The next generation Subaru Legacy is headed upmarket, with a new 3.6 liter boxer six (hello Zuffenhausen!) and six-speed transmission. Familiar 3.0 and 2.5 liter boxer engines should return, and will be joined by the world’s only diesel boxer; a 2.0 four-banger that will almost certainly not make it to the States. More details when the Legacy Concept previews the new look of Legacy at the Detroit Auto Show. If there still is a Detroit Auto Show.
“There’s an orderly way to do bankruptcy that produces a soft landing,” White House spokeswoman Dana Perino said today. “That’s one of the options.” As we’ve said before, the longer this goes on, the shorter the walk to bankruptcy court. Speaking of which, Bloomberg reports that “The federal bankruptcy court in Detroit, preparing for large reorganizations including possible filings by General Motors Corp., Chrysler LLC or Ford Motor Co., has changed some of its rules. Efforts to make the jurisdiction more business-friendly may prompt automakers to seek protection in their Michigan home, rather than in the traditional, big-business venues of New York and Delaware.” The court has passed a new administrative order that empowers the chief judge to choose a bankruptcy judge for any given case (as opposed to random selection). At the same time, they’re reviewing staffing, security and technology functions, waiting for the “big one.” Or two. Or three. “There is no district in the country that has a greater stake in the outcome of a filing by one of the Big 3 than the Eastern District of Michigan,” said Chief Judge Steven Rhodes. Ironically enough, it looks like there’s one part of Motown’s business where the state will fight outsourcing.
Are you in automotive R&D? Experience and successful track record in automotive marketing? Worried about your job? Polish up your resume. Chinese automakers are hiring. “After considering the risk of buying US auto manufacturers’ assets, Chinese automakers realized that targeting their research and development (R&D) talent would be a more realistic and profitable option,” writes China Daily today.
China Daily called around. Zeng Qinghong, General Manager of Guangzhou Automobile Group, for instance said that his company is not interested at all in buying brands or whole companies in the U.S.A. However, he’s very interested in US auto professionals. The head of his research center had already been on a recruitment trip to the US, and he was surprised: “Interest shown by US auto talents in Guangzhou Auto exceeded expectations.” Xu Heyi, board chairman of Beijing Automotive Industry Corp said that they are also interested in talent from the US. Even the Chinese government is prodding their auto industrialists to buy themselves some foreign know-how.
The glorious times when Japan could pride itself as the world’s second largest auto market are definitely over. Never mind that next year will be the year of the bull according to the Chinese/Japanese Zodiac. As cars go, 2009 will be a grizzly bear, the Nikkei (sub) reports. The Japan Automobile Manufacturers Association projects domestic new car sales for 2009 to come in at a paltry 4.86m 4.9 percent below 2008. For the first time in 31 years, Japanese new car sales will be below 5m. If the JAMA projection is correct (and it could be worse,) new car sales in Japan will have declined for five straight years, with the market shrinking by 40 percent from its peak of about 7.78 million units in 1990 to a not seen since the late 1970s. Even the burst of the Japanese bubble in 1990 didn’t have the implosive energy of what’s happening now: Sales dropped into the mid 6m, and recovered in 96. Since 97, sales remained in the high 5m, and started deteriorating in 2006.
JAMA sees large vehicles and luxury models as particularly endangered. The impact on mini vehicles will be less severe, with sales expected to total about 1.85m units in 2009, down only 1.6 percent from the figure forecast for 2008. The trade group sees this trend to continue. Overall domestic sales in Japan for 2008 are projected to reach 5.1m vehicles, down 4 percent from 2007. With an aging population and a protracted recession ahead, this will be the last 5m for quite a while.
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.
Nikkei: GM & Chrysler talking again: The biggest news in Japan today is that “General Motors Corp. and Chrysler LLC have reopened merger talks, as Chrysler owner Cerberus Capital Management LP has signaled its willingness to give away part of its ownership in the auto maker,” the Nikkei (sub) writes. The Tokyo paper assumes that “the renewal of the talks could be a way for Cerberus to show Washington — which is weighing a $14 billion rescue package for the auto industry — that it wants to cooperate in restructuring the industry.” Japan is very worried about any of the D2.8 going out of business, as it would decimate the supplier base of their transplants.
Japan on slim-fast: The Japanese are skinny already, pocha-pocha (chubby,) or even debu-debu (fat,) are a rare sight in the land of sushi. Prepare for even leaner figures, the Nikkei (sub) writes. “The situation is worsening day by day,” Honda President Takeo Fukui said yesterday, “no signs of a recovery are in sight.” In addition to the austerity measures already announced by Honda, there are more: One year delayed are a new factory in Yorii, and a new R&D center in Sakura, originally scheduled to come on-stream in 2010. Honda group firm Yachiyo Industry likewise delayed their new factory in Yokkaichi by slightly more than a year. Nissan said yesterday that it will reduce domestic car output by and additional 78,000 units than previously planned. The Nikkei: “Freshly revised production figures from Honda and Nissan have increased the total planned worldwide output cut by Japanese automakers for fiscal 2008 to slightly more than 2.2 million.”
The car bloggers went sub-ballistic (what would that be, scientists?) today because Honda announced that it was killing the NSX project. Well, I say good riddance to a stupid idea. I’m in that camp of people that thinks the original NSX is the very rare car that came out perfectly. And while many people have admonished me for clinging to outdated conceptions of what a particular car or company “should” be (like the 1-Series not being a suitable sucessor to the 2002, or the Subaru Forester betraying its goofwagon roots), I can’t understand the business case for a front-engined V10 Acura NSX. Trickle down tech? Maybe – though certainly not the V10 engine, unless it was going to be tacking two extra cylinders onto Honda’s already dubious planned V8. Front engine supercar? Plenty of those out there. Expensive? Again, plenty of those out there. Lexus reportedly cancelled its LF-A program because it was clear that they weren’t going to take down Godzilla (the Nissan GT-R). So why would Acura plan differently? I think people would welcome a modern version of the original NSX concept, though – a mid-engined car with the best handling in the world, a great gearbox, and a relatively simple V6 or V8 engine. Or, as Lieberman says in the podcast – Honda’s version of a Ferrari F430. Sold.
In today’s TTAC contest, we were looking for the best bumper sticker slogan for the bailout-begging CEO. And man were there some good ones. We had several Jet-Gate references, from My other car is a Gulfstream/Learjet/LS430/Golden Parachute to I’d rather be flying. A few were based in visual gags, such as The Darwin fish eating Chrysler and A graphic of the Democratic congressional leadership: Don’t Laugh. They’re Paid For. Still others riffed on some of the classic standbys of the bumper sticker universe. Ass, Grass or Duracells- No One Rides For Free would be great on a Volt, as would My Child is Honor Student at Detroit Elementary School, and he could have have run this company way freakin better than I did. Finally, a few popular bumper stickers would have made great additions right out of the box, specifically Baby On Board and What, Me Worry? And we loved the idea of slapping a certain infamous quote by a certain Maximum auto executive on Wagoner’s DC-bound Volt mule. But only one quote could win…
Yes, bailout watchers, President Bush was under pressure to make an announcement today on the possible use of TARP funds to rescue the domestic auto industry. And by the looks of things round Chrysler way, waiting even until today was probably a stretch. But Bush has juked expectations (and not for the first time) by failing to make any kind of announcement by close of business today. And this mysterious defiance of the media-proclaimed deadline has ABC News wondering “What’s Taking So Long?” No, seriously, that’s the headline. Not being the kind of news source that asks a question with no convenient answer, ABC quickly reveals that “some of the GOP senators who killed a congressional bill to save American carmakers last week have written to the president to say they don’t believe ‘any amount of money’ will save the struggling car companies without major changes to how they operate.” The letter was signed by senators Jim DeMint; Jeff Sessions; John Ensign; Tom Coburn; John Cornyn; Mike Enzi; and Saxby Chamblis as well as more than two dozen Republican members of the House. The White House responded through spokesman Tony Fratto, who told ABC “it’s a huge industry, and both the problem and the potential solutions are complicated. Congress is leaving the administration with suboptimal choices to deal with the issue.” Meanwhile, for Chrysler and GM the choices become increasingly “suboptimal” with every passing hour.
“Due to the continued lack of consumer credit for the American car buyer and the resulting dramatic impact it has had on overall industry sales in the United States, Chrysler LLC announced that it will make significant adjustments to the production schedules of its manufacturing operations. In doing so, the Company will keep production and dealer inventory aligned with U.S. market demand. In response, the Company confirmed that all Chrysler manufacturing operations will be idled at the end of the shift Friday, Dec. 19, and impacted employees will not return to work any sooner than Monday, Jan. 19, 2009. [emphasis added]
Chrysler dealers confirmed to the Company at a recent meeting at its headquarters, that they have many willing buyers for Chrysler, Jeep® and Dodge vehicles but are unable to close the deals, due to lack of financing. The dealers have stated that they have lost an estimated 20 to 25 percent of their volume because of this credit situation.
The Company will continue to monitor the production schedules of its manufacturing operations moving forward.”
The new Flint, Michigan engine plant slated to build the ICE for the Chevrolet Volt has been put into deep freeze. AP (via Yahoo) has this latest tale of woe. Word is that GM has shut down construction because it doesn’t have the cash to pay for steel structural members. The Volt’s 1.4 liter four banger is to be shared with the Chevy Cruze, and both engines are planned for the brand new factory. Why is GM constructing a new building to manufacture this engine while at the same time closing factories by the dozen? Ah, the answer is hidden in Spokeswoman Sharon Basel’s statement: “The company already makes the 1.4-liter engine at a plant in Austria, she said, giving it another option for engines.” The last thing cash strapped GM needs is another engine factory while global automotive demand is imploding. If the Volt ever appears, look for its exhaust note to have a distinctly Austrian accent. California’s Governor Schwarzenegger will be so proud! Only four short months ago GM said it would spend $370 million building the new engine plant, and scored $132.5 million in Michigan tax incentives for its efforts. Hopefully Michigan didn’t put cash on the barrel. Bailout or no, the prospects for this factory going online are only slightly better than those for the revival of the GM Rotary Engine, likewise “put on hold” decades ago.
There has been a lot of speculation why the Chinese have such a hard time exporting meaningful numbers of cars. The Chinese government even has a 7 point program to boost exports – under review. Allow me to add an eighth point to the program – after all, 8 is a lucky number in China: Find someone who writes serviceable tag-lines, in English. “Unlimited Almightyness” (a tagline for the Great Wall Hover CUV) just won’t do, unless you are advertising the pope mobile. For a free review of your taglines, give me a call. New lines at a slight extra charge.
Sometimes a car is just a car: a large assemblage of metal, glass and plastic designed to provide mobility. But as the recent bailout hearings proved conclusively, sometimes a car can be so much more. A car can be a symbol of hope. A sign of change. Or a red herring. When GM CEO Rick Wagoner rolled up on the Capitol in his Cruze-bodied Volt mule, he expected it to erase the negativity that was spawned by Jet-gate only a few weeks earlier. And yet, somehow the symbolic power of the Volt arrival failed to inspire enough faith in GM’s future to secure a quick $34b. Perhaps Wagoner should have done more to amplify the message that a wholly unrecognizeable car (to congress and most Americans) was supposed to send. May we suggest that silver bullet of automotive communication, the bumper sticker? After all, nothing highlights the relationship between a one’s deeply-held values and their car’s brand image like a well placed bumper sticker. And so the question comes to you, oh Best and Brightest, if Wagoner could have slapped a single bumper sticker on his beltway beggarmobile, what should it have been? Answers can be existing bumper stickers or unique creations of your own twisted imagination. The winner will get $100 worth of Car Tattoos (your design or theirs) from Cartatts.com.
TTAC has long predicted a supplier-led “run on the bank” scenario, whereby suppliers demand COD and destroy Chrysler, GM and (yes) Ford’s life-sustaining cash float. While the automakers have managed to stave-off that eventuality– as suppliers jostle for their position in line at the bailout buffet– it seems that Chrysler dealers are showing the same level of respect to the corporate mothership as the channel stuffing colossus has shown its dealers. The Wall Street Journal reports that “Chrysler LLC’s financing arm has warned dealers it may have to temporarily stop loans that dealers use to pay for stocking vehicles on their lots as a result of a recent wave of withdrawals from a fund used to pay off those loans. In a letter dated Dec. 12, Chrysler Financial Chief Executive Tom Gilman said dealers have been withdrawing up to $60 million a day from the fund…. Gilman said more than $1.5 billion has been withdrawn from the CMA [cash management account] fund since July.”
As Detroit holds its collective breath on President Bush’s plan to pull the automakers’ collective fat from the metaphorical fire, the autobologosphere’s been quiet. No doubt something’s up, including GM’s stock. [NB: a large percent of bupkis is still bupkis.] And the longer this jury stays out, the more likely bankruptcy’s the final verdict. Yesterday, Moody’s published this report pegging the odds of a pre-pack with (federal debtor-in-possession financing) C11 at 70%. To which nobody said nothing (excluding own Bertel Schmitt). Today, The Wall Street Journal published a piece saying consumer resistance to buying a car from a bankrupt automaker is declining. And then there’s this, from Bloomberg…
The Zenvo ST1 hits 60 mph in 3 seconds flat and tops out at 233 mph, thanks to its 7 liter turbo- and supercharged V8. This “100 percent Danish,” 1104 hp, RWD beast is hand-built, and features a six-speed manual transmission and a hydraulic limited-slip differential. Nobody knows what it costs.
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