Uncle Sugar has completed the transfer of the first $4b of a $13.4b loan to General Motors, under the Troubled Asset Relief Program (TARP). Despite CEO Rick Wagoner’s previous pronouncement that his employer had enough cash to last through 2009, the artist once known as the world’s largest automaker (and the world’s most profitable corporation) was in danger of running out of money. And now it isn’t. Until later. Meanwhile, you might think that a $13.4b “investment” in GM would buy the U.S. taxpayer a little something called “transparency.” As The LA Times reports, you’d think wrong. “The cash-strapped Detroit company plans to use the money for continuing its operations… GM is obligated to make a large payment to a major supplier in early January; it has declined to offer details on the amount it owes or to which supplier.” And there are more strange doings over at Chrysler. (The automaker’s owned by Cerberus Capital, a private equity firm with close ties to the federal government, increasingly famous for bending rules to its advantage while operating under the cover of darkness.) “Auburn Hills, Mich.-based Chrysler is expecting $4 billion in cash as well, but the Treasury has yet to announce the closing of the first round of loan money. ‘We’re working expeditiously with Chrysler to finalize that transaction and we remain committed to closing it on a timeline that will meet near-term funding needs,’ [Treasury spokeswoman Brooklyn] McLaughlin said. Isn’t it wonderful how responsive our federal government is to the public’s– I mean, private industry’s needs? But wait! There’s more! Lots more!
Category: News Blog
It would be everybody’s dream come true: A car running on nothing else than sunshine. Well, not everybody’s dream maybe. In Saudi Arabia, they have a lot of sunshine, but it doesn’t fit in tankers. “Toyota Motor Corp. is secretly developing a vehicle that will be powered solely by solar energy in an effort to turn around its struggling business with a futuristic ecological car,” reports AP via Yahoo News. AP says, Toyota is working on an electric vehicle that will get some of its power from solar cells on the vehicle, and that can be recharged with electricity generated from solar panels on the roofs of homes. As a next step, says AP, “the automaker later hopes to develop a model totally powered by solar cells on the vehicle.” Sounds unbelievable? AP says they have it on good authority.
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In Japan, a privacy rights group demands the take-down of Google’s Street View, after couples entering love hotels, or men urinating outdoors found a permanent home on Google’s servers. The Japanese group now found another ally: Porsche, or rather Porsche’s test drivers. They were caught by Google’s Street View car with the pants of some prototypes down. The invasion of Porsche’s privacy was spotted by a contributor to the Garage419 blog. In anticipation of his next vacation, he had googled the Mount Evans Toll Road.
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A short 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. Until Jan 4, 2009, WAS will be filed from Tokyo.
December possibly below 10m. Edmunds.com predicts the annually adjusted sales rate of light vehicles in the U.S. to come in at 9.8 million for December. J.D. Power and Associates now expects 10 million. The rate was 10.3 million in November. Sales results will be announced Monday, Jan. 5.
China expects 9.4m units for 2009: China’s total vehicle sales are expected to reach 9.41 million units for the full year of 2009, according to a State Information Center’s forecast, says Gasgoo. China’s GDP growth next year is expected to remain above 8 percent and its car market should see similar growth, says the forecast. Something is screwy about those numbers. January through November, China’s total vehicle sales were 8.63m. December is usually a strong month in China. The end of year number for 2008 (which is not out yet) is expected to be in the low 9m. If that’s true, then the forecast would not reflect increases in-line with expected GDP growth.
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Figuring many TTAC readers would be interested, I input pricing for the new 370Z into TrueDelta’s pricing database the day it was released. Since TTAC licenses this information, this site is about the only place you can already configure the new, 332-horsepower 370Z. Media reports suggest that the new car handles better and has a nicer interior than the less compact, slightly heavier 350Z. Compared to the 2008, the base price is up $1,425, to $30,625 (the $30,000 figure you’ll read elsewhere ingores destination). BUT the new car has airbags, stability control, and a few other features as additional standard equipment. Adjust for these, and the 2009 is actually priced a bit lower than the 2008. The more agile Mazda RX-8 runs about $3,500 less, but no doubt most people will opt for the much more powerful Nissan when choosing between these cars. When both cars are loaded up, the related Infiniti G37 coupe runs about $3,800 more than the 370Z. But adjust for the Infiniti’s additional content (sunroof, additional power seat adjustments, etc.) and the difference is close to zero.
[Michael Karesh’s TrueDelta.com is a TTAC info provider]
We’ve already flagged the fact that Delphi may be lining-up at the federal bailout buffet, what with GM depending on it for its survival, and the survival of GM and Chrysler being all that matters when it comes to taxpayer trough snuffling. Our TTAC radar is picking up more blips on the domestic auto industry bailout bucks front. In a report revealing that Chrysler is having a little trouble finishing the paperwork on their $4b bonanza, Wall Street Journal writer Jeff Bennett drops this little McNugget in the middle of his piece (just below the snooze button): “Meanwhile, the Treasury Department said it will decide on a case-by-case basis whether other companies connected to the struggling automotive industry should be provided emergency aid from the $700 billion bailout pot.” So that’s not a no. Of course, that depends on the Treasury Department receiving congressional authorization for the second tranche from the aforementioned trillion dollar-ish Troubled Asset Relief Program fund. ‘Cause they already “spent”– sorry, “invested” $354b of the $350b previously authorized. Paperwork, eh? Meanwhile, what’s the WTO going to make of all this?
Don’t ya just love marketing guys who trot-out terms like UIO (units in operation, i.e. sold cars) and say things like “We have seen both positive and neutral perceptions grow, and negatives decrease. So we have moved lots of negative perceptions to neutral”? Neither do I. Of course, I’m sure Hyundai Motor America’s VP/Marketing Joel Ewanick is, like most of God’s children, a lovable human being. And if you’re talking to Marketing Daily (MD), what’s a UIO between friends (sounds like something Morris Day would sing about to me)? But I digest. And here’s some interesting factoids from the Ewanick’s Q&A. “We know that 40% of those buying Genesis have traded in vehicles like Lexus, BMW, Mercedes, and Porsche. We know what their income levels are, and we are finding that people are gravitating from luxury or near-luxury cars to Hyundai.” MD reminds us that “since the sedan version of Genesis went on sale in July, the company has sold 5,127 of the cars, including 1,151 of them last month.” That’s far short of Hyundai’s targets, but a pretty good showing in a market so down it has to reach up to tie its shoes. Anyway, about that Super Bowl ad…
Back when I worked for CNN, I went to some damn auto show or another. I was trying to interview a gentleman about his cherry ’34 Chevy when something roughly approximating depth charges went off. I turned around to see Paul Revere and the Raiders performing. Well, Paul anyway. And a bunch of middle aged men dressed like, what? Minute Men? Pirates? Thanks to acoustics that would make the inside of Quaker oatmeal box sound like the studio at the top of Bose Mountain, I couldn’t hear a word they were singing, which was OK. No one was paying attention anyway. And both of those who were knew all the words. Now I don’t expect the Jonas Brothers to be afforded the same indifference when they do their thing at this year’s North American International Auto Show. And who knows? Maybe the Doobie Brothers will convince a new generation that Jesus is just alright. Oh yeah. But I was thinking, who would be the perfect artist to perform at this year’s auto show? The obvious answer is Maureen McGovern from the original Poseidon Adventure, singing There’s Got to Be a Morning After (pass the Alka Seltzer will ya?). But you guys didn’t get to be the B&B by going for the easy laughs. So put it out there. Who should take center stage at NAIAS?
Well why not? If the the Fed can justify “emergency” approval of GMAC’s switch to bank status as a necessary step to save GM, it’s not that much of a leap to suggest that bankrupt parts maker and GM spin-off Delphi’s next in line for some bailout bucks. As we’ve said here before, no Delphi, no GM. Bloomberg puts it this way: “GM has already spent more than $11 billion to help Delphi, the largest U.S. auto-parts maker, exit bankruptcy. Delphi has been unable to get further loans to help it leave court protection because of stricter credit requirements and declining revenue from slow auto sales.” And now… “We would not be surprised to see additional government funds to GM to support a Delphi solution,” JPMorgan Chase & Co. analyst Himanshu Patel said in a report today. As JP is up to its eyebillions in GM, Chrysler, Chrysler Financial and GMAC, it’s a good bet this is more of a trial balloon than mere conjecture. Bloomberg points out that the idea of throwing some cash at, I mean arranging some loans for Delphi is no longer beyond the remit of the increasingly vaguely remitted $700b Troubled Asset Relief Program.
Lord love a duck, but sometimes the most idiotic things surface on the internet. And a certain piece favorably comparing Ferrari’s environmental impact to that of the Prius doesn’t have the excuse of coming from some blogspot-based Private Snafu in the Army of Davids. No, it comes from Car And Driver. Print Media. The Big Boys. Etcetera. And since they don’t have the decency to expose their own baldfaced disingenuousness and sensationalist ignorance-peddling until after the jump, we’ll return the favor. Car And Driver’s Steve Siler is an idiot, and that’s all we’ll say unless you bump our page views by hitting the jump.
The analysts at Credit Suisse (CS) get no points for predicting the continued cratering of the U.S. car market [full report after the jump]. But one has to wonder just what in the Hell GM was thinking when it predicted 12m unit sales in the U.S. as late as late summer. No matter how you cut it, or what incentives GM’s offering, the American automotive industry is looking at sustainably low numbers. And speaking of “sustainability,” CS is now starting to factor in consumer fears of bankruptcy. When the words “bailout backlash” start to appear, as they surely will, it’ll be all over bar another $50b or so in taxpayer subsidies. Sorry, loans. Meanwhile, there is some good news here: CS reckons The Big 2.8’s production cutbacks will clear their 35 percent overstock. And “all else equal, GMAC’s increased access to funding could increase GM’s sales by several hundred thousand units in 2009.” Good luck with that.
The team behind the Eliica is currently seeking corporate sponsorship so they can build this car at an estimated price tag of $225k. That buys you a 0-60 mph time of four seconds, and a 0-100 mph of seven seconds flat. Oh yeah, and eight wheels. Because six wheels is weak sauce and 10 wheels is just plain ostentatious. (via Jalopnik)
The bailout-beggar line just got a little longer, as Green Car Congress reports that the US Fuel Cell Council is requesting a cool $1.17b of your hard-earned tax dollars (kudos for making the smallest handout request in months!). The money would come in the form of full funding for a number of programs authorized in the 2005 Energy Policy Act, including deployment programs; development of a refueling infrastructure; learning demonstrations; building domestic manufacturing capability; accelerating public-private research; and investing in fuel cell transit programs. And they aren’t leaving it there, either. A July 2008 study by the National Research Council estimated that a total public-private investment of about $200 billion would be required from 2008 to 2023 to support a transition from gasoline to hydrogen fuel cell vehicles, at which point fuel cell vehicles would become competitive with gasoline-powered vehicles. Or, as we find so many causes for repeating, not. Though hydrogen fuel cells offer more long-term promise than say, ethanol, we’re still talking about some serious pie in the sky. At an appropriately astronomical cost too. Sorry kids, but if we’re to spend government money on something like this, I’d like to see it go towards lithium-ion battery development, which shows more medium-term promise and doesn’t require a new ground-up infrastructure.
Not for us though. We’ve had the luxury of several pre-bailout months of foreknowledge of this particular $33m white elephant. The kids at Fox News, on the other hand, seem to have only just found out about the UAW’s Reuther Family Education Center, and they’re downright apoplectic. The $33m resort, nestled on “1,000 heavily forested acres” has lost $23m over the past five years, despite charging as much as $85 in green fees. Besides improving the UAW’s collective handicap, the Family Education Center provides accomodations for retreats and conferences which give members “a deeper understanding of the UAW and the union movement away from the routine of their daily lives,” according to the Center’s website. All of which has Fox reaching for the “union-basher” volume of its rolodex.
12/30/2008
To: All GM Dealers
Subject: GMAC APR RATES
Date: December 30, 2008
I wanted to update you on the recent actions that have taken place with regard to GMAC obtaining bank holding status.
We believe GMAC’s ability to extend financing will be greatly enhanced.
To that end, I am pleased to tell you that starting today, GMAC will be offering reduced rate financing as low as 0% APR for up to 60 months on select new cars and trucks. The reduced rate financing is available to qualified buyers (S, A, B and C tiers) through January 5, 2009.
In addition, we have stackable bonus cash and/or dealer cash of $500 to $4,250 on some models.
Following are examples of the supported rates being offered:
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