You might think that Barron’s would ease-up on the “bet on GM” advice. In a June 2 cover story, Barron’s told its readers to buy shares in the ailing automaker. At the time, The General’s stock traded at $17.10. “GM’s turnaround will accelerate over the next two to three years, even if the U.S. cyclical downturn dims the outlook for the next 12 months,” Barron’s prophesied. “The shares could rise to at least 30 and maybe as much as 45 once those big cost reductions drop to the bottom line in 2010. And if the stars align perfectly — the economy enjoys a second-half uptick and the housing market and consumer confidence turn for the better sooner than expected — the stock’s rebound could be quicker. Even a small improvement in sentiment could bring a disproportionate rise in the stock.” To be fair, in November, when the excrement and air movement device had already collided (but good), Barron’s did the mea culpa thing: “Our enthusiasm for GM was clearly wrong, as was a suggestion that its bonds, like the senior note maturing July 15, 2041, would be more valuable.” And now, Ward’s Auto reports “GM restructuring may make bonds best bet-Barron’s.” There’s more, but we’re not subscribers– to either publication. At close of play Friday, GM’s stock traded at $4.49 a share– and that’s AFTER the bailout.
Category: News Blog
‘There are two engine options, both new and both featuring direct fuel injection to save fuel. The base models get a 182-hp four-cylinder that’s good for 21/30 mpg city/highway with front-wheel drive and 20/27 mpg with all-wheel drive. The V-6 packs 255 hp and returns 18/25 mpg with front-wheel drive and 17/24 with all-wheel drive.”
Island Chevrolet’s general sales manager doesn’t like transplanted products. (Yes, I know: any car on The Big Island is an import. But you know what I mean.) So James Severtson commissioned a Chevrolet Suburban-bodied monster truck to kill, crush and destroy a Honda Accord. On the first attempt, the Hawaiian Rebel blew a hydraulic hose and leaked vital fluid. The Honda was non-plussed. After several hours, take two. Wheelman Ryan Kepiki attempted to surmount a Hyundai Excel. The AP reports that “Kepiki drove over the cars’ hoods, destroying the windshields to the seeming delight of the rush-hour crowd. Severtson said the dealership had been planning the crush-fest for a while.” Appreantly, the Bush bailoutfest was a “happy coincidence.” “We’d like to send the message that the best way to support your country is to buy an American vehicle today,” Severtson said.
Fifty-two miles per gallon is, it has to be said, a lot of miles per gallon. And who better to say it than Pulitzer Prize-winning caramudgeon and Top Gear USA bullet dodger Dan Neil? In a column founded upon the old English expression “I can’t win from losing,” Neil lauds FoMoCo’s gas – electric fusion Fusion. “Wait, so, has somebody invented the car of the future and didn’t tell us? It’s a worthy question. The scolding undercurrent of recent congressional hearings on the auto-industry bailout was the notion that Detroit had failed to invest in next-generation technology that could help wean us off foreign oil. Not so. What they did fail to do was sufficiently commercialize this technology so that it was ready and waiting at dealerships when people got stampeded this year by spiraling gas prices. Had Ford made a few hundred thousand of these cars available in June — along with the financing to sell them — we’d be erecting 50-foot equestrian statues of William Clay Ford and Alan Mulally in city squares, and the streets of Dearborn, Mich., would be repaved with diamond cobblestones.” As if. “The price of gas has dropped by two-thirds in six months, thereby de-motivating buyers who might have been willing to bear the incremental cost of a hybrid. What we really need is an increased federal gas tax, but the chances of that getting passed in Congress are comparable to my chances of being named Miss Universe.” To quote another English aphorism, Dan, you gotta be in it to win it.
The beast in the picture sits in what’s commonly called your “lower intestinals.” And the butt-ugly critter may just be the answer to our energy problems. Bacteria that live in your digestive tracts, and that can give you the runs, can be genetically modified to eat plants and then shit out jet fuel, high grade gasoline and other petroleum products. According to a CBS report, this was proven by a team of UCLA researchers.
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. For the next two weeks, WAS will be filed from Tokyo.
Canada paying their share for the bailout: Canada will follow the United States and give $3.3b in emergency loans to the Canadian arms of the D2.8, Prime Minister Stephen Harper said to Reuters. GM of Canada is eligible for loans of up to $C3b, Chrysler Canada Inc can get up to C$1 billion. The Canadian arm of Ford has not asked for assistance. Harper said the governments were attempting to attach some liens and secure some assets of the car companies “but I will not fool you — there is obviously some money at risk here.” Translation: Don’t ever expect to see the money again.
Toyota still has got the dough: One of the most important metrics in business is “free cashflow.” It’s the money you can spend: cash generated from operations plus capital available for investment. Despite the business downturn, Japanese companies added to their free cashflow. Toyota tops the list with an improvement of 500.7 billion yen on the year, The Nikkei (sub) reports.
And now, the Chinese bailout plan: China is thinking about its own bailout plan for the auto industry, says Gasgoo. The plan joins several that had been announced in the past. It could also be a retread of the bailout plan that was proposed Ministry of Industry and Information Technology in November 2008. What is interesting is that the plans get more focused. Or less diverse, however you may want to look at it. The first plan had nine recommendations. Further plans went to eight, then seven. The new plan now reportedly is down to six policy recommendations including jacking up domestic demand, expanding overseas markets, supporting homegrown brands, reforming fuel tax, boosting the second-hand vehicle market, and “preventing policies and regulations that may hurt auto sales.” The last one sounds like a great idea.
Ed Wallace at Business Week offers a counter-intuitive view: 2009 will see record low automobile sales…. and increased prices. My first inclination was to dismiss the man out of hand. But this past April he presciently said “There is No Gas Shortage” and followed up a few weeks later with a well-argued skewering of the ethanol myth. So, Ed Wallace is no Bob Lutz. But still, his latest proclamation is hard to swallow. “The time of heavy rebates is over as carmakers get ready to raise prices to increase profits. Get ready for sticker shock.” After that opening salvo, Ed goes tells the global tale of automaker woe. He rightfully points out that governments in German, England, France, Canada and China are stepping in to make sure their companies stay in the game, while the US government wrings its hands. But does anyone really think that the new US government is going to sit back and watch the indigenous auto industry implode?
Normally, I let The Newspaper cover stories about police perfidy, especially as it relates to speeding. But I was cruising the net this evening, looking for titillation. Oh wait, that was before my wife came home. Ahem. So it seems that the UK police have found a nice little earner in their police chase videos. The News of the World reports that aliens are purchasing the tapes for Elvis’ amusement, deep within his lunar enclave. Oops! That’s the Weekly World News (e.g. “North Pole Requests Bailout”). The other News says “POLICE forces are FLOGGING off video clips of car chases and traffic emergencies to TV shows . . . raking in up to £555-A-MINUTE.” [NB: FLOGGING means selling, not whacking someone with a cat ‘o nine tails.] What’s WRONG with THAT, you ask? (Selling the videos, not whacking someone with a cat ‘o nine tails.) Sweet FA, according to the Association of Chief Police Officers. It “APPROVES of selling the footage. And it even takes a 10 per cent CUT, from Police, Camera, Action! payments for viewing the programmes to ensure they “convey a general message about road safety”. Yes, well, back in the day, this reporter documented the UK’s flawed police pursuit policy, which resulted in the needless death of dozens of innocent bystanders. Just sayin’…
High school students in Maryland are using speed cameras as a tool to fine innocent drivers in a game, according to the Montgomery County Sentinel newspaper. Because photo enforcement devices will automatically mail out a ticket to any registered vehicle owner based solely on a photograph of a license plate, any driver could receive a ticket if someone else creates a duplicate of his license plate and drives quickly past a speed camera. The private companies that mail out the tickets often do not bother to verify whether vehicle registration information for the accused vehicle matches the photographed vehicle. In the UK, this is known as number plate cloning, where thieves will find the license information of a vehicle similar in appearance to the one they wish to drive. They will use that information to purchase a real license plate from a private vendor using the other vehicle’s numbers. This allows the “cloned” vehicle to avoid all automated punishment systems. According to the Sentinel, two Rockville, Maryland high schools call their version of cloning the “speed camera pimping game.”
Misery loves this company. When the bailout was announced, when TTAC unveiled its Ten Worst Autos for 2008, the website got a nice little lift. As is the way of things here, our traffic had plateaued for the last couple of weeks (albeit at a gratifying 32kish unique visitors per day). The two posts helped boost TTAC traffic to 940,481 uniques per month (upm). Although the holiday will take us back down a bit, it’s the first time we’ve been within spitting distance of 1m upm. At the same time, we’ve maintained our “stickiness;” the average TTAC visitor hangs around for 4:12. And while I’m trotting-out our Google Analytica, that same average visitor clicks on 3.82 pages; he/she and his/her brethren racked-up 3,595,809 pages this month. OK, that’s that. At the same time, we’ve taken on board your suggestions for improving content. We’ve stopped bashing other websites, sold our trademark “Or not” to Autoblog, eschewed T&A and shit-canned the “TTAC Called It” breast beating. We’ve added more [non-financial] automotive flava. By the new year, daily podcasts will return. To improve loading times (a source of reader irritation) and (frankly) increase our page views, we’re going to cut our home page down to ten items. Meanwhile, I’d like to thank you all– writers and readers alike– for taking TTAC from zero to 940,481 in six years. If you have any more suggestions for improvement, please leave them below. While our dedication to telling the truth about cars is non-negotiable, we’re always open to new and better ways to realize our mission.
Apart from keeping an eye on the imploding world economy, North Korea’s nuclear ambitions, Iran’s nuclear ambitions, the war in Iraq, the war in Afghanistan, a Russia that is flexing its muscles, and other minor annoyances, “the incoming Obama administration is closely monitoring the innovative electric car project being developed by Israel’s Better Place company,” writes the Jerusalem Post. Idan Ofer, chairman of Better Place, says [hopes?] that Obama “may be adopting it.” Also according to Ofer “a leading US car manufacturer” is “putting together a team” to work on the project. Now who might that be? “Renault-Nissan agreed 18 months ago to build the first cars, and will be mass-producing hundreds of thousands of the electric-powered vehicles by 2010,” Ofer said to the paper. So why the need for a leading US car manufacturer? For all we know, the US car manufacturers are leading straight into C11.
Ofer doesn’t suffer from a lack of self-esteem. When “you hear announcements” from the incoming administration about reviving Detroit with electric cars, job creation in battery factories and modernizing the national electricity grid, the Better Place chairman reckons “you’ll know that it will have come from us.”
Cerberus wants to unload Chrysler, keep GMAC: That’s what Automotive News says. I’m sure TTAC’s day shift will have more on this.
Honda uses the F-word: Honda President Takeo Fukui had already dropped hints about locating the Honda HQ outside the land of the rising yen. Now, even more sinister threats. Fukui said to the Nikkei (sub) that Honda “may have to abandon one of its key principles of protecting the jobs of its full-time workers next year, if the Japanese currency remains at current levels of around 90 yen to the dollar.” That means F as in fire, unless the effing Yen is getting cheaper against the greenback. Honda is bracing for a group operating loss of 190 billion yen in the second half of the current fiscal year. “I think the dollar will move back to above 100 yen because the level of below 90 yen is abnormal,” Fukui said. Hint, hint, hint.
Toyota and Fuji Heavy put joint sports car on back burner: Toyota decided to delay the compact sports car it has been developing with Fuji Heavy, the Nikkei (sub) writes. The two automakers had planned to begin manufacturing the car in late 2011 for the domestic market, but the start of production will now likely be postponed until 2012 or later.
As we’ve pointed out ad infinitum, Cerberus is a deep-pocketed private equity firm with assets out the ying-yang. Why should Uncle Sam send their ailing automotive arm a $4b Christmas present? “In a statement today, Cerberus responded to that criticism,” Automotive News [sub] reports. “The company said it manages and allocates capital on behalf of its investors — including ‘retirees, teachers, municipal workers and ordinary citizens’ — and its charter limits how much it can put in any single investment. Said the statement: ‘Cerberus is not a deposit-taking institution that can act as an ATM machine for its portfolio companies.'” So now you know.
Chattahbox.com reports that a professor of chemistry at Rice University has created a car slightly wider than a strand of DNA. Jame Tour’s nanovehicle is 3nm along and 2nm wide. “It rolls on buckyballs, which consist of 60 atoms pure carbon formed like a sphere, includes a chassis with an engine, a pivoting suspension.” Sweet ride! I mean, it does move, right? Absotinylutely! “By heating the surface that the cars are on, the team is able to excite the molecules in the vehicle, and they move forward in a straight line until they hit an object. [Are you in good hands?] The light motion works on the principle of photo activation.” But don’t get to thinking that this bad boy is ready for prime time. “They are manufactured in a 20-step process similar to the way many drugs are synthesized from small molecules in closed reactors. They are then suspended in toluene gas and spun cast onto the gold surface… it took Tour and his team eight years to build the car. One of the significant challenges was attaching the wheels because the buckyballs had the adverse affect of shutting down the binding property — the palladium reaction — used to form the rest of the vehicle.” Don’t you hate it when that happens?
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