Sensibly enough, Audi originally quashed all talk of a “baby R8.” As Ingolstadt belongs to VW and Porsche’s playing MEIN! MEIN! MEIN! with VW, the brand overlap between Audi’s existing mid-engined range-topper (excluding the uber A8) and Porsche’s venerable ass-engined Nazi slot car (P.J. O’Rouke) was already slightly… uncomfortable. Our own Jay Shoemaker described the Audi R8 as a Porsche 911 created from a clean sheet of paper (and some metal bits, presumably). The idea of a mid-engined R4 going head-to-head with the Boxster/Cayman duo is, obviously, “ill-advised.” In these crazy times, that pretty much makes the R4 inevitable. AutoExpress— who never met anything with four-wheels it didn’t absolutely adore– absolutely adores the new R4, despite the fact that it’s not been built. “Sports car fans are in for a real treat!” Sit sports car fans Sit! Treat! Treat! I hereby declare AE an irony-free zone. “It’s the result of a rumoured joint venture with Porsche – so the project will produce a new platform to underpin Coupé and Roadster versions of the R4, and also provide the basis for the next Boxster and Cayman. It’s these core sellers in the Porsche line-up that the R4 will target.” Riiiiiiight.
Posts By: Robert Farago
Automotive News [sub] reports that Georgetown University law professor Daniel Tarullo may be president-elect Barack Obama’s choice for U.S. Car Czar– should such a thing be deemed nceessary. You may remember Tarullo as a world-renowned expert in the design, manufacturer and marketing of automobiles worker bee for the Antitrust Division of the Justice Department. No? Special Assistant to the Undersecretary of Commerce. No? Chief Counsel for Employment Policy for Senator Edward M. Kennedy. No? Assistant Secretary of State for Economic and Business Affairs. No? Deputy Assistant to the President for Economic Policy. No? Assistant to the President for International Economic Policy. No? Jeez, you really should get clued-in here! Tell you what, read Tarullo’s testimony to The Subcommitee on Security and International Trade Finance, Committee on Banking, Housing and Urban Affair’s hearing on Reforming Key International Financial Institutions for the 21st Century. And then tell me Tarullo isn’t a car guy, if you’re still conscious. Meanwhile, I want to have a little rant about the dangers of creating a Car Czar…
Treasury Secretary Henry Paulson has announced that the $700b government rescue program will not be used to purchase troubled assets as originally planned. Just like that. I swear. MSNBC reports that turnabout is fair play. “The administration decided that using billions of dollars to buy troubled assets of financial institutions at the current time was ‘not the most effective way’ to use the $700 billion bailout package.” That said, the TS isn’t totally shit-canning the previous plan: “Paulson said the administration will continue to use $250 billion of the program to purchase stock in banks as a way to bolster their balance sheets and encourage them to resume more normal lending.” So, that leaves $450b, right? Where’s that going to go now? “He announced a new goal for the program to support financial markets, which supply consumer credit in such areas as credit card debt, auto loans and student loans.” Good news for the domestics? Not overmuch. Any recovery in the auto loan biz will still be chasing diminishing demand. To wit: Toyota’s been hawking the Hell out of its zero percent financing and its October sales dropped 25 percent.
David Cole is the man whose industry and union-funded Center for Automotive Research carried-out a study of the economic implications of Detroit’s meltdown. The result has become the de facto standard for “this is the serious shit that will happen if we don’t bailout Motown’s mismanagers with federal tax money” argument. So much so that the mainstream media uses the figures without attribution. TTAC has exposed Cole’s blantant self-interest in this matter. Our Best and Brightest have examined CAR’s study and exposed its deep methodological flaws. While there is no doubt that a GM, Ford and/or Chrysler bankruptcy filing would create an economic catastrophe for tens of thousands of workers and hundreds of communities, exaggerating the impact for political gain is deeply immoral. And just plain wrong. Giving Cole an uncontested platform to promulgate his propaganda is, if anything, worse. And yet that’s exactly what The Detroit News has done…
“Westchester County lawmakers last night made it illegal for drivers to keep their vehicles running for three minutes or more while parked.” Now I’m sure TTAC’s Best and Brightest will be all abuzz with lots of reasons why this idea makes no sense at all (kids roasting/freezing to death), defines “unenforceable,” doesn’t make any sense and violates Americans’ constitutional right to not be hassled by the government for stupid ass shit. But all that counts for naught compared to our collective responsibility to “reduce dangerous emissions like carbon dioxide that contribute to Westchester’s poor air quality and to global warming.” This according to Thomas Abinanti, D-Greenburgh, the bill’s sponsor. “Climate change is the defining issue of the 21st century,” Abinanti told LoHud.com. “We can do our part by not adding to the problem. Idling uses more gas and is worse for vehicles than turning your car off. Most idling is not only wasteful, but unnecessary.” Most? Not all? Westchester motorists who find themselves on the wrong end of a cop’s stop watch could be fined up to $250. [Miss you Glenn]
Let’s get one thing straight: Bob Lutz is the Car Czar. The GM Veep’s claim on the title is as absolute as his inability to revamp GM’s product lineup to avoid bankruptcy. TTAC’s respect for Maximum Bob is such that we created the Bob Lutz Award, given to the automotive executive who’s made the most outrageous, politically incorrect or just plain dumb public pronouncements of the year. OK, that piece of business done, Politico reports that president-elect Barack Obama is considering appointing a car czar to oversee the U.S. government’s widely anticipated “investment” in Detroit’s failed automakers. “Specifics about the proposal remain unclear. But the transition team says Obama suggested to President Bush on Monday that aid to the auto industry could be coupled with the appointment of ‘someone in charge of the auto issue who would have the authority’ to push for reforms. The details came from a more extended readout of the White House meeting provided Tuesday. The person would assist in efforts to create an ‘economically viable auto industry,’ a transition aide said – a move that could alleviate concerns about protecting taxpayer interests if more money is directed to assist automakers.” Combine this with Nancy Pelosi and Harry Reid’s call for an equity stake in exchange for bailout billions and you have a perfect recipe for The Mother of All Automotive Failures. [thanks to KixStart for the link]
Dear Secretary Paulson:
We are writing to request that you review the feasibility of invoking the authority Congress provided you under the Emergency Economic Stabilization Act of 2008 (EESA) for the purpose of providing temporary assistance to the automobile industry during the current financial crisis. Under EESA, Congress granted you broad discretion to purchase, or make commitments to purchase, financial instruments you determine necessary to restore financial market stability. A healthy automobile manufacturing sector is essential to the restoration of financial market stability, the overall health of our economy, and the livelihood of the automobile sector’s workforce.
[Once again, our anonymous bankruptcy lawyer has put his skills to use on our behalf. His C11 plan’s a bit technical, and it sounds crazy, but it just might work.] The process kicks off with a GM Chapter 11 filing. The U.S. Treasury then gives GM a secured debtor-in possession line of credit for $40b. The line of credit is secured by a first security interest on all GM assets, being junior only to the existing secured line of credit. The fed’s $10b of the line of credit is used to support essential suppliers through loans and pre-payments, perhaps tracking the existing GM model for financing its suppliers.
Autocar slips this little nugget in an alarming alarmist story that Ford will run out of cash by May: “Ford has already pulled all of its UK advertising across all mediums until the end of the year.” I’m Googling like mad, but can’t find any corroboration. If true, this is some SERIOUS SHIT. Meanwhile, TTAC’s Ken Elias debunks Autocar’s assertion that FoMoCo will be out of dough by the spring. “AutoCar’s analysis on Ford’s cash flow is incorrect. For the year to date, Ford has used $15.7 billion in cash, although only $2.9 billion relates to pre-tax losses. The bulk of the cash used to date reflects mostly restructuring efforts due to constriction in working capital ($6.7 billion) and funding the required VEBA to the amount of $4.6 billion. Since these are mostly one-time items, the cash burn situation at Ford does not appear as dire as that of GM. Any stabilization of Ford’s North American business will stem its cash outflows.” Thanks for the heads-up Ken.
You know how it is. You’re talking with someone in the autoblogosphere on Ye Olde iPhone and he says “You know, GM’s pulled out of the LA Auto Show.” So you click over to the GM media website to see if it’s true, and there it is in black and white: “Public Invited to Put Pedal to the Metal Behind the Wheel of GM Vehicles at the Alabama International Auto Show November 14 -16.” No really. “Consumers attending the Alabama International Auto Show… will have a unique opportunity to truly ‘experience’ the GM display by getting behind the wheel and test driving many of General Motors’ new, fuel-efficient vehicles.” Such as the HUMMER H3T ALpha. Meanwhile, The Detroit Free Press‘ Katie Merx minx reports that GM’s “scaling back” its participation in the LA Auto show. “General Motors Corp. has canceled plans to unveil any new vehicles or host any news conferences at the Los Angeles Auto Show this month… The automaker will still have a presence at the LA show next week. The production version of the Chevrolet Volt extended-range electric vehicle will make its first auto show appearance and GM’s two-mode hybrids will be driving there.” By themselves, presumably.
DATE: November 10, 2008
TO: All GM Dealers
FROM: Mark LaNeve [GM’s Marketing Maven]
SUBJECT: November GM Business Update – IDL Broadcast
On Wednesday, November 12, 2008, we will air a special IDL broadcast for all GM dealers. This broadcast will provide additional insights regarding last week’s GM Business Update.
Autobloggreen‘s Sam Abuelsamid’s been talking to GM PR about his story re: the delayed debut of Saturn’s plug-in hybrid gas – electric Vue. (I could blog my blog of his blog, but why bother?) More accurately, GM PR’s been talking to Autobloggreen’s Sam Abuelsamid re: the delayed debut of Saturn’s plug-in hybrid gas – electric Vue. “Our original statement said that production would begin ‘as soon as 2010’ because we did not want to create artificial deadlines,” GM spokesman Brian Corbett lied to AB’s man in green. “We have dedicated significant resources to the program and it is progressing rapidly. Now that we are further along in the development process, we can now give a more up-to-date projection.” And that is? “From what we’re hearing from sources at GM,” Sam reports, “the PHEV is still moving ahead and will go into production and it will likely debut sometime in 2011.” Sources? Does Sammy mean Senior Corbett? Dunno. But the scribe’s coda sounds suspiciously pre-spun. “Given the importance of the Volt to GM and the limited resources it has at the moment, it makes sense for them to focus on the ER-EV first. Work is proceeding on the VUE and knowledge learned about lithium batteries and controls is being applied to the PHEV.”
Buried in this morning’s Detroit News article on White House support (maybe) for additional bailout bucks for Detroit: news that Chrysler has filed an application with the Department of Energy (DOE) to secure a share of the $25b federal no to low-interest retooling loan program. Showing the reportorial sympathies for which his paper is justifiably known (at least in these parts), the News’ David Shepardson wrote that “it was not clear how much the automaker requested.” In fact, Chrysler is refusing to release this information. I just got off the blower with Shawn Morgan. The ChryCo spinmeister said her employer has “no plans to release the information.” In fact, Chrysler has specifically asked the DOE to keep the information confidential. When quizzed for an explanation, you know, being that it’s taxpayer money involved an all, Morgan claimed the amount of money requested constitutes “competitive information.” Chrysler’s secrecy is hardly a surprise, given that the ailing American automaker’s owned by the Kremlin-like Cerberus private equity group. Still, it IS our money (for now). Needless to say, TTAC’s putting in a call to the DOE.
Whether you agree with the Iraq War II or not, whether you view America’s military presence in country as a burgeoning success or an endless quagmire, the Bush administration has created what we’ll call an “ongoing situation.” The question now facing George W: does he want to be the president who initiated direct(ish) federal participation in the American automobile industry? The answer came on Monday: maybe. Our pals at The Detroit News report that The White House has signaled its willingness to support new legislation to aid Detroit. BUT– keep your God damn hands off the previously-enacted $700b Wall Street bailout package. “Congress is going to come back into town next week,” Presidential Spokesfolk Dana Perino said. “If they decide to try to do something more on the auto industry, we would listen.” Meanwhile… “Michigan lawmakers and the automakers are moving aggressively to try to shift public opinion in favor of more federal aid for the Big Three.” Yup. “GM posted a link on a company Web site for its dealers to send letters to Congress, and will be posting similar letters for retirees and consumers. The effort is called ‘Mobilize Our Auto Nation.'”
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