Lithium-ion batteries are not yet a major source of automotive propulsion. Excluding the li-ion cells lingering within the $100k+ Tesla Roadster, not a single volume vehicle depends on the technology. Toyota has adopted a “go slow” policy on li-on cells re: their gas – electric Synergy Drive (most famously found inside the Prius). Sure, li-ion batteries will power Chevrolet’s electric – gas hybrid Volt. Eventually. And that’s no small point. At the moment, with gas prices at historic low levels, hybrids simply aren’t selling. Of course, nothing’s really selling. Except the idea that we need lots and lots of hybrids and that those hybrids will need lithium ion batteries and we better make sure we have enough lithium otherwise the vision of clean, gas-free personal transportation will disappear. And the New York Times can’t have that, now can it?
There’s little debate that the Corvette is one of the things GM does do right. As in really right. But does this mean that the program deserves the resources for new concepts like this Stingray? Or does it mean that the money would be better spent working on mass-market offerings, where the track record is not so good? It’s your money (if you pay taxes); you decide!
With the third deadline for Detroit’s viability plans rapidly approaching, President Obama needs something, anything, to work with. “My goal, consistently has been to offer serious help once a plan is in place that ensures long-term viability and that we’re not just kicking the can down the road,” Obama tells Reuters. “What the nature of what that help ends up looking like, I think is going to depend on the plan.” And at first blush, Detroit’s task appears to be an easy one: tell the President what you need to survive and he’ll give it to you. But there’s a catch. “If a plan is presented to us premised on 20 million sales when we just know that’s not going to happen, then we’re going to have to ask them to go back to the drawing board,” says Obama. Seriously though, isn’t a plan premised on 10m sales this year a bit overoptimistic?
And why wouldn’t they? As attractive as 30 cents on the dollar for equity in a firm that has five frantic days to produce a viability plan is, there seems to be some . . . hesitation. The Detroit News reports that GM is trying to finagle a $9.2b debt for equity swap with the holders of its unsecured debt to fulfill the requirements for federal loans. According to the usual anonymous sources, bondholders are holding out for 50 cents on the dollar. They say the figure mirrors the value of concessions being negotiated with the United Auto Workers. (Sound familiar?) Luckily bondholders seem to have an ingenious solution for the UAW-bondholder deadlock: the government could just lend GM more money. This is some seriously high-stakes poker.
The more tax money GM asks for the more it seems to need. Starting at home, it had come to the attention of our elected leaders that their $13.4 billion bailout of GM would bump GM’s tax liability by $7-$10 billion dollars. Specifically, the loan terms (new equity structure) would have constituted a “change in ownership,” potentially triggering the massive tax bill under terms set to prevent companies from merging to avoid tax liability. Luckily for GM, the new compromise stimulus bill exempts TARP-receiving firms from these ownership requirements, reports MLive. Good luck digging through the 778-page bill to find the exact wording, though. Meanwhile, we’re still waiting on word from the International Swaps and Derivatives Association as to whether these same equity structure changes and government regulations will trigger GM’s default swaps. And while DC kisses $7-$10 billion in potential GM tax revenue goodbye (which should be reflected in the total bailout cost), GM has already moved on to the next trough.
It may be a groaner, but it’s oh so true. Kia’s replacement for its aging Spectra is a cleanly-styled, classy little sedan that looks more Civic than, say, Optima. Already available in Korea and coming to the US this summer, the Forte is about an inch longer and an inch and a half wider than the the Spectra it replaces. According to Automotive News [sub], base engine is a two liter four-pot, making 156 hp and 144 twisties of torque and mated to a five-speed manual or four-speed automatic. Upgrade to the SX trim level, and you get a 2.4 liter engine with 173 hp and 168 lb·ft, and a standard six-speed manual standard or five-speed slushbox. Which probably has visions of Forte Coupe hoonage dancing through your head. Well you can just forget it.
How much fun are those back seats going to be? Tesla plans to fully reveal the Model S and its spec sheet on March 26, “by which time Tesla hopes to have a final decision on its DOE loan application so that they can make other announcements about production,” according to Autoblog. Or not. Etcetera.
Nissan’s Cube goes on sale this May, and a Nissan Press Release states that a base 6-speed version (what, you wanted the CVT?) will start at $13,999. And even though only 122 hp are on offer fom the Cube’s 1.8 liter four, even a loaded CVT version will weigh less than 2,900 lbs. There’s also something about an expensive special Krõm (Krôm? Kröm? Krøm?) edition. Specifically, “for those consumers that love the cube but are looking for a little something extra, the cube Kr?m (sic) offers that and then some.” Duly noted. But the nausea-inducing corporate enthusiasm doesn’t stop there. “It’s unique, it’s fun, it’s functional, and it makes being “square” hip again,” bubbles Nissan’s Al Castignetti of the cubist wonder. Translation: the Cd rating is 0.35. More pricing, model info and well-compensated enthusiasm to come.
We all knew it would happen. The Lutz does not die with a whimper. In a farewell interview, GM’s lame duck car czar gave The New York Times‘ Bill Vlasic the most maximum farewell quotes yet. “We are a country that hates its own industry,” roars Lutz in our general direction. What’s that again, Bob? “The auto industry may be partly at fault for its situation, but not entirely.” Oh. Good. How’s the retirement plan? But Maximum Bob did a maximum job. Given what Curly might call the coicumstances. “If this is just the beginning of a very catastrophic economic situation, then all bets are off for everybody, and that includes our most esteemed Japanese competitors,” quips Lutz. Yes, if. On the other hand, if things do get worse, it won’t be the esteemed Japanese competition that will be elbowing GM in the stimulus line. Or out of the stimulus line. Hint hint. But don’t worry. Everything is going to be just maximum. Specifically, Lutz is “convinced that when everyone is staring at the reality of the situation, and also staring at the alternative, that they will make the right decisions.” Yes, but how long do they have to stare?
As the maximum era draws to an end at GM, there’s no shortage of praise for the Bob Lutz-led product turnaround. Cars like the CTS, Lambda CUVs and the Chevy Malibu are said to represent a new day in quality and design for the General. And without a doubt, they are all consistently better cars than GM has made for years. But for all their accolades and fawning reviews, these vehicles actually represent a relatively small fraction of GM’s offerings. Though marketing executives wail from the Renaissance Center that consumers aren’t understanding the alleged sea change in GM products, there are still more GM vehicles you can ignore (to borrow GM’s marketing phrase) than you can’t. Automotive atavisms occupy GM’s entire lineup, but the contrast between Chevrolet’s D-segment offerings, the Malibu and Impala tells the whole story. And it isn’t pretty.
Fourteen percent of GM’s global salaried workforce will lose their jobs by the end of the year, reports Automotive News [sub] as the General flails to slash costs. GM’s salaried ranks will drop from 73k to 63k by the time the current cuts are completed. 3,400 of GM’s 29,500 US salaried employees will lose their jobs by May 1, and remaining workers will see their pay cut by between three and ten percent. These cuts will bring GM’s salaried workforce to a lower level than the 65k-67k called for in their initial December 2 viability plan. DId we mention that these fine folks will be losing their jobs without any buyout offers, just as GM slashes its severance pay? Sometimes it doesn’t pay to be a salaryman.
Kicking Tires has apparently been curious about yet another potential pitfall of the Volt’s Extended Range Electric Vehicle (EREV) design: gasoline aging. If gas sits in the Volt’s fuel system for an extended period while its owner stays within the EV range, will it degrade over time and harm the gas engine performance? That’s what KT asked GM alt-energy poobah Britta Gross, and guess what? Her answer wasn’t wildly convincing! Writes KT’s Kelsey Mays “It’s certainly a concern, Gross said, but it shouldn’t be a problem: The Volt’s system stirs fuel in the tank about once a month to fight fuel-system buildup. At most, ‘it’s a minor impact on performance and emissions,’ she said.” Unconvinced, May took the query to Volt spokesman Dave Darovitz. “I wish I could talk about it,” he said, “but we will have solutions in place to address the aging-gasoline situation. It’s a great problem to have . . . [and] the engineers are addressing that situation.” Darovitz says the issue came up in product planning, and that GM wasn’t disclosing its workaround for “competitive reasons.” Not that consumers need convincing, or anything.
The Freep reports that GM will not be offering the customary buyout offers to its white-collar employees as it seeks to cut its salaried ranks by double digit percentages. Huh? The General’s offering its UAW workers $20k and a $25k car voucher to bugger off. Turns out GM’s bailout agreement with the government prohibits the ailing automaker from using GM’s pension fund to pay for those kiss-off packages– as it has done in the past. Specifically, the loan states that “the prohibitions on benefit increases under this covenant include… a prohibition on the creation or… payment of any obligations associated with any plant shutdowns, permanent layoffs, attrition programs or other workforce-reduction programs after the effective date.” And guess what? With the pension fund piggy bank cut off, there’s nowhere else to get the money!
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