Delphi and Visteon were spun off from GM and Ford respectively at the turn of the millennium, in hopes of cutting costs and improving efficiency. But rather than creating healthy, solid companies they could rely on as major suppliers, the Detroit OEMs used the spin-offs to dump unwanted assets, UAW workers and fixed-cost obligations on their new partners. And now GM and Ford are reaping the bitter harvest of their ill-advised spin-offs. Visteon, which has never turned a profit, just had its stock delisted last week after losing $663M in 2008. Delphi has been in Bankruptcy since October 2005, and, having lost $1.48B last year, it is barely surviving on cash infusions from the General, which really could have used the dough. And both suppliers are threatening to take down America’s two largest automakers.
Susanne Klatten, Germany’s wealthiest woman, and a member of the Quandt family—the leading shareholders in carmaker BMW—bid good-bye to a former lover. Helg Sgarbi was jailed for six years on Monday for trying to blackmail (with secret video of their lovemaking) the heiress to the BMW car empire, Reuters reports.
Helg Sgarbi admitted that he had seduced heiress Susanne Klatten and three other wealthy women, persuading them to pay him almost 10 million euros ($12.64 million). Klatten went public last year with the story of how her lover secretly shot intimate footage and later demanded tens of million of euros not to reveal it. Sgarbi’s admission spared Klatten, who is rarely seen in public, a court appearance. Read More >
Automotive News [sub] reports that even as GM seeks to spin Opel off to anyone who has the cash to save it, it’s raiding its German subsidiary for competitive product. Specifically, Opel’s much-vaunted Insignia sedan is set to become the 2010 Buick Regal, rather than the 2010 Saturn Aura as previously planned according to anonymous sources. Which is not completely surprising considering that Saturn as we know it has shuffled off the mortal coil, and the Insignia is, by many reports, a great car. But it’s still a horrible idea. Buick has already debuted another 2010 Epsilon II-based model, the LaCrosse, making for some instant cannibal action. “We’re looking at a bunch of stuff from a sedan standpoint,” says BPG VP Susan Docherty. “We’re going to add some more sedans, so stay tuned.” Docherty declined to comment specifically on the Buick Insignia fandango, but tells AN that “as GM works to cut Pontiac’s product offerings, the company can offer new Buick vehicles to keep the Buick-Pontiac-GMC channel well-rounded.” Well-rounded? Seriously? Besides revealing that GM is light-years away from whipping its perennial cannibalism problems, this story also suggests that Opel will continue to share architecture and platforms with the corporate mothership. Whether they need them or not.
German newspaper Die Welt had reported on Saturday that GM and Opel seems to be preparing for insolvency at Opel, having hired three law firms with renowned insolvency experts. GM denies the report, writes Reuters. “This scenario is currently not on the agenda,” a GM Europe spokesman told Reuters on Sunday. Note the careful usage of “currently” and “agenda.”
Die Welt says GM Europe would be advised by Baker & McKenzie as well as Clifford Chance, while the management of Adam Opel GmbH had hired Heidelberg-based firm Wellensiek. GM doesn’t deny that they have hired counsel: A GM Europe spokesman said the company had hired the firms to assess the effect of potential restructuring measures. Meanwhile, there is growing outrage in Germany about the fact that Opel never paid tax in Germany because it transferred profits to its U.S. parent. Read More >
Viability Requirement: The firms must use these funds to become financially viable. Taxpayers will not be asked to provide financing for firms that do not become viable. If the firms have not attained viability by March 31, 2009, the loan will be called and all funds returned to the Treasury.
Definition of Viability: A firm will only be deemed viable if it has a positive net present value, taking into account all current and future costs, and can fully repay the government loan.
Binding Terms and Conditions: The binding terms and conditions established by the Treasury will mirror those that were voted favorably by a majority of both Houses of Congress, including:
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.
A couple of months ago I got the SVT suspension for my Focus. Not want to blow the budget any more I left the 205/50/16s that the Focus came with and there is a unhealthy amount of sidewall flex with the 50 (Pirelli P6). The SVT had 215/45/17.
My question is when its time for new tires, should I go for 40 or the 45. I’d like to stay on the 16″ rims as don’t really want to get new 17″ rims as well.
Sajeev responds:
If you stay with 16″ rims and go for a lower profile tire, the change in circumference messes up the speedometer, gearing (lower profile means more gear and less economy) and increases the unsightly gap between the tire and the body. We did this for TTAC’s entry for the 24hours of LeMons, and the gearing advantage was totally worth it. On a street car? I doubt it.
The Presidential Task Force on Automobiles (PTFOA) rolls (flies?) into Motown today for a pow-wow with the ow-ow brigade. But wait! There’s more! Photo op alert! The AP tersely reports that “members of the government’s auto task force will test drive a General Motors Corp. electric car and tour a Chrysler LLC pickup truck factory on their Detroit-area visit Monday.” Whoa! GM has an electric car? Ohhh. They mean the electric – gas hybrid Hail Mary known as the Chevrolet Volt. The Detroit News—which previously linked their Volt-driving headline to a story on GOP opposition to more bailout bucks that forgot to mention either cart or pony (oops!)—is [now] a bit more forthcoming.
Injuryboard.com, a website dedicated to promoting safety, protecting lives and chasing ambulances (I made that last one up, ish) writes:
The funeral of Harold St. John, a retired airline employee and former auto mechanic who died from mesothelioma caused by asbestos exposure, was interrupted at a New Jersey cemetery last week when, in a new moral low for defense tactics, a Chrysler official arrived with subpoena for his body.
The subpoena, which prevented the burial from taking place, was issued so that more tests could be performed to determine the cause of death. Before he died, 67-year-old St. John had sued Chrysler, along with Honeywell, claiming that the automobile brake linings he used to install in his father’s auto shop in the 50s and 60s had caused his illness.
The trial was set to begin March 9. Unexpectedly, St. John died on February 28. Though he had undergone a painful biopsy to provide a lung tissue sample while still living, Chrysler insisted on taking the body from its burial site before it could be laid to rest.
ChryCo spokesman Mike Palesi’s statement after the jump.
Students (student?) of Sunday TV magazine shows will know that the Republican Party is beginning to realize the political advantages of throwing Detroit to the lions—I mean, upholding their responsibilities as guardians of the public trust (and purse). “The best thing that could probably happen to General Motors, in my view, is they go into Chapter 11,” Senator John McCain said on Fox News Sunday. Which would help GM reboot (not that John would ever say anything so hip), reorganize (not that John knows what that would entail) and renegotiate its labor contracts (ah-ha!) and emerge “stronger, better, leaner.”
The Detroit News reports that the UAW vote on Ford’s proposed modifications (full summary in PDF) to the union contract is “tight,” as locals wrap up balloting by Monday. Eight union locals have approved the modifications while four have rejected them, but margins of victory were in the “low 60-percent level to the mid-50-percent range.” Modifications must be approved by a simple majority of Ford’s UAW workers, meaning “no” votes in locals that passed the measure still count and vice versa. And though the Freep has uncovered a letter from Ford to the UAW detailing the carnage that has already been wrought upon Ford’s hapless contract employees (possibly the great unsung victims in this mess), and suggesting that perhaps contract modifications aren’t the end of the world, the video above proves that the old UAW zero-sum perspective is alive and well.
I’ve got a question for the best and the brightest-child car seats in two seater cars. I drive a ’06 S2000 and I’m expecting my first child. I’ve read my owner’s manual which foretells doom and gloom for children who ride along. However having ridden in my father’s 190SL extensively (sometime with only meager lap belts holding me), some of these hyper safety warnings ring a little false. If I take the necessary steps to make sure an airbag will not deploy when a child is with me, is the front seat just as safe as the back seat? Or is there another reason children should be in the back seat only? If you post this, in the interests of protecting my mortified wife, please only use my screen nic.
Automotive News [AN, sub] is reporting that Der Spiegel is reporting that German automakers BMW and Daimler are planning on exchanging seven percent of each other’s shares. Daimler’s motivations seem clear enough; it’s been looking for a way to end its status as takeover bait for over a decade. (If you remember, the possibility of a hostile takeover had a little something to do with the ill-fated formation of DaimlerChrysler.) BMW’s motivation: cost-savings though component sharing with their [former?] Stuttgart rival. Yes, well… so much for BMW’s publicly-touted status as the last major independent automaker. Der Spiegel says the automaker’s majority owners– the publicity shy Quandt family– are not happy with the Daimler stock swap. I guess 46 percent ownership doesn’t buy what it used to.
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