GM’s troubles are hitting home. ALL its homes. Reuters reports that GM’s Korean division Daewoo—provider of the execrable vehicle known in the US as the Chevrolet Aveo—is getting the snot kicked out of it in its home market. “GM Daewoo is struggling. It is asking for additional loans from banks, including state-run Korea Development Bank, after using up $2 billion in credit lines.” Oops. Hey, did you know that Daewoo now accounts for a quarter of ALL of GM’s [soon to be formerly] worldwide automotive production? That’s a salient fact because we now learn that the Aveo’s replacement, codenamed T300 and scheduled for April 2010, has been back burnered. To January 2011. In theory. In practice, any such delay is most definitely not a good thing, as its fellow Korean, Hyundai, is planning to cap Daewoo’s ass [paraphrasing]. And anyone else at the bottom of the ladder, anywhere in the world, including China and the US. So can the Chevy Cruze fill The General’s small car gap? Place your bets here. Oh wait, you already have [via Uncle Sam].
The Wall Street Journal has got its mitts on a document detailing Fiat’s plans for world automotive domination and can reveal that the name for Sergio Marchionne’s plan is “Project Phoenix.” The plan reportedly calls for Fiat to take over Opel, Vauxhall, Saab and GM’s South African operations in addition to the Chrysler brands. Fiat would spin off this new auto empire into a new entity which would also include the Fiat, Alfa Romeo and Lancia brands, but not Ferrari and Maserati. Fiat would also close GM Europe’s plant in Luton, UK, and cease operations in Graz, Austria. The payoff? Annual savings of around €1.4 billion from 2015 onwards, according to Fiat’s estimates. The downside? A high chance of epic failure.
Reuters reports that gunmen shot and killed a union leader at Toyota Motor Corp.’s Venezuelan unit on Tuesday, a few weeks after the Japanese automaker said it might leave the country because of chronic labor problems. “Labor disputes and strikes have become frequent in Venezuela. In January, two workers were shot to death as police broke up a protest at a vehicle assembly plant for Japan’s Mitsubishi Motors Corp. and South Korea’s Hyundai Motor Co.”
GM wants to dump Opel on Fiat, but Fiat has its eye on GM’s successful Latin American division. GM sees a chance to hop on Fiat’s runaway train and is considering giving the operations to Fiat for a stake in the Marchionne empire. Two anonymous sources tell The New York Times that Fiat’s CEO “has indicated a willingness to give up less than 10 percent of Fiat to General Motors.” GM is said to be asking for 30 percent. How awkward.
“Insane like a fox,” you’re thinking. And yes, the Fiat CEO is set to receive “good Chrysler” with a taxpayer-funded bow on top. He also has his eyes on Opel, which the German government is desperate to find a good home for. But lightning still hasn’t actually struck once yet, and may we remind you once again that Fiat is in not-great shape financially. And yet Marchionne, mad with power, turns his eyes towards China. And South America. And Russia. In fact, according to the industry analysts Bloomberg talks to, Fiat is like communism in the 50s: everywhere, especially right behind you. You see, Marchionne “craves” 5 million annual global sales even though Fiat sold only 2.15 million cars last year. Reportedly the Chrysler deal will bring the Fiat empire to 4m sales (lets wait for those chickens to hatch, shall we?) and adding any one of GM’s global divisions (Opel, Latin America, Asia/Pacific) would take it over the 5 million mark. For Marchionne the only challenge is figuring out which ones he can pick up for free.
The New York Times‘ headline writer offers a piercing glimpse into the obvious: “Russian Auto Bailout Protects Jobs, Not Efficiency.” Remind me again how ANY bailout improves efficiency? Oh right: federally-funded union buyouts get rid of excess workers and facilities at the taxpayers’ expense, leaving fewer workers on the books—although adding to the automakers’ debt mountain. But that’s OK, ’cause when they file for Chapter 11, all that goes away. Da? Well, that’s not the way in works in Russia. In Russia, the government “loans” their domestic automakers billions (trillions) of rubles and . . . that’s it. I’ll be white this time, Boris. [NB: the above picture was taken in 1999.] The Gray Lady links cause and effect.
Because any day in Hanoi without a traffic fatality is a good one. Just outside of Hanoi’s Daewoo Hotel (the hotel of choice for both international conferences and visiting despots) is this large, prominently displayed billboard. In addition to the running count of traffic accidents and fatalities, levels of key pollutants are represented by animated faces with corresponding levels of positive emotions. Carbon levels, for example, got a big smiley while Sulfur Dioxide levels elicited a more ambivalent emotional animation. Good thing the principle wasn’t applied to the traffic fatality count.
In his first piece for TTAC, our former celeb contributor Brock Yates noted that “until the underlying economics of private transportation changes . . . economies will be saddled with the private automobile, whether they like it or not.” Here in Hanoi, that truism holds up . . . only you’d need to replace “private automobile” with “Honda Wave.” Though four-wheeled transportation is clearly picking up pace here (more to come on the quirk and diversity of said transport to come), the Vietnamese could no more imagine Hanoi without a crush of sub-200cc scoots than an American could imagine commuting on a camel. What’s a developing (or overdeveloped, for that matter) economy to do?
The sale of its automobiles on the prices of 2008 g., which will be prolonged from March 23 to April 30. Thus, [UAZ] attempts to get rid of the overstock of storages. The average sum of reduction is 25 thousand rubles. With its calculation the price on UAZ Of patriot with the gasoline engine in the assembly Of classic will be 440 thousand rubles, and ” [Patriot]” in the complete assembly with the Diesel engine Of iveco it will manage to buyer into 595 thousand rubles. The buyers of the automobile UAZ Of hunter with the gasoline engine can save 20 thousand rubles, and with the diesel – 24 thousand rubles. Let us recall, since February 16 plant works three days in the week, this graph will be preserved until August 1. If until this time situation with sales does not change to the best side, company will be is forced to begin the releases of personnel, since according to the Russian legislation the reduced operating mode can be introduced in enterprise maximum for six months. It previously communicated that in 2009. ” [UAZ]” it plans to let out 53 thousand [vsedorozhnikov], which to 26,7% is less than in the past year, when were assembled 72,3 thousand automobiles. P.S. [Interestno] will influence this the prices of Ukrainian dealers.
Looks like fifty cars per day is all that is needed from the Trollhätten plant to satisfy world demand. Yes, you heard that right: fifty cars per day, two days per week. With Saab apparently refocusing their production target to 12,000-13,000 cars for 2009, they’re cutting back their already slow schedule of three production days per week to two in some sort of effort to say “hey, we’re not dead yet.” Meanwhile the separate (desperate) search for a buyer for the company continues with Deutsche Bank handling the deal. They’d better act fast: Teknikens Värld says Saab’s piggy bank will be totally empty this summer. So if you’re one of those fifty people that want this Swedish meatball, act fast before they are all försvunnen.
No doubt inspired by the endless supply of videos around the web of Saudi drivers tearing ass across the streets of the Kingdom, the NY Times recently sent a man to investigate. He found that between drag races and the “drifitng” shown in the video above, the Saudi streets come to resemble a cross between Death Race and The Fast and The Furious. It seems that a great national boredom, or “tufush,” has seized the young men of Saudi, and with no public entertainment and few jobs, an underground car culture has flourished. Wealthier and middle-class men drag race Corvettes and Imprezas all night, but for the poorer, more desperately in need of excitement, only drifting cars through and around traffic will do. And the scene has created one crazy melting pot of young, angry desperation.
Ingvar, Swedish member of TTAC’s Best and Brightest, translates a report in today’s Aftonbladet:
“Aftonbladet can disclose today that Secretary of Industry Maud Olofsson fasttracked GM into the Europan Investment Bank. But GM said no. A source says: GM wasn’t interested in saving Saab.
In the late fall, Maud Olofsson had talks with GM Europe boss Carl-Peter Forster. Olofsson offered GM government loan guarantees if they turned to the European Investment Bank. But his response was lukewarm. It takes too much time to go through EIB, was his answer.
But Olofsson didn’t give up. In early december, she contacted EIB and asked them if they could fast track GM’s eventual case. The answer was positive. But when GM was told, they were only making excuses. There was obviously no interest from GM in pursuing the case, they only kept stalling, a source says.
Between holidays, the Swedish government called in consultants to review the numbers for GM and Saab. They shook their heads in despair, there was no reality in the numbers, a source says. The advice they gave: Forget about Saab.”
“Renaissance” plan for Europe is not viable. It will finish off the European GM brands and companies and includes unacceptable risks of litigation—the alternative is the spin off of the European operations
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