Chrysler is doing better than GM. At least when it comes to winning arbitration cases brought by culled dealers. GM lost both cases brought against them. Chrysler bats much better. Read More >
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Category: Industry
In January, the Chinese government had warned its (mostly government-owned) car companies to go easy on capacity expansion. Car sales in China were expected to show more sedate numbers than last year’s torrid growth rate of 45 percent. Sales did not follow government orders. In the first four months of 2010, Chinese car sales grew 60.51 percent. Now finally, the government can say “we told you so.” China’s car dealers sit on a mountain of unsold cars. Read More >
Demonstrations in Bangkok have been put down with a brutality not expected from the Land of Smiles. The stock exchange is on fire. Thailand instated a news and power blackout, making the number of killed and wounded hard to assess. Japanese car makers have long been invested in Thailand. Now, they are worried about long-term implications. Read More >
When I did my first copywriting jobs for Volkswagen in 1973, I heard to my great amazement that the Passat wasn’t designed in Wolfsburg. It was designed in Turin (“Isn’t that where Fiat is?” “Don’t ask stupid questions, Schmitt”) by someone called Giorgetto Giugiaro. Lo and behold, the Golf thereafter looked a little bit like the Fiat 128, but nobody cared. Volkswagen and Giugiaro‘s Italdesign worked together ever since. Now Volkswagen will buy a controlling stake in Italdesign, if industry sources who whispered it to Automotive News[sub] are not totally mistaken. If the deal happens (and an announcement could come next week), Volkswagen will formalize old friendships. Read More >
Now that GM has released its Q1 data, let’s have a look at the race for the top spot, world’s largest auto maker. We are counting global deliveries only, not production. Even with “deliveries” there is room for interpretation. Deliveries to customers? Or cars dumped on dealer lots? We’ll never know. All we know is: Read More >
Brazil beats America! Over at well-known Brazilian communications giant Globo, they are reporting that little ole Brazil has overcome big ole USA in car production and has taken 5th place worldwide. Can this be true? It depends on how you look at the numbers… Read More >
After four straight profitable quarters, Alan Mulally’s forecast today of a “solidly profitable” 2010 shouldn’t come as a huge surprise. But, as Executive Chairman Bill Ford put it to Ford shareholders at the company’s annual meeting [via AP],
It is the very early days in our recovery. We still have a lot of debt
And he’s not kidding. As of the end of Q1 2010, Ford was carrying $34b in debt. And though Ford faces a higher cost of borrowing because of its staggering debts, Bill Ford was clear that he wouldn’t trade places with Ford’s Detroit competitors, which cleaned out their balance books, at the expense of government bailouts and accompanying PR problems. After all, while GM and Chrysler were rebuilding, Ford managed to outperform both of them last year by gaining sales and market share. And Ford’s leadership sees that momentum carrying forward into next year.
News that GM is considering a number of options for a return to captive finance, has lit a fire under Chrysler CEO Sergio Marchionne, who tells the Detroit News that
One of the things that we do not wish under any circumstance is to have an uncompetitive relationship vis-À-vis GM
That would certainly be the case if GM bought up its recently-bailed-out former captive finance arm, GMAC (now known as Ally Financial). Chrysler relies on GMAC for leasing and loans just as much as GM does at the moment, so an Ally buyout would create major long-term problems. But even if GM created a new finance arm, Chrysler doesn’t seem to think that it will be able to survive without forming its own in-house finance department. Which would then compete with GM and Ally, to say nothing of the industry’s other finance competitors. But is the rush to captive finance going to be good for anyone?
Whenever TTAC took GM to task for branding run amok and excessive platform sharing, the example of Volkswagen has always been the key counterfactual. With seven brands available in Europe, the Volkswagen-Audi group is the continental GM, always looking for another way to repackage a pedestrian FWD platform. The only difference is that VW has actually been growing. But Wolfsburg’s brand profligacy is starting to bear some GM-style bitter fruit. Skoda has been surprisingly strong of late, actually making problems for the Volkswagen brand in certain markets. Seat, on the other hand, is not doing so well. With only one factory, at Martorell, near Barcelona, Seat has always been a slightly niche player, offering older VW designs with some Pontiac-style “emotional” styling flair and a sportier image. The problem now, as Seat CEO James Muir tells The WSJ [sub], is that
The brand really is too small for this plant
Running at only 60 percent of its 500,000 unit capacity, Seat is too small for its lone plant. As a result, VW is launching a last-ditch effort to save its dying brand.
Read More >
Bloomberg reports that Ferrari workers walked off the job for four hours yesterday, in protest of planned job cuts and production idling. Ferrari has announced that it plans to eliminate 120 office jobs and 150 production jobs, or nearly ten percent of its workforce. The Italian sportscar firm has also said it will put 600 workers on a week-long furlough next week, as it idles production of engines for its sister brand Maserati at a Maranello plant. Last year, Ferrari built about 4,500 engines for Maserati, about half of the 2008 number, as sales of the brand fell.
Yesterday, we greeted news that Detroit had reached wage parity with transplants by noting that it hardly makes the UAW look great in the eyes of its membership. Sure enough, UAW boss-in-waiting Bob King is firing back in today’s Detroit Free Press, arguing that a return to a 16m unit market would yield “astronomical” profits to GM and Chrysler. As a result, he said,
There was equality of sacrifice, there’s got to be equality of gain. It’s our responsibility to make sure that in that turnaround, our members are treated fairly
According to King, UAW members have given up between $7,000 and $30,000 per year in concessions, but wouldn’t speculate on the prospect of next year’s contract negotiations. Whether those talks will yield further concessions or a reversal in fortunes for the union depends on the economy and the membership, said King. On one point, he was less equivocal: when it comes to the one domestic automaker that the UAW doesn’t own a stake in, King and the UAW are maintaining a hard line.
Speaking at the same Detroit conference on the auto bailout that Steve Rattner and Ron Bloom attended, the Center for Automotive Research’s Sean McAlinden proclaimed the end of Detroit’s era of unsustainable high wages. In 2007, said McAlinden, building a car in North America cost GM about $1,400 more per car than it did Toyota, thanks largely to a $950 health care charge. Since then, GM’s bailout and renegotiated wage and benefit contracts with the union have actually brought GM’s hourly compensation to just under what the CAR says the transplants pay. The AP reports that McAlinden’s estimate of GM’s average hourly worker salary is $69,368 while the transplant average is $70,185. Better still is McAlinden’s prediction that
between 2013 and 2015, Toyota could even be paying $10 more per hour than GM unless the Japanese company reacts and lowers wages.
And all it took was giving the UAW a $17.5 stake in the new GM!
To anyone who reads my articles, (that’d be Bertel and my mother) you’d know that I’m not a big fan of Ford. Mark Fields is Susan Docherty for Ford, their cars underwhelm me, and I don’t really like the company as a whole. Having said that, I am a journalist. (Don’t laugh! I am!) And I am professionally impartial. So, when I was on the train last night, I decided to do a quick rundown of Ford’s situation. Currently, they are the darlings of the North American market and Europe loves them, too. They turned a big profit in the first quarter of this year and confidence is growing in the company. But despite all of the this, the markets aren’t convinced. Read More >
AutoblogGreen‘s Sam Abuelsamid earns a tip of the blogger’s hat today for making sense of a fascinating nugget in a Times of London piece on the Nissan Leaf. The revelation by Nissan EV honcho Andy Palmer to the British paper that Leaf battery packs cost £6,000 (about $9k) to produce could have been missed, buried as it was near the bottom of the story. Not only did Abuelsamid catch it, he calculated that the Leaf’s 24 kWh lithium-ion battery costs break down to a staggeringly cheap $375 per kWh. How cheap is that, relatively speaking? Apparently cheap enough to send Li-ion startup A123 Systems’ stock to record lows according to the WSJ [sub]. More price-comparison context and some insight into how Nissan might have beaten those costs down after the jump.
One by one, European countries will scrap their scrappage incentives this year (if they haven’t already.) With predictable results: Without the governmental amphetamine, the market will be down. How much? Read More >
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