Like our friends up in the RenCen citadel, New York State has been taking in less than it spends. In a big way. In fact, The Empire State has racked-up a $15.4b deficit. A fact that somehow didn’t make it into The New York Times story on Governor Paterson’s plans to drain $9b from Albany’s pig trough and tax the beJesus out of anything that moves or breathes within his state’s boundaries. We’re talking 137 new or increased taxes and fees. And guess who takes it on the metaphorical chin? iPod users! Not to mention… “The tax on car rentals would rise to 6 percent from 5 percent… Taxes on gasoline, cable and satellite TV service, cigars and flavored malt beverages would also go up. And the cost of owning and operating a car would rise significantly, with 16 fee increases.” Including (but not mentioned in the article) a five percent tax on any vehicle that sells for over $60k. TTAC’s UK readers will roll their eyes at any idea that NY drivers will crumble under the yoke of such a puny extra burden, but it looks like a slippery slope to me.
Category: News Blog
With Chrysler going on what may be a permanent Christmas vacation, things aren’t going good at all round Auburn Hills way. Especially with the Cerburian masters busy sweating the GMAC situation. Automotive News [sub] communicates the urgency of the situation the only way it knows: by extolling how much more necessary this makes a bailout. But you won’t learn much by reading the rhetorical flailings of bailout-backing legislators. No, to get the real skinny on how bad things are you need a good old-fashioned racing metaphor from Dodge Motorsports director Mike Accavitti. “We are going to throttle back,” he tells Automotive News [sub]. “We have to reduce our spend. We have to get our expenses in line with our revenues.” Madness. And what of the literally hundreds of people who buy Avengers because of their epic oval exploits? “NASCAR is not exempt from anything else that we do to market and promote vehicles,” reveals Accavitti, who says Chrysler has plans to cut its NASCAR spending by more than 30 percent next year. Not too shabby for a company that’s literally at death’s door. Honda, Subaru and Suzuki ditched high-profile racing programs this year due to declining sales. And they all plan on staying open past December without receiving government aid. What’s wrong with this picture?
The fate of GM’s dead brands walking generates rumor and hearsay like few other topics. GM is unraveling into a buyers market, and secret talks are typically denied within hours of their leaking. Ironically, one detail that rumors seem to have in common is the proliferation of Opels in the United States. Thus far Saturn has been the defacto donor brand for American Opels, but Motor Trend now claims it “makes sense” for Buick to cover Opel with brand familiarity. Read More >
The Wall Street Journal (WSJ) reports that General Motor’s former captive finance unit and current chest-strapped TNT device looks set to miss its deadline for a debt-for-equity swap. GMAC needs to get the deal done to transform itself into a bank and score federal funding under the Troubled Asset Relief Plan (TARP). “GMAC needs to show $30 billion of capital in order to become a bank holding company regulated by the Federal Reserve… As of Wednesday, GMAC had received 58% of existing, eligible GMAC debt securities and 38% of outstanding debt securities of ResCap (as the mortgage unit is also known) — little changed from late Tuesday. Around 75% of the selected securities must be tendered for the proposed debt restructuring to succeed in raising capital that would go toward satisfying GMAC’s conditions to become a bank holding company.” Those plans took a major hit today…
We just had a public sale close up in Atlanta. This was a place I called ‘The Red Light District’ for the whorific dealers and management team that ran it. These putzes used to steal keys after the cars ran through, knock out odometers (to hide real mileage), put racing oil in the engines, and did everything short of telling the truth to their customers. But for every jerkoff at this place that bought a near dead car at the impound lot sales and sold to a clueless public, there were other public sales that did offer some (not all) good vehicles. How can you tell the difference? Here’s one clue. Look for the names of the sellers. If new car dealerships, credit unions, banks and rental companies make up the bulk of their business, it’s generally a good operation. It doesn’t mean the car you eventually buy will be worth a flip. But if you’re willing to play the automotive lottery you deserve to dream. Just make sure you don’t buy anything too shiny or hip.
From GM’s FastLane Blog: “We’ve been very proud of and grateful for the support and encouragement we’ve received from so many in the business community recently, especially locally here in Michigan. Jim Hiller, CEO of Hiller’s Markets, recently wrote this post on his corporate blog in which he explained why he feels it important to buy from American-based vehicle manufacturers and why he supports his community here in Michigan. We thought Mr. Hiller’s comments were worth sharing.” – Christopher Barger, Director Global Communications Technology” Excerpt:”My epiphany came as I stood on slick-top pavement in a moon-lit night, waiting for my car after a fundraiser for the Juvenile Diabetes Research Foundation. I stood with General Motors Vice-Chairman Bob Lutz, watching foreign car after foreign car drive away into the rain-slicked night. He turned to me as those foreign luxury vehicles peeled out of the parking lot and said, ‘How many people realize that when they buy an American luxury vehicle, they’re providing work for a dozen people for at least a week?’ Before then, I hadn’t felt in my bones the direct connection between the car I drive and the people in my hometown being in, or out, of a job. Many of my friends had told me so, but I didn’t listen – friends from other countries, shaking their heads in disbelief at the thought of neglecting one’s homeland… I don’t even remember what kind of car I was driving, but the next day I bought a Cadillac STS and loved it. All of my preconceived notions that foreign cars were better-made and were longer-lasting, well, they proved untrue.”
Knowing Jonny would be interested, I rushed pricing for the 415-horsepower Pontiac G8 GXP into TrueDelta’s database, so you can now configure one here on TTAC as well. [To my knowledge, there’s nowhere else you can already configure a G8 GXP.] Base price is $39,995 after destination and the gas guzzler tax–the EPA ratings of 13/20 are almost identical to those for an SRT8. This is what happens when you delete the GT’s “active cylinder management.” The only options are $695 if you want the manual (not available at any price on an SRT8 sedan) and $900 for a sunroof. Bluetooth has been added to 2009 G8s, but if you want nav you’re still SOL. This pricing puts the GXP about $1,700 below a Dodge Charger SRT8 at MSRP. At invoice–what you’ll more likely be paying–the difference is a smidge over $1,000. The premium over the 361-horsepower GT? About $6,500 even after adding leather seats to the latter (they’re standard on the GXP). And that’s before including the $1,500 rebate on the GT. No word yet on whether the GXP will get the same rebate right out of the gate. But seeing as the GXP can’t be worth $8,000 more than the GT, a rebate at least this large seems almost certain.
[TrueDelta is a TTAC information provider]
The bad news is that GM is so desperate for cash, it’s literally selling off its glorious past. Jalopnik reports that GM is auctioning off “many recent and slightly less-important vehicles from its Heritage museum Collection.” The good news? This is your chance to save GM, and get your hands on some of the products that once made GM the largest corporation in the world. As well as tons of the products that brought The General from there to Barrett-Jackson in search of cash flow. Plus some other random stuff (Pug 205 Turbo?). The auction will take place January 13-19, 2009 in Scottsdale, AZ. Mystifyingly, GM is even listed as a sponsor. So go on down and do your patriotic duty, and take a teal 1998 Riviera for the team. Or just gaze once more at the Art and Colour of General Motors wile crying softly. Full list of former GM Heritage Museum Collection vehicles on the auction block after the jump.
Oh dear. At one time, The Bentley GT Coupe was the UK footballer’s favourite. And it may still be, given that young men with a supernatural ability to play the beautiful game tend to spend orgiastically, ignoring such petty concerns as depreciation. But the fall-off in automotive values during these recessionary times is enough to give their accountant pause. UK auto industry experts HPI report that “the Bentley GT Coupe is depreciating at £500 ($753.37) more per week than it did 12 months ago. This means owners will lose over £67,000 ($100,874.89) in value, which is 56% of its £120,000 ($180,731.64) new price tag, in the first year. “Looking ahead, the huge rate of depreciation means the more affluent consumers will change they way they shop,” HPI’s Martin Keighley predicts. “Luxury models such as Ferrari and Porsche used to have bullet proof residuals, but with consumer confidence at an all time low these once secure purchase items will not seem so attractive. Buyers are going to be looking at how well a vehicle holds its value before splashing out, which doesn’t bode well for high end models.” Make the jump to see the UK’s worst depreciators.
Ah ha ha ha — I’m still having a ball. I love these X vs. Y QOTDs. Maybe it’s time for a new feature? Hmmm… Anyhow, there are a lot of people (er, were a lot of people) that purchase two-door sports coupes. So many in fact that Nissan’s on their 6th iteration of the Z and Ford’s Mustang is older than most people. Last week through, uh, fate, I was able to drive the 2010 versions of each car (Mustang review here ,370Z here). And as different as they are, man, are they the same. The Z makes do with “just” six cylinders yet weighs about 200 pounds less than the more powerful V8 ‘Stang. Therefore performance is nearly identical. In fact, so close that it just doesn’t matter. But surely the IRS Nissan has the edge over the live axle Mustang in the handling department, right? The 370Z might be able to provide flashier numbers on a skid pad, but on the street? The two cars feel equally capable. Looks? Take your pick — both cars are muscular, handsome, loaded with retro cues yet modern. Hamburger vs. Sushi? Depends on my mood — one has no inherent advantage over the other. 5-speed vs. 6-speed? I prefer 4-speeds. Interiors? Both are good, not great. So, how then? Here’s the thing — Nissan swore up and down that when they were developing the 370Z they didn’t bother to benchmark the Mustang. Porsche Cayman? Yes. BMW Z4? Yes. Audi TT? Yes. But while they were playing footsies with the Germans, Ford went ahead and developed the Bullitt, one of the greatest cars of the last 10 years. And the 2010 Mustang GT is a better Bullitt. So yeah, Mustang for me. You?
Engineer A: How’s testing on the Merak going?
Engineer B: The brakes catch fire all the time.
Engineer A: Put in a warning light.
Engineer A: Make it big.
Autoexpress has one of those compelling-but-mysterious stories on a possible new MPV from Toyota. We know that it will be a compact seven-seater, but the basis for the new MPV is still unclear. “We’re looking at a seven-seater based on the Prius. It would use a lithium-ion battery, and could be here by 2012,” says one anonymous tipster. But iQ city car chief engineer Hiroki Nakajima claims that another approach could be in the cards. Specifically, Toyota is looking at proliferating iQ space-saving developments across its product line, and Nakajima reckons that iQ breakthroughs could be used to squeeze seven seats into a Yaris platform. “We’re working on a seven-seater that’s the size of the Yaris,” says Nakajima. “We can do it, and give limo-like legroom in the back!” Of course this approach would likely make a hybrid system too expensive. For the US market, a slightly-larger Prius-based option (such as the Estima concept pictured above) would likely be a more popular choice. Frankly, the California soccer mom arms race would never be the same. Until the Lexus version comes out.
OPEC’s threatened 2 million barrel/day output cut has done nothing to halt oil’s collapse. The AP reports that Wednesday’s futures market dipped below $40/barrel for the first time since 2004. Markets are spooked by the realization that even mighty China is in a world of growth hurt at the same time as an unprecedented continued fall in US demand. US “demand for gasoline over the four weeks ended Dec. 12 was 2.7 percent lower than a year earlier.” “‘There’s just so much oil in inventory out there right now,’ said Michael Lynch, president of Strategic Energy & Economic Research. ‘Nobody wants to buy this stuff.'” Read More >
Fourteen US companies have ganged up on the taxpayer to demand $1 billion so they can get back into the battery game. Today’s Wall Street Journal tells the story of this “latest pitch from corporate America to inject federal dollars into a project”. Alliance participants point to the 1987 creation of Sematech as an example of a successful government-industry partnership. There are, however, some big differences between the US Semiconductor industry of 1987 and the almost non-existent US advanced battery industry of today. The US’ semiconductor industry was a world leader in 1987 and was shocked into further efforts by the rise of Japanese competitors who made higher quality, lower priced memory chips. The US battery industry, on the other hand, was largely abandoned by indigenous firms as they chased ever higher return-on-investment businesses in order to boost short term stock prices. The story of failing to keep a hand in significant games due to the lure of better profits elsewhere has been told over and over again in America’s MBA infested halls of shame. Read More >
Well, it was only a matter of time. After all, the ethanol industry receives about $7b in annual government subsidies and still can’t turn a profit when times are good. Why, they’re going to need the most special bailout of all! The WSJ’s Washington Wire reports that the Renewable Fuels Association recently sent a bailout-begging mission to DC. The RFA lobbyists met with congressional and Obama staffers and reportedly “provided them with some ideas on how to craft the language of” an economic recovery package. Run that phrase through the DC bullshit decoder, and it turns out that the RFA team was actually lobbying for a massive bailout package. And a hauntingly familiar massive bailout package at that. The RFA is seeking $1 billion short-term credit facility so ethanol producers could finance current operations (think “bridge loans”); a $50 billion federal loan guarantee program to finance investment in new renewable fuel production capacity and supporting infrastructure (think “136 loans”); and a requirement that any auto maker receiving federal aid only produce new vehicles that can run on any blend up to 85% ethanol, beginning with the 2010 model season (give up on democracy). Meanwhile, the RFA’s Matt Hartwig insists that “we’re not asking for a specific bailout, but rather, as a trade association, we’re providing ideas to an incoming Congress and a new administration about ways to bolster the domestic renewable fuel industry.” Right. (Hat Tip: Reason Hit & Run)
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