Automotive News [sub] reports that Toyota’s profits took a dive in Q3, as sales in its North American and European markets dried-up and blew away. “North America slumped to a $335.9 million operating loss in the April-September fiscal first half. Sales there slid 9.4 percent to 1.357 million vehicles in the period. For the full year, Toyota lowered its ambitions 2.420 million units, an 18.2 percent fall off.” Bottom line? “Toyota now expects global operating profit to plummet 73.6 percent to 600.0 billion yen ($5.83 billion) in the fiscal year ending March 31, 2008. Just three months ago, Toyota had forecast operating profit to decline a comparatively modest 29.5 percent to $15.5 billion. The new goal would be Toyota’s lowest operating profit since the company began calculating in U.S. accounting standards in 1998.” But it is, let’s face it, a profit. If GM and Ford report similar revenue drops tomorrow– and why wouldn’t they be worse?– excrement and air movement device will collide. (As everyone and their mother are predicting.) Meanwhile, back to Toyota…
Posts By: Robert Farago
I know Autoblog and TTAC are the Michael and Garth Knight of the autoblogosphere, but I can’t help but reach out across the e-aisle to happily married blogger Alex Nunez and extend him an invitation to live blog auto-related TV shows for TTAC, should AB seek to purge itself of its only writer with cojones (willing to draft 18-wheelers for mpgs, no less). Once again, Nunez nails it. His haiku-like (haiku-esque?) summation of the new but not improved Knight Rider is nothing short of genius. For example, “8:25: Time to defuse KITT, but it’s complicated, natch. I somehow missed the part where he turned into a convertible. Billy’s magic parabolic mic is is recreating the shooting, because you can do anything in Knight Rider, except the one thing that NEEDS to be done at any given moment.” Or “8:49: Blah blah blah, it’s all a setup. Mike wants to stop downloading KITT. It’s too late. We have a Sexy Cheerleader Zoe doppelganger. And she has a gun to Billy’s head. Do it.” Folks, it just doesn’t get any better than that. Kudos.
The Detroit Free Press claims to have access to the results of Ford’s most recent buyout program, designed to downsize the ailing automaker, and they ain’t good. “Despite an aggressive [and expensive] campaign by Ford Motor Co. to get more autoworkers to leave the company through a voluntary job buyout program, fewer than 3,000 of Ford’s 60,100 autoworkers in North America have decided to go.” In case you missed the meaning of that failure to entice a posse of Blue Oval Boyz to blow town, the Freep sums-up the situation succinctly. “Ford already has lost $8.6 billion through the first half of the year, and it needs to shed workers as quickly as possible to reduce its costs, as global demand for its cars and trucks continues to shrink in the suffering economy.” Even though Ford’s fighting for its survival, the workers’ reluctance to cut bait and fish is understandable; where the Hell are they going to get a job these days? “They can stay and risk their job being eliminated,” analyst Aaron Bragman opined. “Or, they can try to find a new job in one of the worst job markets in years.” In other words, like the orchestra on the Titanic, they’re staying.
The Detroit Free Press finally gets it. “GM’s report Friday will be so dismal that the federal government will be forced to decide whether the U.S. auto industry will survive, people familiar with the situation told the Free Press.” Don’t be fooled by the “people familiar” routine. This is the Freep’s editorial team acknowledging GM’s acknowledgement that they’re fucked. Without federal aid, they’re done. The fact that Mssrs. Wagoner, (GM) Nardelli (Chrysler), Mulally (Ford) and Gettlefinger (UAW) are meeting with House Speaker Nancy Pelosi today, the day before GM announces its Q3 bloodbath, is hardly a coincidence. Nor is the unprecedented timing. For the first time in recent history, both GM AND Ford will reveal their respective meltdowns on the same day. The basic idea is simple enough: if the news is bad enough, SOMETHING MUST BE DONE! Throw in Barack Obama’s victory and you have a perfect storm of federal teat sucking.
The New York Times wants everyone everywhere to drive fuel-efficient automobiles or, preferably, take the subway. The Gray Lady’s Op Ed staff view SUV and pickup drivers as intellectually, politically, environmentally and morally corrupt. At the moment, the Times has won the day; new federal regulations force automakers to sell fuel-sippers or die– at least until they can figure-out a way to queer the system. But don’t expect magnanimity from the Big Apple Boyz. They see Ford’s new F-150, one of America’s most popular vehicles, as recidivism of the worst sort. “We fear that a $1.50 drop in gas prices was all it took to blunt Detroit’s newfound fervor for energy efficiency. Just a few weeks ago, the Big Three American automakers convinced Congress to give them $25 billion in cheap loans to retool their plants to make fuel-efficient cars. Then, with nary a blush, the Ford Motor Company introduced the new star in its line: the 2009, 3-ton, 16-miles-per-gallon, F-150 pickup.” The nerve! The fact that the new F-150 is the most fuel-efficient full-size pickup truck on the market doesn’t seem to matter. Ford– and by extension Detroit– just aren’t trying hard enough…
The capi di tutti di automibili Americani are having a little sit down today, to figure-out the best way to spend your tax money. GM CEO Rick Wagoner, Chrysler CEO Bob Nardelli, Ford CEO Alan Mulally and House Speaker Nancy Pelosi (who never met a union she didn’t like) and United Auto Workers President Ron Gettlefinger will meet to iron-out details of their federally-sponsored survival strategy. “I want you should know that our friends in Washington have been very kind,” Nardelli will pronounce. “I ask Mr. Wald and Mr. Vlasic of The New York Times to tell us the good news about the first 25 billion dollar payment, which, as you know could have been, shall we say, tied-up.” “The Energy Department usually takes more than a year to write rules;” the Timesmen report. “Congress gave it 60 days but it completed the work in about 30. The program, hurriedly passed by Congress as part of the budget for the fiscal year that began on Oct. 1, was given to the Energy Department because it is intended to finance the development of high-mileage car models or components for them.” “Notice the word ‘intended’.” [murmurs of assent] “There are still problems. Boys?” “Another complication is that before it can lend money, the Energy Department must conclude that the borrower has assets that exceed its liabilities, and is likely to be able to repay the principal and interest.” “Details, but important ones, I think you would agree. Our friend Ms. Pelosi is on the case and will report in due time. So… Next order of business. The next $25b. Our reporter friends will now leave the room. Ron?”
In 1955, GM company reps testified at the Senate Committee on the Judiciary. The Subcommittee on Antitrust and Monopoly was unhappy that The General’s five auto divisions accounted for 50.76 percent of all cars sold in the U.S. (peaking at 55 percent in 1956). The same year, GM CEO Harlow Curtice was named Time magazine’s “Person of the Year.” “Because of the success of the American economic system, the U.S. rolled through 1955 in two-toned splendor to an all time crest of prosperity, heralded around the world. Much of this prosperity was directly attributable to the manufacture and sale of that quintessential American product, the automobile. Some 8,000,000 of them were produced and sold, and a good half of them were made and marketed by General Motors under the direction of President Harlow Herbert Curtice—the Man of the Year. Yet this production alone would not make Harlow Herbert Curtice, 62, the Man of the Year. Nor would the fact that he is president of the world’s biggest manufacturing corporation—and the first president of a corporation—and the first president of a corporation to make more than $1 billion in net profits in a year. Curtice is not the Man of 1955 because these phenomenal figures measure him off as first among scores of equals whose skill, daring and foresight are forever opening new frontiers for the expanding American economy by granting millions to colleges, making new toasters that pop up twice as fast, or planning satellites to circle the earth. Harlow Curtice is the Man of 1955 because, in a job that required it, he has assumed the responsibility of leadership for American business. In his words ‘General Motors must always lead.'”
Here it is: the pdf that launches a $25b+ (and the rest) bailout. GM’s FastLane Blog gets out the big guns: a Center for Automotive Research (CAR, geddit?) report that says that millions Americans will be condemned to soup kitchens if the Big 2.8 go belly-up. As always, I invite TTAC’s Best and Brightest to analyze the data– and its reliability– on the community’s (not to mention taxpayers or humanity in general) behalf. It must be some serious shit, because the FastLane folk are downplaying it BIG STYLE (so sue me: I’m an oxymoron): “You see a lot of discussion in the news – and even in the comments of this and other blogs – about the state of the domestic auto industry and what the current economy means for the industry’s future. Some of you have even expressed the belief that this is something GM and the US industry brought on ourselves, and that the domestic industry should be allowed to fail. ‘So what if Detroit goes down,’ the thinking seems to go. ‘It doesn’t affect me.’ However, the reality may very well be that it does affect you.” May? Cowboy-up guys! Anyway, the study reckons that… hang on. Here’s CAR’s background on itself: “To fulfill its mission, CAR maintains strong relationships with industry, government agencies, universities, research institutes, labor organizations, and other major participants in the international automotive community, The Affiliates Program to strengthen those industry ties and build support of ongoing service activities.” Oh, and about CAR’s director David Cole, son of former GM Prez Ed Cole.
Automotive News [AN, sub] reports that freshly emboldened Democrats are looking for Uncle Sam to underwrite another $25b worth of no- to low-interest loans for embattled American automakers. And they hope to get the cash money to GM, Ford and (if they’re still around) Chrysler by year’s end– without any of those pesky strings that made the Department of Energy’s $25b no- to low-interest “retooling” loans such a PITA. Yes, “The source [“familiar with the discussions”] said Democratic lawmakers want the second $25 billion in loans to be more flexible than the first batch. The loans would be part of a proposed stimulus package of $100 billion to $300 billion to be considered in a lame-duck session of Congress. The size of the package would depend on what outgoing President Bush finds acceptable.” While we’re not big on AN’s speculation– I mean “source”– the unnamed spy offered an interesting codicil to the down-low. “The source said Democrats are not inclined to provide loans to support a proposed General Motors purchase of Chrysler LLC.” Not inclined? Does that mean, oh go on, twist my arm?
Back when the “first” Detroit bailout bill was headed for the President’s desk, U.S. automakers scrambled to justify their $25b call on the public purse. Read the goddamn label, they cried. It’s a LOAN. For building FUEL EFFICIENT CARS. Meanwhile, Michigan Senator Stabenow displayed the political instincts for which she is rightly famous. “It’s about jobs, jobs, jobs,” the Debster decried. Well exactly. And thanks to “jobs, jobs, jobs,” the domestics will get a second, third, fourth and fifth turn at the taxpayer trough. But first, there’s a little business to take care of: Cerberus.
John Snow was the U.S. Treasury Secretary under President George W. Bush, from 2003 to 2006. Snow is now drawing a paycheck– the size of which dwarfs all but GM CEO Rick Wagoner’s imagination– for shaking-down Uncle Sam on behalf of Cerberus’ Chrysler play. As you’d expect, Snow is wasting no time in pursuit of your tax money. “Cerberus Capital Management LP Chairman John Snow said Wednesday that president-elect Barack Obama and his treasury secretary need a bipartisan plan to counter the worst economic downturn in about 50 years. ‘What we need is to make sure that a vital industry like autos… which is such a big part of the overall economy, doesn’t lead us into a deeper and harsher downturn,’ Snow said in an interview on the CNBC cable channel. ‘The collapse of the auto industry at this time would be devastating for a new president.'” Note: president. Not American workers. And I’d like to take this opportunity to remind TTAC’s Best and Brightest that Cerberus claims income of over $100b per year from its various businesses. OK, right. Where were we? Changing the subject slightly, how about GM’s “welcome” to the new prez?
TTAC has intercepted a memo from GM PR Spinmeister-in-Chief Steve Harris to the troops. [Full text of missive after the jump.] In the message, Harris advises GM employees to tune-in to the internal TV channel for an announcement from GM CEO Rick Wagoner and COO Fritz Henderson (former CFO and Harvard MBAs both) that will “share third quarter results and tell employees about important changes to our business to address the challenges brought on by the volatile global economic situation.” At this point, we have no idea what’s going down (other than GM’s cash reserves, stock price, credit-worthiness, etc.). Our best guess is the one we made for Monday (which didn’t materialize as predicted): a few GM brands are about about to go away. But it could be the GM Chrysler merger. Or… I dunno. Anyone with a lead can email me at robert.farago@thetruthaboutcars.com or place their idle speculation below.
So conservative talk show host Rush Limbaugh is a big “friend” of GM’s. Thanks to pressure from Ralph Nader’s org on the FCC, El Rushbo decided it was in his own best interest to stop slipping mentions of GM products into his dietribes [sic]. These days, the segments promoting the General’s vehicles are separated from the main program- ish. But the question of conflict of interest rears its ugly head once more, as Limbaugh claims that he bought a listener a Chevy Tahoe, Elvis-style. According to the headline at rushlimbaugh.com, “It’s Official: Rush Buys Chevy Tahoe for Kerrville, Texas Caller.” Yada yada yada Zicam (don’t ask) go get a car on me. The transcript leads me to believe that the whole deal is a lightly-disguised marketing stunt– and contains some awesome unintentional humor: “She said, ‘I’ll pick one that I would normally buy.’ I said, ‘No, pick what you want. As long as it’s a GM car, pick what you want.’ So she finally picked a green Chevy Tahoe. She picked a green Chevy Tahoe. I don’t think it’s a hybrid. I’m not sure if she got the hybrid or not, but I do know that she drove off the lot with it yesterday. She and her husband have a brand-new green Chevy Tahoe, and the Kerrville, Texas, paper had been running stories on this. It’s the cutest thing. It is just the cutest thing. So they were just… They didn’t believe it.” The question is, do we believe that Rush paid for this out of his own pocket? Make the jump to read the rest of undeclared pimpatorial.
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