Looks like President Obama’s team has a loose grasp on the realities of the U.S. automotive market, as in who builds what where. Either that or a firm grip on what the public needs to hear to sign-off on the roughly $100b’s worth of taxpayer money headed in Motown’s direction, pissed away trying to resurrect the dead and forestall the inevitable. I mean, preserving an important part of America’s industrial base and protecting America’s middle class.
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Ingvar, Swedish member of TTAC’s Best and Brightest, translates a report in today’s Aftonbladet:
“Aftonbladet can disclose today that Secretary of Industry Maud Olofsson fasttracked GM into the Europan Investment Bank. But GM said no. A source says: GM wasn’t interested in saving Saab.
In the late fall, Maud Olofsson had talks with GM Europe boss Carl-Peter Forster. Olofsson offered GM government loan guarantees if they turned to the European Investment Bank. But his response was lukewarm. It takes too much time to go through EIB, was his answer.
But Olofsson didn’t give up. In early december, she contacted EIB and asked them if they could fast track GM’s eventual case. The answer was positive. But when GM was told, they were only making excuses. There was obviously no interest from GM in pursuing the case, they only kept stalling, a source says.
Between holidays, the Swedish government called in consultants to review the numbers for GM and Saab. They shook their heads in despair, there was no reality in the numbers, a source says. The advice they gave: Forget about Saab.”
Sorry about the pun (referring to the yearly sales rate), but Automotive News [sub] nailed the headline, and I couldn’t just repeat it without a little TTACitude. Sometimes, though, the simple truth is all there is. The fact that America’s largest publicly traded dealership group has cut new vehicle orders by 60 percent is… stunning. It means that that the U.S. new car market is dead in the water. Federal bailout or no, someone’s going to take a dirt nap. Not that Mike Jackson thinks so. The AutoNation CEO reckons U.S. new car sales have stabilized at a rate of 10 million per year, and expects that number to climb over 11 million by the end of the year. What’s more, the formerly pessimistic Jackson has looked at Chrysler and GM’s new viability plans and put Smash Mouth’s “I’m a Believer” on his iPod. “I felt the outline of the direction they gave back in November was too optimistic on the sales side and not deep enough on the cuts side. These plans are much more realistic and it’s the right approach.” So another one bites the rust. Or something like that.
An overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. WAS is being filed from Beijing until further notice.
Increasing indications that GM plans to cut Opel loose: North Rhine-Westphalia’s Premier, Jürgen Rüttgers, had a chin wag with GM’s CEO, Automobilwoche [sub] reports. Rick Wagoner told Rüttger there are no plans to close any German plants, including the one in Bochum, which is in Rüttger’s state. “Currently.” News flash! Wagoner expressed his interest in spinning-off Opel. Rüttgers told Rick that GM would have to keep the German plants open to qualify for German government money. How the spin-off is going to work still is anybody’s guess.
Saab may go bankrupt this week: GM’s Saab will start insolvency procedures as early as this week, das Autohaus reports, citing Swedish news reports. Sweden’s Economy Minister has already said that this would be the proper way to go.
[Editor’s Note: This is the second of a four-part series by Dr. Rob Kleinbaum. Read the first part here.]
The scholars Lawrence Harrison, Samuel Huntington and their colleagues have addressed the fundamental question of whether culture “matters” in how societies develop and make a compelling case that it matters a great deal. They have also outlined the specific traits that lead a society to progress or prevent it from doing so and their work provides a rigorous way to think about culture that is based on substantial evidence. These traits seem applicable to a private enterprise, especially one that is larger and older than many countries.
The first rule is that everybody at the auction is your friend. This doesn’t mean you back slap or kiss ass (though many do this quite well). But I like to say that the three currencies in the auto auction business are conversation, collusion and company. Simply put, you converse and collude with those you hang out with in the hope that when it’s your time of need, they leave you the hell alone.
Well, they didn’t kill the Corvette, but GM’s iced its performance tuning division. Automotive News [sub] reports on the car-nage.
GM today disbanded High Performance Vehicle Operations, which is based at the company’s suburban Detroit technical center, and redeployed its engineers, said spokesman Vince Muniga.
“All high-performance projects are on indefinite hold,” Muniga said. “The engineers are moving into different areas of the organization, and they will work on Cadillacs, Buicks, Chevrolets and Pontiacs.”
Auto Motor und Sport‘s latest images of the 2011 Mercedes SLK show it looking Crossfire bad. Sure, that’s better than leaf blower supercharger bad, but it’s still really bad.
Detroit’s hometown newspapers are reacting positively to the most recent requests for another round of automaker bailouts. Shocking, I know. After all, Detroit’s media is fast becoming the most notorious bailout boosters on the block. But titling an editorial “U.S. auto producers make a solid case for federal aid” is really stretching things, even by Detroit News standards. And as conditions worsen, the rose-colored-glasses act is really wearing thin. To paraphrase an old Soviet joke, there are two ways Detroit can be turned around: the natural and the miraculous. The natural way is that the Archangel Michael and his bands of angels descend to earth and work 24 hours a day to save the city’s economy. The miraculous way is that the automakers do it themselves. Detroit’s local media clearly believes in miracles.
Farago is going to kill me for this one, but if I don’t tempt fate every so often, the dullness wins. Since the discussion of the bailout has turned my brain to Chex Mix, and seeing pictures of the Porsche Panamera and BMW 5-Series PAS SAC KNICK KNACK just make me nauseous, I figure we should try some lighthearted fun. Readers, please put the following cars in order according to . . . whatever you like. Just tell us your sorting mechanism when you post, or be more mysterious and let folks guess.
(A) Nissan 370Z
(B) Dodge Charger R/T
(C) Volkswagen Jetta TDI
(D) Lexus IS-F
(E) Hyundai Genesis 4.6
(F) Audi A4 2.0T
(G) Citroen C6 V6 HDI
And if this wasn’t enough to make you say “huh?”, please enjoy today’s podcast.
“Sweet” Peter DeLorenzo, the self-styled Autoextremist, has some extreme thoughts on the General Motors predicament. Specifically, his latest “Rant” suggests that General Motors is so compromised as a brand that he’d go as far as to rename the artist formerly known as “the world’s largest automaker.” “If GM is able to emerge from all of this with a strengthening pulse,” writes DeLorenzo (without getting too hung up on that “if”), “then I have a recommendation. Substitute the word ‘Precision’ for ‘General’ in the company title and then move on, burying the old company name – and the associated negativity – once and for all.” Holy unpronouncable symbols, Batman! Precision Motors? What, was “Patriotic Motors” taken? More importantly, how can Sweet Pete think a name change will make a lick of difference, while rejecting bankruptcy, brand cutting and other meaningful reforms? For more insight into DeLorenzo’s Extremist Makeover Branding Edition, check out some of his thoughts on GM’s brands over at the New York Times.
I’ve been poking around the Chrysler deal with members of our Best and Brightest. I asked one of them to explain the original Chrysler deal. I’m not completely sure what the hell he’s talking about in several places, but I get the general gist. And this information needs to see the light of day. So, here we go . . .
The agreement known as the “Contribution Agreement” found in the 6-K filed at the SEC by Daimler around 5/14/07 explains in painful legalese what was to occur and defined the capital to be funded upon closing the deal. The purpose of the agreement: protect both sides and to provide a financing commitment so that when Daimler’s Board of Directors signs off on the deal their backside is protected. It should be noted that the contributions to C-Auto and C-Finco changed from what was described in the Contribution Agreement once the loan money was raised and the deal officially closed.
Via Green Car Congress comes a number of perspectives on Plug-In Hybrid (PHEV) adoption fom the 2009 SAE Hybrid Technology Symposium. And there are some interesting lessons to be learned. One consumer study by Dr. Ken Kurani of the UC Davis Institute of Transportation Studies indicates that mainstream consumers favor less PHEV capability than manufacturers are developing. The ITS study asked a sample of plausible early market households (neither pioneers, advocates nor experts) to design their own PHEV, and found that expectations of all-EV range and battery capacity were remarkably low. Says Dr. Kurani, “consumers right now, given the opportunity to manipulate the idea of a plug-in vehicle, are designing not only very different vehicles, they are designing vehicles that are much more possible than the experts are assuming.” How so?
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