You thought you’ve heard it all? Now hear this: “The private equity firm Cerberus plans an engagement in a possible new European Opel concern,” the Düsseldorf, Germany, newspaper Rheinische Post writes, citing unnamed German government sources. If true, doesn’t Cerberus know how to say “uncle?” If not true, isn’t crack illegal, even in laissez-smoke Germany? According to the newspaper’s deep throats, the hellhound is interested in a chow-down of 25 percent of an independent Opel. Fiat would be part of the party, last week’s denials notwithstanding. According to the Rheinische Post, the prospective gang bang has been organized by Roland Berger. Roland Berger, the German consulting company, is in the employ of GM Europe. Roland Berger, the owner, has been hired by the German government to advise them in sticky Opel matters. He’s also on the Board of Directors of Fiat, says Der Spiegel. Conflict of interest? Never heard of it.
The remnants of the British automotive industry offer a wealth of important lessons for America’s declining industry, having made the hero-to-zero leap a few decades ago. And though British Leyland would certainly constitute the major lesson from the fall of the British Automotive Empire, the overemphasis on “heritage” among survivors of the BL experiment offers teachable moments of its own. During and after the sunset on Britain’s auto heyday, investments and advantages in technology, performance and reliability were ceded to the Japanese and German firms, as the backwards-looking British industry got lost in its own history. “Charm” and “Britishness” became the raisons d’brand for Jaguar, Rover, Landie and Rolls/Bentley in the 70s, 80s and 90s, leading to a creative funk only recently be shaken off by the brands’ new guides. Case in point: Jag’s XJ.
Fiat, the great Italian hope for the American auto industry, has a lot of expectations to live up to right now. Not only are the Torino boyz tackling the miasma of despair that was the Chrysler corporation, but Automotive News [sub] reports that Fiat could “form an alliance with General Motors’ core operations in Europe and Latin America.” Italian-American Leyland, anyone? Fuhgeddaboutit. According to anonymous sources, talks with GM are in the “early phases,” which means that nobody has suggested that an allied Chrysler, Fiat, Opel/Vauxhall and GM Latin America might be too much concentrated fail for one corporation to handle. And Fiat’s got the usual unnamed competition for Opel to contend with. “More than six people have expressed interest, serious people,” says GM CEO Fritz Henderson of his firm’s unwanted Opel/Vauxhall operations. Why so serious? Did previous offers come from folks wearing giant shoes, tiny hats and rubber noses? More importantly, if one of these “more than six serious people” comes from Fiat, might it not be time for a reality check on that firm’s transformative power?
And the bigwigs spent ten years building brand equity with cheap, basic transportation. And lo, the Japanese automakers headed upmarket, ceding entry level business to the Koreans. And the Seoul sales train smiled for it was good. And then came the Genesis, and Hyundai’s new day morphed in the minds of its creators from budget luxo-fighter to an opportunity for sub-brand confusion and ADD.
It’s nice when Detroit News auto journalist Mark Phelan and I agree. We recently had a head-to-head on BBC World Service where I called GM and Chrysler zombie automakers, and Phelan didn’t. In a piece in this morning’s Free Press—“Bankruptcy no fast cure for GM“—the Irish scribe shares my belief that a GM C11 will be, as the Brits might say, the bunfight to end all bunfights. But first, let’s put the pro in prolepsis, and begin with Phelan’s final paragraph: “GM’s cost-cutting progress has allowed it to pass on some of the loan money the government has promised, but the company’s own projections say it could need another $4.5 billion to $12 billion if the economy remains moribund.” That’s what I call a big spread. But there’s something else about Phelan’s finale that gets my goat . . .
Who needs ’em? Of course the soccer mom and sales folk amongst us really “need” the perpetual motion of a second car. But what about the married schlep who walks to work? Or the enterprising couples that work together? For them a second car may be nothing more than an inconvenience and an expense. Some folks in high places (and low places) say you should go for an alternative that conserves resources and costs less. Fair enough. But is that always a rational choice?
Loose cannons. Where would TTAC be without them? Now that GM Car Czar Bob Lutz has his bankruptcy-proof pension to think about (no thanks needed for the early heads-up, Bob), the man of Maximum has somehow learned to shut the f up. Bob “Operationally Bankrupt” Nardelli hasn’t said boo to a goose since telling the feds he wasn’t earning any salary for driving Chrysler into the history books. Ford’s Presidente del Americas Mark Fields is flying low, maybe even commercial. The head of the Presidential Task Force on Autos, Steve “Chooch” Rattner, is as taciturn as he is tyrannical. These days, GM’s VP (“Very Profitable”) Mark LaNeve is about as good/bad as it gets. At least until last night, when former Ford CEO Bill Ford played BMOC (big man on campus) at the green love-in known as this year’s Fortune Brainstorm Green conference. The MSM has yet to chronicle the PC hoedown. But according to earth2tech.com (who supplied our headline quote), Former FoMoCo CEO Bill Ford’s mea culpa was muchomaxima.
Are electric cars a dead end? Just as Ho Chi Minh said when asked about the French Revolution, it’s probably too early to tell. In the meantime, interesting things are happening. Der Spiegel reports that a European consortium of car makers and utilities has agreed on a standard for plugs. That means you’ll soon be able to drive from Lappland to Sicily, or from Lisbon to Moscow (albeit in 50-mile spurts), without worrying about compatibility. The plug will be in a three-phase, 400V configuration. But what about loading stations connected to the plugs? The news here: a consortium including Volkswagen, Daimler, BMW, Ford, General Motors, PSA, Fiat, Toyota, Mitsubishi as well as major western-European utilities are working on a standard electric “filling station.” So much for infrastructure. But what about the cars?
Earlier this week, one of our Best and Brightest wondered how Chrysler and GM’s collapse into receivership would affect minority dealers. He wondered if political correctness would color the Presidential Task Force on Automobiles decisions about which dealers get the axe and which don’t. Ford is proactively addressing the issue by launching a new program that allows roughly a quarter of its minority-owned dealers to buy their store from Ford for a $1. For some reason, the Detroit Free Press fails to mention the amount of money Ford has invested in these dealers. Anyway, in a letter to the 64 eligible minority dealerships (out of 255 Ford Motor Minority Dealers Association members), FoMoCo says the “I’ll buy that for a dollar!” deal’s only good “if you are able to provide adequate operating capital at the time of the buy-out.” Good luck with that. On the other hand, the offer expires September 30. A LOT’s going to happen between now and then: cash for clunkers, GM’s C11, Chrysler’s dissolution, etc. A smart man might have a weapon under there. If he did I’d have to pin his head to the panel. I mean, a smart man would wait to see how this plays out before signing anything.
I need your opinion and that of the B&B. I need to change my current vehicle (1997 Honda Civic 2dr) for a car with room for 2 car seats because starting in August I will be taking the twins to daycare in the mornings before heading to work. We have a minivan as the “main vehicle” for long trips, going out with family, grocery shopping, etc. So I do not need or want another minivan nor an SUV. Taking into consideration all variables (price, fuel efficiency, resale value, reliability, maintenance, safety and performance) a 2009 Civic Si Sedan seems like a good all around car for what I need but somehow I keep thinking it comes up short in the performance dept. Second choice is the Mazdaspeed 3 but I am afraid of its long term reliability, resale value, integrity and maintenance costs. Third choice is the 2009 WRX but they seem to be having problems with rod bearings and quality seems down.
What other cars around this price would you consider that can offer similar attributes to these three? What about pricier cars, around $28K? Read More >
Back at the beginning of March, GM and its camp supporters were touting the fact that they could go all the way ’til April without a fresh infusion of federal funds—sorry, “loans.” See? Things aren’t as bad as they seem, GM CEO Fritz Henderson pronounced. Cuts are paying dividends already! Deeper, faster, oh baby! Yes, well, as we said at the time, bullshit. The actual reason for GM’s small push away from the bailout buffet: GM’s outgoing CEO had sucked a cool half a billion dollars from The General’s Canadian subsidiary. And now it turns out that current CEO Fritz Henderson’s prediction that GM would need “between $2 and $4 billion” to get it to June 1 misled taxpayers by a billion dollars. “General Motors Corp. will get up to $5 billion and Chrysler LLC $500 million in short-term aid, according to a 250-page government report obtained Monday by The Detroit News.
The Washington Post reports that Chrysler Financial turned down $750 million worth of federal loans to avoid executive pay limits. Surprised? Me neither. And that’s not a whole lot of money in the grand scheme of things ($1.5 billion already “loaned” to Chrysler Financial, $6 billion for GMAC, $7 billion for Chrysler, $17.4 billion for GM, $5.5 billion for suppliers). Anyway, the WaPo sure has its dander up. “In forgoing the loan, Chrysler Financial opted to use more expensive financing from private banks, adding to the burdens of the already fragile automaker and its financing company . . . The company’s decision comes amid a firestorm on Capitol Hill and elsewhere over the lavish pay of executives at companies being aided by government money. The uproar has made companies skittish about taking federal aid and hindered the Obama administration’s effort to revive lending by replenishing the coffers of the nation’s financial firms.” Ah. OK. So, NOT accepting federal support is bad. Welcome to Bailout Nation. And its media dupes, like Autoblog, who called ChryCo execs’ explanation (after the jump) “disingenuous.” Folks, the LESS taxpayer-funding in the US auto industry, the better. Period.
KTAR.com reports that Phoenix, Arizona, police have arrested a suspect in the fatal shooting of a civilian photo radar operator. According to the Arizona Department of Public Safety (DPS), witnesses called police to Phoenix Arizona’s Loop 101 and Seventh Avenue at approximately 9 pm last night. They found operator Doug Georgianni, 51, dead from multiple gun wounds. The victim worked for Australia’s RedFlex Traffic Systems Inc., which operates photo radar vehicles for the AZ DPS. Police viewed the tape made by the radar van immediately after the shooting, and traced a gray and white Chevy suburban with a roof rack carrying a spare tire to a suburban driveway. They arrested its owner, 68-year-old Tom De Stories. Redflex pulled its 40 radar vehicles on state highways out of service until further notice.
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