Chrysler’s Q1 conference call is just beginning, and though you can’t listen in unless you’re registered media, you can download the slide set here [PDF] and the press release here. Besides, I’ll be updating this post with the latest as it happens, so why bother? Marchionne is just noting that Chrysler’s $116m Q1 profit is the first since 2009, although he seems more excited about “modified operating profit” of $477m, and free cash flow of other $2.526b.
George Orwell’s warning, that “the first victim of war is the truth,” apparently applies equally to trade wars. On Friday, Senators Carl Levin and Debbie Stabenow (both D-MI) wrote the United States Trade Representative to express their concern over “reported draft regulations” of China’s New Energy Vehicle plan, noting
We are concerned that these draft regulations continue China’s long history of breaking international trade rules.
Given that the ongoing low-level trade war between the US and China, this was a predictable bit of saber-rattling. But if Levin and Stabenow’s political motivations are easy to understand, the logic that leads them to believe China’s New Energy Vehicle plan is a violation of international trade rules is not. Meanwhile, neither the Senators nor the USTR appear not to have heard about another, more serious possible trade issue arising from China’s headlong dash towards electric vehicles. Sounds like a job for The Truth About Cars…
Now, our strategy continues to be to exit these investments, and just today Chrysler announced that it intends to raise the money it needs to repay the government. Two years ago, no one would have expected us to be in this position today, and it shows the success of the strategy the President implemented and the skill and dedication of Chrysler’s employees. We are looking forward to the full repayment of our loan to the company.
Treasury Secretary Tim Geithner, speaking in Detroit, makes strategic use of the singular tense in order to use the phrase “full repayment” without actually revealing the losses taxpayers have already taken. After all, the $1.9b Debtor-in-Posession loan made to “Old Chrysler” in May 2009 isn’t the loan Geithner is referring to (that one was “extinguished” in liquidation). Nor is the $4b “bridge loan” from January 2009 the loan Geithner is referring to, as a mere $2.1b repayment was counted as “satisfaction in full of the remaining debt obligations associated with the original loan.” Geithner may be “looking forward to full repayment” of the one loan he considers “ours” (as are we), but that’s not the whole story. Once again, a slickly-phrased “payback” claim trumps any sense of responsibility at Treasury to be transparent with taxpayers. And a quick survey of the media indicates that Geithner’s use of the singular has worked quite effectively.
You’ve probably noticed by now that things haven’t been quite up to speed here at TTAC, as both Bertel and myself are here in Detroit to meet with a few OEMs as well as our corporate overlords (who are actually quite nice people, as corporate overlords go) on the northern side of the border. Oh yes, and we’re making one other acquaintance: each other. Though Bertel and I have worked together for getting on three years now, and he’s been my right-hand man since I took over the reigns here at TTAC, we’ve never actually met in person until now. Needless to say, we’ve had a lot to catch up on, and frankly picking through the post-New York and Shanghai auto show media dead zone is nowhere near as interesting as being regaled with Bertel’s “too good for publication” tales.
The good news: if you’re in the Detroit area tomorrow, you need not wait as long as I did to meet TTAC’s managing editor, as both Bertel and myself will be taking up positions at the Detroit Beer Company (downtown Detroit, directions at the link) tomorrow (Wednesday, April 27th) starting around 7PM, and you are all invited to come down, sip a beer, grab a bite and talk cars. We’ll be hot off TTAC’s first-ever visit to the RenCen, and if the past is an indicator, it could be another three years before TTAC’s Editor-in-Chief and Managing Editor are in the same place at the same time again. So drop your mid-week plans, and come down and say hello to your friendly, not-so-local car bloggers. After all, we’re anxious to meet you, the readers who make TTAC possible… and one of the most vibrant auto-oriented communities on the web.
They’re baaaack! Ever since Cadillac displayed its XTS Platinum Concept as a future flagship model, the brand’s lack of a range-topping super-luxo-barge has become an increasingly regular complaint. The XTS’s humble (Epsilon II platform) roots, modest proportions and general “Buick-in-Caddy-clothes” vibe led TTAC to dub it “The Phantom Flagship,” a criticism that has echoed throughout the automotive media. The issue isn’t so much whether or not the XTS is a good luxury car, but rather the fact that even Hyundai has a more plausible large, rear-drive, V8-powered flagship in the traditional mold. With Cadillac’s products and image steadily improving, the lack of a legitimate flagship is even more glaring. Last summer, after several months of griping from Cadillac fans, rumors began to surface that GM’s then-CEO Ed Whitacre was pushing for a “proper” rear-drive flagship. Well, the rumors are back… and as before, they’re as confusing as ever. Luckily, we’ll have more than a few years to speculate about this mythical beast… so let’s get the party started.
Ever since Bertel showed us the newest version of the Buick GL8 minivan, with its “Business Concept”-inspired design and executive airport shuttle mission, we’ve been curious about the chances of it coming to the US. After all, GM hasn’t sold a minivan in the US since the Uplander died in 2009, a far cry from the 336,000-odd minivans The General sold in America just ten years before. But when we asked our Best and Brightest if Buick could use a minivan, the response was a fairly resounding “no.” One particularly uncharitable soul even suggested that we were trying to goad GM into making a mistake in order to have something to bash them for. But, as it turns out, GM’s US execs didn’t need to be goaded at all to consider bringing the GL8 to the US market. GM China boss Kevin Wales tells Reuters [via the Baltimore Sun] that
They’ve looked at it on and off as long as I’ve been out here. They’ve made a fundamental decision that says demand for that type of product’s not strong enough. We say that’s fine. We’ll just keep selling out here.”
Does the UAW owe taxpayers a thank you? Chrysler’s attempts at thanking the taxpayers in the midst of bailout-mania seemed to draw more ire than respect, so it’s understandable why the UAW has not made any effort to thank taxpayers for the auto bailout, without which the union surely would not have survived long. But now that UAW local 1268 has made a somewhat belated, but nonetheless earnest gesture of thanks, the national UAW’s silence on the matter suddenly seems a bit deafening.
Last week we discussed a rumor that suggested the new 2013 Malibu’s rear legroom might be compromised as a result of its redesign, and in the original post I included the official manufacturer numbers for rear legroom in the “big six” midsize sedans. This led to an interesting discussion in our comments section, and the comparison apparently caught the attention of at least one boss of a global automaker’s US operations. This exec (who has admitted to being a daily TTAC reader), wrote in to point out that there are two different SAE standards for measuring rear legroom, the L33 “Effective legroom” test, in which the front seat is placed at the appropriate distance for a driver in the 95 percentile of height, and the L34 “Maximum driver legroom” test, in which the front seat is placed all the way before measuring. As a result of our conversation, I thought I’d share a comparison of the six best-selling D-segment sedans using a different (and hopefully less-confusing) metric: combined legroom. You can move the seat, but you can’t run away from this metric…
TTAC has always taken pride in its outsider status, and we’ve taken pains to cover the industry from a safe distance in order to continually bring a fresh perspective to developments. As a result, we’re not always on the same page as trends in the industry at large, which tends to be far more given to wild optimism than the average TTAC analysis. But, based on a new study by Booz & Company [PDF], it seems that the “carpocalypse” of recent years has driven the industry to a more TTAC-esque pessimism. According to responses by executives at both OEMs and suppliers, the industry generally feels that the bailout was either a missed opportunity or it didn’t do enough to address fundamental weaknesses… and as a result, executives see challenges ahead.
The Detroit Free Press reports, almost giddily, that GM will almost certainly replace Toyota as the world’s largest automaker by volume this year, as tsunami-related production problems will continue to plague the Japanese automaker. The graph above, by IHS Global Insight [via AutoObserver], shows that the impacts of the tsunami will continue to be felt well into next year, and that Japanese production will likely fall permanently by around 15%. Toyota’s full-year production could be cut by around 20%, possibly bumping the automaker to the third position in the global volume race, after GM and VW.
An earlier report, stating that Bob Lutz would be returning to GM as a consultant was true… but so was the news that Treasury opposed GM’s plans to pay its longtime executive, who retired a little over a year ago. Speaking to the press at the New York Auto Show, Maximum Bob confirms that he is on the board of Lotus, and revealed that he is doing “pro-bono” work as a consultant for GM’s new product development boss, Mary Barra. According to Automotive News [sub], the prospect of Lutz returning as a GM consultant (ala Fritz Henderson) caused such a stir at Treasury, that he decided to work informally at GM, without pay. Given that Lutz’s heavily-hyped products have yet to return GM to steady retail market share growth, perhaps GM is finally paying him what he’s worth?
Recently, our man in Brazil has been confessing his love for Citroen’s “anti-retro” DS series, sparking a debate over what qualifies as “retro” and what qualifies as “anti-retro.” Here, to help draw the distinction are two separate interpretations of an iconic vehicle. On the left is Geely’s EnglonSC7-RV concept, which gives a tackily Chinese take on the classic British taxi. On the right is VW’s Up! London Taxi concept, which takes the same inspiration and packages it in a far more sleek, modern style. As a result, the Englon looks like a doughy, anglophile PT Cruiser, while the VW looks sharp, crisp and yet classic. When it comes to interpreting modern classics, its seems that capturing the spirit of a car is more important than faithfully recreating its cues.
The slide above shows Chrysler’s product plan for the 2010-2014 timeframe, and as it shows, after the new 300 and “refreshed” 200 and T&C, the next Chrysler was supposed to be a C-segment compact sedan. But, reports C&D’s Justin Berkowitz, the subcompact car (essentially a rebadged Lancia Ypsilon) has already been canceled for being positioned too close to the Fiat 500. Meanwhile, it seems that now only one of Chrysler Group’s brands will get a forthcoming compact sedan, and since Dodge has confirmed that it will get a Fiat-based Caliber replacement next year, it seems Chrysler won’t be getting any help in one of the most important segments in the market. So, without a subcompact or compact car coming down the pipe, what does Chrysler have to look forward to? Another crack at the D-segment, come 2013, and a crossover based on the same platform. Apparently the Chrysler brand, which is supposed to be a Lancia-style luxury brand in the Fiat empire, doesn’t need more than four products.
Hyundai updated its web-only “save the asterisks” video for the New York Auto Show, as it continues to highlight fuel economy as a key brand value. And the brand didn’t miss the opportunity to talk about future fuel-efficient products either, as InsideLine reports that Hyundai is promising two more vehicles rated at 40 MPG highway or above in the “next couple of years.” One is the Prius competitor, which was previewed with the Blue Will concept, and which appears to now be a dedicated hybrid-only model, after having been initially tipped as a plug-in hybrid. The other? Hyundai won’t say, but an exec does tell the Edmunds blog that
The strategy of further developing the internal-combustion engine, with significant increases in fuel economy, is where we see the market going
So, something non-hybrid… perhaps the i10 A-segment hatch that Hyundai USA recently let us drive? The Europe-only i40 wagon? What about the Euro-market ix20 subcompact MPV? Or are we waiting for something brand new?
Speaking from Shanghai, NHTSA Administrator David Strickland tells Bloomberg that “a number” of Chinese automakers have expressed interest in selling their products in the US, to which the auto safety regulator says:
When they offer their vehicle for sale, we will treat them like we will treat any company whether it is a Detroit company or a Japanese company or a Chinese company.
Strickland identified GM’s partner SAIC as one company that was interested in US sales, although the automaker says it’s waiting until it has “more suitable product” for the market. Chinese auto exports currently make up only 3 percent of production, a number the Chinese government wants to increase to 20 percent by 2012-2015. Separately, SAIC announced this week that it plans to invest some $1.85b into its hybrid, electric and fuel-cell technologies.
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