“We haven’t quite figured out exactly between sports cars and entry-level cars, but it’ll be a very narrowed and focused brand.” So pronounceth GM NA Marketing maven Mark LaNeve at a “roundtable interview” attended by Automotive News [AN sub]. Here’s another surprise: GM can’t figure out to do with HUMMER, Saab or Saturn, either. “There’s nothing that can be said today that can calm the nerves of a Saturn, Hummer or Saab dealer,” LaNeve said. Or is there? “The studies of Saab and Hummer are very externally focused,” LaNeve said. Translation from AN (for the drunks and idiots amongst us): “That means GM hopes to sell them or form some type of partnership.” Mark his words. “We have production facilities that could be carved out; we could build the vehicles for somebody.” Any idea who that could be? Me neither. Oh wait; “The Swedish government is involved in the Saab review.” Is that the same Swedish government that declared it would be a cold day in Hell before they combo-nationalized Saab and Volvo? Chrysler and GM, on the other hand… It gets better, Saturn-wise.
Category: News Blog
One of the most ridiculous aspects of the Chrysler bridge to nowhere $7b bailout buffet: we still don’t know who owns the ailing American automaker. Yes, it’s Cerberus Capital Management, a company with its fingers in many pies, from guns (Remington) to paper (NewPage Corporation) to a chain of TV stations (Four Points Media Group) to bad loans (GMAC). That’s disturbing enough– given that the federal government is shoring-up a deep-pocketed, privately-held company. Worse (again): we don’t know the identity of “about 100 co-investors” who anted-up when Cerberus bought the domestic automaker from Daimler. Anyone remember Cerberus’ official response to Senator Corker’s question: why don’t you use your own money to bailout ChryCo? “No one is asking General Motors and Ford to pour their money in, and Cerberus has the same shareholders as they do— retirees, pension plans and endowments.” Yeah really? Who are they? Whose investments are we protecting? So I called Cerberus.
General Motors hasn’t made money on its core auto business since 2004 – and did nothing. Same cars, same talk, same mismanagement. GM is in the government’s intensive care, hangs on a the tax payer’s money drip, and still hasn’t changed.
Contrast that to Toyota. Toyota will announce its first operating loss in its history – approx $1.6b, less than GM’s monthly cash burn – and Toyota went to battle stations months before the announcement.
Toyota does everything GM failed to do. They changed the management. Akio Toyoda, grandson of the founder, will take over as president. Even before he’s officially taking the job, Toyota “appears ready to overhaul its entire operations, from development to production to its sales network,” the Nikkei (sub) reports. Nothing is sacred. Plants are idled worldwide. Output is slashed. A few days ago, the company held a meeting in Nagoya that was attended by 1,000 representatives from Toyota dealerships across the country. Toyoda made it clear that he would not hesitate to drastically revise the firm’s domestic sales structure. And that’s just the beginning. More drastic moves are afoot.
For months, TTAC followed the increasingly desperate attempts of Ford to sell Volvo to the highest, and, as time went on, to any bidder. We reported that Ford’s Volvo joint venture in China, Changan, along with the Indian company Mahindra and Mahindra were in talks about Volvo. Which led to nothing. We reported that China’s Geely was looking at buying Volvo. Which led to nothing. We reported that Daimler isn’t interested in Volvo, and neither is BMW. Everybody in the auto business knows that Volvo is for sale. Everybody, except Ford. For a long time, everything was denied in Dearborn. Last December, Mulally raised Ford’s skirt a little bit for a peek at the no longer very private parts and said that Ford “is considering strategic options.” Whatever those may be. Now, after there is not a soul left that doesn’t know that Volvo is for sale, Bloomberg reports that Volvo is for sale:
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Definitely infrequent for a few weeks while I’m in Europe, hunting the elusive Euro: 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 Berlin – when I’m in Berlin.
Idle chatter: More and more drivers of Japanese cars will have their rides die on them at an intersection, only to miraculously re-start once they mash the pedal. “Japanese carmakers have been equipping more and more of their passenger cars with a function that automatically kills the engine when the vehicle is stationary,” the Nikkei (sub) writes. Mazda aims to make the idling stop function available with some configurations of its fully remodeled Axela to be launched this summer. Toyota started offering a newly developed idling stop system on some of its Crown Comfort sedans in August. Toyota plans to install the system in a wider range of its passenger cars in the future, with a focus on Europe. Mitsubishi aims to offer some of its European model Colt cars with an idling stop system starting this year.
Ready, set, fire: Toyota plans to reduce its full-time work forces in North America and the U.K., by more than 1,000 jobs, the Nikkei (sub) says. The move is unprecedented for the automaker, which has protected full-time jobs even in tough times. A rare exception was in 1950, when it let go roughly 1,600 workers in Japan through early retirement programs. Toyota employs nearly 30,000 in North America, mainly at seven assembly plants, and about 5,000 in the U.K., where it has one assembly facility. The scope of the job reductions there will likely be finalized as early as this month. Toyota is considering pay cuts as well.
Nissan joins club of lost profits: Nissan joins other Japanese car makers such as Toyotay and will most likely ost a group operating loss of more than 100 billion yen for the year ending March 31, its first dip into the red since fiscal 1994, the Nikkei (sub) says. Depending on car sales for the January-March quarter, the loss could even swell to around 200 billion yen. The automaker logged an operating profit of 790.8 billion yen for the year ended March 2008. Sinc January, “the situation has grown more dire each day,” a company official says. Depressed demand alone will eat into operating profit by more than 200 billion yen. In addition, the yen’s appreciation against the dollar, the euro and emerging-market currencies is seen dragging down the result by some 100 billion yen.
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“Am I reading this right?” That’s the question posed by one of Our Best and Brightest regarding GM’s recent SEC filing [excerpted text after the jump]. The 8-K details the automaker’s purchase of GMAC shares. A purchase funded with your money (thanks to the Treasury Department). Here’s Uncommon Sense’s take:
1) GM is now the majority owner of GMAC
2) GM has to sell from over 50% to under 10% in 3 years — sounds like some cash
3) GM can’t try to influence GMAC until March of this year
My take: the more you monkey with a free market system, the worse it is for the consumer. Yours?
Former Toyota President and current Chrysler Co-Prez Jim Press has been out and about, playing pimp my press. In so doing, he’s revealed his employer’s strategy for scarfing another $3b in bailout bucks from its current (not to say only) financial backer (that’s you). The ailing American automaker must present its case to Congress on or around March 31. And here, via Ward’s Dealer Business, it is…
“Press says there are four points to the auto maker’s turnaround:
* Chrysler has invested in new product – the auto maker has eight new vehicles coming out in the next year and a half and 24 in the next 48 months.
* The company will continue to support its dealers “with record levels of incentives.”
* Credit is improving with the auto maker’s finance company.
* Fiat has some of the best platforms in Europe in terms of cost and performance.”
Now how much would you pay? Well don’t answer! Mr. Press is happy to share some of the philosophy underpinning his Congressional term paper.
“The front suspension is operated by a wireless remote control unit by the driver. It enables the car’s front suspension to rise by 55mm enabling it to negotiate obstacles such as car park ramps, speed humps, high kerbs etc. without expensive damage to the front spoiler or underside of the car. If the driver forgets to cancel the system and lower the suspension after he has negotiated the offending obstacle, the “Airlift Suspension” will automatically lower the car back down to normal ride height once it has reached a speed of 50 km/h.”
Just like the industry we cover, The Truth About Cars is hunkering down for the duration. To that end, we’ve ended our contract with Michael Karesh’s TrueDelta vehicle pricing and specification website. TTAC will no longer link directly to Michael’s site from our reviews. We’ve removed TD’s price comparison widget. And we’ve deleted the “pricing” option from our top menu bar. We thank Michael for the breadth, quality and utility of his data, and recognize the hard work he puts into its creation. We wish him good luck during this economically challenging time, and ask that our Best and Brightest recommend his site to anyone shopping for a car or searching for vehicle reliability information. Thankfully, Michael will still contribute reviews and commentary to the site. He is a valued part of TTAC’s editorial voice. Rest assured, that voice will not be quelled. The truth will out. Meanwhile, thank you for your ongoing support for our writers and advertisers.
“I found real gasoline again. So my days of 33 to 37 mpg in the Prius during winter SHOULD be over soon, and hopefully I’ll see my typical winter time 44 mpg overall average return soon. On the current tank of E10, as the trip meter passed the 120 mile mark, the fuel gage went to 4 bars used up (4 gallons roughly). When you’ve seen the car doing 58 mpg, you KNOW damned well that it’s more than a little frustrating to see this. Computer claims about 37 mpg, but with E10 that seems to be off when it used to match the measured MPG pretty closely ON AVERAGE over say 10 tankfuls (which evens out the topping-up variations).
In this morning’s column, Detroit News scribe Daniel Howes’ pointed out that “Road for Autos Runs Through Oval Office.” In other words, GM, Chrysler and perhaps Ford’s fate now rests in the hands of the President of the United States. True dat. Piper. Tune calling. Gold. Rule making. Etc. But Danny wasn’t making the expected plea for Barack’s administration to keep Motown’s hometown heroes out of bankruptcy court until, well, whenever. Oh no, there’s another battle brewing… “President Barack Obama is poised to face an automotive conundrum potentially pitting him, the Detroit auto industry and the more immediate needs of the beleaguered national economy against pressure from environmentalists, fuel economy zealots and the powerful California delegation, including the two members of Congress who escorted him to his inauguration.” Translation: Danny’s signaling Detroit’s “need” to resist state-based hoikment of fleet-wide federal fuel economy standards. In this, he’s not alone…
Tax refund. Got one yet? Well even if you don’t, millions of people will, and this is great news for car dealers. The fortunate folks who can afford to pay off their Christmas largess with a few paltry Benjamins left over will often go car shopping. $700 down, $500 down. Heck anything more than a pulse will get you into a car these days. The effect of all this newfound money being dispersed into our economy: a lot of interesting and stupid behavior at the auctions. For starters, everything gets a lot more expensive.
Fiat CEO Sergio Marchionne has said that he is open to further consolidation talks with any interested firms. “A partnership with a European rival is vital,” says Emanuele Vizzini of Investitori SGR, who tells Bloomberg that PSA PeugeotCitroen or BMW are the “natural candidates.” Marchionne is staying mum, but he has aknowledged that many see a Fiat-Peugeot hook-up as a “marriage made in heaven.” For now, however, Marchionne and PSA are denying rumors of hookup talks to the Detroit News. But then, Marchionne has said that Fiat needs to approach its goals “softly and quietly.” So who knows? “The Chrysler deal does nothing to solve the overcapacity problem,” says Credit Suisse analyst David Arnold. An all-European deal could “offset spiraling costs and declining volumes with savings from joint procurement, capital expenditure and research and development,” argues Arnold.
Former McLaren designer Jim Doyle has announced that his firm JJAD will build 500 of these all-electric P1-E sportscars by 2012. An electric sportscar that goes 200 miles on a plug-in charge! Where do they come up with these ideas?
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