Tick tick tick. “Ford finished the year with cash reserves of $13.4 billion as it tries to avoid borrowing money from the U.S. government,” Automotive News [sub] reports. So, if the cash burn continues at the pace of the last three quarters—and why wouldn’t it?—Ford has fewer than six months (June ’09) before it’s running on fumes. Fewer, if you consider that the ailing American automaker needs a $10b pad to keep the lights on. More, after they tap their remaining credit reserve. Which they’re doing as I type. OK, let’s drill down. 

Read More >

Chris Paukert got his start here at The Truth About Cars. He was, in fact, our first freelance contributor. Since then, it’s been a winding road for Chris. When I heard he was joining Autoblog, I didn’t know to be happy for Autoblog or sad for Chris. Since joining AB, Paukert’s posts have been press release compliant. But, while you can take the boy out of TTAC… Today, Paukert (or one of his eagle-eyed spies) spied the fact that Saturn pulled the “Build Your ’09 Astra” function from their website. Yup, one of GM’s endless stream of Hail Marys has shuffled off this mortal coil. Chris did the right thing and called Saturn for confirmation. “We spoke with Steve Janisse, group manager for Saturn communications, this morning, and he confirmed that while there will be no 2009 model, a 2010 is scheduled and on track for a spring roll-out. Given this unfortunate economic environment and GM’s rude health, of course, we’ll wait to ‘call the ball’ until 2010s are on dealer forecourts.” Aside from the fact that rude health means good health and the glaring lack of the word “bullshit,” it looks like AB might finally have a writer with a pair of stones. We look forward to the competition.

[Read Justin Berkowitz’ review of the Saturn Astra here] 

In a comment under our most recent United Auto Workers post, Taurus GT500 posted the below. I thought it worthy of lifting into pride of place in our blog roll.

“Bob Cratchit asked us to drop you a line. We’re the Ghosts of Main Streets Past, Present, and Future.

The what?

You know us by our nickname. We’re the (former) steel towns of the Mon River – the Steel Valley. You know, Steelers, Steel City. Get it? That’s us.

We’ve been where you’re going. …But, it wasn’t always like this.

Once, we made rails that connected shining sea to shining sea; girders that put the sky in skyscraper; and when Henry and those Dodge boys and that Durant fellow put America on wheels, where you think all that steel came from?

You and Rosie the Riveter was the Arsenal of Democracy. Maybe with better PR we’d a been the Blast Furnace of Freedom.

Our furnaces’d light the sky for miles. Endless parades of coal barges. And freight train whistles at all hours. Man, like the song said, we were something to see.

But that was then …and this is now.

Read More >

The Aston Martin factory in Gaydon is moving to a three-day work week, as demand for the eternally troubled supercar maker’s mechanically-plagued products craters. The BBC reports that the marque’s masters are putting the best possible spin on the move, which is fooling nobody. “The company, based in Gaydon, Warwickshire, said the new Monday to Wednesday shift pattern was temporary and affected just under 600 staff. The employees’ hours will be ‘banked’ and claimed back by the firm later. The firm, which announced 600 redundancies in December, said it had consulted unions over the move. Three hundred staff have already left and it is in the final stages of consultation over the remaining 300. It will employ 1,250 staff at Gaydon following the planned redundancies.” But wait! Here comes the cavalry!

Read More >

“One of Cadillac’s most anticipated models is being delayed one year.” Automotive News [sub] breaks the story- and stretches the limits of credulity. Anticipated by whom? The luxury coupe market is a niche within a niche. And to this blogger’s jaundiced eye, the CTS Coupe is hideously overwrought (which probably means it would have been a hit). GM spinmeiser Joanna Krell says the CTS two-door will now appear in summer 2010. Meanwhile, Cadillac really needs to concentrate on flogging the new CTS Wagon, apparently. Oh, and the next gen SRX, which is about as brand faithful as you’d expect for a vehicle that’s so not an Escalade it Hertz. Not to mention the fact that GM may not exist per se in one year. Or that this “postponement” is just another example of GM’s on-again, off-again, on-again, off-again product planning. “Selected journalists were shown the 2010 CTS coupe last August at a private party held in conjunction with the Pebble Beach Concours d’Elegance in California. At that time, the car was scheduled to debut in November at the Los Angeles auto show. In early November that plan was canceled, and the car’s debut was postponed indefinitely.” Taxpayer-funded chaos.

As America’s car dealers gather in N’orlins– an ironic enough venue given that some 80 percent of U.S. car loans are “under water”– the talk of the town is culling. Where once there were too many domestic car dealers, now there are too many car dealers full stop. Now you might think that a process of natural selection would have untied the Oldsmobile-shaped Gordian knot (i.e. 50 states’ worth of franchise laws say they can’t simply pull the plug and be done with it). Nope. In a story that somehow got culled from The Wall Street Journal website, Sharon Terlep provides a reality check. “NADA in December predicted about 900 dealerships — including small numbers of foreign-based auto makers — would go out of business in 2008. But Detroit’s auto makers alone lost more than that, company executives said this weekend. About 300 Ford dealers closed last year, while 401 GM dealers and 287 Chrysler dealers went out of business. Consulting firm Grant Thornton estimates about 2,500 of the nation’s 25,000 new vehicle dealerships will close in 2009. However, 5,000 would need to close to have a healthy level for this year’s anticipated level of auto sales, the firm said this week.”

Read More >

At the moment, Chrysler reimburses a dealer for the cost of topping-up the gas tank on a car the dealer sells to a customer. No mas. That little tidbit was buried deep in the Detroit News story about Chrysler’s incipient “traveling roadshow”– a corporate effort to “convince” dealers to order more cars despite the fact that no one’s buying them and it costs money for the dealers to have vehicles sitting on their lots. We also learn that Chrysler has frozen the labor rate for warranty work, scheduled to rise in ’09. “‘I think they understand the place we are in and understand the need for all parties to put some skin in the game,’ said [former Toyota Prez and current Chrysler Co-Prez Jim] Press, who received a standing ovation during the meeting with about 400 dealers.” Somehow I don’t think it was that particular statement that earned Mr. Press the standing O. Perhaps it was his pledge to work for $1 until Chrysler paid back its four soon-to-be seven billion dollar loan. Just kidding. Unfortunately. Anyway, Chrysler’s set a target for channel stuffing– I mean, dealer orders…

Read More >

How reassuring. Not to taxpayers, obviously. We’re supporting this dead brand with $13.4b of our tax money– if you don’t include GM’s share of the Department of Energy’s $25b retooling loans (remember those?). Still, Saturn dealers must have been pleased as punch to hear The General claim– at The National Automobile Dealers Association (NADA) conference in N’orlins– that it will continue to build models for Re-Thinkers through 2012. Why “in some cases,” they’ll keep creating Saturnalia until 2013! After the meeting, GM Marketing Maven Mark LaNeve told Automotive News [sub] “We have all the current products funded. What we told them was the biggest issue is slimming down our product cadence. We don’t have enough finances to fund all these brands.” What new product cadence would that be? “I’m talking about vehicles with a fluid, uniform design theme, top-notch engines, dynamic chassis philosophy and a focus on detailed interior and exterior execution.” GM Car Czar Maximum Bob Lutz, “Product Will Reign,” 2005. Two years later, via Edmunds, “If this lineup doesn’t work, I’m out of ideas.”

“We haven’t quite figured out exactly between sports cars and entry-level cars, but it’ll be a very narrowed and focused brand.” So pronounceth GM NA Marketing maven Mark LaNeve at a “roundtable interview” attended by Automotive News [AN sub]. Here’s another surprise: GM can’t figure out to do with HUMMER, Saab or Saturn, either. “There’s nothing that can be said today that can calm the nerves of a Saturn, Hummer or Saab dealer,” LaNeve said. Or is there? “The studies of Saab and Hummer are very externally focused,” LaNeve said. Translation from AN (for the drunks and idiots amongst us): “That means GM hopes to sell them or form some type of partnership.” Mark his words. “We have production facilities that could be carved out; we could build the vehicles for somebody.” Any idea who that could be? Me neither. Oh wait; “The Swedish government is involved in the Saab review.” Is that the same Swedish government that declared it would be a cold day in Hell before they combo-nationalized Saab and Volvo? Chrysler and GM, on the other hand… It gets better, Saturn-wise.

Read More >

Chrysler is hoping against hope that it can move the moribund metal with an employee pricing incentive interest free what about leasing financing sale. Yes, it’s the kitchen sink of car deals, with every gimmick the freshly capitalized (thank you America) Chrysler can muster. More specifically, Auburn Hills is offering buyers employee pricing– whatever that is– plus $6k off ’08’s, or zero percent financing or low-cost leasing for up to 48 months (for somewhat qualified buyers). Customers who fancy an ’09 Chrysler, Dodge or Jeep product “only” get $3500 off the employee price. No matter what you call it, the reality is that Chrysler continues to drop its prices in the hopes that someone will buy its products. Residuals be damned.

Indeed. Now that General Motors depends on Uncle Sam for its survival, why would the Securities and Exchange Commission (SEC) levy a fine against the ailing American automaker? Answer: it wouldn’t. Under the terms of the deal with GM [full press release after the jump], the SEC ends its investigation into the company’s bookkeeping without a GM admission of guilt or a cash fine. Oh, and GM pinky swear promises it won’t ever do it again. The settlement and dispensation adds to Rick Wagoner’s growing rep as the industry’s Teflon Don. Lest we forget, Wagoner was GM’s Chief Financial Officer from 1992 to 1998, before becoming Chief Operating Officer (2000) and then CEO (2203). His career at GM (the only career he’s ever had) began as an analyst in the treasurer’s office. If Wagoner didn’t know the books were cooked, why didn’t he? 

Read More >

During the first round of Motown bailout begging, professional wordsmiths made the connection between Detroit’s $17.4b “bridge loan” request and Alaska’s “bridge to nowhere.” Thus “bridge loan to nowhere.” In fact, the Granvina Island Bridge project would have opened-up the Alaskan archipelago to real estate and tourist development. Boondoggle yes, but one with a long historical precedent and a reasonable expectation of some sort of commercial (i.e. taxpayer) return. In contrast, Chrysler’s supposed tie-up with Fiat is a genuine scam. The idea that Chrysler can become a viable automaker by re-engineering Fiat automobiles for the hugely competitive U.S. market is patently ridiculous. But not for Congress, the entity that offers the ailing American automaker its only hope for survival (cash). At least that’s the plan. And the man with the plan is ChryCo 300 designer Ralph Gilles. Speaking at The Automotive News World Congress [sub], Ralph told the world that he loves him some Italian. Well he would, wouldn’t he? But the details have to be seen to be believed. Or not, as the case may be.

Read More >

To qualify for additional bailout billions on March 17, Congress dictated that GM must clear two main hurdles: reduce its public debt by two-thirds (via debt-for-equity swaps), convince the United Auto Workers (UAW) to accept half of contributions to a retiree healthcare trust in the form of GM stock, and lower union workers’ wages to parity with foreign automakers. OK, three. Three main hurdles. Oh, and eliminate the union jobs bank. So, four. Four hurdles. Within two hours of the Bush’s bailout bonanza, the UAW considered the conditions and said uh, no. And now GM’s third largest bondholders have left the investor committee considering the mandatory d-for-e swap, claiming “We’re just not good committee members.” Not so funny now, eh Mr. Bond holder? More specifically, Bill Gross of Pacific Investment Management Co. (a.k.a. Pimco) has just administered the official kiss of death to GM’s shot at meeting Congressional loan conditions. Either the pols will change the rules (the “we’re sorry we were so mean” scenario), or this is it: the remaining money will be used for GM’s post Chapter 11 debtor-in-possession financing.

Read More >

Fritz Henderson is not a happy camper. Speaking at the Automotive News World Serious, GM’s Chief Operating Officer came off all emo, revealing a string of bad news without the usual spin. Of course, the event’s host chose to focus on the more, uh, upbeat side of Fritz’ speech. Henderson washed his hands of HUMMER, Saab and Saturn, albeit without announcing a “final solution.” And although “Pontiac is toast” isn’t the brand’s official tag line, it might as well be. “Henderson said the four core brands [Chevy, Cadillac, GMC and Buick] comprised 83 percent of GM’s total sales volume in the United States last year. Going forward, the Pontiac brand will ‘shrink substantially,’ Henderson said. But the fact that GM is investing heavily in the Buick brand in China will benefit that brand in the United States. ‘When you see the new LaCrosse, it will be very familiar to the one you’ve seen GM reveal in China,’ Henderson said.” And now, the real deal, brought to you by the MSM…

Read More >

Even before the debate over federal loans to the domestic automakers, a number of TTAC editorials pointed out that a bankruptcy by one of the The Big Three would lead to a C11 by the remaining two. Bankruptcy allows the abrogation of labor contracts; an automaker in Ch. 11 proceedings would be able to lower labor costs significantly, putting the other car makers at a competitive disadvantage. [ED: one of Ford’s SEC filing made that very point.] Parts provider Checker (no cabs since 1982) tried to negotiate wage concessions from its employees’ labor union. But even with bankruptcy hanging over their heads, the union wouldn’t make the needed concessions. And so Checker has become the eighth major US auto supplier that’s filed for bankruptcy in the past year.

Read More >