Toyota had slammed hard on the brake when it came to capital expenditures. So hard that ToMoCo (and Sony) were rapped on the knuckles by the Japanese Ministry of Finance for hobbling Japan’s economy. Suddenly, Toyota starts pouring concrete and installing machinery again. Not because of newfound faith in the auto market in general. Two factors made them do it: The Yen has become so expensive that manufacturing in the USA is cheaper. And China is gobbling up cars faster than Toyota can make them.

According to the Nikkei [sub], a Toyota plant in the US and one in China will increase ToMoCo’s annual output capacity by 200,000 units before the Japanese 2010 fiscal ends on March 31, 2001. The construction will cost Toyota a little over $1b, depending on the vagaries of the greenback and its pegged follower, the Chinese Yuan. Here are the blueprints:
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Having planned to idle production plants for a mere ten days over the winter break, Chrysler is responding to weak sales by extending the holiday shutdown of several plants to three weeks or more. The WSJ reports that Chrysler’s Windsor and Brampton plants (minivans, 300/Charger/Challenger) will shut down starting December 21 and will idle through January 18. The Toledo plant (Jeep Wrangler) will also idle beginning on December 21, and will resume production on January 11. Chrysler is also said to be considering extended production shutdowns at its Detroit Viper factory (which is entering final production anyway) and an unspecified Ram plant. Unless December sales numbers turn out to be humdingers, this winter vacation could possibly go on even longer, as Chrysler struggles under falling sales and a 64-day supply inventory.

The AP reports that GM’s Ed Whitacre is reshuffling executives, turning an already-nervous RenCen on its head. Whitacre has elevated global engineering boss Mark Reuss to take charge of US operations, not an entirely surprising decision as the former Holden boss’s star had clearly been rising. Considerably more shocking was Whitacre’s decision to strip Bob Lutz of his marketing position and roll that responsibility into Susan Docherty’s Sales position. But don’t cry for the man called Maximum: Lutz will remain vice-chairman, will become “an adviser on global product development,” personally advising Whitacre on the auto industry. Nick Reilley, who has been GM’s international fix-it man, has been appointed President of GM Europe, while Diana Tremblay has been named vice president, Manufacturing and Labor Relations. “I want to give people more responsibility and authority deeper in the organization and then hold them accountable,” Whitacre said in GM’s statement, found here.

For most of the last 20 years, Ford and Mazda have enjoyed a symbiotic relationship which worked quite well. Ford needed Mazda’s engineering and Mazda needed Ford’s volume to keep their profit margins. In short, everyone was happy. Then came the recession. Ford needed money and it needed it fast, so they mortgaged their logo, cut staff and closed factories. But curiously, Ford divested a huge chunk of Mazda which netted them, in the auto world, very little money. Ford reduced their 33.4% stake in Mazda to 13.4%, netting $540 million, but effectively losing Mazda. Not that Ford’s Mark Fields is worried.

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After writing about Spyker transferring production from the Netherlands to the United Kingdom, I thought I’d seen it all. Well, now I have. Production going OUT of Germany and into the United States. After much debating, Daimler have finally decided to switch some production from Germany to the United States. According to Reuters, roughly a fifth of Mercedes-Benz C-Class models will be built in Alabama by 2014, in hopes of protecting against currency fluctuations and maintaining profit margin. Naturally, the unions weren’t happy, in fact they downed tools in protest, claiming it was a “blatantly wrong decision.” Dr Z saw it differently, especially considering the move is said to be worth $100m in incentives from the state of Alabama.

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In another example of Hyundai’s ability to meet goals it sets for itself, one year after announcing its intention to become the most fuel efficient manufacturer in the land, it has done so. The EPA has released its latest U.S. Environmental Protection Agency fuel economy report, and Hyundai passed all major manufacturers in Corporate Average Fuel Economy (CAFE) including traditional leaders like Honda and Toyota. And that’s for Model Year 2009, without the aid of new and expensive technology like hybrids and direct injection. A chart of of all the leading manufacturers’ CAFE numbers follows: Read More >

Like a highschooler puffing on its first joint, GM’s embattled corporate culture is sure it can feel something changing, and it’s eager to share its fresh perspective on itself. As with the allegorical proto-stoner however, when the need to appear altered is more important than an honest journey of self-discovery, strange hilarity ensues. To wit, this tidbit from the WSJ’s Bankruptcy Beat Blog:

“As we work to create the New GM with a new culture that includes personal accountability, our existing dress code seems outdated,” Mary Barra, GM’s vice president of global human resources, wrote in an employee memo earlier this month, according to the newspaper. “Going forward, our dress code policy is ‘Dress appropriately.’”

After giving its balance sheet a makeover in bankruptcy, it seems the company is finally ready for a cultural revamp too. It’s renaming its conference rooms – anyone up for a meeting in the “Groovy Room” or the “Zen Room?” – in an effort to promote risk-taking.

All of which leads to at least one troubling question: what is “appropriate” attire for a meeting held in the “Groovy Room?” I mean, how much “risk taking” are we talking about promoting? Also, as this video from a year ago proves, casual dress at GM was Rick Wagoner’s idea… sort of.

Last week, in our post on Hyundai’s new DI (Direct Injection) Theta II engine, we questioned Honda’s long-standing engine technology leadership. We also assumed (wrongly) that they would be joining the DI club shortly, given the advantages DI technology affords. Turns out we weren’t the only ones wondering, except that in the case of auto, motor und sport, they weren’t asking it rhetorically, but the person in the know: Honda CEO Takanobu Ito. In an interview with Europe’s leading car magazine (print edition), Ito gave DI a pass with his answer to the question: “Honda was once the leader with its internal combustion engines. Did your competitors overtake you with gasoline Direct Injection?” Read More >

UBS has cut Fiat’s rating from “buy” to “neutral”. UBS cites its cautious views on car demand in Europe and Brazil as well as heavy trucks and machinery, the areas in which Fiat are strongest. UBS notes that Sergio Marchionne’s grand scenario of spinning off Fiat’s auto division is still the company’s goal, and PSA Peugeot-Citroen as a “likely candidate”. In the near term, UBS thinks that Fiat’s market share price of €10 per share is fair, as a consolidated manufacturer. Another reason why UBS cut Fiat: Chrysler. The article finishes with a stark warning that the “value of Chrysler to Fiat has been cut to 1 euro from 2 euros.” In the interest of fairness, we shouldn’t listen too much to the stock market as these are the same people who proclaimed that the banking sector was in rude health, right up until they asked for a bailout, catching the market “by surprise”. Especially considering Sergio Marchionne is the non-executive vice chairman of UBS’s board of directors. These caveats aside though, it’s important to note that Chrysler has realistically gotten Fiat no closer to the magical 5m annual sales number it needs to spin off its auto business, nor has it added real value. And Marchionne is apparently eying up PSA as the next target in his mad march to world domination. What a gas.

For manufacturers of engine timing chains, main bearings or any of the hundreds of unique components for engines and transmissions, EVs like the Nissan Leaf pose an enormous threat. Decades of investment in the manufacturing technologies and IP are potentially rendered irrelevant if the switch to battery-powered EVs progresses at the rate that its optimists proclaim. Bloomberg tells the tales of woe from anxious Japanese suppliers: “It’s a crisis-like situation,” said Toru Fujiwara, head of Tsubakimoto’s auto-parts division. “With electric cars, there’s no way we can apply our current technology.” Especially when their current technology lacks AC or DC. Read More >

“Without any doubt we knew fundamentally that [a merger with GM] would work, but only if it was a collaborative effort. Frankly, there was a possibility to create something that would be extremely competitive… unfortunately, it did not happen.”

Nissan/Renault honcho Carlos Ghosn reflects on the GM merger that might have been. When asked if he was happy that the merger hadn’t gone through, Ghosn replied “when you see the disaster and the waste of energy and skills and talent, nobody can be happy.” But was he talking about GM or the failure to merge with them? And since Ghosn has us in a reflective mood, isn’t it fun to imagine how a GM-Renault/Nissan merger might have played out?

One of the most overlooked arguments during last year’s bailout debates was the fact that America’s automotive industry was not under threat. Sure, a few companies based in Detroit were panhandling at death’s door, but so-called “import brands” have been closing the gap in terms of Americans employed for years. And America’s transplant auto industry is continuing to grow. Even as the Detroit firms have slimmed down their North American manufacturing footprints, foreign firms are moving ahead with American and NAFTA-area plants despite the economic downturn. Not only do these moves signify possible new jobs, they also represent a long-term bet on the fundamental strength of the US economy.
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Volkswagen wants to unseat Toyota as number one by 2018. When they announced that strategy, it was widely discounted as Wolfsburg hubris, and as a goal so far out that nobody will recall nine years down the road that the goal has ever been set. Or as the saying goes in Wolfsburg: “In 2018, I’ll be retired.”

A few days ago, The Guardian reported that in the first 9 months of 2009, Volkswagen/Porsche made 4.4 million cars whereas Toyota made 4 million. Which ignited speculations that VeeDub may have reached its elusive goal 9 years early. Then the usual count of apples and oranges ensued, and after the joint ventures with minority stakes were included, Toyota nosed ahead.

Everybody calm down. Volkswagen is years away from overtaking Toyota, reports Das Autohaus. Surprise, surprise, arch rival GM is nipping at Toyota’s heels.
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