According to the silver-lining seeking scribes at The Detroit News, the Presidential Task Force on Automobile is taking the long-term view on the Motown meltdown. Hang on. Didn’t DetN scribes Gordon Trowbridge and Christine Tierney read Daniel Howes latest column? You know, the one where Mr. Howes called bankruptcy deniers “deluded.” And yet, less than twenty-four hours later, the word “bankruptcy” appears in the DetN’s Task Force article exactly none times. Instead, there’s a hopeful assumption that the Obama admin wants YOU to support Chrysler (maybe), GM (definitely) and Ford (maybe) for as long as it takes to . . . well, we’ll get to that in a minute.

The federal auto task force that arrives in Detroit on Monday has spent the past two weeks meeting with a range of industry players, pushing its work beyond the automakers’ immediate cash crisis and strongly hinting at a longer term goal… the group’s focus appears to extend far beyond the balance sheet, looking more deeply into the question of what a successful U.S. auto industry would look like in the long run.

Yeah, that’s what I want: a gaggle of professional politicians deciding what the American auto industry should look like under a new five-year plan. So, how much is this boondoggle going to cost me? As the DetN points out, it’s not all about money (even though it is). DC’s going to make sure there’s plenty of green in that mean, mean, mean; mean green.

Read More >

Newbie TTAC registrant USLuxuryman entered this comment under the post Ford-UAW Deal Rejected By Two Locals. I’m republishing it here because I think it’s important for all of us to understand the fears, frustrations and general motivations of the workers at the sharp end. Now, if he could just walk away from that endless quiver of spears . . . . [NB: USLuxuryman is protected by TTAC’s no-flaming rule. Obviously.]

As an Auto Worker, instead of some hateful, biased, resentful outsider, let me help give you some perspective!

I work for Chrysler, but the ENTIRE AUTO INDUSTRY is in free-fall, and for a VARIETY of reasons! Those two Locals, or any others, have the RIGHT to say YES OR NO, just like you could vote for McCain or Obama! You have no say in that any more than I DO if you let your Police,Fire, and Teachers lose their jobs because you don’t wanna pay more in taxes!

if a Ballplayer turns down $45 Million, I can’t call him a fool, he is obviously in a different economic-bracket than you or me! These factors affecting our Economy were not caused by or controlled by the average Blue-Collar OR White-Collar worker in this or related industries!

The Big-Three didn’t MAKE you buy SUV’s and Pickups! AMERICA wanted these vehicles until the 4/Gal gas slaughter helped to KILL the economy! We DON’T make the decisions that put us in this shape, or put the Credit-markets, Housing-markets, or the economy overall in the shape that it is in today! We take direction from Management, just like most of you do on your jobs.

Read More >

A deeply divided Ohio House of Representatives on Thursday passed sweeping legislation that would impose new penalties on motorists, including a statewide speed camera program. State Representative Peter S. Ujvagi (D-Toledo) inserted the controversial proposals into a “must pass” $7.6B transportation funding measure to avoid individual discussion of the merits of the many programs rolled into the 361-page bill. Only one Republican voted in favor of Ujvagi’s plan, which passed by a margin of 53-45.

Read More >

The Freep reports that Ford’s deal with the UAW, which could have signaled a way forward for all the Detroit automakers, has been rejected by two locals. Local 892 of Saline, Michigan, rejected modifications to the union contract with 76 percent opposing. Local 1219 of Lima, Ohio, also rejected the changes by a mere 14 votes. Two Michigan locals are known to have approved the changes, 900 of Wayne and 228 of Sterling Axle Plant.

GM’s Steve Harris is dancing all over the bankruptcy issue at GM’s Fastlane blog. Yesterday Haris was sounding resigned if still-delusional. “So, by now you’ve seen the news reports,” he wrote. “You know that auditors have said that there is substantial doubt about GM’s ability to survive as a ‘going concern’ through the end of the year. It’s certainly led to some scary headlines – some more accurate than others, of course.” But all scary. Yeah, believe it or not, we kind of saw it coming.

Read More >

Everyone’s favorite feel-good broadsheet, SubPrime Auto Finance News, reports that 13 members of congress have written a letter to Fed Chairman, Ben Bernanke, and Treasury Secretary, Tim Geithner, requesting another raid on TALF, the Term Asset-Backed Securities Loan Facility. The congressional bagmen “applaud the joint efforts of the Federal Reserve Board and the Department of Treasury to promote liquidity in consumer loan markets through the Term Asset-Backed Securities Loan Facility.” Because making $200B available was an interesting start. “However,” continue the servants of the public trust, “we are concerned that the program may not sufficiently address the problems facing the domestic automobile industry.” Oh dear.

Read More >

The question that has haunted the very soul humanity for eons—“that thing gotta hemi?”—should hopefully drift out of the vernacular, as ChryCo is offering free Hemi V8 upgrades on every Ram 1500 they sell during “shovel ’em out the door,” uh, make that “truck month.” So yes, good sir, it’s got a Hemi. But as Wikipedia puts it, “today, ‘hemi’ is little more than a trademark that bears little meaning, descriptively, for the engines designated as such.”

The BBC reports that GM’s European division Opel has learned a valuable lesson from the German government. Insolvency law was “not set up for the destruction but for the preservation of economic assets,” German Interior Minister Wolfgang Schaeuble said after meeting with Opel leaders. “The public perception is that insolvency is associated with going bust or bankruptcy, but that is wrong. We must grasp that to survive such a crisis, modern insolvency rules are a better solution than the state taking a stake.” Hint, freaking, hint. And just why is the German government so jazzed about seeing Opel restructure on its own? Accoding to the Beeb, “media reports suggest that the German government was angry that the bail-out proposal—which asked for 3.3B euros ($4.16B)—was simply a glossy 217-page brochure which read like an advertisement, rather than presenting any viable business plan.” Sound familiar? Apparently German members of parliament were also shocked to learn that Opel doesn’t own its factories (GM does) or intellectual property. As in GM has hocked all of its Opel IP to the US government as security for its own bailout. Classy. Now, as the worm turns, even the Canadians are saying they don’t want to go through with the bailout if it’s a “waste of taxpayers’ money.”

The Wall Street Journal reports that the usual unnamed “top executives” are saying GM is warming to the idea of bankruptcy after all. “The change in thinking, combined with the disclosure Thursday that GM’s auditor has raised ‘substantial doubt’ about the car maker’s ability to keep going, appears to move GM closer to the possibility it will file for reorganization.” Something about staring at the hangman’s noose brings a new clarity of thought to the fore. The journal’s new owner seems to have brought a bit of dry British humor to the biz: “The increased threat of bankruptcy could prod bondholders into making concessions, since these investors are said to believe a bankruptcy reorganization could harm their holdings, according to a person familiar with their thinking.” Wow, those bond manipulating masters of the universe sure are smart!

Read More >

China’s top economic planner has approved of Chery’s plan to buy the Volvo brand from Ford Motor, Gasgoo says. The report is not confirmed yet by Chery Auto. However, Gasgoo is very close to Chery.

According to Chinese media reports, Dongfeng Motor Co. has also submitted its Volvo-bidding plan to the National Development and Reform Commission (NDRC). The company’s spokesman denied the reports.

On Feb. 12, Chery Auto president and CEO, Yin Tongyao, said that his company would not rule out the possibility of buying a troubled European auto brand. Volvo was believed to be one of the choices.

Chery Auto received a 10 billion yuan ($1.47 billion) loan to fund its global growth from Export-Import Bank of China (China Eximbank) in December 2008. The company was also granted the flexibility of a credit line by the bank.

Ford put Volvo up for sale late last year to raise cash, but has found little interest in the brand, because many potential buyers are facing similar crisis and the nearly $6 billion needed for buying Volvo is a prohibitive price for most carmakers.

The report has been repeated on China Daily. China Daily is the English speaking organ of the government news agency Xinhua.

Looks like we may have retired the Tesla Deathwatch a bit prematurely. Valleywag reports that Tesla CEO Elon Musk has launched a Nixonian “plumber” offensive aimed at eliminating leaks from the Silicon Valley startup. And boy are the employees happy about it. The plumb-and-purge strategy was launched when Tesla engineer Peng Zhou told Valleywag that the company’s cash reserves had dropped to $9M. According to the blog, Musk “hired an outside IT contractor go through the company’s email and instant messages, and then had an investigator take fingerprints off a printout discarded near a copier used to leak the email.” That investigation implicated Zhou who was asked to confess, apologize and leave the company. This was just the beginning.

Read More >

A message to the troops from GM’s VP of sales and marketing for GM North America:

Today’s submission of our annual report has generated a significant amount of media speculation about GM. Specifically, the media are covering the auditor’s language about whether or not we are a ‘going concern.’

Let me be clear — neither is this “new” news, nor does it change our viability plan to succeed.

For months we have explained the need to restructure and recapitalize our business for the long-term. As dealers, you are integral to that long-term success. Dialogue with the Auto Task Force team in Washington is ongoing, and we remain focused on implementing our viability plan.

So, here’s what I’d ask of each of you: Stay focused on the business, not the media hysteria. Reassure your customers that we are here for the long haul and that we’ve overcome challenges many times before in our 100 year history. Also remind customers that we deeply appreciate their business and support. For new customers, take a few extra minutes to show them the great GM cars and trucks we offer, and demonstrate our commitment to the best service in the industry.

As always, we are very appreciative of your support and welcome your continued comments.

The statement we are using in response to media questions is attached for your reference.

Mark LaNeve

Read More >

TTAC reader JG writes:

Sajeev, do I have a question for you! Knowing the roads (and potholes) of Houston (like I know you do) here goes. I own a 2001 Ford Explorer 4-door. My pregnant wife curses the ride every time she’s in the car (whether it’s moving, or not). I have recently replaced the tires, which helped a little and ball joints up front. I’d love to get out of this car into something safer, but it’s not an option for a few more years. Is there anything I can do to improve the ride quality? I know I’m dealing with limited options with the solid rear axle, but there has to be something, right?

Sajeev writes:

I see two quick fixes: put several bags of mulch in the cargo area, or hack the muffler and run a straight pipe. (You can get away with it in Texas.) The mulch takes the bite off the leaf springs, and a large amount of ride quality comes from the rear suspension, fuel economy penalty be damned. But the straight pipe ensures your wife will never complain about the Explorer’s terrible ride. Ever.

Read More >

The auto industry spends millions each year studying what motivates people to buy a car. Much less studied, perhaps not even studied at all is what motivates people to get rid of a car. After all, people don’t just fall in love. They also fall out of it. We have a list of likely suspects: new car fever, the warranty running out, problems, maybe even the suspicion of future problems. So, what motivated you when you got rid of a car? A few critical bits of info: model, model year, month/year sold, odometer when sold (or junked). Extra credit: month/year purchased, odometer when purchased. Lessees need not respond: you’re boring—the lease simply ran out. I’ll go first. I traded my 1996 Ford Contour SE V6 (purchased October 1997 with 23k miles) when the engine lost some compression in three cylinders thanks to an engineering defect. Replacing the engine would have cost more than the resulting increase in the car’s value. That was in November 2003, with 69,000 miles. We sold my wife’s 1998 Olds Intrigue (purchased in January 1999 with 14k miles) in July 2004 with odometer in the high 70s because she was bored with it, and we thought it might start having problems at some point—though it had had none for the previous 2-3 years.

We at TTAC are aware of the strain we’ve been placing on attention spans today, what with the six (!) full-length pieces we’ve published today and all. In honor of your noble sacrifice at the altar of literacy we present a gallery of photos from our photographer in Geneva, Tim Sutton. Without comment. Enjoy.