The Detroit Free Press reports that Toyota has taken GM's position as the top seller of cars in the world. Toyota announced yesterday that it had sold 2.41m vehicles the first quarter of this year, compared to longtime volume champ GM, which sold 2.25m vehicles. Of course, Toyota beat GM in the first quarter of last year only to have the General pull out a narrow victory to hold on to its top spot for the 76th year running. Toyota has surpassed GM in production volume, and with global sales up 2.7 percent this quarter while GM's sales dropped less than one percent, this could well be the year they drive old Dixie down. So to speak. Not that the General would even stand a chance if it had to rely on the American market, where its sales are down ten percent. Curious why the fifth largest corporation in the world is having its lunch eaten? There are a few Deathwatches for that!

Yesterday the Indian auto parts maker Argentum Motors said it intends to gain a majority interest in the sickly French auto body maker Heuliez. They're in discussions to release Heuliez from the French equivalent of Chapter 11. In operation since 1920, Heuliez has built some respectable cars including the current Opel Tigra, the Peugeot 206CC, the Citroen XM station wagon, and the Peugeot 407 Macarena and Dacia Logan Edelweiss concepts. Argentum's acquisition illustrates the contrasting strategies between Indian and Chinese automotive companies. The Chinese prefer organic growth, and would rather develop/steal their own car-making knowledge. Indians companies, staffed as they are with cosmopolitan managers, seem to be more intent on expansion through buying foreign companies.

Suzuki and Toyota are radically increasing production in China, in an attempt to compensate for faltgering sales in more established markets. Thomson Financial News (via Forbes) reports that Suzuki plans to double production "as early as next year" at its Chonqing-based ChangAn factory. The plant currently churns out 100k Chinese-market Altos. But a recent $144m investment in a new 1.5-liter engine for the ubiquitous (in China) hatchback, and a forthcoming additional $100m + investment in assembly lines, will see production rise to 200k annual units. Toyota is likewise betting long on China; a new factory is under works now in Jilin. Set to open production "some time next decade," the factory will lift ToMoCo's China production to over 1m per year. This will make China the number two manufacturing location for Toyota after the United States, where it builds some 1.5m vehicles annually. This will knock Hyundai out its position of top car manufacturer in China, after the Koreans recently spent nearly $800m to increase output to 600k per year.

At $115.07 a barrel, oil prices appears to have hit an all-time high. But the Economist reports that a Deutsche Bank analyst says chill; that oil is still more affordable than it was in the 1980's. Michael Lewis adjusts oil prices for inflation, by which he proves that pegged to the producer-price index oil is at an all-time high. BUT when you adjust the price for gains in the consumer-price index, oil has to hit the $118/barrel mark to reach a new record. This revelation led Lewis to compare the price of oil to gains in Western consumer's incomes. He found that the annual income of a G7 citizen would have bought 318 barrels of oil in 1981. To match this price (relative to income), oil would have to increase to $134/barrel. What's more, in 1980 American consumers spent some eight percent of their disposable income on energy, compared to 6.6 percent today; a difference that would require oil to climb to $145 to match. By measuring global oil consumption, Lewis also finds that worldwide spending also peaked in 1980 at 5.9 percent, compared to 3.6 percent today. To reach that percentage of global expenditure, oil would have to jump to $150/barrel. In short, gas prices have risen, but global gains in prosperity mean that oil is actually cheaper today than it was at the end of the Carter Administration. Whew!

It looks like GM's labor pains are just starting. The Detroit News reports that strike threats are coming in from sites around the country. While The General is busy dealing with a strike at their Delta Township, MI plant, they also have to defuse threatened walkouts at plants in Parma, OH; Mansfield, OH; Grand Rapids, MI; Kansas City, KS; Flint MI and Arlington, TX. And that's on top of dealing with parts shortages caused by strikes at suppliers American Axle and Alliance Interiors. Even though UAW prez Ron Gettelfinger says he supports the strike actions, he seems to have forgotten the fact that the actions are a backlash caused by the contracts his minions acquiesced to negotiated last September (and strong-armed the members into ratifying). At the time we wondered how workers could agree to the contracts; it seems that they've "woken up" to the reality. Once the Locals settle their differences with GM, you have to wonder if they'll have the same issues with the Ford and Chrysler, and if they'll go after the UAW's leadership for putting them in this situation in the first place.

"Peak Oil"– the theory that the planet is in imminent danger of running out of oil– is not, as yet, a mainstream media shibboleth. But God knows they're flirting with the idea. After all, it jibes nicely with the dare-I-say-it liberal idea that American is an arrogant gas/oil hog whose energy/foreign policy chickens are coming home to roost. New York Times columnist Paul Krugman provides an excellent analysis of the Peak Oil perspective, outlining the three possibilities: nonsense (it's speculation), maybe (it's the market catching-up with growing worldwide demand) and yes (we're fucked). Krugman's eminently sensible argument takes a swing to the left when he cites billionaire political activist George Soros (of all people) for the speculation theory. From there, it's a short trip to yup, we're screwed, and, by implication, still screwing others. "Rich countries will face steady pressure on their economies from rising resource prices, making it harder to raise their standard of living. And some poor countries will find themselves living dangerously close to the edge — or over it. Don’t look now, but the good times may have just stopped rolling." Damn! That sucks. 

A strike deadline passed today for GM's Warren transmission plant, with negotiators agreeing to work into the weekend to reach an agreement. This glimmer of hope comes as GM endures strikes at suppliers American Axle and Alliance Interiors as well as its Lansing Delta Township factory. Detroit News reports that the Warren negotiators are deadlocked over implementation of the new two-tier wage structure, a nationally negotiated deal which has run caused numerous issues (including the Delta Township strike) as individual plants struggle to determine which jobs are "core" to vehicle production and which aren't. The American Axle strike has stopped or slowed production at some two dozen GM plants, leaving GM's entire supply chain at risk as negotiators slowly fumble towards an agreement. If negotiations at the Warren plant break down over the weekend, the 1k workers there could join the thousands of striking UAW workers, leaving GM without production of four and six-speed transmissions.

Chrysler LLC announced today that it has opened a design office in China, a move the Detroit Free Press calls "part of a much larger expansion by the Auburn Hills automaker to beef up its product design efforts outside the United States." While Chrysler slashes as many as 25k North American jobs this year, it plans on recruiting 1k engineers outside from outside the United States. Chrysler's Chinese operations are expanding to include more local suppliers, in India the local engineering staff is set to double. Arguing that Chrysler is designing models specific to rapidly growing markets abroad, VP for product development Frank Klegon points to the success of its Mexico division (which is set to add 450 new staff). "They're already doing unique product for Mexico that's designed and developed in Santa Fe and for sale in Mexico by themselves," says Klegon. "It's a resource center that we're building upon. They started out as more of a vehicle development and test facility and moved them into design." But something doesn't add up here. If this is all about "unique products for unique markets," then why is Chrysler selling a rebadged (Chinese) Chery A1 in Mexico as a Dodge?

Yesterday, managers at GM's Delta Township plant (Buick Enclave, Saturn Outlook, GMC Acadia) sent workers home after a strike at Alliance Industries left them carpetless. Workers were told to report back to work this morning in case the parts were there. This morning, carpets were the least of GM's problems. The Detroit Free Press reports that UAW workers at Delta Township walked out on strike over the terms in their local contract. It's too early to know what effect the walk-out will have or how long it'll last, but between this and the strikes against American Axle and Alliance Industry, the UAW is taking a big bite out of GM's business. While The General probably welcomed the shutdowns at first– it gave them a chance to clear out a backlog of trucks– they're starting to feel the pressure. Can they afford to dig into their diminishing cash hoard relieve it? Can they afford not to?

The Detroit Free Press reports that workers have launched a strike at the Alliance Interiors plant in Delta Township. The strike comes after months of negotiations on the plant's first labor contract. The strike means that interior components will not be delivered to GM's Lansing Delta Township factory.  Enclave/Acadia/Outlook CUV production will likely be idled there… soon. "I'm assuming right now that they (GM Lansing Delta Township) are being shut down," says UAW Local 652 President Chris (Tiny) Sherwood, noting that workers from other Lansing factories, including Cadillac's Grand River plant, have joined the picket line in solidarity. The Lansing Delta Township plant could face a strike of its own by as early as 10am Thursday, as safety and working condition issues there remain a sticking point in labor negotiations. If Lansing Delta Township goes off-line, other Lansing-area suppliers could see demand dry-up for their components. Ryder Logistics, Android Industries and Plastech are all facing work stoppages if Lansing Delta Township ceases production. With the American Axle strike already wreaking havoc on the General's supply chain, this strike couldn't have come at a worse time for GM.

While talking heads like John McCain bob and wobble about the state of our economy, for the RV industry there is no doubt. It's recession time. Forest City, Iowa's famous Winnebego has seen their earnings fall by 67 percent this past quarter, after ten years of straight growth. The obvious reason not to buy a giant motor home: gas prices. As we saw yesterday, prices everywhere are up, up, up. Especially diesel. What kind of mileage does a typical RV get? Gas-powered homes-on-wheels manage about five mpg, whereas the diesel rigs average nine mpg. More troubling though, is the prospect that people aren't buying RVs because they can no longer afford big-ticket items. Especially as the typical RV owner is in the sweet-spot of the disposable income range: empty nest, soon to be retired boomers, aged 55 – 60. I mean, if not them, who? Cutting back on land yacht road trips because of a temporary spike in fuel prices is one thing. Not buying the behemoths in the first place is another. (As is buying your dream RV and then having a bank repossess it.) Bottom line: RVs might just be gigantic dead canaries in a very toxic coal mine.

The Chevy Impala showed a 1.8 percent gain in sales in March. At the first of April, GM only had a 21-day supply on the lots. The factory in Oshawa, Ontario has been running three shifts with Saturday overtime for several months. So why are they suddenly cutting back on production? An industry source (yes, we have them too) tells us that GM's canceled Saturday overtime and laid off the third shift until further notice. Rumor has it the American Axle strike is affecting the plant; although it wasn't previously identified as one threatened by a parts shortage. The more likely scenario: Chevy's filled all its Impala fleet orders. With overall sales down 11.1 percent for the year, and the distinct possibility that Malibu sales are (as predicted) cannibalizing the Impala, GM's simply slowing Impala production to meet retail demand (or lack thereof). The sales numbers over the next few months will throw some light on the truth of the matter. We'll keep you posted.

If the United Auto Workers (UAW) are expecting General Moneybags to "solve" the UAW strike using the Delphi solution (buyouts for everyone and your checks for free), they may be waiting a long time. Automotive News [sub] reports that the expected shutdown of the Malibu/G6 plant– due to lack of an AA-supplied part– ain'tgonnahappen.com. When asked when GM would run out of the part, supply guru Bo Andersson answered, "Based on the way I see it now, never." Bo added that his employer has "a good plan for handling the potential shortage" after they use up the supply of parts they "found " earlier this month. When asked if GM was receiving parts from another manufacturer, he declined to answer. But, Bo added, "What we learn every day is to have alternatives. It is my job to make sure we have alternatives for everything we buy." The most probable explanation: American Axle's Mexican operations are suppling the necessary bits. Alternative theory: China. Think about that the next time you equate "buying American" and "buying domestic."

Is there anyone Chryslerberus isn't trying to strike up a deal with? According to Reuters, Germany's Handelsblatt newspaper claims Chrysler is in "quite advanced" talks with Fiat to produce Alfa Romeo cars in the U.S. using Chrysler's factories. The newspaper cited "industry sources" (can you  be any more vague?) as saying "the talks are moving forward." Hang on; isn't that Toyota's tag line? Anyway, Fiat had no comment on the rumor. Chrysler's spokeswoman called the story speculation (ya think?). But she admitted what everyone in Christendom already knows: "there could be other partnerships with other automakers." The questions yet to be answered: will Alfisti accept an Alfa that doesn't come from Lo Stivale? Who has the worse reputation for quality? And why didn't anyone use the date 2010 in this story, except us?

A report by the Center for Automotive Research in Ann Arbor MI concludes that Detroit will begin hiring again as soon as September, and should add some 46k jobs by 2016. According to Detroit News, the report is based on "interviews with Big Three officials and others in the auto industry," so, y'know… have that salt ready. The average age of UAW workers in Michigan is 50, and the majority of new hires between now and 2016 will be replacements for retiring and bought out workers. In fact, Michigan's 129k industry employees will dwindle to about 108k by 2016, says the report. Replacements for longtime UAW workers will fall under the new two-tier wage structure, meaning Detroit's hirings will not only be under replacement levels, but they will also contribute greatly to declining wages in the industry. Factor in projected labor shortages for skilled workers in Michigan, and the Detroit News' headline seems more than a little overoptimistic. But hey, this is what passes for good news in Detroit these days.