The E85 BOTDs are less frequent these days. Thanks to low gas prices, the ethanol industry has run headlong into what they call the “blend wall.” In fact, the corn juice supply so far outpaces demand that government subsidies, mandates and [the E85 folk hope] bailout bucks are all that stands between the industry and total collapse. In other words, here’s another auto-related enterprise whose survival depends on the taxpayers, rather than commercial success. So when I encountered E85 consumption figures for Iowa on MidwestAgnet.com, I nearly fell out of my chair. Well, OK, I’m too old for that action, but the numbers indicated a huge jump. [jump after the jump] And the answer is… “Quarters prior to 4th quarter 2007 did not include government gallons. Beginning with the 4th quarter 2007, government gallons are included.” I’m not entirely sure what government gallons are, but whatever they are, you can bet your bippy the tank-fillers had little say in the matter. There’s some interesting info if you follow the links to Iowa’s fuel tax revenue. Year-to-date to November 2008, the state collected $198,280,544. Of that, E85 accounted for $44,683. The year previous: $35,705. And this, folks, is The Tall Corn State.
Category: News Blog
And the hits keep happening. So this is how it’ll work. Eddy and I and other TTAC writers will select our faves and then submit the finalists to you, our Best and Brightest, for a vote. As in Wisconsin’s “change our license plate logo” contest, we reserve the right to over-rule the popular vote. (“Eat Cheese or Die?” I don’t think so.) But we will present the results of the poll– so you can see if we’re elitist scumbag hypocrites. Again, please send jpeg entries to robert.farago@thetruthaboutcars.com. The deadline is midnight Tuesday. [NB: The software tends to squish some images. Please click on it twice to see the proper proportions.]
Europe has an abundance of car makers. Apparently, Brussels is preparing the populace for less. As EU business ministers gathered in Brussels to discuss support for the flagging industry, as French manufacturers lobby their government for aid, European Union industry commissioner Guenter Verheugen said some European carmakers face an uncertain future.
“There is no guarantee that all the main European manufacturers can survive the crisis,” Verheugen told BBC radio. Translation: don’t bank on a bail-out. If you get in trouble, you’re on your own. There’s surely BIG trouble ahead; Verheugen forecasts a further 20 percent drop in sales in 2009. He said the industry’s outlook was “to say the least, brutal,” as cash-strapped consumers defer big-ticket purchases.
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.
Toyota closed on Saturdays: Toyota closed all of its 12 Japanese factories Saturday in response to the worsening global sales slump. Toyota plans to suspend production for a total of three days in January, the Nikkei (sub) says. Toyota will have a total of 11 no-work days in February and March. As a result, its daily production capacity in February and March will fall to 9,000 units, about the half the year-earlier level. Toyota also plans to reduce output by closing all seven vehicle assembly plants in the U.S. and Canada on some days through early April.
Buyers return in Beijing: After disappointing sales in the second half of 2008, China’s auto market is showing signs of life. As the Lunar New Year holiday season approaches, prices have been cut and favorable credit sales policies expanded to lure customers into showrooms, Gasgoo writes. Sales in Beijing’s biggest auto market have jumped over 40 percent compared to the same period last year. Financing is becoming more popular. Currently, only 10 percent of car buyers in China financing vehicles, the rest pays cash.
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In 1999, a French-Brazilian-Lebanese businessman saved a large Japanese automaker from certain bankruptcy. Since then, Carlos Ghosn, cost cutter extraordinaire, wears the dual crowns of the presidency of Renault and Nissan. The Japanese crown is turning into a very heavy burden. According to Tokyo’s Nikkei (sub), Carlos Ghosn, “is facing an even more daunting challenge of securing profits amid the yen’s rise and the deep economic downturn. Ghosn acknowledges that the external environment facing Nissan is far more bleak than in 1999, when Nissan was trying to rise above damages that were largely self-inflicted.” Fixer Ghosn is softening the blow for the announcement that he can mend self-inflicted wounds. But he isn’t godlike – yet – to save Nissan from external damnation. Nissan appears to be in deep, deep kuso. Ghosn is fighting two armies of windmills:
Back when the CEOs of Chrysler, Ford and GM were “caught” flying corporate jets into Washington to beg for bailout billions, we cautioned our readers that the media scrum had made a great landing at the wrong airport. Yes, these execs were frittering away millions of dollars on their jet fleets. Yes, their Gulfstream travel violated their companies’ supposedly proletarian appeal; Henry Ford’s model T and all that. But blaming jet travel for the CEO’s woes was like blaming Harrison Ford’s limo for the travesty that was the fourth Indiana Jones movie. So yes, but no. Anyway, The Detroit News reports (of course) that Sunflower State senators have lifted the corporate jet ban from the non-automotive recipients of Congress’ recently-refilled, near-as-dammit trillion dollar trough. “Kansas is a center of aircraft manufacturing, and Kansas lawmakers complained that the provision could reduce aircraft orders and cost jobs. This week, House Financial Services Committee Chairman Barney Frank, D-Mass., author of the bill, lifted the jet ban. Could the DetN resist placing another mountainous chip upon the shoulder of their hometown heroes? Are you kidding? “So remember, folks: According to Congress, it’s only a waste of taxpayer money if auto execs are the ones flying private.”
Europe’s industry association ACEA finally got around to counting 2008 car sales, and there are good news and bad news. The good news is that the news from Europe aren’t half as bad as the news from the U.S. The bad news is that European new passenger car sales fell 7.8 percent in 2008, their sharpest fall for 15 years, Reuters reports.
Like in America, the sharpest drops occurred in the last quarter of 2008, with a 19.3 percent fall in new passenger car registrations compared with the year earlier period. In December car sales fell 17.8 percent year on year across the European region (which includes the 27 EU member states as well as the European Free Trade Association countries, but excludes Cyprus and Malta.) December was the second worst month of the year for the region, as after a 25.8 percent year-on-year fall recorded in November. Like in the U.S. the Q4 numbers don’t augur well for a happy 2009.
In the olden days, the headquarter markets got all the new toys first. Joint ventures and subsidiaries abroad had to wait a whole generation, until tooling, machinery, sometimes whole assembly lines were crated up and shipped abroad. Especially in China, this had attracted criticism, as in “we don’t want your hand-me downs.” With computer aided manufacturing and robots, the introduction of new models to other markets was sped up significantly. Now, China can’t complain anymore. This week. Ford China started manufacturing the seventh Generation Fiesta subcompact at their Nanjing plant, only months after the first cars had hit the market in Germany last October. Nanjing is the second plant in the world to build the car. In China, the Fiesta will go on sale late in the first quarter. The Fiesta was shown at the North American International Auto Show in 2007 under the name, “The Verve,” but Americans will have to wait until 2010 before they can buy it domestically. In Europe, they can’t make enough of the little guy.
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.
Toyota shifting down in NA, again: Toyota will shut down all seven vehicle assembly plants in the U.S. and Canada on some days through early April, as part of an effort to cut growing stockpiles by half, the Nikkei (sub) reports. The number of non-operating days will vary by facility. The production line for the Sienna minivan at the Indiana plant will be stopped for 30 days. Toyota had shut down some production lines in the U.S. for three months starting last August. Toyota hopes to reduce inventories from the current 80-90 days to the desirable level of about 40 days by the end of June.
Nissan shifting down in Japan, again: Nissan will reduce Japanese domestic output by 64,000 vehicles in February and March from its earlier output plan, prompted by an increasingly decelerating global auto demand, the Nikkei (sub) says. The company had already announced reduced production as sales at home and abroad tank. Nissan had decided to dismiss all non-full-time workers by the end of March. Although it has no plans to shed any full-timers, it does intend to reduce their base pay for February by designating some of the days the plants will be idled as non-work days.
Honda shifting down in Japan, again: Honda will cut production in Japan for this fiscal year by 56,000 vehicles on the continued slump in auto sales, the Nikkei (sub) writes. The latest production cutback follows a domestic output reduction by a combined 86,000 vehicles that Honda already had announced. Japan’s second biggest car maker by volume now expects its domestic output to total 1.168 million vehicles in the fiscal year ending March, down 10% on year.
Audi is the official sponsor of President Elect Barack Obama’s inauguration. No really. “ABC, CBS, NBC evening newscasts will be presented with limited commercial breaks exclusively from Audi. An eight-page insert in major newspapers nationwide [USA Today, The Wall Street Journal, The Washington Post, Los Angeles Times, The Miami Herald, Chicago Tribune, San Francisco Chronicle, and The Boston Globe] highlight Audi innovations and Audi will be the sole sponsor of the inaugural address on top news sites.” Isn’t Ingolstadt a little leery of playing partisan politics with America’s well-heeled motorists? “Regardless of political preferences, the inauguration represents a unique moment of progress,” Audi NA Prez Johan de Nysschen. “That’s why we wanted to share this experience and begin a conversation about innovation, technology and the path ahead.” Get it? No? Let’s try that again…
Tuesday’s the deadline for this mission of mercy. [Send your design to robert.farago@thetruthaboutcars.com] Meanwhile, we’re getting the second tranche of bailout money– sorry, I mean, logo action. The logos below are the latest from members of our Best and Brightest, whose affection for the site and dedication to clarity gives me pause. OK, that done, I appreciate all your efforts on our mutual behalf. In these hard economic times, I’m trying like Hell not to cut our editorial budget. If I can get some new income streams going (consultant speak for make some money), it will help sustain my effort to reward our contributors and maintain their interest in submitting material for our mutual entertainment, information and informed debate. Again, please do not flame the artists here. Constructive criticism is most welcome and expected, but your restraint is, as always, integral to the process. Thank you.
Automotive News [sub] reports that President elect Barak Obama is calling on automakers to develop sustainable business models. Aparently, it would be unacceptable “to keep them on their lifeline through taxpayer dollars in perpetuity.” Although Obama admits he’s not an industry “expert”, he claimed making the bailout work means everybody, “from labor to management to creditors to shareholders, giving something up.” Specifically, taxpayers will now be sacrificing $1.5b to Chrysler Financial. And yes, it’s coming from the second half of TARP, so it has the O-man’s blessing. And so… “Zero percent interest financing will be [immediately] available on 11 Chrysler LLC vehicles, and in many cases for up to 60 months. Vehicles included in the program are Chrysler Town & Country, 300 and 300C, Jeep Grand Cherokee, Commander, Wrangler, Dodge Grand Caravan, Charger, Magnum, Challenger, Ram Pickup and Ram Heavy Duty.” Oh wait, that’s our sacrifice too. And isn’t this how we got in this mess in the first place?
Auto industry suppliers have been stuck between a rock (penny-squeezing OEMs) and a hard place (volatile commodity prices) for some time now. And though the Detroit Three argue relentlessly that their own bankruptcy would doom them in the eyes of consumers, bankruptcy protection has practically become the norm for their suppliers. Which is why supplier firms need a bailout of their own in order to give Detroit’s bailout a chance. Chrysler’s endless winter break, GM’s half-sized Q1 production plan and general industry turmoil is about to cause exactly what the bailout was supposed to prevent: cascading supplier bankruptcies. Bloomberg documents the doom in detail, concluding with American Axle’s Dick Dauch’s assessment that “there’s a shakeout occurring.” Unless…
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