders had expected for a brand that has lost more than $1 billion in recent years,” and yet the latest news from China [via Xinhua] has Alan Mulally saying there’s been “no new progress” in the ongoing negotiations. Now don’t get it twisted: nobody expects Mulally to publicly accept this kind of offer within hours of being reported, but you’d think he’d at least send encouraging signs. Instead Mulally tells Xinhua, “Volvo is a good brand, but Ford will sell it in order to shift its main focus on developing the Ford brand.” Which is like someone on Craigslist talking about the sentimental value of an item with the words “or best offer” attached to the asking price. The fact that Geely has made an offer for 100 percent shows that they’re serious (that used to be a Ford negotiating point). So what’s Big Alan waiting for? Offload the money-loser, snag some cash and move on. The deal doesn’t look to be getting any sweeter.

You might be forgiven for thinking that a major lesson of GM and Chrysler’s kicking-and-screaming-and-sucking-down-tax-dollars reorganization was that less is more when it comes to brands. Only you’d still be wrong. Chrysler appears to be adding brands faster than GM shed them, as the Pentastar adjusts to life under its Italian overlords. We’ve already heard that the Fiat 500 will be America’s only Fiat-branded product, that Chrysler is supposed to become a Cadillac competitor, Alfas are en route, Dodge and Jeep will stick around, and somehow Mopar is a brand as well. Well, let’s throw another log on that fire. Edmunds Inside Line is confirming wild-ass rumors (by way of anonymous sources, of course) that Ram will become a standalone brand, selling pickups, vans, SUVs and commercial vehicles. Why? In order to “allow [Dodge] to develop as an affordable performance-car brand,” goes Inside Line’s insider’s line. So why not just throw Lancia into the mix and give ChryCo a GM-tastic eight-brand lineup?

Honda’s U3-X was designed more with robots in mind than humans. Can you tell?

I have a lot of non-car-enthusiast friends. When conversation moves to my work at TTAC, one of the most common responses I get is, “I’m not all that into cars, but I love Top Gear.” To which my answer is usually, “Well, you should check out TTAC because you might develop a new-found appreciation for our four-wheeled friends.” But, self-promotion aside, Top Gear may be the best thing to happen to cars since the development of the V8. The British show has simply refined the formula for pro-car propaganda to perfection. Which is why The Jay Leno Show‘s “Green Car Challenge” is so galling. The segment manages to completely rip off Top Gear‘s “Star In A Reasonably-Priced Car” segment, while leaving out all of its most compelling elements. Top Gear‘s race takes place around a real track (developed by Lotus no less), making its results a compelling measure of celebrity racing ability. Plus, its use of truly pedestrian vehicles never smacks of product placement and provides an entertaining counterpoint to the pervasive images of celebrities in the latest, hottest whips. In contrast, Leno’s track is a pathetic excuse for a raceway, his car is a shameless plug for Ford and the whole spectacle is coated in an unnecessary layer of gimmickry resulting in wholly uncompelling results like this latest Rush Limbaugh-piloted run. Leno may be the closest thing America has to a Jeremy Clarkson, but his Green Car Challenge is an unmitigated travesty that does great dishonor to the comparison. Thumbs down.

Lithium-ion battery maker A123 Systems launched its IPO yesterday, and by end of trading its shares had soared over 50 percent making it the second biggest IPO of 2009. Founded on nanoscale electrode technology that emerged from MIT, the Watertown, MA-based firm counts BMW, Chrysler, SAIC and Delphi among its automotive customers (not to mention DeWalt power tools and other non-automotive clients). Despite its impressive customer list, Automotive News [sub] notes that A123’s heady IPO is “reminiscent of the frothy IPO market of a decade ago, given the company has never made a profit.” And a lack of profit isn’t the only issue facing A123. Bloomberg reports that in the midst of its IPO, A123 is trying to resolve a patent suit by the University of Texas and Hydro-Quebec alleging A123 designed its batteries around technology developed by the U of T’s John Goodenough. Which could mean post-launch Challenger, er, challenges.

(Read More…)

AutoBild reports that Audi will be dropping Lamborghini-sourced V10s from its R8, RS6 and S8 models. AB blames the V10’s weight, thirst and complexity for the move, although one might guess brand strategy played a role in the decision as well. With over twice as many brands as GM, the Volkswagen Group has to work hard at not competing with itself, and keeping V10s in the Lamborghini camp seems like a good place to start. But Audi’s long-soldiering aluminum 4.2 V8, which has seen duty in everything from the R8 to the RS4, has also earned eight-cylinder engines a home in the Audi brand. And since that engine is used by independent supercar manufacturers from Spyker to Gumpert, there’s no shame in giving up a pair of cylinders. Besides, with the new S4 downsized to a supercharged V6, there’s room at the top of the range for an eight-pot. And guess what? There’s a new one in the works. AutoBild says an Audi-only 4.0 V8 is being developed which will make up to 550 hp and 515 lb·ft of twist in its highest state of tune. And even that won’t be the be-all and end-all of Audi performance: an R5 coupe is set to debut towards the end of 2011, powered by a 375 hp 2.5 liter turbo-five that harks back to the Ur-Quattro.

Casey W. Raskob writes:

Years ago, I would see tires with a pattern. That pattern was cut to the base of the tire, and but for tread wear indicators, the pattern of the tire did not change from new to bald. I now have a set of General UHP tires, reviewed on this site. I’ve been happy with the UHP’s overall—while not the Pilot Sports they replaced, they are 9/10’s of the PS for 1/3 the price. Now the tires approach the halfway point of tread wear. The tread blocks and pattern will change in a few places. I’ve noted this on other tires as well. Why do tire makers “tier” the tread patterns today? What advantage will accrue? Do they make the tires louder at the end of service life to encourage replacement? (my last set of Pilot Sports were way loud at the end). Is the rubber formula different and if so, why?

The new Kia Sorento pitches camp in one of America’s hottest segments. Will it match RAV-4, CR-V, Equinox and the other big Sellers?

This is good — the money on the trucks. The money on the 2010 models is a nonevent because there aren’t any of them in stock . . . The incentives are good advertising to get people in the door, then we can sell them whatever we have in stock.

Tommy Brasher, owner of Brasher Motor Co. of Weimar, Texas, on GM’s decision to hold a “Truck Month” sale after all. Maybe we didn’t get the memo, but GM’s Bob Lutz said last week that GM would forgo the celebration of lost profits for fear it would hamstring the “May The Best Car Win” campaign. After all, the whole point of “May The Best Car Win” is to convince consumers that GM products are worth shopping even when they don’t have cash on the hood. But with trucks cramming the lots and in-demand models nowhere to be found, GM went ahead and sacrificed perception for what spokesfolks call a “competitive response” to Ford’s Truck Month. Old habits die hard.

The Los Angeles Times reports Toyota has requested $2m in state training funds for workers at its NUMMI plant. The only problem? Toyota has already announced plans to close the Fremont, California, factory. The State of California’s Employment Training Panel had previously agreed to pay back the $2m Toyota spent for training at NUMMI, but since then Toyota and GM made the decision to end their joint venture at NUMMI and end production there. Toyota’s argument was summarized in a statement by NUMMI saying, “These skills have made our team members greater contributors to NUMMI and will make them more attractive to prospective employers when they conclude their employment here in April 2010.” But don’t count on that argument gaining much traction.

(Read More…)

We obviously were micromanaging our cash — down to the penny, down to the minute — because that was our lifeblood

GM Spokesman Dan Flores in an Automotive News [sub] story on GM’s decision to pay suppliers weekly instead of monthly. The savage irony? By making payments monthly, GM actually had a harder time managing its dwindling cash pile during the bad old days referenced by Flores. And now? “We’re not going to save money by doing this,” says Flores. “But it’s a better, more reasonable, smarter way to run the business.” On the downside, the changes won’t mean suppliers will get paid any sooner as GM plans on maintaining the 47-day lag between supplier delivery and payment. Plus ça change…

Automotive News [sub] reports that Fiat CEO Sergio Marchionne has ordered facelifts of five ChryCo models within the next year and a half. Although it might actually be more accurate to describe the refresh order as being for five nameplates of two basic “models”. After all, the Chrysler Town & Country and Dodge Caravan minivans are nearly identical under the skin, as are the Dodge Caliber, Jeep Compass and Jeep Patriot. Apparently the PT Cruiser will be updated as well, although on an unspecified timeline. Besides the obvious question this brings up (why, God, why would they waste precious publicly-funded resources reheating unwanted leftovers?) there’s the issue of how Chrysler will get these updates to market on an accelerated timeline. Apparently the answer is that Chrysler plans on rehiring an undisclosed number of recently-fired designers, engineers and developers and giving them overtime. Paging Mike Donoughe! Meanwhile, Marchionne’s plan must still be approved by the Chrysler BoD and the Presidential Task Force on Autos.

Neil Barofsky, Special Inspector General for TARP (SIGTARP), will audit the closure of 2,139 GM and Chrysler dealerships, reports Automotive News [sub]. Barofsky told members of the Senate Banking Committee [download PDF of Barofsky’s testimony here] that his office “will examine the process used by General Motors and Chrysler to identify which automotive dealerships should be maintained or terminated” [start your own audit of GM’s cull here]. Barofsky also indicated that he would conduct a separate audit of “governance issues when the U.S. government has obtained a large ownership interest in a particular institution.” Though he didn’t explicitly confirm that the “particular institution” is GM, that seems to be a safe conclusion, given the Treasury’s 60 percent stake in The General. “The extent of government involvement in management” is said to be the focus of Barofsky’s GM audit, along with “risk management, monitoring, internal controls, performance measures and transparency.” In other words, we’re going to be learning a lot more about post-bailout GM… at some point. Maybe.  Barofsky didn’t indicate when his audits would be complete of whether the information would be made public.