Greg Keenan of the Globe and Mail reports that Chrysler's decision to temporarily abstain from producing trucks and minivans hits Canadian automotive parts-supplier Magna International like a kick in the nuts [paraphrasing]. Despite attempts to diversify its customer base beyond Detroit, Chrysler remains Magna's number one customer. "Magna accounts for about $1,900 (U.S.) worth of parts in the assembly of every Chrysler minivan," Keenan reveals. With Chrysler's Missouri minivan plant closing until further notice, Magna's Missouri minivan seat plant is SOL. Even the street still thinks Magna is too closely linked to the domestics, having bid down the supplier's shares from $100/sh in August 2007 to $60 – $70/sh today– a drop that parallels the drops in value of both Ford & GM. On the bright side, at least they're not Ford nor GM.

Today marks Canada's 141st anniversary. CTV reports that British Columbia's motorists can now look forward to higher motoring costs. That's right, Premier Gordon Campbell's "carbon plan" goes into effect today, costing motorists an extra $0.024/L per fuel in carbon tax. According to Campbell, the plan is "revenue neutral;" any extra revenue will be offset by income tax cuts. The aim, of course, is to tax consumption rather than income, thereby providing an incentive to reduce fuel consumption. Obviously, some of the highest gas prices in the ten provinces (as B.C. has) were not enough. Despite assurance from Campbell, many British Columbians are weary. How can its provisions be enforced without earmarking funds and major transparency?

Back when fuel was below $3 a gallon, renting a car was like playing Wheel of Fortune. Though you usually got the car you rented, once in awhile, a big prize like an SUV or a Cadillac DeVille came up. ABC News reports that rental customers are now avoiding upgrades to bigger cars and SUVs because of high fuel prices. In turn, they've created a shortage of rental compacts, forcing rental companies to respond with more aggressive tactics to "upgrade" the customer to bigger and more fuel-thirsty options. The oversupply's sending SUVs daily rental rates downward, to the point where renting an SUV is becoming  cheaper than renting a compact. As ABC notes: "an Internet search by ABC News this week found Budget Rent A Car offering a daily rental of an intermediate SUV from Newark airport in New Jersey for $66. An economy vehicle was $76, and a compact car cost $77." [NB: TTAC could not duplicate these deals on AVIS.com or Nationalcar.com.] One frequent renter has a word of advise for rental car companies: deal. "[They] need to anticipate what's coming. If Avis came up tomorrow and said, 'Our vehicles are fuel-efficient vehicles,' they'd see a surge in people wanting to rent from Avis." Oops! Looks like Hertz's Green Collection PR team dropped the ball. 

CTVNews.com reports that, starting in 2012, any production overflow of Porsche's Boxster and Cayman models will be handled by Magna-Steyr's automotive plant in Graz, Austria. Porsche AG chose Magna "because it submitted the most financially attractive offer, and because it is in a position to take on development tasks for Porsche sports cars." Porsche will continue to build the engines that go into these cars, but Magna will chip in where possible synergies can be found. CTV notes that Ontario-based Magna is already a major supplier to Porsche. Before you worry about Boxsters not feeling German, Porsche already has an agreement in place with Finnish company Valmet for Boxster/Cayman capacity (which expires in 2012). At least they speak German in Austria, right?

For the last two weeks, Canadian gas prices have hovered between $1.36/L and $1.47/L. In American terms, that's roughly $5.60/gallon. CTV News is reporting that this price level looks like the sweet spot for the average Canadian hybrid driver; that is to say, the point at which the long-term savings from lower fuel consumption outweigh the up-front savings from buying a conventional petrol-only vehicle. The finding is based on a study conducted by the British Columbia Automobile Association (BCAA). They projected operating costs for 13 hybrids (versus their respective, conventional ICE brethren) over five years, assuming 20,000 km driven/year. The result: seven out of 13 hybrids were cheaper to operate. Leading the way: the Honda Civic Hybrid. The gas – electric whip cost some $4k less  to run than its petrol-powered counterpart. Notable by its presence, the Prius was compared to the Matrix and came out… second. The Prius cost $86 more to operate over five years. Unfortunately, the study focused primarily on sticker pricing (meaning the domestics, which don't sell anything for sticker, were again disadvantaged), and didn't include depreciation. So… what?

Bloomberg reports that Democratic presidential candidate Barack Obama is proposing new rules to increase government interven… err… oversight in energy markets. He wants to "require the U.S. Commodity Futures Trading Commission to regulate trading in energy futures contracts and direct the commission to investigate ways to lessen speculation, such as increasing margin requirements." As oil takes an extended sojourn in the neighborhood of $135/barrel, Obama joins the growing chorus blaming high oil prices on greedy speculators. While Sen. Obama rails against the "Enron loophole"– allowing energy speculators to speculate without Uncle Sam riding herd– he's also busy promoting ethanol. And ethanol is promoting him. According to the New York Times, one of Obama's advisors, Tom Daschle (yes, that one), identifies himself as a man who spends "a substantial amount of time providing strategic and policy advice to clients in renewable energy." (That's a lobbyist, to you and me.) Obama's also traveled on a corporate jet owned by "Archer Daniels Midland, which is the nation's largest ethanol producer and is based in his home state;" not-so-coincidentally the nation's second-largest corn producing state. In fairness to Senator Obama… no, that's all I got. 

July's Car and Driver pits a new Ford Mustang against a new Dodge Challenger and joyfully proclaims "it's 1970 again!" Wrong. It's 1973 again, the year of the Arab Oil Embargo. This time there's plenty of gas at the pumps, but its price has thrown the U.S. car market into the same chaos/doldrums that afflicted it the year FedEx was born. Back then, the Mustang's pony car competition rolled over and died. Today, the Mustang faces new challengers with a convertible that gets 17/26 mpg. How great is that?

Canadian finance minister Jim Flaherty awakes!. After years of ignoring calls from Ontario's Premier Dalton McGuinty to subsidize Ontarian jobs, brushing off accusations of inaction vis-à-vis the steady outflow of Ontario's manufacturing jobs to lower-cost areas, Flaherty could hold back no longer. Call it a Shakespearean twist of fate, but of all of the 308 electoral districts in Canada, Flaherty has the misfortune of representing the federal electoral district of Whitby-Oshawa, right where GM Canada lives– the epicentre of Ontario's ailing manufacturing. Flaherty opened the newsday by announcing a $250m bailout of GM Canada. Except he didn`t call it a bailout. CBC reports the Flaherty will make money– set aside under an "environmental investment fund"– available to GM to help it pursue green technology. The move, another possible knee-jerk reaction to the closure of GM-Oshawa, has caught even Dalton McGuinty by surprise. (Dalton hasn`t decided whether to be pleasantly surprised or to, in typical provincial fashion, say it is not enough. Though the conditions of the deal aren't finalized,) Flaherty hinted heavily that the money should be used to replace truck production by smaller car production. Well duh.

One knee-jerk reaction begets another. As reported yesterday, the Canadian Auto Workers (CAW) wasn't over the moon over the announced closure of GM's Oshawa truck plant. Note: Oshawa IS General Motors. Chevrolet's had a plant in the city since the early 1900s, before Oshawa itself was incorporated as a city. The local hockey team is named for GM. GM-Oshawa employed 2600 direct workers, and no doubt accounted for thousands of other peripheral jobs. So when GM CEO Rick Wagoner sounded the plant's death knell, the CAW's members immediately declared war. Today, CTVNews reports that defiant CAW members, fueled by a desperation that only comes when one has nothing to lose, are blockading the offices until further notice. There's no news of reactions from workers at the other Oshawa plant where they build Chevy Impalas and Buick Lacrosses/Allures. Meanwhile, Toyota and Honda, just as recently as last month, announced billion-dollar investments in Ontario. Hyundai/Kia is also considering moving in. Of course, we all know this story, don't we? Soon, Ontario will be another theatre of war that The General will cede to the Asians, during its long, tragic descent into oblivion.

CTVNews reports that the Canadian Auto Workers (CAW) has reached deals with both GM and Chrysler for its Ontario members. The agreements mirror those that the CAW obtained from Ford. According to the official story: "Workers will see their wages frozen for three years in exchange for improvements in other areas." "Other areas?" Such as not getting fired in the first place? The crux of the deal: Buzz Hargrove successfully delayed the inevitable. GM-Oshawa's planned shift reduction is put off until 2009, and Chrysler's Etobicoke plant, on death row for over a decade, will have its life extended to 2011. Hargrove is spinning the wage freeze as a victory, noting that he's "done the very best to protect as many jobs as we could and protect and support people who won't have a job"– despite failing to secuire long-term plans for either of the two plants. We now return you to our regular discussion of American Axle's ongoing strike.

The Globe and Mail reports that the International Energy Agency (IEA) has cut its 2008 forecast on global demand for oil. Don't worry, the IEA says demand will still grow. But not by the aforepredicted 1,233,000 barrels per day (BPD). The new figure: 1,030,000 BPD. The 230k BPD adjustment was attributed to softening demand for oil in the USA (still the world's largest consumer) and world-record oil prices. I wonder if those two factoids are connected… Anyway, the news comes as oil futures hit $126.40 per barrel on Monday. Hedging its oil futures bets, the IEA notes that "sustained weakness in European consumption" and "reassessment of fuel subsidies in countries such as Indonesia may create more downside risks." If their predictions come to bear, it'll be a simple affirmation of market principles. That said, if oil prices go down, the consumer will be the last to see it.

Buried in a CTVnews.ca story about the upcoming launches of the Ford Flex and the 2009 F-150: Ford's view of the future. Reporter Jeremy Cato spent some QT with Ford execs (including FoMoCo CEO Big Al Mullaly himself) to find out if there's a future in their Ford. Once again, Ford's top brass tout their forthcoming product revamps to predict a return to operationally profitability by the last financial quarter. In that vein, Ford intends to release models that will be "polarizing" for most consumers. Huh? "That's is exactly what we want," proclaims the Flex's design chief. By the end of the article, Cato remains unconvinced that the Flex will be relevant. (Not everyone can– or should– be Chris Bangle.) Cato declares that all Ford's marketing-speak, brand sell-off and quality initiatives are essentially Big Al's push to turn Ford into Toyota. You know: one global brand, a solid reputation for quality and billions in profits posted like clockwork every quarter. Yeah. that one. Meanwhile, The Blue Oval Boyz concede a porno style loss for the fiscal year. Yes, "it will be a big one."

GM's Rick Wagoner clone, Fritz Henderson, recently told the AP's Tom Krisher that the U.S. auto industry is in a recession. (Insert "Duh!" here.) Regular, non-lobotomized reader of Frank Williams' By The Numbers series would have come to that conclusion two months ago. Fritz trots out the usual explanations for GM's woes: "troubled housing market, tight credit and higher gasoline prices that are sending consumers from trucks to cars at a rate much faster than the company has ever seen." The last part is particularly odd and GM-centric, because the truck-for-car swap hits GM a lot harder than Toyota or Honda given each company's respective product mix ratios. Fritz then goes on to confirm what many have speculated: "The 11-week strike at parts supplier American Axle and Manufacturing Holdings Inc. has had only a minimal effect on the company's retail sales, largely because it had built up a large inventory of pickup trucks and sport utility vehicles at a time when the market shifted to smaller vehicles." By minimal, of course, Fritz means $800m in lost EBT (earnings before taxes, which in this case, is sales to dealers) as the AP diligently reminds us. Be careful Fritz, $800m here, $800m there, and pretty soon we'll be talking about real money.

CTV reports that General Motors is closing its transmission plant in Windsor, Ontario by 2010. The plant currently employs 1400 workers producing ye olde four-speed automatic transmission. GM Canada's Stew Low offered an explanation that made no mention of a warning shot over the Canadian Workers Union (CAW) bow, in advance of contract negotiations. "With the dynamic of our changing portfolio, there just wasn't a new transmission to put into there." Translation: four-speeds are so 1939 and you guys cost too much. The announcement caused some political scuffles. The provincial (left-leaning) NDP party implored Ontario Premier Dalton McGuinty to step in and stop the rampant job losses in the automotive industry. As The Big 2.8 have shuttered plants and moved production to cheaper jurisdictions, investments from Asian automakers have not risen to produce employment break-even. It's a shame too, since Windsor was on a roll. On the plus side, given Ontario's more diversified economy, it appears it can shelter a contraction of the NAFTA-zone's automotive industry with less pain than Michigan. But, unless a career at GM provides a good stepping stone to working on Bay Street, that won't soothe any of the CAW members' worries.