In a recent interview with AutoObserver, Chrysler’s Jim Press tries desperately to state the case that somehow things could be worse at Auburn Hills. In the process he piles on the layers of denial that keep the smallest Detroit automaker senselessly hanging on. “It’s hard to say things are good when sales were only down 25 percent [retail],” press tells AO’s Michelle Krebs. “That’s terrible, but it’s less terrible than the industry decline of 40 percent.” It’s also less terrible than the 44 percent overall sales drop that ChryCo endured last month, but then the fact that Press only mentions retail sales kind of says it all. Especially considering he made AO’s editors include [retail] in his otherwise misleading (or is that self-deluding?) quote. But, “things aren’t so bad,” concludes Press. “At 80,000 vehicles sold in February, we’re doing OK.” Apparently we will know things are bad when Press starts lying about sales rather than pathologically misrepresenting them.
Delphi and Visteon were spun off from GM and Ford respectively at the turn of the millennium, in hopes of cutting costs and improving efficiency. But rather than creating healthy, solid companies they could rely on as major suppliers, the Detroit OEMs used the spin-offs to dump unwanted assets, UAW workers and fixed-cost obligations on their new partners. And now GM and Ford are reaping the bitter harvest of their ill-advised spin-offs. Visteon, which has never turned a profit, just had its stock delisted last week after losing $663M in 2008. Delphi has been in Bankruptcy since October 2005, and, having lost $1.48B last year, it is barely surviving on cash infusions from the General, which really could have used the dough. And both suppliers are threatening to take down America’s two largest automakers.
Automotive News [sub] reports that even as GM seeks to spin Opel off to anyone who has the cash to save it, it’s raiding its German subsidiary for competitive product. Specifically, Opel’s much-vaunted Insignia sedan is set to become the 2010 Buick Regal, rather than the 2010 Saturn Aura as previously planned according to anonymous sources. Which is not completely surprising considering that Saturn as we know it has shuffled off the mortal coil, and the Insignia is, by many reports, a great car. But it’s still a horrible idea. Buick has already debuted another 2010 Epsilon II-based model, the LaCrosse, making for some instant cannibal action. “We’re looking at a bunch of stuff from a sedan standpoint,” says BPG VP Susan Docherty. “We’re going to add some more sedans, so stay tuned.” Docherty declined to comment specifically on the Buick Insignia fandango, but tells AN that “as GM works to cut Pontiac’s product offerings, the company can offer new Buick vehicles to keep the Buick-Pontiac-GMC channel well-rounded.” Well-rounded? Seriously? Besides revealing that GM is light-years away from whipping its perennial cannibalism problems, this story also suggests that Opel will continue to share architecture and platforms with the corporate mothership. Whether they need them or not.
No doubt inspired by the endless supply of videos around the web of Saudi drivers tearing ass across the streets of the Kingdom, the NY Times recently sent a man to investigate. He found that between drag races and the “drifitng” shown in the video above, the Saudi streets come to resemble a cross between Death Race and The Fast and The Furious. It seems that a great national boredom, or “tufush,” has seized the young men of Saudi, and with no public entertainment and few jobs, an underground car culture has flourished. Wealthier and middle-class men drag race Corvettes and Imprezas all night, but for the poorer, more desperately in need of excitement, only drifting cars through and around traffic will do. And the scene has created one crazy melting pot of young, angry desperation.
The Detroit News reports that the UAW vote on Ford’s proposed modifications (full summary in PDF) to the union contract is “tight,” as locals wrap up balloting by Monday. Eight union locals have approved the modifications while four have rejected them, but margins of victory were in the “low 60-percent level to the mid-50-percent range.” Modifications must be approved by a simple majority of Ford’s UAW workers, meaning “no” votes in locals that passed the measure still count and vice versa. And though the Freep has uncovered a letter from Ford to the UAW detailing the carnage that has already been wrought upon Ford’s hapless contract employees (possibly the great unsung victims in this mess), and suggesting that perhaps contract modifications aren’t the end of the world, the video above proves that the old UAW zero-sum perspective is alive and well.
The Freep reports that Ford’s deal with the UAW, which could have signaled a way forward for all the Detroit automakers, has been rejected by two locals. Local 892 of Saline, Michigan, rejected modifications to the union contract with 76 percent opposing. Local 1219 of Lima, Ohio, also rejected the changes by a mere 14 votes. Two Michigan locals are known to have approved the changes, 900 of Wayne and 228 of Sterling Axle Plant.
GM’s Steve Harris is dancing all over the bankruptcy issue at GM’s Fastlane blog. Yesterday Haris was sounding resigned if still-delusional. “So, by now you’ve seen the news reports,” he wrote. “You know that auditors have said that there is substantial doubt about GM’s ability to survive as a ‘going concern’ through the end of the year. It’s certainly led to some scary headlines – some more accurate than others, of course.” But all scary. Yeah, believe it or not, we kind of saw it coming.
Everyone’s favorite feel-good broadsheet, SubPrime Auto Finance News, reports that 13 members of congress have written a letter to Fed Chairman, Ben Bernanke, and Treasury Secretary, Tim Geithner, requesting another raid on TALF, the Term Asset-Backed Securities Loan Facility. The congressional bagmen “applaud the joint efforts of the Federal Reserve Board and the Department of Treasury to promote liquidity in consumer loan markets through the Term Asset-Backed Securities Loan Facility.” Because making $200B available was an interesting start. “However,” continue the servants of the public trust, “we are concerned that the program may not sufficiently address the problems facing the domestic automobile industry.” Oh dear.
The question that has haunted the very soul humanity for eons—“that thing gotta hemi?”—should hopefully drift out of the vernacular, as ChryCo is offering free Hemi V8 upgrades on every Ram 1500 they sell during “shovel ’em out the door,” uh, make that “truck month.” So yes, good sir, it’s got a Hemi. But as Wikipedia puts it, “today, ‘hemi’ is little more than a trademark that bears little meaning, descriptively, for the engines designated as such.”
The BBC reports that GM’s European division Opel has learned a valuable lesson from the German government. Insolvency law was “not set up for the destruction but for the preservation of economic assets,” German Interior Minister Wolfgang Schaeuble said after meeting with Opel leaders. “The public perception is that insolvency is associated with going bust or bankruptcy, but that is wrong. We must grasp that to survive such a crisis, modern insolvency rules are a better solution than the state taking a stake.” Hint, freaking, hint. And just why is the German government so jazzed about seeing Opel restructure on its own? Accoding to the Beeb, “media reports suggest that the German government was angry that the bail-out proposal—which asked for 3.3B euros ($4.16B)—was simply a glossy 217-page brochure which read like an advertisement, rather than presenting any viable business plan.” Sound familiar? Apparently German members of parliament were also shocked to learn that Opel doesn’t own its factories (GM does) or intellectual property. As in GM has hocked all of its Opel IP to the US government as security for its own bailout. Classy. Now, as the worm turns, even the Canadians are saying they don’t want to go through with the bailout if it’s a “waste of taxpayers’ money.”
Looks like we may have retired the Tesla Deathwatch a bit prematurely. Valleywag reports that Tesla CEO Elon Musk has launched a Nixonian “plumber” offensive aimed at eliminating leaks from the Silicon Valley startup. And boy are the employees happy about it. The plumb-and-purge strategy was launched when Tesla engineer Peng Zhou told Valleywag that the company’s cash reserves had dropped to $9M. According to the blog, Musk “hired an outside IT contractor go through the company’s email and instant messages, and then had an investigator take fingerprints off a printout discarded near a copier used to leak the email.” That investigation implicated Zhou who was asked to confess, apologize and leave the company. This was just the beginning.
We at TTAC are aware of the strain we’ve been placing on attention spans today, what with the six (!) full-length pieces we’ve published today and all. In honor of your noble sacrifice at the altar of literacy we present a gallery of photos from our photographer in Geneva, Tim Sutton. Without comment. Enjoy.
Sitting between two highly conventional Rios on the Kia lot, the Soul Sport looks like a visitor from another planet. The Kia’s European styling not only refutes the bland mediocrity of its fellow Kias, but also challenges the toaster-oven aesthetics of its boxy competitors. At the same time, it offers a more unique approach than Honda’s low-slung Fit hatchback. That said, the Soul is more the product of a careful compromise between its competitors rather than a genuine automotive oddity. So what happens when you pick the least-compromising trim level, the Soul Sport with manual transmission? You develop a new level of appreciation for the art of compromise.
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