Chicken and egg this. If Chrysler doesn’t score an additional $3b worth of bailout bucks, Fiat can/will walk away from their agreement to “buy” 35 percent of the ailing American automaker. The Wall Street Journal quotes “people familiar with the pact” to substantiate the proviso. Equally anonymous sources told the Journal (we hope) that if the loans go through, Fiat will take three seats on Chrysler’s Board of Directors. And then, “If Fiat meets goals for improving Chrysler’s operations within 12 months of the agreement, Fiat would have the option of buying an additional 20% of Chrysler for about $25 million, said people familiar with the matter. Details of the goals weren’t clear.” Twenty-five million? They’re joking right? Or is that the amount Cerberus would pay Fiat for 20 percent of Chrysler?
Category: News Blog
Capn’ Mike is back from the Middle East. Our Road Test Editor has been busy looking for something tasty to take to his next posting in Germany. MS reports that the manual Mercedes 300 is a diamond in the smooth, offering more on-tap torque than its auto-equipped sib. It’s also a depreciation lover’s ideal whip. Not only is the manual transmission dead, but cars so equipped are a drug on the market, and it ain’t cocaine. In fact, I know of automotive journalists who can’t drive stick. After trying any of the new-generation paddle shifters, you can see why they don’t bother. At the risk of reigniting the debate over the zen and the art of the manual transmission, a properly sorted paddle shifter is wikkid pissa fun. Click, clack, track attack. But then, so is not getting your car stolen; and car thieves are just as stick ignorant as the general population. OK, peace of mind isn’t “fun.” But there’s nothing worse than waking up to find your car’s been lifted. Unless you paid for the service– which is very, very wrong and I don’t know a guy who knows a guy who can make it happen. And yes, the audio quality sucks today…
Why does The Detroit News scribe Scott Burgess feel the need to diss environmentalists to praise a gas guzzler? Defensive much? All the time. In this case, Scott uses a Cadillac Escalade Hybrid to launch the usual condescension cruise missiles on tree huggers. “When the word ‘hybrid’ is scrawled across the front, back and sides of this big SUV… It creates a moral dilemma even Dr. Laura may not be able to solve as well as a jagged little pill for 40mpg.org to swallow. Can an American have a vehicle with room for eight but be environmentally sensitive? Could the crest and wreath really create the Cadillac of hybrids? Apparently so. The new Escalade hybrid offers prestige, power and just enough greenness to annoy environmentalists. Naturally, I love it.” And I love that “room for eight” thing. As if the fact that all those empty seats in the blinged-out Yukatoahoeburbalade make it somehow more environmentally friendly like, say, a minivan.
When it comes to moving the metal, Toyota doesn’t fool around. OK, they did do those stupid Tundra truck tricks. But how do you think a man like Mr. Toyonda got to be a man like Mr. Toyonda? By building on the brand’s rep for reliability. To that end, to expand the market for Priora and other hybrid models, Toyota’s adding “Toyota Certfied Used Hybrids” (TCUH) to their Toyota Certified Vehicles (TCUV) program. “Customers benefit from additional inspection and warranty coverage on Toyota hybrids within the program. Each vehicle comes with the three-month/3,000-mile comprehensive warranty, seven-year/100,000-mile limited powertrain warranty and roadside assistance plan offered on traditional TCUV models.” The program also “brings added awareness to a pre-existing eight-year/100,000-mile factory hybrid battery warranty.” In other words, same coverage, more rappers. The TCUH pre-certfication process includes 14 additional hybrid-related inspection points, including the hybrid transaxle, control modules and battery. Existing owners should benefit from improved residuals. Now, if Lexus will do the same for the LS600hL…
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.
Alliances ahead: The not yet wrapped-up tie-up between Fiat and Chrysler “may spur Japanese automakers to look into alliances of their own,” the Nikkei (sub) writes. Already, Nissan and Chrysler produce each other’s vehicles on an OEM basis, Suzuki teams with Fiat in environmental technologies. “While these two Japanese firms may need to rethink their strategies, the Fiat-Chrysler alliance could have broader implications,” says the Nikkei: “Budgetary constraints may force Japanese carmakers to focus on their strengths while striking partnerships in other areas. Foreign rivals are said to be looking for Japanese partners for the technologies needed to make fuel-efficient vehicles.” The Nikkei speculates that this could be”setting the stage for an industry reorganization involving domestic and foreign carmakers, including such midtier players as Suzuki, Mazda and Mitsubishi.”
Japanese carmakers have hat in hand: Mazda has appealed to the Japanese government for financial assistance to cover roughly 10,000 employees’ wages at two domestic plants where it has scaled back production, says the Nikkei (sub.) Mazda will pay 80 percent of the basic wages while output is suspended. The government subsidies are to cover a portion of these salaries. Mitsubishi has already filed for such aid, Nissan plans to do same soon.
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America may be generally averse to the hatchback genre, but hot hatches are a different matter. VW’s stellar GTI sold well enough stateside– after VeeDub eventually got around to bringing over the current gen. As Berkowitz will tell you, they would have sold even more uber-Golfs if the model was anything like reliable, if VW dealers weren’t such NSFWs and the starting price was a few thousand lower. OK, the Saturn Astra flopped, the Audi A3 just stood there, watching and even the hideous, horrendous U.S.-spec Ford Focus sells best in its four-door iteration. Hmm. What was I saying? Ah yes, the Euro-Focus RS. They’re starting to build them in Germany, and pistonheads on the other side of the pond are all abuzz. John Fleming, FoMoCo’s Europe’s CEO stokes the stoked. “We’ve had a huge amount of interest in this model from the loyal army of Ford RS enthusiasts as well as potential customers who have never owned an RS before. I am confident that they will fall for it the moment they get behind the wheel.” Which, for us in the U.S., is never.
Fritz Henderson is not a happy camper. Speaking at the Automotive News World Serious, GM’s Chief Operating Officer came off all emo, revealing a string of bad news without the usual spin. Of course, the event’s host chose to focus on the more, uh, upbeat side of Fritz’ speech. Henderson washed his hands of HUMMER, Saab and Saturn, albeit without announcing a “final solution.” And although “Pontiac is toast” isn’t the brand’s official tag line, it might as well be. “Henderson said the four core brands [Chevy, Cadillac, GMC and Buick] comprised 83 percent of GM’s total sales volume in the United States last year. Going forward, the Pontiac brand will ‘shrink substantially,’ Henderson said. But the fact that GM is investing heavily in the Buick brand in China will benefit that brand in the United States. ‘When you see the new LaCrosse, it will be very familiar to the one you’ve seen GM reveal in China,’ Henderson said.” And now, the real deal, brought to you by the MSM…
“With its sophisticatedly produced light metal wheels, AEZ targets an equally demanding and style-conscious clientele. An image, which is not just underlined in the new 38-page 2009 alloy catalogue by the high-quality product range, but also by the stylish model Caroline from Austria. For a whole week the photographer trekked with the stylish Viennese through the salines of Es Trenc in Mallorca for the shooting of the brochure. There she posed in the company of classy automobiles with partners made of cool aluminium that had exotic sounding names such as Lascar, Tidore dark or Tacana. In the resulting scenes, shot against natural backdrops, Caroline impressively showed that neither the industry-standard bare breasts nor promiscuous poses are needed to create a sexy aura.”
Have you ever opened a real estate magazine and read “House prices suck. They’re going to get worse. Stay away from real estate”? Obviously not. It’s a perspective problem shared by the American automotive press, whose Panglossian reviews rankle anyone who wants the truth about cars. Yada, yada, yada. Advertising. Unfortunately, the non-critical kudzu is starting to spread. We’ve already blogged the Motown-friendly press’ straw-grasping predictions for a sales recovery. I’d kinda assumed they’d pipe down after December’s debacle. Sigh. “Despite doomsday auto sales forecasts for 2009, promising signs continue to emerge about early January sales in the United States and their potential for growth.” The Detroit Free Press isn’t free, and this is not what I call the press. “Pent-up demand for new vehicles grew to 820,000 new cars and trucks last year, as consumers continued to wait out the dismal economic environment before making a new purchase, according to a report released Monday by CNW Marketing Research. That’s nearly four times as high as pent-up demand was in 2007, CNW said, and the research firm predicted that ‘the bulk of those postponements are slated to return to market in 2009.'” And now, a reality check…
Farley was first. Last week, Ford’s marketing maven threw down for The Blue Oval Boyz, declaring Crazy Henry’s mob’s would grab a bigger slice of the new car pie. Now Ed Peper’s prognosticating a more prodigious piece of America’s deflated new car market. Chevy’s brand Veep stepped up to the microphone at the Automotive News World Congress (our invitation got trapped by the spam filter) and told the world– well, Detroit– that the bow tie brand is ascendant. “We gained six-tenths of a point of (retail) market share last year,” Eddy declared. “This was the second-highest year-over-year share gain among all car brands, behind only Honda.” Hang on; what’s this then? “Chevrolet’s 2008 total market share was 13.5 percent, down from 13.9 percent in 2007, according to the Automotive News Data Center. Toyota Division overtook Chevrolet as the top-selling brand in 2008, rising to 13.9 percent from 13.4 percent in 2007.” Hmmm. Anyway, you’ll never guess how Chevy will steal sales from its rivals. Government checks for buyers? Well, not directly. (Just kidding. Sort of.) Nope. Marketing!
I’ve been following the “coverage” of President Obama’s fancy new limousine for some time now. We’ve known what it will look like for a long time, but that’s about. No, really. Anyhow, seeing the car that the Secret Service has reportedly nicknamed, “The Beast” roll down Pennsylvania Ave, dwarfing the Chevy Tahoe to its left, I couldn’t help but be awed. What a vehicle. And really, what a Cadillac. Say what you want about the Art & Science design motif, but the snouts currently hanging off the front of both the CTS and Escalade are handsome. Not only that, but the Beast’s stance is correct. Imposing, solid, American. The proportions look like a Cadillac should (though the actual size is borderline absurd). Farago has been arguing since 2002 that Cadillac needs to forget about lapping the Nurburgring and get back to building big ass cars that are desirable for their big assedness. Oh, but what about the Great Depression 2.0 and herky-jerky gas prices and the environment? All valid points. But, as a brand, shouldn’t Cadillac be building, well, Cadillacs?
How would you react to a spirited encounter with a Porsche GT3?
GM will invest $30m in the Michigan LG Chem/Compact Power battery plant which will assemble lithium-ion cells for its Chevy Volt. Of course the actual cells are made in Korea, a fact which make the Volt’s many taxpayer subsidies less than exclusively patriotic affairs. But fear not, American taxpayer! Korean subsidies make your subsidies go farther! GM’s Bob Lutz reveals to MLive that one of the reasons GM picked the Koreans over homegrown A123 Systems was because “LG Chem has massive support from the Korean government in terms of a whole research campus was paid for by the Korean government because Korea recognizes that advanced battery technology is a key component of the country’s competitiveness.” Hint, hint. Since LG Chem is farther along with prismatic (flat) cells, we’ll all just have to live with the fact that our tax money is flowing through GM to foreign firms, although to be fair, A123 did its cell manufacturing in China. So much for “supporting domestic industry.” Anyway, in his announcement of the $30m investment, GM’s Ed Peper tells Reuters to forget any CadiVolt dreams. “We chose Chevy because we can’t be niche with the Volt,” explains Peper. “We have to make it a mass-production vehicle.” A $40k “People’s Car” which depends on foreign technology, and will lose money even with “government support” coming from all sides? Niche? Never.
Or so argues a study from Science Daily (via The National Motorists Association). Thomas Garrett, assistant vice president at the Federal Reserve Bank of St. Louis, and Gary Wagner from the University of Arkansas Little Rock, looked at revenue and traffic citation data from 96 North Carolina counties collected from 1990 to 2003.. Their conclusion is that as the economy weakens, local governments seek to replace lost tax revenue with increased traffic tickets. “There is ample anecdotal evidence that local governments use traffic tickets as a means of generating revenue,” wright Garrett and Wagner. “Our paper provides the first empirical evidence to support this view.” How? According to the data, “a one percentage point decrease in last year’s local government revenue results in roughly a 0.32 percentage point increase in the number of traffic tickets in the following year.” Though they admit that the numbers seem small, Garrett and Wagner call them “statistically significant,” noting that they controlled for demographic and economic differences in the sample. The study will be published in the Journal Of Law And Economics, and will shock readers who haven’t read TTAC’s coverage of the ongoing speed camera nightmare.
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