Back around the time Chrysler was liberated from its German overlords, the automaker declared that it would make a $3b investment in launching new engines, complete with a fuel-efficient, dual-clutch transmission by Getrag. As we reported yesterday, the plan is now in limbo, as Getrag has stopped construction of a new facility designed to build 700k Chrysler-bound transmissions. Meanwhile, the Globe and Mail reports that New Process Gear– formerly owned by Chrysler, currently owned by Magna International– is laying off 1,650 workers at its suburban Syracuse, N.Y. transmissions parts factory. The newspaper tells the story as a union deal: "Magna has told the union it cannot afford to keep the factory open with its current cost structure and it plans to close the plant." But it's also likely that Chrysler is pulling back on ALL its transmissions suppliers to meet falling demand. Lest we forget, pre-sale, Chrysler was slated to sell Chery a complete assembly line for building automatic transmissions. So, is Chrysler's "Powertrain Initiative" dead, moribund, outsourced or some combo thereof?

Inside INdiana News reports that autoparts supplier Getrag has suspended construction of a $530m DSG  (dual sequential gearbox) transmission plant in Tipton County. Starting in 2009, the factory was set to produce 700k transmissions per year and employ some 1400 people. Indiana was in deep too; the Indiana Economic Development Corporation stumped-up $8.75m worth of performance-based tax credits and offered up to $500k for training grants. The state was on the hook for $3.4m for local road improvements. Getrag Human Resource Director Randy Cyman told the News that the plant is on hold "indefinitely" while Chrysler and Getrag work out a supply agreement. "He says the two parties are meeting daily to try to iron out some unspecified issues. Cyman says he does not believe the project is in jeopardy. He says both parties realize the value of the new state-of-the-art transmission plant." Let's assume that Getrag had a clear contract with Chrysler before starting to build the factory. So, did Chrysler try to squeeze Getrag's profit margins and Getrag balked? Is Chrysler trying to walk away from an expensive project? TTAC is investigating… 

Any guy who's gone swimming in cold water can tell you shrinkage is not a good thing. Yet even as Ford comes to grips with losing second place to Toyota, The Blue Oval Boyz say the automaker could shrink even more before they return to profitability (and start to pay off the principal on those gi-normous loans). At a "roundtable dinner" last night with the Detroit Free Press' Tom Walsh, FoMOCo CEO Big Al Mulally said his employer's market share could continue to drop as they seek to stabilize output to match demand (translation: cut production, close down plants, eliminate jobs). Mark "What Me Worry?" Fields thinks Lincoln can help pull the company out of its doldrums, citing a 15 percent increase in sales last year. Apparently, that's "the largest gain of any luxury brand in the U.S. market." Chief marketing director Jim Farley added Lincoln has a good future with younger buyers and ever-oh-so-PC "diversity customers." But what about poor, pitiful Mercury? Will it suffer the fate TTAC's Steven Lang predicted yesterday? Mulally tap-danced around that one. "We're committed to Mercury" but "we're continuing to review our portfolio. That's an ongoing assessment we continue to have, and should have." And if it does survive? Fields says it'll be the "smaller volume brand" in the Lincoln-Mercury portfolio. So as Ford shrinks, Mercury will shrink even more. And when something shrinks too much it just fades away…..

Writing for Reliable Plant magazine (how appropriate is that?), Lean Enterprise Institute founder Jim Womack offers insight into Toyota's management style. Womack says that ToMoCo solicit workers' opinions on job-related problems– like a lot of companies. But Toyota doesn't take the kvetching at face value. "They challenge the employees and enter into a dialogue about what the real problem is. (It’s rarely the problem showing on the surface.)" The semi-confrontational style continues through the search for solutions and a measure of success. "The manager challenges the employees every step of the way, asking for more thought, more facts and more discussion, when the employees just want[s] to implement their favored solution." Apparently, this shows Toyota's "respect" for its workers. Semantics aside, a comparison between two distribution centers lies at the heart of Womack's analysis. In plant A, "management was focused on controlling the workforce through individual metrics. Employees were told to get a given amount of work done but given considerable latitude on just how to do it." In plant B, "the management had worked with employees to create standard work for every task and had introduced visual control with status boards so everyone could see how everyone else was proceeding with their work." Guess which one was run by Toyota, and how and why Womack found it superior. 

CNNMoney.com reports that the price of oil has topped $100 a barrel, for the first time ever. (Happy New Year!) U.S. crude priced for delivery in February has gone up $4.02, to reach $100 a barrel on the New York Mercantile Exchange, Inc. (NYMEX). Ira Eckstein, president of Area International Trading Corporation, says you ain't seen nothin' yet: "This market is really gonna fly.” CNN lists several reasons for the rise, including civil unrest in Nigeria and rumors of a potential cessation of Mexican supply (no reason given). And then there's the ongoing decline of U.S. oil supplies. Oh, and a “surprise fall” in US manufacturing, which could lead to lower interest rates, which could further ding the value of the dollar, which could lead investors bail out of U.S. equities and into commodities, which would drive up the cost of imported crude. No mater how you slice it, gas prices are sure to arc upwards, putting yet more pressure on a beleaguered market for gas-hungry SUVs and pickups.

The American Family Association (AFA) has sent out an "action alert" to its members informing them that Ford's health care policy covers the medical expense of workers who undergo a sex change operation. Apparently, a full page Volvo ad in The Advocate's transgender issue got someone within Donald E. Wildmon's organization thinking about Ford's medical plans for employees suffering from gender dysmorphia. The AFA report claims "Ford offers medical benefits to help pay expenses of those who choose to undergo sex change operations. Ford pays for mental health counseling, hormone therapy, medical visits, and short-term disability after surgical procedures for employees who desire to change their sex." The AFA hopes the alert will help add adherents to their petition declaring its signatories' intention to "boycott Ford Motor Company automobiles until Ford stops supporting homosexual groups which are pushing homosexual marriage." The AFA claims the e-document has attracted 777,833 signatures. Given that the organization also claims its campaign has been the "driving force" behind Ford's dropping sales and Bill Ford's decision to step aside for CEO Alan Mulally, a grain (though not a column) of salt may be in order.

With 2007 gasping its last breath, the Detroit Free Press asked local civic and industry leaders for their thoughts on the upcoming year. GM's Slick Rick Wagoner took the conservative approach and wished for "an end to the housing and auto recessions in the U.S. in 2008; a comprehensive U.S. energy policy, and continued success in emerging markets." Mark "The Mullet" Fields from FoMoCo took an equally optimistic view, hoping "we don't continually talk ourselves into a recession" and wishing "cars and crossovers will outsell trucks and SUVs for the first time in many years." But every auto journalist's favorite sound bite machine Maximum Bob Lutz didn't mince words: "Now that we have the 35 miles-per-gallon fuel economy mandate by 2020, I am hoping that in 2008 'Professor Doktor' David Friedman (research director, clean vehicles program, Union of Concerned Scientists) and his 'highly-qualified' band of allegedly concerned, self-proclaimed scientists will turn their energy toward showing the world's automotive industry exactly how those numbers, using existing technology and 'costs of a few hundred dollars at the most' can be attained with a vehicle selection that even remotely resembles the cars and trucks Americans want to buy today." Go get 'em Bob!

I know TTAC is the hard man of the autoblogosphere, but sometimes I can't resist taking a walk on nerdy side (and the pistonhead girls go do do do do…). The International Herald Tribune addresses one of rivet counters' most vexing questions, as above. Previously, on "You Need To Get A Life," Trib author Jan Freeman declared that the appropriate term for more than one Toyota Prius was "Prioria." Reader Christopher Casey took exception, kinda. "You were right that Prius is the neuter nominative/accusative singular of the adjective prior, but the plural forms of the word – which means 'earlier, better, more important'- would be Priora, not Prioria." Freeman rang-up Harry Mount, author of "Carpe Diem" (a.k.a. "Latin isn't half as dull as you think it is. More like a quarter"). "Yes, it's Priora," he told Freeman, "because it's neuter plural. But if you cheated a bit and made the car masculine or feminine – and I do think of cars as female – then it would be Priores. And Priores has nice undertones of grandness – Virgil used it to mean 'forefathers' or 'ancestors.' So if your hybrids are named for the dames of ancient Rome – Drusilla, Octavia, Agrippina – you're granted poetic license. Otherwise, Priora is the Latin plural you're looking for." Mea culpa! TTAC's been using Prii. We sit corrected. 

GM Car Czar Bob Lutz sat down with journo Jerry Flint for a major chin wag. Forbes' finest asks Maximum Bob about his employer's two-mode hybrid system; Flint wonders if the system costs costs more than $10k per vehicle. "Well, at least," Lutz admits. "And we're not selling it for that." Oops! So will the inherently unprofitable technology help GM achieve its federally-mandated 35mpg by 2020 fuel economy targets? Nope. "Even with that, we get a full-sized Tahoe sport utility to 22 miles per gallon, which is 50% to 60% better than anyone else [?], but is still only 22. So where are we going to get the other 13 [mpg]? We don't have a clue, and throwing another 10,000 bucks at it isn't going to do it either." As for GM's next Next Big Thing, the electric – gas Chevrolet Volt, Lutz backpedals so hard he falls over. Flint bears the bad news: "On a scale of 1 to 10, he says his confidence level is a 9.5 that GM can build the Chevy Volt. The production date is another matter; Lutz's confidence drops to a 5.5. 'We're holding people's feet to the fire for the very end of 2010 into 2011. But that can slip, depending on how the development goes.'" In short, "It probably won't be a flawless launch." So, it's business as usual at GM.

Back when Toyota first toppled GM from the worldwide sales charts, The General's General dismissed the historic milestone as no biggie. When the markets growled at Rick Wagoner's ho-hummer, the American CEO eventually declared his intention to defend the company's honor. While it's down to the wire for '07, Toyota is already announcing its intention to snag the sales title in the New Year. According to The New York Times, ToMoCo plans to sell 9.85m vehicles worldwide in 2008. In fact, despite a U.S. economic downturn, Toyota is set to increase American sales by one percent.  So what does the 76-year worldwide sales champ have to say about its own plans for world domination? Nothing. "G.M. has not given a forecast for the number of vehicles it expects to produce or sell in 2008." Just in case you missed the contrast in corporate cultures, Credit Suisse auto analyst Koji Endo reminds us that “These are targets Toyota is giving, not forecasts, and so they are reasonable." Oh, and Toyota also says it will begin mass-producing lithium-ion batteries for its low-emission vehicles in '09. And so it goes.

Some? I mean, c'mon Mr. Phelan. As a Detroit Free Press columnist, if you're going to proclaim a design renaissance at GM, why go half way? Why just trot out the Buick Enclave, Saturn Aura, Chevy Malibu and Silverado, draped though they are in various advertiser ingratiating COTY awards? What of the Pontiac G6? Saturn Sky? Chevrolet HHR? The General has 51 models spread over eight brands. Or are these four examples a sign of things to come. Apparently so… "The reason the new 'vehicles happened is that GM now has a hyperefficient, product-focused vehicle development program,' said Jim Hall, managing director of 2953 Analytics of Birmingham. GM's vehicle-development system today can stand alongside Toyota and BMW as the best in the industry." While one wonders just how efficient a development system has to be to qualify as "hyperefficient," Phelan identifies the three major changes ensuring that his Big Four aren't flukes. First, "A single executive is responsible for each family of vehicles, usually keeping the job for 10 years." Second, "Each of GM's global engineering centers now concentrates on the kind of vehicles it does best." And third, "The goal for each new vehicle is to be the best in its class, rather than simply hoping to be competitive." Phelan ends his paean to The General by elevating CEO Rick Wagoner, design chief Ed Wellburn and Car Czar Bob Lutz to sainthood. Clearly, the hometown scribe knows how to put the sick in sycophancy.

Since the [now stalled] Energy Bill was first mooted, TTAC warned its readers to read the fine print. Detroit's support for the legislation was a sure sign it contained enough loopholes to maintain the status quo and enough sweeteners to make Hemlock a palatable potion. On the former point, we've learned that the bill maintained the distinction between light trucks and passenger cars for Corporate Average Fuel Economy (CAFE) calculations. (The system that made SUVs a roaring success and allowed Chrysler's PT Cruiser to be classified as a truck.) We also discovered that the CAFE regs were switching from a fleet-wide average to a footprint-based system– which bases mpgs on vehicle size and allows automakers to finagle the bagel (so to speak). And now, thanks to WardsAuto, we finally hear the number for the federal loan guarantees that the United Auto Workers helped arrange, to keep production stateside. It must be said that $25b is a lot of billions– especially when its your tax dollars on the line. That's doubly true given that the money was earmarked for companies retrofitting factories built before 1987. That means virtually all of the cash would go to The Big 2.8, as the transplants (Toyota, Honda, Hyundai, Nissan, Mercedes, BMW, etc.) built the lion's share of their domestic production facilities after that date. A federal bailout by any other name would still smell so rancid. 

The Detroit Free Press takes its turn as hometown cheerleader, touting Michigan as the U.S. auto industry's current and future "think tank." "The state has reached a historic crossroads," Katherine Yung opines. "Even as it sheds much of the business of building cars and trucks, Michigan is quietly growing its ability to design and create the next generation of vehicles." Quietly eh? Sound kinda tenuous to me. To wit: note the word "can" in the following quote: "Experts say that even as Michigan diversifies its economy, it can grow by expanding its role as the auto industry's knowledge capital." In terms of hard facts, Sean McAlinden, vice president of research at the Center for Automotive Research in Ann Arbor, reckons The Wolverine State captures nearly 80% of the $16.7b spent on American automotive research and development. Buried amongst details of new investments and quotes from the happy campers who might expand their Michigan-based R&D facilities, CSM Veep Michael Robinet predicts that "basic development work for different vehicle platforms may decline." The future, then, is in "hybrid, electric and fuel cell vehicles." Although Yung sees Tesla's new Rochester Hills' research center as a sign of things to come, that could cut either way. 

BMW builds Bimmers in South Carolina. Mercedes-Benz manufactures Mercs in Alabama. Now Audi's considering an American factory. According to Auto Backstage, Audi CEO Rupert Stadler told Auto Motor und Sport that the weak dollar has forced Ingolstadt to consider building a factory in the U.S. Audi is aiming for an eight percent profit margin; an American assembly plant could help them realize that goal. Statler said his employer might produce the Q7 SUV stateside but didn't indicate when they might make the move. If they want to immigrate, there are plenty of southern states which would welcome them with open arms, cheap labor, loads of tax incentives and a hearty "Audi, Y'all!" 

After divesting itself of every ancillary business from appliances to locomotives to raise operating capital, GM's started throwing the last pieces of furniture onto its cash conflagration. This past July they sold the Allison Transmission unit for $5.6b. Now The Flint Journal tells us they're getting closer to selling off their medium-duty truck line to International. Sales of the medium-duties– sold as the Chevy Kodiak, GMC TopKick and Isuzu T-Series– have been down this year. The United Auto Workers (UAW) will have to approve that sale and VP Cal Rapson says he won't go for it unless GM asks him nicely "it makes sense for Flint and the UAW." In the meantime, UAW workers at International are on strike over the planned layoff of 500 workers, which may complicate things. At the rate they're going, GM's "damaged brands" Pontiac and Buick better watch out — Chinese automakers would line-up cash-in-hand to get access to a ready-made U.S. dealer network.