Believe it, kids . . . the Cimarron is back! According to a Motor Trend “Scoop,” GM has acknowledged that it doesn’t have the resources to compete in Europe’s tough luxury market, build an RWD Alpha-platform “baby CTS,” or really do much of anything besides bringing another Epsilon II-based whip to the US market. Can you feel the excitement? The project, codenamed “GM 166,” will reportedly be positioned between the Buick LaCrosse and the Cadillac CTS. How? By costing more than the LaCrosse, of course. Because who doesn’t want a warmed-over FWD midsize starting at $35 grand?
As part of Viability Plan III, GM announced its intention to close 42 percent of its bloated dealer network, reducing the number of stores to 3,600. That’s a cut of 2,600 dealers. Our take on that part of that part of the new new new new new new new new turnaround plan: a Mandarkian laugh. American car dealers are covered by 50 states worth of franchise laws; politicians don’t get elected without the support of their local or state dealers’ council. Any dealer cull would have to wait for a bankruptcy judge. Nuff said? Apparently not. Wards’ Dealer Business reports that The General is laying the groundwork for an anti-dealer jihad, regardless of the “niceties” of C11.
The Washington Post reports that the Treasury reached an agreement “in principle” with major Chrysler bondholders last night on the terms of their haircut. Under the deal, $6.9 billion in debt would be paid off with a mere $2 billion in cash once Chrysler completes restructuring. Unlike GM’s debt-swap effort and Chrysler’s UAW VEBA deal, the debt is not being swapped for equity in a reconstituted Chrysler. Which means Chrysler’s lenders would rather walk away with about 28 cents on the dollar than cast their lot in with the New, New Chrysler. The Treasury is still trying to keep Chrysler’s restructuring out of bankruptcy court, but officials emphasize that this deal does not guarantee that Chrysler won’t file. Also, about a third of Chrysler bondholders are still mulling the offer over.
Since their installation in December 2007, red light cameras in Chattanooga, Tennessee, have failed to decrease the number of collisions at the locations where they are used. The UK-owned firm LaserCraft operates automated ticketing machines at six city intersections, splitting the revenue generated with the city. Officials claim the two primary objectives of the program are saving lives and decreasing the number of accidents, injuries and fatalities caused by speeding and red light running. Instead of a decrease, the total number of accidents at these locations increased six percent from 143 to 152, according to the city’s own data. At most of the locations, there was little or no change in accident frequency following the installation of cameras. The only significant change was seen at Fourth Avenue and East 23rd Street where ten accidents in 2007 jumped sixty percent to sixteen in 2008.
The Freep reports that the Treasury has blocked GM’s plans to buy Delphi’s unwanted steering business, while putting the kibosh on $150 million in payments that GM had planned to keep its major supplier operating through May. This puts Delphi, GM, The Treasury and creditors on a shorter timeline to resolve Delphi’s three-year-long bankruptcy; a deal must now be reached by May 9. If a deal isn’t reached by then, Delphi will be liquidated, GM will have to buy back mission-critical plants, and new suppliers will be contracted. So now you know why GM is idling most of its plants this summer: if parts stop shipping, there won’t be an (unplanned) production disruption. What isn’t clear is why the Treasury thinks a Delphi liquidation is a desireable outcome. After all, $5 billion has already been earmarked to help guarantee OEM payments to suppliers. Maybe Treasury actually thinks that money would be better off spent on ads. More likely though, the Treasury boyz want a top-to-bottom restructuring to go down next month, and Delphi’s lingering bankruptcy (and estimated $2billion yearly cost over competition according to GM) put it squarely in the “Bad GM” camp. And so it burns.
Hmmm, new Nissan QX? Nissan rumored to be replacing the current Armada-based vehicle with a Japan-sourced vehicle, and this seems like just the ticket to keep up with the Lexus LX-leasing Jonses.
Bloomberg reports that Source Interlink has gone Tango Uniform. You may know Source Interlink as the publisher of Motor Trend, Automobile and [a claimed] 73 other publications. Not to mention [a claimed] 90 websites. Like the formerly octo-branded GM, Source Interlink simply bit off more than it could chew—and then discovered there wasn’t enough to eat. “The company listed debt of $1.9 billion and assets of $2.4 billion . . . US magazine advertising revenue in the first quarter fell 20 percent from a year earlier, according to the Publisher’s Information Bureau, an industry group. US auto sales tumbled 37 percent in March. Source Interlink hasn’t reported a profit since the second quarter of 2007.” This after spending $1.2 billion to buy a package of titles from PrimeMedia in 2007. As for the future . . .
When the historians chronicle Detroit’s decline and fall, Daimler’s rape and pillage of the storied American car brand will merit an entire tome. In short form, the Germans came, they saw, they laughed, they lunched, they left. And when they left, they maintained a 19.9 percent share in the hollowed-out American automaker. Wishful thinking? Tax law? A codicil from Cerberus to allow Chrysler’s new masters to sue the shit out of the Germans if things went badly? In any case, thanks to The Presidential Task Force on Automobiles determination to reconstitute Chrysler as a worker’s co-op, by Friday, Daimler gets to see Chrysler implode from afar. [NB: So much for the “The Big 2.8”.] Bloomberg reports that Daimler will “cede” its remaining its stake in “former U.S. division” (ouch) to Cerberus Capital Management LP. More to the point, the “transaction” will result in a $700 million write down in the second quarter. Oh, and Daimler will “forgive” $1.3 to $1.7 billion worth of “loans” to Chrysler. And “contribute” $600 million to the US automaker’s pension plans over the next three years. Meanwhile, Daimler’s own haus is on fire . . .
According toAutomotive News [sub], the United Auto Workers (UAW) agreement with Chrysler/Fiat would deliver unto the union a 55 percent share of the reborn Italian – American automaker. As in the proposed (but doomed) GM bondholder offer, ChryCo union workers will forego a multi-billion dollar payment into their Voluntary Employment Beneficiary Association (VEBA) health care fund in exchange for the equity stake. In Chrysler’s case, $6 billion buys them controlling interest in Chrysler. That’s all kind of nuts on all kinds of levels. And as we’re in tail wagging the dog territory . . .
Political posturing, trial balloons, PR positioning—savvy elected officials know that professional survival depends more on voters’ perceptions than actual accomplishments. And so, when Norway’s Finance Minister called for an end to the sale of purely petrol powered vehicles by 2015, it was a major miscalculation. Info consumers are hard of hearing; they perceived Finance Minister Kristin Halvorsen’s proposition as a general ban on all gas-powered vehicles (including hybrids) in six years. Halvorsen was forced into damage-control mode, “This is much more realistic than people think when they first hear about this proposal,” she told Reuters. The fact that no politician in their right mind would suggest such a thing clearly occurred to the plucky Norwegian: “Halvorsen knew of no other finance minister in the world who was even arguing for such a goal. ‘I haven’t heard about any ministers. I’m not surprised. We are often a party that puts forward new proposals first.'” That said, Halvorsen has been on the front lines of extreme ideology before; she was forced to rescind her call for a ban on Israeli-made products.
My 1995 Lexus LS 400 needed a replacement computer to fix a known drivability problem related to the car’s throttle position sensor (TPS). Ever since I got the computer back, my car dies at low idle. I’ve reproduced it with the AC on, turning the AC off and then coming to a stop: it almost always stalls from its low idle.
When I originally had the computer checked out at a Lexus dealership, they said I might need to adjust the TPS after installing the new computer. I imagine that is what is going on, especially since the original codes from the (now replaced) computer said it was the TPS and I replaced it with a new one. Do you know if TPS adjustment is an easy fix that my mechanic can do?
“Our ‘CC’ corporate credit rating on GM continues to reflect our opinion that there is a high likelihood that the company will undergo a distressed debt exchange (which we would consider tantamount to a default under our criteria) or file for bankruptcy protection toward the end of May or shortly thereafter. Read More >
But as one door closes, another opens. With Pontiac dead, Automotive News [sub] reports that GM will use its NUMMI capacity for some other Corolla-based GM product. Because, as one Pontiac spokesman puts it, “there’s really nothing wrong with the Vibe. Its only problem right now is that it is a Pontiac.”
Late last Friday, GM revealed in a regulatory filing with the Securities and Exchange Commission that its employee stock fund manager, State Street Bank and Trust Co., has unloaded all company shares. According to the Associated Press (AP), “The plan’s financial manager said it began selling off shares of the Detroit automaker in late March ‘due to the economic climate and the circumstances surrounding GM’s business.'” This may help to explain the dead cat bounce GM’s stock experienced today.
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