"One advantage of private ownership is that we can sell nonearning assets to generate cash," Chrysler President and Vice Chairman Tom LaSorda told the Detroit Free Press. "To date, we've identified over $1 billion in non-earning assets and we're more than halfway to achieving that goal." Of course, another advantage of private ownership is that Chrysler doesn't have to reveal financial information, so why advertise the fire sale? "It has a lot to do with the media," LaSorda claimed. "They like to write about us and other auto makers who post $15.5 billion or an $8.7 billion loss just to get a few headlines." A more likely motivation: heading off further cuts to ChryCo's credit ratings. At the same time, LaSorda announced a forthcoming $1.8b spend to make the Jefferson North Assembly Plant more environmentally friendly, develop new cars and keep 400 jobs in Michigan. The green initiative– including energy management systems, efficient lighting and the use of solid waste and paint sludge for energy– will clear the way for Jefferson North to build a new, car-based (i.e. brand dilluting) Jeep Grand Cherokee, scheduled to debut in 2010.

We've been helping to circulate rumors of possible Volvo sales recently, most of which have centered on Chinese firms as the potential buyer. All the while Ford has insisted that Volvo isn't for sale; statements which we've treated with the incredulity that all pre-sale denials deserve. But it seems Ford's sticking with the Swedes. In a post on his Autocar blog, Hilton Holloway describes Volvo's 20-year quest to emulate Audi's upmarket appeal, and its utter failure to escape its stodgy image. One Volvo exec tells Holloway that "he wished he had BMW's customers, who would tick all the options boxes and update their car every couple of years." Obviously that's not about to happen anytime soon. So FoMoCo is set to dial back Volvo's upmarket ambitions and reposition the Gothenberg brand as a VW-style "upmarket mainstream" marque. This means building cheaper cars that are "more closely related to Ford models" so that U.S. production can boost Volvo's profit margins. It also means Volvo wants to hoik sales from 420k to 600k vehicles per annum. The new Volvos could be green lighted as early as January. With such short development times, look for Volvo to descend into the bowels of brand engineering with its new generation of high-volume models. It could well be "one Ford" too many.

Toyota's Senior VP for NA engineering and manufacturing is rooting for the D3. "Competition is good for us," Steve St. Angelo told The Detroit News. 'The customers are the big winners, because it makes all of us better." But there's more to Toyota's largesse than simple concern for consumer choice. "We share many of the same suppliers, so if one of our suppliers has difficulty with either Chrysler, GM or Ford, there's a good chance they are going to have difficulty for us." And because of this interconnectedness, Toyota is helping its American rivals however it can without breaking U.S. antitrust laws. "When any of our competitors want to come to our plants, we let them," says St. Angelo. "We really don't want anybody to go bankrupt." The ToMoCo honcho professes faith in the D3's current leadership. "If you really look at the leaders of the Detroit Three, they're some of the finest leaders that this business has ever had. I hope and I think that they'll come out of this. It would help our company. It would help America. It would help our suppliers. It would help everyone." Not to mention the fact that rooting for Detroit helps Toyota in its quest to morph from evil, America-destroying transplant to leader of the United States of Toyota (as examined by Automotive News [sub] columnist Edward Lapham).

Chrysler ranks below the industry standard in J.D. Power and Consumer Report quality ratings. So when ChryCo VP for manufacturing Frank Ewasyshyn announced that warranty costs had fallen by 29 percent in the past year, he had a bit of trouble explaining why the improved reliability wasn't showing up on recent external surveys. When asked by MSNBC to explain this conundrum, Ewasyshyn replied, "If I could answer that question, you wouldn't be asking it. We certainly put enough energy and effort into it." He points to all the things Chrysler is doing right: sending teams to investigate recurring vehicle problems, establishing worker input boards, and standardizing production processes. But then Ewasyshyn takes a page from the GM's handbook: "In the meantime the rest of the organization is focused on improving the things that are customer dissatisfiers, or again, perceived quality." To be fair, Chrysler is digging its way out of a giant hole. Before Daimler offloaded Chrysler, it had the highest warranty costs in the nation; improvements haven't been dramatic enough to bring things up to industry standards. Meanwhile, Chrysler is essentially staying the Tom Lasorda-guided course. "We've got a plan. It works. We're gonna stick to it. And it's constantly being reinforced," Ewasyshyn said. "We know the right formula. Sticking to it and just constantly pushing it every day of the week, challenging people to do better, that's how we're going to get this thing done once and for all."

High material costs (particularly steel) are wreaking havoc on automotive suppliers, caught between soaring raw materials costs and cost-cutting customers. But the industry is getting a new tool which could help iron-out the most precipitous jumps in steel prices. Automotive News [sub] reports that the New York Mercantile Exchange will introduce a futures market for domestic hot-rolled coil steel this fall. The move could provide more price predictability for the crucial commodity. "The NYMEX proposal is one more option that we will review in determining the most appropriate overall strategy for us," GM spokesfolks didn't reveal. Steelmakers are not thrilled by the plan. They prefer the current method of direct price negotiation, and warn that speculators could drive prices up (it's hard to believe things could be much worse than the doubling of steel prices since December). Steel mill profits have been strong during the period of price increases, and the bankruptcies which once riddled steel production have migrated to steel customers, particularly auto parts suppliers. Though speculation is always a concern, a competitive futures market typically stabilizes market prices and makes downstream contract negotiations far easier.

ToMoCo's fears of "big company disease" seem most credible when looking at its non-Toyota brands. While Scion fails to capitalize on increased demand for smaller, more efficient cars, Lexus is struggling to adjust to the changing market conditions. Automotive News [sub] reports that Lexus has relied too heavily on SUV and crossover sales, allowing its car offerings to wither on the vine. The IS isn't due for a restyle until 2012, the GS and ES models are two and three years away from redesigns respectively, and the aging SC430 is [still] dead in the water (1,373 sales year-to-date). On the performance front the GS-F's on hold and the LF-A development project has failed to hit performance benchmarks in line with its $160k price tag. Delaying the LF-1 production model until 2010 seems a foregone conclusion. Even then there's no guarantee that there'll be a market for Lexus' halo model. No wonder, then, that Lexus is amping-up its hybrid options. Not only does "the power of H" give the brand unique cachet, but it also returns hefty profits on ToMoCo's hybrid platforms, helping the Japanese automaker drive down costs on Toyota-branded hybrids. 

Walk into a video rental store, and you're sure to encounter a large number of titles you've never seen gracing the marquee of your local cineplex. Similarly, rental companies hunting for the best deals buy-up huge numbers of the slowest-selling vehicles at cut-rate prices. And nobody makes more straight-to-rental releases than Chrysler. So it should come as no surprise that rental firms like Dollar Thrifty Auto Group have fleets that are up to 85 percent Chrysler. And that shouldn't be the end of the world, because most of the rental car market doesn't mind rocking a Sebring for a weekend if it saves them some cash. But, for Dollar Thrifty, the now-legendary Chrysler depreciation is munching a giant hole in their bottom line– at a time when rentals are slowing anyway. The LA Times reports that Dollar Thrifty (DT) has posted a 30 percent decline in Q2 earnings compared to last year, spurred by epic depreciation among the Chryslers that make up the bulk of DT's fleet. Costs associated with depreciation are up 28 percent. The only thing falling faster than the value of DT's fleet is their stock price, down 89 percent in the last year. 

Even though Autosavant's J.S. Smith is "hardly a snarky, cheer-as-the-Titanic-sinks sneerful spectator," he's more than willing to lay into GM hard when they deserve it. And the decision that prompted Smith to assert that "trained monkeys could do better than the crumb-bums in the RenCen," is certainly worth the vitriol. Smith takes GM to task for deciding against bringing the Chevy Beat stateside. With Toyota bringing a five-door Yaris to the states, and Ford Euro-sizing, not bringing on the Beat "qualifies as less a business move than a bowel movement," says Smith channeling his inner Farago. He also notes that revealing the Beat in New York and asking Americans to vote for a favorite between the Beat and its Trax and Groove siblings was disingenuous at best. Considering that the Beat was handily the people's choice, the move is just plain suicidal. "Not only was GM being idiotic in its decision to not have the Beat available for sale in the US in its first generation when consumer demand for small, efficient vehicles is at a fever pitch, but the company was also dishonest about its intentions and plans for the small cars with the public… This is how you go from a 50% market share to under 20% in a generation." Well said, sir. And welcome to the "snarky, cheer-as-the-Titanic-sinks sneerful spectator" club.

Fears of takeover, foreign or otherwise, figure large in the minds of many European auto execs. These fears ostensibly caused the Porsche-VW shotgun marriage collegial partnership. Schaeffler's "sneak-up" takeover of Continental is fuelling a whole new round of paranoia. Daimler's market value has declined by 45 percent on the year; the weakness has placed the Stuttgart firm in the middle of the takeover mania. Reports emerged saying "a foreign hedge fund is buying a large number of shares in (Daimler)," followed swiftly by more rumors that Swedish hedge fund Cevian Capital was taking a position in the firm. Daimler now says that it has "no indication" that it is under assault. But that confidence is undermined by reports from Automotive News [sub] that Daimler has enlisted Deutsche Bank to watch its back. Deutsche Bank is reportedly helping Daimler find an "anchor investor" who could play white knight should a takeover materialize. Hedge funds, like most predatory creatures, tend to not give a lot of warning in advance of a takeover, so its hard to blame Daimler for freaking out over this one. Especially considering that the prime suspect, Cevian Capital, "does not see itself as a hedge fund but as an investor that pushes for changes in companies." Yikes!

After 70 years of doing business together, Chrysler and driveline supplier Dana appear headed for a nasty breakup. Automotive News [sub] reports that Dana has asked a U.S. Bankruptcy Court in New York to allow it to end its business with Chrysler by the end of this year. Dana, which recently emerged from a two-year bankruptcy, is not divulging the exact causes for the rift. Increasing material costs are said to be a major reason. Dana buys steel and supplies driveline components for Chrysler's Jeep products, as well as its Dodge Viper sportscar, Nitro SUV and Ram pickup. "Our goal is to establish a mutually rewarding supply agreement with Chrysler moving forward," says Dana Chairman John Devine, in a statement asking the bankruptcy court to uphold an earlier agreement between Dana and Chrysler. If negotiations break down, Dana will abandon its business with Chrysler. This latest supplier conflict comes on the heels of Chrysler's nasty divorce from its bankrupt interior supplier Plastech, and reinforces Chrysler's (somewhat undeserved) rep as a notorious supplier abuser. On the other hand, you can't squeeze blood from a stone, and Chrysler's financial situation hardly allows it to practice far-sighted largesse with its business partners. Rock, meet hard place.

We've been hearing rumblings for some time that post-Ford Aston Martin has been talking about forming an alliance (The Axis of Axles?) with Mercedes. CAR Magazine claims to have the inside line on details emerging from the negotiations. Unsurprisingly, the cooperation seems to center on getting Mercecdes engines into future Astons, replacing the aged Ford-sourced motors currently on offer. This will supposedly include diesel and hybrid options, as well as AMG's 6.2-liter V8 which may power future Vantage models. alAston could so get Mercedes' eight-speed autobox. And there's even talk of "whole platforms to be shared by top-end models," and cooperation between Aston and Maybach (anyone remember Maybach?). In other words, no matter how hard they try, the British cann't seem to stop their most beloved brands from going German, one way or another. But, as Lieberman suggested the last time this rumor came around, all the identity politics in the world mean nothing if this cooperation makes Astons better, faster and more reliable. And if "whole platforms to be shared by top-end models" means Aston gets to drape the "death on a stick"-sounding AMG SLC in its trademark sex appeal, even Clarkson might forgo ze German jokes.

Aston Martin DBS - official promo video of the new

GM's Fastlane blog keeps the chuckles coming, with an awkward little paean to the General's legendary reliability. Penned by "GM VP, Quality" Jamie Hresko, the post lets webizens know that if you Google "one million miles" you'll find stories about two GM vehicles that have crested the million mile mark: a 1989 Saab 900 SPG and a 1991 Chevrolet Silverado. But wait; didn't GM first buy into Saab in 1990? Although the old 900 had nothing to do with GM, its achievements still reflect well on the General because, dammit, they shelled-out for the PR rights. By buying the owner a brand new 9-5 Aero when the 900 SPG's odometer rolled over and didn't die. Over two years ago. But the funniest (not ha-ha) part of the story: GM just reduced the length of its Saab warranties, cutting mileage covered from 100k to 50k. But as Hresko says, this whole affair proves that "the real gap is not between GM quality and that of our competitors, the real gap lies between perception and reality." Like when he encourages the perception that "we back up our products with the industry's best transferable powertrain warranty, five years/100,000 miles," despite the, well, reality. [hat tip to kixstart]

Information Week reports that Cobasys can't make shipments of NiMh batteries to Daimler. The battery firm, a joint venture between Chevron and Energy Conversion Devices (ECD), lost $76m in 2007. The owners mixed like oil and water. Both "partners" are keen to foist the money-loser on someone else. Daimler's filing a lawsuit (or two) against Cobasys accusing Chevron, ECD and Cobasys of conspiring to keep the plan to bail a secret from Mercedes officials– so that the automaker wouldn't pull the battery deal. Daimler also alleges that Cobasys hadn't begun production on its $6m NiMh contract "in case new owners don't want the contract." And so… "Without a reliable source for this critical part, (we) will be unable to produce the hybrid vehicle in accordance with its scheduled launch date, and will likely be forced to either cancel the vehicle entirely, or delay the launch for an extended period in order to identify and develop a substitute battery, and to redesign other portions of the vehicle to accommodate it." Ouch. Meanwhile, we are still anxiously waiting to hear if rumors of a Cobasys sale to GM were correct or not. After this debacle, with GM's cash flow issues, we can only hope the answer is not.

Packard had a long, proud history of building head-of-state-worthy whips. But what's the long defunct company actually worth these days? Ask the man who owns one! Roy Gulickson has been president of Packard since he bought the company name in 1995, and now he's trying to sell it for a princely $1.5m. So for Veyron money you could own a classic luxury marque of your own, complete with engineering designs, tools, spare parts and supplier information… from 1958. But wait, there's more! Reuters says Gulickson will also throw in "a new Packard prototype that comes with an all-aluminum V-12 engine and a traditional chrome grille." And by "new" they mean it was built in 1998. If you are foolhardy bold and visionary enough to want to resurrect a once-proud American luxury brand, you might want to move soon on this. An analyst insists that four companies have expressed "serious interest" in buying the company. Gullickson does admit that "perhaps using a smaller engine or converting it to run on compressed natural gas" would make the prototype more attractive in the era of four dollar gas– but that's a problem for the buyer to figure out. Meanwhile, Packard purists insist the brand should be allowed to rest in peace.

Automotive News [sub] reports that HSBC is leaving the U.S. auto loan business. The financial giant cites diminished returns on investment (i.e. it's not making money). The Hong Kong-based banking house plans to eliminate its $12.5b portfolio of American auto loans over the next three years. According to the less-read SubPrime Auto Finance News, HSBC has been reducing its exposure to the volatile US car market since March of this year. Since HSBC wasn't in the lease-financing  business, it hasn't faced the ravages that have led the domestic automakers to end their leasing problems. In fact, the cause of the withdrawal seems less about its business is tanking and more about putting the money to more profitable use. "Our vehicle finance portfolio actually improved credit quality over the period," HSBC Finance CEO Michael Geoghegan claims. "But the business does not have sufficient critical mass or the pricing power to provide an acceptable return to the group." Interestingly, Forbes argues that HSBC's willingness to write down bad debt early in the subprime mortgage crisis indicated a conservative approach that paid off. HSBC stock took an immediate hit, but with its books in order, it's now considered to be better off for having faced reality when other banks clung to their bad paper. Maybe HSBC sees more unraveling ahead for U.S. auto lenders, and wants to avoid the writedowns it endured a few months ago.