According to an editor's note in yesterday's LA Times, the Autos section, Highway 1, is no more. The likely reasons? The LA Times is having a hard time making money. Subscriptions and circulation are down, paper, ink, and distribution costs are way up. This is true for most print newspapers, and something's gotta go. Why they picked autos, I don't know, since the biggest part of the budget is Dan Neil's salary. And that will stay put as he moves over to the business section for his charming reviews (he hits the Alfa MiTo this week). The bulk of the rest of the section is advertisements, and I'm fairly certain the LA Times gets paid for those. Still, this was an accounting department decision, so we can be sure the math added up. For a city like LA, so steeped in car culture, this is a sad development. And yet not at all surprising. Kevin Roderick over at LA Observed thinks Home, Real Estate, Books, and Food are lined up for the guillotine, also. Meanwhile, Crain's Detroit Business reports that it's only a matter of time before The Detroit News sends its cheerleaders packing. "Dwindling circulation, plummeting retail and classified advertising sales and the tribulations of metro Detroit's economy make this two-newspaper town an 'anomaly,' said Rem Rieder, editor and senior vice president of the American Journalism Review." How ironic is that?

America can't get enough of the Prius. To meet demand, Toyota will begin building the gas – electric four-door in the U.S. in late 2010 (yes, at the same time the Volt is supposed to debut). ToMoCo'll use the plant they're building in Blue Springs, Mississippi– originally destined for Highlander production. Highlanders are moving to the Princeton, Indiana plant starting in late '09. To make room for the Highlander, they'll shift Indiana Tundra production to San Antonio, consolidating Tundra production in Spring 2009. But before they do that, they'll shut down all Tundra production from August 8 until early November (lagging sales). Toyota says they'll continue to provide work for the non-union "team members" at both facilities, as well as those working at the Huntsville, Ala. plant that builds Tundra and Sequoia engines.

In a move bound to raise howls of protest from the Chevy Volt's cheerleaders, GM (along with nine other manufacturers) has asked the National Highway Traffic Safety Administration (NHTSA) to lower the 4.5 percent annual increases in the CAFE standards projected between 2011 and 2015. To justify the request, GM stated they won't have enough Volts and Vue plug-in hybrid electric vehicles (PHEVs) on the road by 2015 to meet the more stringent standards. GM "strongly discouraged" any assumptions that their PHEVs would impact their corporate fleet average. Their NHTSA filing flatly stated "GM's game-changing (extended range electric vehicle) technology should be treated as a low-volume application." (Only GM could use "game changing" and "low volume" in the same sentence.) How low is "low volume"? The Detroit News reports GM plans to build fewer than 200k Volts in the first five years (40k per year average). To make matters worse– for the U.S. PHEV crowd– GM says many of those will be exported. Of course, this all assumes GM will start producing Volt and PHEV Vues in late 2010 as promised. So now, it's put up or shut time. The sad thing is that GM will do neither.

Automotive News China [sub] managing editor Yang Jian has a column warning Chinese firms not attempt to buy Volvo anytime soon. Yang considers the Shanghai Automotive Industry Works (SAIC) and First Auto Works (FAW) as the most likely suitors for Ford's Swedish division. They alone have access to the state-controlled bank financing needed to make the deal happen. Never mind that, Yang says, there are a wealth of lessons that China is still not ready to buy-up western car brands. The first-ever Chinese purchase of a western brand, Nanjing Auto Group's takeover of MG, led to an overleveraged NAG being bought up by SAIC. When SAIC bought Korean firm Ssangyong, it had to endure labor walkouts over plans to shift production from Korea to China, followed by a slide into unprofitability. As a friend of Yang's at SAIC puts it "SAIC certainly won't consider buying (Volvo) since we know how much hassle an overseas acquisition could create." So it turns out that a booming market isn't enough for Chinese firms to overcome their unfree-market disadvantages. 

With The Land of The Free deep in auto-market hell, our cheese-eating  surrender-monkey pals look set to follow suit. PSA (Peugeot-Citroen) has enjoyed relatively brisk metal moving thus far this year. But the automaker expects sales in its Euro-market bastion to start dropping through the rest of the year. Sales in Western Europe (where PSA gets its fattest profits) are down two percent year-to-date, and headed south– despite French-market tax incentives (where 22 percent of PSA sales originate). The Wall Street Journal reports that price increases set to go into effect this summer may help PSA's bottom line, but only at the expense of sales. At Renault, CEO Carlos Ghosn's ambitious ten percent sales growth target has been halved. "Realistically we are dealing in an environment which is very uncertain and we have to be very transparent in the fact that it can get better or worse," says Ghosn. Analysts say profitability goals are also likely to be abandoned. C'est la vie.

Forbes reports that China's Chery Automobile is looking into a purchase of Ford's struggling Volvo division. According to Chinese media reports, Chery is shopping for some $4.4b in financing to make the purchase, although observers are skeptical that the purchase could actually take place. Chery (which is owned by the city of Wuhan) can not simply buy Volvo outright, as it has not yet been able to raise funds on Chinese capital markets. Having failed to meet the Hong Kong stock index's capital structure requirements, and with the Shanghai stock exchange taking a beating, Chery must rely on outside financing to make a play for Volvo. And as Zhang Xin, an auto analyst with Guotai Jun'an Securities points out, Chery's entire asset value is less than the rumored price tag for Volvo. Furthermore, Ford has already set up a joint venture with Changan Motors to build the Volvo S40 in China, while Chery has entered an alliance with Chrysler. And Ford is letting the considerable barriers to the deal do all the talking, as the International Herald Tribune reports that Ford once again refuses to comment on the possible deal. Still, with a new suitor for Volvo being hinted at each of the last few weeks, Ford's insistence that it is "committed" to Volvo seems just a tad disingenuous.

We all know that GM is burning through cash faster than a well-oiled cash burning machine, but nobody seems to know where the next GM greenback fix is going to come from. Automotive News (sub) reports that a JP Morgan analyst thinks it could come from GM's VEBA contributions. The General has set aside some $14.5b for the UAW fund which was envisioned as a way for GM to get out from under its crippling benefit liability. But with cash tight and credit increasingly unavailable, the UAW may just have to loan that money back to GM to keep the lights on for another few years. Analyst Himanshu Patel reckons GM needs $10b to prevent a major cash crunch by 2009, and that GM could squeeze up to $6b from the UAW fund. "Why would the UAW agree to this? My short answer is they have to," Patel said, adding "the UAW now is extremely motivated to keep GM, Ford and Chrysler out of bankruptcy." Oh yeah, and GM would have to pay the UAW up to 12 percent interest on the friendly loan. It's a risky move though, given that nothing indicates that GM will ever be able to pay the money back. But then GM and the UAW are up the same creek with the same lack of equipment, so the partners in failure may have little choice to double down for another round. Unless of course there's some other white knight waiting to throw $10b into the giant sucking sound that is General Motors. Which there isn't.

Anyone remember the 1932 film If I Had A Million? Didn't think so. Long story short, a dying rich man picks eight people at random from the phone book and gives each of them $1,000,000. The best sequence (of course) belongs to W.C. Fields. Fed-up with "road hogs" and "Sunday drivers," he buys a phalanx of jalopies and begins to run the offending cars off the road. Then, when both the hog and Fields's jalopy have been totaled in a ditch, he climbs into the next junker (he's paying a a bunch of kids to follow behind him in "fresh "cars) and looks for a new target. I mention this classic scene because the Tata Nano's $2,500 price has given me ideas. I mean, for not that much money I could remove a lot of first gen Dodge Caravans from the road [Ed: Jonny's convinced that all traffic everywhere would improve if still existing K-Car Dodge Caravans were outlawed]. However, like most of my fantasies, this one ain't going to happen. Looks like the rising cost of steel is turning into the rising price of Tata Nanos. For their part, Tata ain't saying nuthin' 'bout nuthin'. But Automotive News [sub] is reporting that the Indian automaker is trying to cut deals with its suppliers to keep raw material costs down. Luckily for Tata, they happen to own Tata Steel Ltd., the largest steel producer in India. However, as John Adams said, facts are stubborn things– steel prices are up. As for my twisted plans, I should be able to get all the Hummer H2s I need for less than $2,500 real soon. 

Fiat makes some really wonderful small cars. But as always, it's more fun to do it with someone else! And so Fiat likes to take lovers, much like the Italian Prime Minister does (e.g. former topless model/current Minister for Equal Opportunities Mara Carfagna, Ministers of Parliament Gabriella Giammanco, Micaela Biancofiore and Nunzia De Girolamo and Venezuelan Model Aida Yespica). Consider: The Fiat Panda and 500 share a platform with the upcoming Ford Ka. Fiat partnered with PSA Peugeot-Citroen for the (these are real names) Fiorino, Bipper, and Nemo small vans. In Europe, Fiat sells the car us North Americans know as the Suzuki SX4 as the Fiat Sedici. And Fiat has been rumored to be talking to Tata about accessing Jaguar's RWD platforms for future models. And now, BMW! Automotive News reports that Fiat is looking to hook-up with BMW for future platform engineering and powerplants. In particular, BMW and Fiat may co-develop the next gen Fiat 500 and MINI. Considering the 500 is reported to be not the most phenomenal car to drive, this would be good news for the Italians. For its part, BMW realizes the importance of collaboration. The current MINI Cooper's 1.6-liter mill was co-developed with PSA Peugeot-Citroen, which also makes a home in a number of small French car-things. And BMW has declared that future BMW branded 4-cylinder engines will be shared with PSA. So how long is it, really, before there are just two car platforms in the world: one RWD, one FWD, with 30 different badges?

And BOY did they sneeze. Sales of the light trucks made at Nissan's Canton, Mississippi plant (Titan pickup, Armada/Infiniti QX56 SUV, Quest minivan) have cratered. The Clarion Ledger reports that a switch to Altima production has saved jobs at the five-year-old facility. But local suppliers geared-up for trucks have been hit hard; more than 200 workers have lost their jobs. MINACT/Yates Logistics laid off at least 64 workers, including supervisor Glenn Roberts. A struggling Roberts has "resurrected his resume and applied to dozens of jobs. He parked his gas-thirsty Tahoe and shares his wife's car. He's known by his first name at the WIN Jobs Center, where he goes twice a week for four or five hours at a pop." PK U.S.A. "downsized" Dave Taylor, who can't afford to keep his house– or sell it. Tower Automotive dismissed assembly line worker Carlos Johnson. "I pay $100 a week for day care. I've got my house note at $500 a month, car note at $350 a month, and insurance is $150. Bills can't care less whether you have a job or not; they're going to be rolling in. Unemployment is what, $215 or $230 a month, that's not enough to live on. It's enough to pay for your gas so you can go around and find another job."

"We continue to question whether GM will be able to sustain eight different brands and over 13,000 franchises with less than 20 percent market share." TTAC? Nope. Deutsche Bank analyst Rod Lache, as quoted by the Detroit News. GM's stock fell below $10 a share yesterday, and the prognosis isn't good for the company whose stock has fallen by more than 70 percent in the past year. Even Merrill Lynch analyst John Murphy, described by his peers as "last guy defending the [GM] bunker," said he expected GM's stock to fall to $7 and forecast "significant losses" for GM this year and next. When even the cheerleaders start predicting a losing season, the team doesn't stand much of a chance. It looks like GM could use a new coaching staff, and fast.

Ontario's struggling manufacturing sector took another blow yesterday. CNews reports that Oakville, Ont-based automotive supplier Polywheels has shut down indefinitely. Workers arrived for their 7am shift on July 2 only to find the plant closed and shut down notices posted at the entrances. The workers, represented by the Canadian Auto Workers (CAW), were surprised that the company shut its doors without warning. "I'm upset because this is a good factory, they had good, good benefits," emotes a local worker in a moment of unionist entitlement. The Toronto Sun reports that American Axle's own strike, which halted production of Polywheels' bread and butter models (e.g. Sierra/Silverado) was a body blow for Polywheels. The subsequent rise in gas prices was the coup de grace, according to another worker: "We figure out how to bring the price of oil down and we'll all be fine." Easier said than done, I suppose. [Thanks for Michael Kirouac for the tip]

Back in Chrysler's salad days, Dick Dauch was the much-admired head-busting manufacturing boss in an executive suite lined with power players like Lee Iacocca and Bob Lutz. Competing egos served as a check on individual power and privilege. My, how things have changed. Lee's pimping with Snoop, Lutz is nutz (and well-paid for it too) and Alex Taylor III is dissing Dick (in his own special way). Taylor's talking about the American Axle CEO's "less appealing side." In fact, Taylor's "pin the tale of D3 woe on the greedy bastard" profile reveals that American Axle is a public company in name only. Get this: American Axle's corporate address is One Dauch Drive. Son David was recently promoted to President and COO, after other son Richard quit working for dad. And the compensation committee paid Dauch over $18m last year [yes, that's $3.95m more than we thought previously]. Of course, our man Alex can't quite step-away from the pom-poms: "There's no question that Dauch has built a successful company, and he has done good deeds for the city of Detroit by locating his headquarters within city limits. But he has left American Axle grievously unprepared for the market shift away from sport utility vehicles." What about Dick's charitable work? And where was Taylor's self-righteous sarcasm last year, when Dauch pulled down $3.9m plus? 

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.

Workers at Chrysler's Windsor, Ontario plant breathed a sigh of relief when Chrysler announced they're closing their St. Louis south plant to cut van production. Their relief may be short-lived, though. We've learned through a confidential informant that Chrysler is also shutting down the Windsor van plant through the end of August. This comes after some component plants have been running at full tilt, working overtime, weekends and even the Canada Day long weekend, to meet Chrysler's demands. This was totally unexpected and "scheduling people are running in circles trying to readjust inventories and halt our suppliers." Which plant will be the next to fall? Or will it be Chrysler itself?