Sadly C-Span‘s coverage of today’s Senate Banking Committee didn’t kick off with a red carpet arrival of America’s automotive future. Similarly, a longish hearing with only the GAO General Comptroller didn’t do much to raise the pulse. It seems that TARP funds are still rhetorically on the table, and some form of oversight board will go along with any bailout. In fact, the seventies were back in a big way, as the 1979 Chrysler bailout is referenced as a model on numerous occasions. As if Chrysler’s CEO weren’t sitting there asking for more money. MarketWatch reports that Comptroller Dodaro said the Federal Reserve also has authority under current law to lend money to the Big Three, if the Fed board of governors determined that the need is urgent and that the loans would be repaid. However, the Fed has determined that it cannot lend to the companies because the loans cannot be collateralized as required.

(Read More…)

As we attempt to understand the UAW’s Job Bank program, and whether or not their reported suspension of that program is a meaningful concession, we’ve been looking for information on it. Unfortunately, as a somewhat outdated but highly informative report from Carlist explains, the details of the Job Bank are kept under wraps by the Union and automakers for “competitive reasons.” In fact, when asked why GM publicized its health benefit and pension obligations but not its Job Bank information, a GM spokesman said “that is public information that can be found in our financial statements, job banks isn’t.” In the absence of public information on the program, the original terms of the Job Bank agreement from 1987 (leaked to Carlist) are all we have to go on.

(Read More…)

Bloomberg reports that Ford is seeking $6b for its Volvo division, and is “counting on the strength of the brand to draw bidders”. Dearborn has hired JP Morgan to advise in the sale of the final remaining brand from Ford’s erstwhile Premiere Auto Group. But even with a Wall Street heavyweight easing the deal along, Ford isn’t likely to get anywhere near that much. “Anything other than a heavily discounted sale seems unrealistic,” says Ferdinand Dudenhoeffer of Gelsenkirchen University. “For a buyer it’s the best time that one could wish for. But it’s not ideal for Ford.” With the global players facing a sales downturn, Dudenhoffer figures that only cash-rich Chinese automakers, buyout firms, or a group of investors backed by the Swedish government might be interested at all. Bloomberg quotes a mysterious “person familiar with the situation” as saying Texas-based TPG Inc may be interested in Volvo. TPG, which has more than $50 billion of capital under management, was among four private-equity companies to make preliminary approaches for Jaguar and Land Rover last year before Ford sold the businesses to Tata Motors. SAIC and Dongfeng are among the Chinese firms that could bid on Volvo.

According to the AP, Korea’s Yonhap news agency reported last week that work could be delayed at Kia’s new West Point, Georgia factory. A wait and see approach would make a lot of sense too, considering that Kia is cutting production worldwide and that the bottom appears to be falling out of the American car market (Hyundai sales being no exception). Except that the report was not true. “No change has been made to our schedule to complete the plant by the end of November and to start production in December (2009)”, says Kia’s Michael Choo. The $1.2b plant was announced in 2006, and will employ 2,500 workers building 300k vehicles annually at full capacity. The West Point factory is Kia’s first in the US, joining parent company Hyundai’s single factory in Alabama. This makes the Georgia Kia’s third overseas production center, joining China and Slovakia, the latter of which is the subject of a fascinating piece by the International Herald Tribune. In it the secretary general of the Automotive Industry Association of Slovakia brushes aside those who would call her country (which builds more cars per capita than any other) “the Detroit of Europe.” “We’re in a good position to grow,” Maria Novakova tells the IHT. “Frankly, we don’t want to be compared to Detroit because we don’t want to end up like Detroit.” An understandable sentiment, to be sure, and one that is poignantly underlined by Kia’s decision to build cars in the US.

So, we know Ford’s Alan Mullaly is driving from Detroit to DC in an Escape Hybrid, and GM’s Rick Wagoner is pushing a Malibu Hybrid from Motown and exchanging it for a Cruze/Volt mule to drive (carefully!) the final two miles to the capitol. We even know that UAW Boss Ron Gettelfinger will be *gasp* flying to the hearings, thanks to the fine reporting at Jalopnik. Then again, Gettelfinger had concession-scrounging duty today while the executives and their symbolic vehicles are frantically prepped for their big day at the Capitol. Only Chrysler’s Bob Nardelli has yet to publicize his vehicle of choice, and I’m wondering what the hell he’s gonna show up in. As Fox points out, if he takes the easy route and rolls up in a Hybrid Durango or Aspen, he’ll be “riding a dead horse to Washington.” Chrysler canceled its only hybrids a short week after launching them this October, and will be shutting down the factory that made them this month. Then there’s the famous EV vaporware that Chrysler pulled out of nowhere, but the risk of national humiliation is a big load for these unproven vehicles to carry. So what, a Sebring and a prayer? If I were him I’d be tempted to say “NSFW it” and show up in a black Challenger R/T. Preferrably modified in such a way that violates as many emissions and noise regulations as possible. That would show them who’s begging. So what’s your guess?

The Detroit Free Press is reporting that GM Chairman Rick Wagoner will “drive a prototype Volt wearing the sheet metal of the upcoming Chevrolet Cruze to the Senate committee hearing on the company’s request for $18 billion in emergency loans.” And though they mention that GM will bring a production prototype Volt as well, they make no mention of where Wagoner will depart from on his drive to the capitol. Here’s a guess: somewhere less than 30 miles away. The WSJ now reports that “Mr. Wagoner plans to drive from Detroit in a hybrid Chevrolet Malibu. He will then drive about two miles — from his hotel, to GM’s Washington office, to Capitol Hill — in a test version of the Volt.” So yeah, a little less than 30 miles.

After recently appearing to edge away from his electorally necessary pro-bailout stance, it seems Obama is headed back towards his original position. “It appears based on reports that we’ve seen that this time out the executives from these automakers are putting forward a more serious set of plans,” the president elect tells Automotive News [sub]. “I’m glad that they recognize the expectations of Congress, certainly, my expectations that we should maintain a viable auto industry,” Obama said. “We should also make sure that any government assistance that’s provided… is based on realistic assessments of what the auto market is going to be and a realistic plan for how we’re going to make these companies viable over the long term.” When pressed for details, such as whether “bridge loans” should come from TARP or the already-approved $25b retooling loan package, Obama stays resolutely nonspecific. “At this point, I’m more interested in seeing whether or not there is a sound plan there,” he said. “Then I’ll be in discussions and listening about where the best sources of money are. But I think it’s premature to get into that issue.” So does President Bush according to Dow Jones (via CNN Money), although we know that he favors using the $25b fund. Of course, with the Detroit bill now coming in at $34b, that $25b will only go so far. Either way, Bush won’t make any kind of decision on the issue until after congressional testimony tomorrow and Friday… and Obama still has the better part of two months to test the waters.

You didn’t hear it here first. Autoblog reports that the 2010 Ford Mustang will start as low as $21,845 for a V6, with GT V8 power starting at $27,995. As AB points out, that makes the forthcoming Mustang less expensive than Chevy’s Camaro ($22,995 for the V6, $30,995 for the V8) and Dodge’s Challenger( $22,545, $30,545). If you put much stock in the whole MSRP thing that is. Besides, who doesn’t think these pony revivalists won’t have tons of cash on the hood within months of showing up on lots? Then again, these have been trying times for the folks who’s interest in cars begins and ends with styling and horsepower ratings. Long days of photoshopping album covers are clearly taking their toll, and nothing cleanses the Autoblog palate like a good Mustang post. In fact, a quick Google search shows that AB posted 1,480 articles with “mustang” in the title in the last year, and 35 in the last month. For comparison, TTAC logged 31 in the last year. Moral of the story? If you’re curious about whether Ford will survive long enough to offer the inevitable incentives on the 2010 ‘stang of your dreams, you’ve come to the right place.

United Auto Workers Boss Ron Gettelfinger held an emergency meeting with union local officials in Detroit today to discuss possible concessions aimed at bolstering the case for an automaker bailout. The result of that meeting was an agreement to suspend the union’s controversial Job Bank program, and to allow the D3 to delay making payments to the VEBA retiree health care trust in 2010. The VEBA fund has long been posited as a potential solution to Detroit’s liquidity issues. Reuters reports that the UAW would consider other changes to the 2007 labor contract with the American automakers, but that all changes must still be approved by union members. Gettelfinger called the decision “the responsible thing to do,” noting that discussions with the automakers are ongoing.

As the battle over bailout bucks rages, it’s easy to get the impression that Fortress Detroit is unanimous in its support for the home team. As usual though, there’s more to the story than just the loudest voices. The New York Times conducted interviews across the state over the last two weeks, and found that opposition to the bailout, if only in private. “There are plenty of people who are rolling their eyes,” said Bill Ballenger, editor of Inside Michigan Politics newsletter. “You keep your head down if you’re one of them, but they’re out there.” And much of the opposition seems to come from Michigan residents who lost their jobs before the automakers even came begging for a bailout. “How many other, small companies would like a bailout?” asks Heather Davison, an unemployed graphic designer who lost her job at a real estate publication a year ago. “It seems to me that the car companies saw the banks getting a bailout and said, ‘Oh, let’s go!’”

(Read More…)

Audi has released photos and details of the convertible versions of its A5 and S5 coupes, and they’re classy little ragtops in the proud Audi tradition. North American pricing and availability are not yet available, but with Euro-only 1.8 TFSI versions starting at $47,300, they won’t be cheap. The S5 version will rock Audi’s new supercharged TFSI 3.0 V6, good for 333hp, 324 lb/ft of torque and a 5.6 second hustle to 60 mph.

Between the release of its congressional bailout term paper and November sales results, it’s been a big news day for Ford. And the hits keep happening. Automotive News [sub] reports that Ford will cut its 2009 Q1 production by 37.9 percent to 430k units, No surprise there; FoMoCo’s monthly sales are sitting at under 125k– and dropping. Dow Jones (via CNN Money) says that Ford’s 2009 Q1 production plan consists of 305k pickup trucks and 125k cars, compared to this quarter’s 255k pickups and 175k cars. A quick look at Ford’s November sales shows that cars are down 31.5 percent while total truck sales are down 29 percent. So what’s the deal? Is Ford signaling to congress that it plans on asking for $13b ($5b more than they asked for on 11/18) only to turn around and ramp-up truck production? Or is there some play here that I’m missing? I can’t make sense of it, so I’m asking: what’s the deal?

It shouldn’t come as a huge surprise to hear that sales of nearly every Honda and Acura model were down in November, but just try guessing the one vehicle that actually increased sales. It’s not the brand-spankety new version of the once-hot Fit, which is down by 8.4 percent. Perennial best sellers Accord and Civic were also down 38.1 and 29.6 percent respectively. Nor did a single Acura crack into positive territory compared to last November, with the RL losing 40.3 percent, the TL dropping 22.2 percent and the all-new TSX down 9.1 percent. No, the only Honda/Acura vehicle that was up in November was the Pilot SUV, which was up 4.5 percent versus last November’s sales. Perhaps the biggest surprise isn’t that Honda’s best seller is an SUV, it’s that the Civic Hybrid is down 67.8 percent. The learning just never ends in this industry.

Street Insider reports that General Motors delivered 154,877 vehicles in November, down 41 percent compared with a year ago. That makes for some of the worst sales numbers in the US, leaving GM PR with nothing to get traction on despite aggressive Red Toe Tag Sale incentives which will continue through January 5. “In November we saw the continuation of the dramatic decline in volume for the industry. Every manufacturer is posting awful numbers and we are no exception,” says GM’s Mark LaNeve in what may be one of the biggest understatements we’ve heard in weeks. GM’s car sales were down 41 percent compared to last November, while trucks were down 44 percent. The only GM vehicle with positive sales growth compared to last November is the much-touted Malibu, which is up 31 percent. Ok, that’s not strictly true. The GMC C/T Series is up 64 percent, at 82 units compared to 50 last November. Needless to say these exceptions won’t save GM from the bleeding across every other model and brand. And, as our Ken Elias points out, the 862,000 models currently sitting on GM lots is “way out of whack relative to trailing sales.” Not good. (Read More…)