A faint silver lining in the dark clouds brewing over Chrysler and GM dealers who have received “Dear John” letters: Volkswagen’s sales chief, Christian Klingler, said he will try to turn many into Volkswagen dealers, Automobilwoche [sub] reports. With a market share of 2.1 percent for VeeDub in the US, unbridled growth would be practically assured. Meanwhile at home, Klingler expects 2009 to become “the best new car sales year since 1999.” The cash4clunkers Abwrackprämie is bringing Germany record sales. Klingler and other analysts believe that 2009 will end with more that 3.5 million cars sold. Looking at the fact that nearly 1.6 million applications for Abwrackprämien money have been filed already, and that nearly half of the applicants never had bought a new car before, the number could reach 4 million.
[GM CEO Fritz] Henderson said there was no resolution yet on the [$20 million] pension for former CEO Rick Wagoner, who was ousted by the Obama administration which is overseeing GM’s Chapter 11 restructuring.
“That issue is still being reviewed by the board of directors and the compensation committee,” Henderson said. “I’m not involved in this.”
Well, we still don’t have that list of doomed GM dealers. Senator Rockefeller’s office has failed to return eight phone calls asking for the information: the list he requested from GM CEO Fritz Henderson, who promised, under oath to provide. Meanwhile, here, finally, is the supporting documentation for GM’s dealer cull. The bankrupt automaker submitted the document [link here] to Friday’s Stupak hearing on dealer closing. Bottom line: GM’s dealernetworkreductionsenableanestimated $415 millionin “grossstructuralcostsavingspotential.” What is it with these guys? There are lots of good reasons to shrink GM’s dealer network. In the face of a total industry bailout that’s topped $100 billion, Henderson’s “rooftop” cost saving ain’t it.
For this week’s Your Shitty Economy Car of the Week (YSE), we present the Chevrolet Suburban. For years, Suburban was the only choice for families with four or five kids (or dogs) and a need for heavy towing. In recent times, the Suburban has seen some heavy competition. When GM doubled down on SUVs and created the GMT900 platform, they maintained the fuel hungry ‘burban’s class competitiveness. [Ed: Great landing, wrong airport.] Even with today’s economy and GM’s woes, a new Suburban doesn’t carry a huge discount: there’s $1,000 in rebate cash on the hood. A new base LS 4WD starts at $44,000. A flush customer can bling-out an L(u)TZ well into the $60,000 range. By comparison, this pictured one-year-old 4WD YSE truck clocks in at $24,987. Buyers looking for 2WD (or more miles) could spend less. The huge numbers of GMT900 trucks sold guarantees parts availability for years to come (hold the comments on GM’s bankruptcy). Before heading out to shop, toss in a copy of Dante’s Peak or Clear and Present Danger to watch some “like a rock” Suburbans tearing it up . . . .
We’ve been quite vocal in our opinion of “Car of the Year” awards such as those sold handed out every year by Motor Trend. Even worse are those awards bestowed by non-automotive rags where a COTY announcement ranks right up there with their pronouncements of the years trendiest sunglasses or the best place for killer mojitos. Yet, for whatever reason, Esquire has decided the world needs yet another of these useless (to everyone but their advertising department) awards.
The Truth About Cars wasn’t founded for the discussion of partisan politics. Thanks to the Motown Meltdown bailout buffet, it just turned out that way. While the intersection of automobiles and ideology has become both inevitable and unavoidable, the discussions centering on political ideology have recently spun OOC. In certain threads, we’re seeing the same endless rounds of right/left blunderbuss action. Even worse, it’s become nasty. As I was away from my desk for 35 seconds yesterday, I missed the onset of the flame wars and, thus, failed to extinguish them. By the time a couple of our Best and Brightest sent a heads-up email, more than a couple of commentators were burning down the house. This morning, I’m in retroactive delete and warn mode. TTAC’s flaming rule is simple: no flaming the website, its authors or fellow commentators. The corollary is this: please keep it as car-related as possible. If you can’t work your way back to the words “and that’s why I’m a Porsche/Corvette/Nissan/Ferrari guy,” you’ve probably gone too far.
An Arizona state Senate committee voted 4-2 on Tuesday to continue, for now, the practice of allowing police to pull over and fine motorists who use certain types of license plate frames. State Senators Jay Tibshraeny (R-Chandler) and Thayer Verschoor (R-Gilbert) had unsuccessfully introduced legislation to gut a state law that took effect in January. “A person shall maintain each license plate so it is clearly legible and so that the name of this state at the top of the license plate is not obscured,” Arizona Code Section 28-2354 states. Although the distinctive colors and cactus designs of Arizona’s basic plates are readily identifiable to the human eye, visibility of the state name is important for the optical character recognition software used by photo enforcement companies.
Speaker Nancy Pelosi released the following statement on the Obama Administration’s order of 17,205 “fuel-efficient” vehicles using funds from the American Recovery and Reinvestment Act:
We know that we can create jobs and save taxpayer dollars while protecting our planet, and with the American Recovery and Reinvestment Act, we are. The news that General Services Administration is one step closer to buying new, fuel efficient vehicles is good for our economy, good for our workers, and good for our environment. Because this will increase the fuel efficiency of the federal fleet, it’s also good for the American taxpayer.
Ah, but how fuel efficient are they? And what percentage of the new vehicles are American-made (a.k.a. UAW-assembled) cars? As you know, TTAC is determined to pry this information from the federal government. Our surprise ally: Speaker Pelosi’s office. They’ve promised to identify the models for us on Monday. We shall see . . .
Hi Robert – Per your mention of Sen. Corker, I just wanted to clarify that GM ASKED for a meeting with Sen. Corker and other Tennessee officials this week to discuss Spring Hill. They also asked our state to submit a proposal for the new sub-compact plant they plan to put in Michigan, Wisconsin or Tennessee.
If we’ve learned anything from animated cats over the last several decades, it’s that opposites can attract (and that music video directors get all the good drugs). But if there are serious doubts among analysts about the Fiat-Chrysler hookup, imagine what they’re saying about the Saab-Koenigsegg deal. After all, the buying firm sells one-of-a-kind cars for a cool million dollars a pop while the purchased firm can’t sell reworked GM offerings at zero-percent interest. Is there something rotten in the state of Sweden?
Creative Global Investments analyst Sabine Blümel takes on the Fiat-Chrysler marriage at just-auto.com [sub] and she seems unable to find anything positive to say about the deal. “A three-way alliance, also including GM Europe, and even better, also GM Latin America, would have given [Fiat Group] a full-range product portfolio and an extended and strengthened geographic footprint,” says Blümel. Take GM’s Opel or Latin American ops out of the picture, and you’ve got a nasty case of the not-so-muches on your hands. “We see little potential strategic benefit for the Fiat and our concerns regarding the benefits for Fiat from the alliance have, if anything, increased since the alliance plan was first announced,” is the verdict.
This spot (which cribs the Allman Brothers tune that gearheads will recognize as the Top Gear theme) is part of what AdAge describes as the repair chain’s effort to attract customers from closing dealerships. After all, the service department is often where the real money is made at dealerships, and the race to snag shuttered dealerships’ business is on. Automotive News [sub] reports that CarsDirect is even offering free 60-day online listings for any dealership that is going out of business. “We hope this offer helps dealers sell more cars as they work to stay in business and remain fixtures in their communities during the transition,” says CarsDirect VP Ken Potter. Not to mention a little free publicity that comes with the charitable territory. Meanwhile, how are GM and Chrysler shoring up their PR after the nasty dealer shutdown debacle? According to a WaPo analysis, Chrysler is emphasizing product competitivity (huh?) and GM is emphasizing restructuring (why?). So much for putting the best foot forward.
GM has bowed to political pressure, deciding that it won’t use taxpayer money to import compact vehicles from China. Instead, Aveo II (a.k.a. the Chevy Viva) will be built at one of three existing GM plants. (Hello, DOE retooling loans!) Up for the contract are Michigan’s Orion Township, Tennessee’s Spring Hill and Wisconsin’s Janesville assembly plants, and GM’s Troy Clarke is meeting with workers and unions from the three locales in order to determine the best site for Viva production. Oh, did I say workers and unions? I meant congressional delegations. Because, in the post Barney Frank-gate environment, “(GM’s choice is) going to be based on pure business decision,” according to Rep. Gary Peters (D-MI). Would Rep. Sander Levin (D-MI) like to clarify? “We’ve been in the front line of pain and we very much believe that one of the factors that should be taken into account is the impact of other decisions,” Levin tells the DetN. Gosh, that sounds almost . . . political. Hit the jump to find out which congressional delegation is most likely to build the new generation of GM compacts.
The European Commission has scrutinized care packages given to car makers by their governments. The Commissars find those programs highly objectionable. According to Reuters, “U.S. financial aid to carmakers and a number of stimulus packages adopted by other countries to fight the economic slowdown could distort global trade,” a (probably not very) confidential European Commission report says. Here are the EU commission’s main objections:
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