The Wall Street Journal reports that the Crown group, which includes former Ford Executives Michael Dingman and Shamel Rushwin as well as former Volvo CEO Roger Holtback, are still in the hunt to buy Volvo Cars from Ford, or at least they like to think they are! Ford has been keeping these guys on the back burner behind Geely and told Crown to come back when they had money lined up. Guess what, Crown now says their “offer is fully funded and includes participation by Swedish investors … two adjustments aimed at making the offer more attractive to Ford in the sale of the Swedish operation.”
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Posts By: John Horner
The Wall Street Journal reports that the Crown group, which includes former Ford Executives Michael Dingman and Shamel Rushwin as well as former Volvo CEO Roger Holtback, are still in the hunt to buy Volvo Cars from Ford, or at least they like to think they are! Ford has been keeping these guys on the back burner behind Geely and told Crown to come back when they had money lined up. Guess what, Crown now says their “offer is fully funded and includes participation by Swedish investors … two adjustments aimed at making the offer more attractive to Ford in the sale of the Swedish operation.” 
Yesterday Daimler announced that McLaren would be buying out Daimler’s interest in their joint venture Formula 1 team. Many, including board member Erich Klemm, thought this made all kinds of sense. “In the (car) factories, every cent is being turned over three times. The employees are feeling the financial crisis with shorter working hours and loss of income,” he continued. “In these economically difficult times, the company should invest in better marketing of its real cars.” My, what a novel idea!
According to the Financial Times General Electric’s in-house virtual bank, GE Capital, has agreed to give JLR (Jaguar-Land-Rover) new financing secured by vehicles as they come off the production lines. Cash flow wise, JLR will get money almost instantly upon completion of production rather than later on down the road when the dealers and/or their banks pay for the vehicles. GE Capital says it looks forward to helping other European automakers free up working capital by borrowing against “underutilised assets”. This new kind of financing gives companies a powerful incentive to build cars for the “Sales Bank” even if no firm dealer commitments are in hand. Rut Row!
CBS’ Marketwatch reports from Tokyo (or more accurately, blogs the Japanese Business Daily Nikkei’s reporting) that Toyota is going to change out accelerator pedals in US market vehicles in hopes of putting the issue behind them. “Toyota Motor Corp. will make changes to gas pedals in certain U.S. models under an agreement with the U.S. National Highway Traffic Safety Administration, according to a published report, in response to accidents blamed on the accelerators getting stuck to the floor mats. Toyota still maintains that the vehicles are not actually defective. But to settle the potentially image-damaging issue, it will change the gas pedals so they are less likely to get stuck. The work will be handled through dealerships, Japanese business daily Nikkei reported Saturday.” Interestingly enough, nothing is said about non-US market vehicles.
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Not long after Fortune’s long time auto writer Alex Taylor III finished his apology to Ford he went on to write a love letter to Sergio Marchionne. Taylor starts with parallels to Ghosn’s myth making success at Nissan, then ups the ante: “The other day in Auburn Hills, Mich., Fiat CEO Sergio Marchionne took a page out of the Ghosn playbook — and then improved upon it.” The impetus for Taylor’s piece was the legendary Power Point Rumble in the Detroit Jungle TTAC’s Edward Niedermeyer reported on with, um, slightly less enthusiasm last week .
Automotive News [sub] has more bad news for Saab dealers and customers. Saab’s prospective new owners have put the hit out on 81 of Saab’s current 218 US dealerships. If all goes according to plan, a measly 137 US Saab dealers will remain. Saab’s thin and uneven sales and service network has been an issue for the brand forever, and this isn’t going to make it any better. “The target date to close the sale of Saab is Nov. 30, but it could take until year end, says Mike Colleran, COO of Saab Cars North America in Detroit.” Don’t count on it.
US sales of the not very Smart car have fallen off a cliff. The Financial Times reports that “Smart sold only 661 of its fortwo model in the US last month, more than two-thirds below October 2008 and the lowest for any month since the car made its debut in the US early last year.” Other analysts are blaming low fuel costs and the foolishness of US consumers who just don’t get the appeal of microcars. Not me, I blame the fact that the Smart car is an all around underwhelming vehicle which gives up too much capability in return for mediocre fuel economy. Note that the Smart brand is a failure in Europe as well. “Daimler’s decision to export Smart to the US was a critical part of its rescue plan for the brand. For all its pizzazz, the little car has been a financial millstone. Daimler came close to shutting down the brand in 2006, but opted instead for a €1bn ($1.5bn) restructuring aimed at making the business profitable by the end of 2007.” How anyone (let alone Roger Penske) thought a failed European microcar would be saved by exports to the US is beyond me. Smart’s new “Value Days” 1.9% financing promotion isn’t going to get the job done. Not even a Toyota-esque Saved By Zero campaign would do the trick.
“Just because you have money doesn’t mean you’re smart” has a new poster boy. According to The AP :
A man blamed a low-flying pelican and a dropped cell phone for his veering his million-dollar sports car off a road and into a salt marsh near Galveston. The accident happened about 3 p.m. Wednesday on the frontage road of Interstate 45 northbound in La Marque, about 35 miles southeast of Houston.
How many Bugatti drivers live in Lufkin?
The New York Times has an update on Infiniti’s Essence concept car. Since the sexy little thing’s March coming out party in Geneva, Essence has been on a tour of Louis Vitton stores in high-end shopping malls for VIP visitors and the commoners. “Guests were invited by the automaker and were typically loyal customers, said Kyle Bazemore, an Infiniti spokesman, in an e-mail message. ‘When we partnered with Louis Vuitton stores, it was half and half — their V.I.P. customers, our customers in the area,’ he said.” But the fascinating part of the article is thrown in at the very end: “It is interesting that the Essence has not appeared at an American auto show. Asked if the concept would return to the auto-show stage in Los Angeles in early December, Mr. Bazemore said, ‘Unfortunately, no. It’s been boxed up and is heading to China for the auto show season there. It should be back for the New York auto show, however.'” Yet more evidence for the ever shrinking role of auto shows, and the ever increasing importance of China’s booming auto market. The Beijing and Shanghai auto shows aren’t until next spring. Sorry, L.A., Infiniti just isn’t that into you, she would rather spend the winter in China.
Last week Toyota followed the lead of Renault, Honda and BMW and bid adieu to Formula 1 racing. The Financial Times pins Toyota’s decision not only on financial belt tightening, and on the notion that racing just doesn’t move the metal in times of increasing environmental concern. When Leonardo DiCapro becomes the inspiration for an electric car and NASCAR talks about moving from carburetors to fuel injection to save some gas , you know something is afoot. Automakers and part suppliers have been backing away from the racing for many months now. Earlier this year both Subaru and Suzuki exited World Rally Championship racing and Bridgestone recently announced it’s giving up being Formula 1’s exclusive tire supplier.
Media outlets around the globe are regurgitating Ford’s Press Release on its latest safety gizmo: Rear seat air bag seatbelts. Next year’s redesigned Explorer gets the optional new belts first with worldwide rollout expected someday. According to Ford, its all about the children: “The advanced restraint system is designed to help reduce head, neck and chest injuries for rear seat passengers, often children and older passengers who can be more vulnerable to such injuries.” However, don’t expect moms to flock back to Explorers thanks to the availability of yet another set of air bags. CarMax put out a release recently on their research into women’s car buying priorities. Safety features came in fifth place as mothers’ primary reasons to buy. Price, reliability, fuel economy and spaciousness all beat out safety as the mom’s hot button issues. It doesn’t look like yet more airbags is going to be the thing to get the Explorer back in the hunt.
The long Ford-Navistar diesel engine drama has played out its final days and the replacement engine is finally officially in existence. Given the troubles—contractual and otherwise—with the outgoing Navistar-sourced engine, Ford is quite eager for everyone to know the new 6.7-liter Power Stroke engine is “Ford-engineered, Ford-tested and Ford-manufactured”. Buried amongst the PR gems in the release is this nugget: “On turbocharger service, for example, the body/cab no longer has to be removed from the frame to access the turbo.” Wow, that means you have to remove the truck body to repair the turbocharger on the current engine. Ouch.
Ford has a gushing press release out on the US’ first month of Transit Connect sales; and a booming small business economic sector! You know things are a bit dicey when a survey saying “9 percent of small business owners plan to hire additional staff within the next three months” gets its own big bold bullet point. That nine percent planning to hire means that the other 91% plan to either hold pat or let employees go. Ouch, those are bad numbers.
The typically boosterish San Antonio Business Journal sees nothing but blue skies and green lights ahead as the decades long move of manufacturing jobs out of California and into Texas continues with the announcement that the Tacoma is moving into the brand spanking new San Antonio factory. San Antonio has been busy not building very many Tundras, so locals there are thrilled at the prospect of feasting on NUMMI’s loss. “Year to date through July, Toyota says it sold 42,419 Tundras — down 52.6 percent from the same seven-month period in 2008. The news isn’t much better for the Tacoma, a smaller truck. During the first seven months of this year, Toyota sold 65,713 Tacomas. It sold 95,732 Tacomas during the same selling period in 2008.” Toyota will have to spend an estimated $100 million tooling up San Antonio to build Tacomas, but the combined volume of Tundras and Tacomas still will not fill the San Antonio factory unless something dramatic happens to increase Toyota’s truck sales.
Bloomberg reports on Toyota’s pickle vis-à-vis Fremont, California-based NUMMI. New GM is leaving its NUMMI ownership share in the hands of Old GM. Thus, Old GM and Toyota together own NUMMI in a 50/50 joint venture. Old GM will be selling off its moribund assets over a period of a year or more as the long slow process of liquidating the discards and paying creditors pennies on the dollar plays out. (Old GM is looking like an economic stimulus program for a small band of lawyers, accountants and realtors.)
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