Thank you, God, or make that Uzume, for keeping me alive long enough so that I can announce this: The Governator himself, that Austrian incarnate of Red, White, Blue, Mom & Apple Pie, has received a starring role in China’s Xinhua newswire:
“California Governor Arnold Schwarzenegger announced on Friday that Chinese manufacturer BYD Auto Company Limited (BYD) will locate its North American headquarters in Los Angeles.” Read More >
[Editor’s Note: The following farewell message from GM Vice Chairman “Maximum” Bob Lutz was published today at GM’s Fastlane blog. In honor of Lutz’s larger-than life presence on the American auto scene, we are republishing his official goodbye in its entirety. Thanks for the memories, Bob!]
As I mark my last day at General Motors today, I want to say a special thank you and farewell to the loyal readers of FastLane. This blog would not have been the success it has become without you, and I’m sure you’ll continue to read the many interesting posts about GM and its vehicles that will follow on these virtual pages.
Fiat doesn’t need other partners. We have a strong relationship with Chrysler and that is what we are actively working on
Fiat’s new Chairman, John Elkann, told shareholder’s in his family company Exor, exactly what every good, newlywed husband would say. Then again, not every husband had, shall we say, the appetite for partners that pre-Chrysler Fiat had. Just ask GM. Or BMW. Or Tata. Or Sollers. Or Zastava. Or SEAT. Or, you get the picture. Literally.
China’s is without a shadow of a doubt one of the most exciting markets in the world (Especially for Bertel, it keeps him in Lederhosen and Japanese bar trips). Many companies are throwing their efforts into the Middle Kingdom. Buick is, to all intents and purposes, a China-only brand. Volkswagen declared China to be “Volkswagen’s second home” and Ford’s sales are rocketing there. However, while all eyes are on the fastest growing economy in the world, something fundamental in happening just across the border. Read More >
The Treasury may be standing by GM’s “payback” claims, but the Congress hasn’t exactly been looking for ways to do the auto industry any favors. In fact, a toxic brew of political fallout from the financial crisis, auto bailout, and Toyota recall scandal has seems to have inspired a backlash against the industry that came to a head this week in the US Senate. Legislation has been introduced that would prevent NHTSA officials from taking jobs with automakers for up to three years after they leave the agency, and yet more is being drafted which could require a vast array of standard safety equipment on all cars sold in the US and could even add a federal fee to new car sales. Adding insult to injury, a much-hoped for exception to dealer financing oversight in the new financial reform bill appears to have fallen victim to Senate negotiations. Did nobody tell the old guys that they’re investors in the auto industry?
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We’re really trying to put together a world-class manufacturing team. We’re trying to create a Spartan army of expertise.
Tesla CEO Elon Musk give Automotive News [sub] his most inspirational metaphor for Tesla’s effort to ready production of its $50k Model S sedan. And though Musk is quick to call outsourced production “wishful thinking,” the vehicle’s transmission and battery cells as well as “wiring harnesses, skeletal mechanisms for the seats, and glass for the windows” will be supplied by outside firms. Musk says that sourcing for 80 percent of the Model S’s components has been narrowed down to one or two companies, and a plant location in Southern California will be announced shortly. But, he notes, the factory deal isn’t done yet. Or, as Musk puts it:
It hasn’t yet been finalized. We’ve almost fully negotiated the deal, but it has not been signed yet
Anywhere there’s a gold rush, competitors have to worry about getting caught on the bust-end of a boom-bust cycle. With the growth of China’s car market projected to roll all the way to about 20m units annually, automakers hoping to cash in on booming sales have to wonder whether their investments in Chinese capacity will actually be used efficiently. And, as the European market is learning, government consumer incentives can also inflate projections, only to create a collapse in demand after they are phased out. These factors have combined to create a bit of a panic about the possibility of a Chinese-market oversupply, as financial analysts start reigning in automakers’ rampant Sino-optimism.
Here is one sad aspect to the inevitable consolidation of the wild and wooly Chinese car industry: It will reduce the amount of humorous material. Case in point: Zhejiang Gonow Auto, known as the creator of such memorable cars as the „Gonow Aoosed GS” will most likely not grace us with more unforgettable nameplates. True to its name, Gonow is gone. Well, not really. Read More >
When I was a kid copywriter on the Volkswagen account, grumpy but thorough VW engineers drummed one tenet of green into me: You don’t save gas with secret carburetors which the oil companies hide. You save by shedding weight. The less weight to push around, the less energy is needed to do the pushing. From the First Law of Thermodynamics to Einstein, all will agree. Like we agree on the need for a balanced diet. Then we go to the next Wendy’s, and order a triple Whopper. Despite the wisdom, cars tend to gain heft over the years like an erstwhile skinny Italian bella ragazza after the age of 30.
With tougher environmental regulations spreading across the globe, and CO2 mutating into a climate-ogre from something that used to provide the fizz in a soda, automakers remember the old engineering rule: Less weight, less gas, less crud. Read More >
The Ford Motor Company released its first quarter earnings today [Full report here, Slide presentation here (both PDF)], revealing that it gained over $2b in net profit on rising revenue and improved operating margins. Sales receipts rose to over $28b, and with each of Ford’s regional units posted operating profits, Ford’s gross automotive cash rose by $400m to $25.3b (although operating cash flow was $100m in the red). North American operations earned $1.2b in pre-tax operating profit, South America earned $203m, Europe recorded $107m and Asia-Pacific-Africa brought in $23m. Ford Credit racked up $828 in pre-tax profits, as lower depreciation levels improved results. Despite these fine results, Ford finished the quarter with $34.3b in automotive debt, a $700m increase from the beginning of the year. Ford paid $492m in interest on that debt in the first quarter.
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Yabe! (Oh shoot.) As the sun set over Toyota City and Tokyo, Toyota’s execs and Sararimen (salary men) alike were crying in their sake. Today was a sai aku (very bad) day. A day everybody at Toyota most likely would want to forget. No, no recall for a change. There isn’t much left to recall anyway, or so it seems.
The sai aku day started with Moody’s downgrading Toyota’s formerly stellar credit rating to “its lowest-ever level,” as The Nikkei [sub] laments. Moody’s came to the somewhat belated conclusion that “multi-million vehicle recalls and safety issues raise questions about its profitability and ability to stay ahead of rivals on pricing power until 2012 at the earliest.”
To make matters even more sai aku, Moody’s warned that its outlook for the rating remains negative. Why the pessimism? Read More >
You might think that, when confronted with its first major quality crisis, Toyota would have responded by upping its spending on DC lobbying. After all, when Washington has painted a target on your back, it’s usually a good time to hire a few well-connected friends. But then, a good deal of the congressional scrutiny aimed at Toyota has focused on the company’s lobbying efforts in the first place, especially after the House Oversight Committee leaked Toyota briefing documents that showed the company had successfully negotiated away penalties for defects. Perhaps then, Toyota’s decision to reduce lobbying spending in the first quarter of this year was a reaction to accusations that the automaker manipulated the NHTSA. Or maybe the Japanese firm simply decided that its huge lobbying budget simply wasn’t winning it any friends. In any case, Automotive News [sub] reports that Toyota spent a mere $880k on lobbyists last quarter, down nearly a third from its $1.3m Q1 spend in 2009. And, according to the Toyota report cited by AN [sub], defect recalls don’t even enter into the equation, as Toyota merely
lobbied the House and Senate on such issues as making it easier for workers to unionize, patents, financial regulation and energy matters
Meanwhile, as the image above proves, Toyota wasn’t going to be able to match the lobbying power of a GM anyway.
While all eyes are on the Beijing Auto Show, which starts by the end of this week, manufacturers are looking at plots of land and architect plans for new plants. According to The Nikkei [sub], carmakers are adding capacity to keep up with the ravenous appetite of the world’s largest car market.
Foreign carmakers don’t seem to be in a mood to exit, or to be squeezed out of this market anytime soon. According to the Nikkei, their building plans are “in response to the growing prominence of Chinese automakers.” Read More >
The EV smackdown is about to begin, as Nissan and GM prepare to launch their competing but different EVs in the final quarter of this year. It promises to be quite a show, as both manufacturers have gambled huge sums on distinctly different approaches. The Leaf is a pure battery EV, with an optimum range of 100 miles, but which will easily shrink into some 60 miles under less than ideal conditions. GM’s Volt’s target EV range is forty miles, also subject to the same diminishing influences. Of course, it carries a security blanket gen-set along for the ride. But the first skirmish for the hearts , minds, hands and wallets of consumers has already been decided, in the Leaf’s favor. Read More >
Should your travels bring you to Wolfsburg in the near future, do yourself a favor, don’t mention “Cologne.” Don’t say anything about “Köln.” For goodness gracious, don’t mention Ford. Even colloquialisms such as “ich mach mich fort” (“I’m outta here”) should be avoided. Any of the above would get you an icy stare at a minimum. Or a uniformed Werkschutz escort to the factory gate at Wache Sandkamp. The boys in Wolfsburg carry a deep grudge against Ford. Ford beat Volkswagen at Golf. Read More >
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