Such as they are. Japanese sales are set to fall below 5 million in 2009 for the first time in nearly thirty years. But even with Japan’s sales slump particularly affecting standard-sized cars, Honda moved 10,481 units of its new hybrid on the Japanese market last month. That makes it the best selling car in Japan just as Toyota brings its third-generation Prius to market. A hybrid as the best selling car? Government subsidies sure help! And with consumers in Japan clearly value-shopping their hybrids (Honda’s Insight is several thousand dollars cheaper than Prius), is it any suprise that we’ve heard rumblings of a Yaris-based hybrid? Meanwhile, German cars top Japan’s import brand sales. VW, BMW and Mercedes took the top three spots but sold fewer cars combined than the Insight.
Remember the whole “we do not want to run the automakers” routine? Cue up the laugh track. President Obama’s PTFOA has intervened to halve Chrysler’s ad budget during its taxpayer-funded bankruptcy, reports Automotive News [sub]. Chrysler had requested $134 million for advertising during its alleged nine-week bankruptcy. That request was halved by the PTFOA because that body “believed that it was not feasible to not spend anything on marketing and advertising for fear of eroding the image of the brand,” says Chrysler Chapter 11 consultant, Robert Manzo, in court documents. We knew Chrysler’s DIP budget was being drawn up “in consultation with the Treasury,” but this is the first glimpse of a struggle between Chrysler management and its government paymasters.
GM’s CEO took a half hour out of his panic-packed schedule to chat with the GM Fastlane-reading public. He discussed CAFE, the Corvette, salaried benefits and more, via CoverItLive. There’s not exactly a wealth of new information, but it’s an interesting insight into the mind and typing skills of GM’s top dog. It also shows the lengths to which GM is going to communicate this week, even if it has nothing specific to announce. Speaking of which, The Detroit News is announcing the kickoff of the “Keep It Made In America” tour, which began at American Axle’s Hamtramack plant today. The Rev. Jesse Jackson, MI Senator Debbie Stabenow, and others reportedly exhorted crowds of UAW workers with chants of “Reinvest in our land” and “Keep hope alive.” Local mayors and union officials provided the requisite pro-union, pro-Detroit quotes, but the effort at feel-good flag-waving rings somewhat hollow, considering the antagonistic relationship that is developing between GM and the UAW as The General unwinds towards bankruptcy.
The $5 billion bailout of Detroit’s suppliers has “flopped” according to Automotive News [sub]. Even though the bailout funds were made available in mid-March, money has yet to be disbursed even to firms which have been blessed with OEM approval. Problems seem to be traceable back to the decision to use Citigroup to manage the funds. “All our paperwork has been in for weeks,” says one supplier CEO. “But Citibank does not return phone calls or e-mails.” With reports of Citi being “overwhelmed” by supplier applications (aka anyone owed money by GM or Chrysler) and rampant government red tape, what do Citi, GM, Chrysler and the Treasury say about the unfolding boondoggle? Nada. “A Treasury spokeswoman said the government has no information on how the car companies have disbursed the money or to whom. She referred all questions to GM and Chrysler.”
General Motors is is “open to considering moving its headquarters from Detroit, selling off U.S. plants and even renegotiating parts of its restructuring plan with its major union,” CEO Fritz Henderson told Reuters today in a conference call. The possible relocation and renegotiations are part of a last-ditch effort to restructure GM outside of bankruptcy, a move that Henderson admits is likely to fail. “It’s more probable that we would need to accomplish our goals in a bankruptcy,” says Henderson. “There’s still a chance for it to be done outside a court proceeding.”
President Bush’s imaginatively-named “Freedom Fuel Initiative” has been slashed by President Obama, cutting $100 million per year from hydrogen research funding according to DailyTech. Government spending on hydrogen fuel cell technology will drop from about $169 million per year to about $69 million, as a natural and healthy skepticism grows about hydrogen’s short-term potential. “The probability of deploying hydrogen fuel-cell vehicles in the next 10 to 20 years is low,” say Department of Energy spokesfolks, taking an early lead for understatement of the week.
To once again paraphrase an old Soviet joke, there are two ways Detroit can be turned around: the natural and the miraculous. The natural way is that the Archangel Michael and his bands of angels descend to earth and work 24 hours a day to save the city’s economy. The miraculous way is that the automakers do it themselves.
Recent reports that GM won’t even let the fanboys drive their Volt mules in the all-important range-extending “generator mode” were troubling enough, but recent chatter from inside GM suggests that maybe Chevy should have simply designed the Volt as an electric-only vehicle. “It’s best utilized in urban vehicles,” GM Product chief Tom Stephens explains to Automotive News [sub]. “We have to consider what is the usage of the person buying the vehicle. For a commuter who drives 40 miles a day and takes it shopping on weekend, it’s the perfect application.” Yes, and a Hummer is the perfect vehicle for those who want to practice counterinsurgency tactics on the weekends, but the market doesn’t necessarily reflect that, does it? No, it’s image über alles at GM. Is it any surprise then to learn (via GM-volt.com) that the Volt was originally imagined by Bob Lutz as an EV-only city car?
Tom Blumer, in the WSJ, says, “Non-TARP Lenders Aren’t Making Up the Stories of White House Pressure,” citing conversations with anonymous Non-TARPies. According to these former holdouts, still masked and anonymous due to fear of reprisal, government officials went to the mats to pressure bondholders into compliance. Seeing as the group has dwindled from twenty to five since Obama called the group “hedge fund holdouts,” these tactics seem to have been highly effective. GM bondholders, pay attention (if you aren’t already).
The Wall Street Journal has got its mitts on a document detailing Fiat’s plans for world automotive domination and can reveal that the name for Sergio Marchionne’s plan is “Project Phoenix.” The plan reportedly calls for Fiat to take over Opel, Vauxhall, Saab and GM’s South African operations in addition to the Chrysler brands. Fiat would spin off this new auto empire into a new entity which would also include the Fiat, Alfa Romeo and Lancia brands, but not Ferrari and Maserati. Fiat would also close GM Europe’s plant in Luton, UK, and cease operations in Graz, Austria. The payoff? Annual savings of around €1.4 billion from 2015 onwards, according to Fiat’s estimates. The downside? A high chance of epic failure.
As Top Gear puts it, “the HS250h is a rebodied, higher-performance Prius. It’s made for the US market, and was introduced at the Detroit show in January. It is hideous in profile . . . luckily, we won’t be getting it.” They say “luckily” because their version will be an Audi A3/BMW 1 series-fighting compact hatchback. But why make two? In fact why is Lexus competing for the European market at all? Lexus Europe boss Andy Pfeiffenberger offers a confused roadmap. “Our hybrid saloons are going up against the V8 diesels in Europe. In future we need to compete against the four-cylinder diesels. So we will enter new sectors with low-displacement hybrids. The C-premium segment is the fastest growing segment and we must be in it.” Huh?
President Obama gave the dying ethanol industry a huge shot in the arm Tuesday when he announced that over $780 million of stimulus money will be spent on biofuel “research and commercialization,” guided by an all-new Biofuels Interagency Working Group. Think of a giant, government-funded R&D/marketing department for the ethanol industry, and you’ll have some idea of what we’re looking at. “We need to work in concert with the industry to figure out how to do a better job to create a market for biofuels, how to increase the use of flex-fuel vehicles, how we can assist those who market, and to coordinate the infrastructure, and do all this in a sustainable way,” says Agriculture Secretary, Tom Vilsack. Unfortunately “creating a market” isn’t easy. The US already spends more on ethanol subsidies than any other renewable energy source, and has been rewarded only with crashing ethanol demand and rampant refinery bankruptcies. Good thing hope springs eternal in the breast of K Street.
. . . will keep Chrysler from delivering the most fuel efficient cars possible. To the US government. But then, ChryCo kinda owes them one, no? Luckily we still get to marvel at the sophistication of Chrysler’s wind tunnel, as operated by the Pentastar’s three remaining employees. On casual Friday, apparently.
Recent Comments