As demand goes, so also goes production. With sales dropping month after month, nearly every major player has been slowing or shuffling production for some time now. Today we are being treated to a pile of cutback stories that is so large as to invite speculation on the timing of the simultaneous announcements. By the way, if you love conspiracy theories and have the [sub], AN’s James B Treece will tell you his favorites. Just remember, all that glitters is probably tinfoil. Anyway, back to the horrible news about how horrible everything is. GM is slashing 250k units from its Q1 production plan, reports Automotive News [sub], a move that affects “virtually” every GM plant. The General Motors that built 885k units in Q1 of this year is looking at a production target of 425k for Q1 2009. GM denies that it will close all its plants for all of January, but according to spokesfolks “it’s safe to say that most of our plants will be closed the week of Jan. 5.” And GM is far from alone. Chrysler, Honda, Subaru and Toyota all have their own awful news to pile up on the mess.
Category: News Blog
GM first made Saturn’s “strategic review” official in the bailout-begging, condition-floating context, although Lutz swears Ol’ Man Wagoner was on it months ago. Anyway, now that the industry has processed the news, there’s a rash of post-Saturn plans flying around. Our man in China seems fairly convinced that Chinese firm SAIC could make a bid for Saturn and its conveniently independent dealer net of over 400 stores. Another possibility that might be more palatable for GM comes from Automotive News‘ [sub] Richard Truett, who reckons the General could kill two birds with one stone, by “handing the keys to the Saturn brand to GM’s German affiliate, Opel.”
Jonny Lieberman just belled me from Spring Mountain Motorsports Ranch outside of Sin City. JL’s flogging the new 370Z on Nissan’s nickel, putting the transplant’s smaller, faster coupe through the corners on our behalf (quel sacrifice!). The TTAC scribe will be scribing his review soon, but initial impressions are… good. “It’s a good car,” Jonny told me with uncharacteristic reserve. “Neutral. Nice.” Tell me more, tell me more, did the synchro revs match? “Around town, it’s fine. But let’s say you’re charging down a straight in third gear, at about 7000 rpm. Red line’s at 7500 rpm, right?” “Right!” So you’re braking hard and you want a lower gear. As it shifts, the tranny blips the throttle. That sucks.” “Yeah I hate it when that happens.” Anyway, even though JL believes Nissan’s assertion that their updated roadster is as fast around a track as Porsche’s hardtop two-seater, a Cayman killer the new Z ain’t. “It’s probably more aimed at the Mustang GT. Against that it’s a Hell of a lot more neutral in the corners.” Safe! Not that Mr. L has that at the top of his priority list. What does linger there will soon be revealed….
For some companies, the ongoing financial crisis will be fatal, but for others, it may turn out to be a historical opportunity to re-define themselves. When weak brands disappear, others can fill their niche. Honda, for one, seems to be one of the first car makers to seize the opportunity that the industry’s re-structuring is providing. “Where we want to be by 2015 is the environmental leader. I mean that in a credible sense, not a greenwash sense,” Chris Brown, the head of marketing for Honda Motor Europe, told The Guardian. Which is easy to say, although Brown says Honda does support an eco-rating system to prevent misleading environmental advertising claims. But the first step in this branding conversion was announced last week, when Honda said it would be terminating its Formula One activities and re-assigning its F1 engineers to work in eco-technology. Egads! Is Honda about to put all that talent towards becoming the car for the dour, anti-car league? Honda is directing its $150m+ ad budget for Europe and Africa towards addressing this question. As Brown puts it, “We want to change the conversation completely. At the moment everything is heavy-handed, preachy and overwhelming. We want it to be positive, optimistic, joyful, powerful.” Read More >
Nissan is wasting no time wasting the Quest minivan, and platform sibs Armada and QX56. All three vehicles are a drug in the marketplace– and it ain’t cocaine. Motor Trend almost connects the dots, “Nissan has partnered with Chrysler to shift the full-size Nissan Titan truck to the Dodge Ram platform, and it appears now that more changes are underway for Nissan’s large vehicles.” Hmmm. Do you think that any new SUV for the U.S. market might be based on that platform, rather than what they done built down in Canton, Mississippi? You know, kinda like the Sequioa sits on the new Tundra? Could be. But I reckon MT’s right on the money (or lack thereof) when they suggest that the Quest and QX are being KOed completely. And here’s why… “Nissan and Infiniti sold a combined 72,450 of all those three models in 2007. The Armada posted a whopping 70.5% drop in November and is down 49.1% so far this year. QX56 sales fared slightly better, dropping only 53.3% in November and 33.6% this year. The Quest was by far the worse off of the three with sales dropping a catastrophic 81.3% in November and 33.3% this year.” Sayonara. Over and out.
Important Message Update: White House Statement
Mark LaNeve, Vice President, GM North America
12/12/2008
Dear U.S. Dealers:
Last night the United States Congress failed to reach agreement on a $14 billion emergency bridge loan in support of the domestic auto industry. Obviously, we’re very disappointed in this development. As critical a situation as this is, GM’s leadership continues to look at options to restructure and stabilize the business in this exceptionally difficult economic period.
I can’t possibly express my appreciation and pride for your participation in this effort. General Motors dealers could not have done more to show support for the loan legislation. You and your teams made thousands upon thousands of contacts with our congressional leaders. Many of you traveled to Washington to meet with your representatives personally, while others organized funds to place ads in local media. I truly believe that your voice was heard and that your efforts will impact the future outcome…
Although I am a long-time critic of long-term tests of hideously over-equipped press cars, raising as they do the questions about Motor Trend’s objectivity, I can see the value of knowing how well a vehicle performs over the long-haul. So, as TTAC’s refocusing its efforts on those four-wheeled thingamabobs known as “cars,” I thought I’d weigh-in with a little encapsulated commentary on the family Honda Odyssey. Before I do so, I want to take this opportunity to tell the world that I have hatred in my heart for Honda’s Majesterial Rhode Island dealer. Suffice it to say, I have sworn off the entire brand because of the treatment received. Ahem. Michelin PAX tires. They blow.
The news of Congress killing the bailout plan got Europe really worried about the survival of Opel and Saab. Work is afoot to keep them viable, even if GM should go under. Workers at Opel are willing to trade salary cuts for a stake in the company. One condition: Opel severs financial ties with GM. That according to Auto Motor und Sport via Reuters. AMS has access to internal documents from the IG Metall engineering sector union. Opel management is looking for $750m in costs savings. According to the paper, the unions are willing to give them the savings, in return for getting a part ownership of Opel. The union has told GM management that the plan “hinges on separating flows of finance between GM’s European business and struggling parent GM,” Reuters says. Otherwise, the danger of the money “disappearing in the big GM pot is too great,” the working paper says. Euphemisms aside, “separating financial ties” means separating ties, period. A month ago, the German metal workers union had already offered pay concessions, under the condition that Opel is being separated from GM. More money could be coming from governments. As reported in today’s WAS, the Swedish government already has offered financial support for Saab. The German government has been petitioned for $1.34b in loan guarantees. Now if Saturn goes to China, and if Opel gets liberated, what would be more logical than a Saturn-Opel-Saab pact, helped along by the Swedish, German, and Chinese governments? Meanwhile in the UK, Vauxhall offers workers 8 months off for 30 percent pay, the Times reports. Vauxhall made this offer to most of the 2200 workers at its Ellesmere Port in Merseyside.
In the last E85BOTD, Farago had the temerity to suggest that perhaps E85 and E10 are DOA. And we have surely come a long way from even nine months ago, when corn-based ethanol was still publicly accepted as an environmentally-friendly fuel for American energy independence. You know, a tortilla riot and media feeding frenzy ago. But mandates are still in place, and as the Chicago Tribune reports, the ethanol industry is awaiting the Obama inauguration with quivering anticipation. After all, Obama has long touted ethanol as a cornerstone of his energy independence plan, even pledging that all new cars would be flex-fuel by 2013. And a quick look at opensecrets.org (tsk, no ethanol breakouts) shows that a number of big names in biofuels gave heavily to Obama and the Democrats. Also, the recent announcement that Dr. Stephen Chu, Lisa Jackson, and Carol Browner will fill key energy and environmental roles in the Obama administration has the biofuel bizz cheering. Of course the all-flex-fuel-by-2013 pledge was qualified with a hearty “if elected,” and these things have a habit of changing. Just ask the UAW.
The Washington Post reports that President Bush has signalled (from Air Force One no less) that he will “consider using funds from other sources to provide emergency aid to the nation’s Big Three car companies following the Senate’s rejection Thursday night of a Congressional bailout plan.” This is a reversal of Bush’s previous insistence that the money for Motown’s Troubled Twosome (Ford’s maintaining its low profile) must come from the Department of Energy’s $25b “retooling” loan program, and follows Congress’ abortive efforts to scarf the funds. “Under normal economic conditions we would prefer that markets determine the ultimate fate of private firms,” the White House statement said. “However, given the current weakened state of the U.S. economy, we will consider other options if necessary — including use of the TARP program — to prevent a collapse of troubled automakers.”
And there you have it: Senate republicans have scuppered the Detroit bailout. Automotive News [AN, sub] reports that democratic Senator Harry Reid has thrown in the towel at the the eleventh hour (literally). “”We have not been able to get this over the finish line,” Senate Majority Leader Harry Reid said after 10 p.m., following daylong negotiations to broker a deal among lawmakers, automakers, auto workers and other interest groups.” AN clearly identifies the United Auto Workers as the gordian knot that could not be unpicked. “But few could have predicted the final stumbling block: A dispute over when UAW workers would consent to have their wages reduced to match those paid to nonunion workers in U.S. import-brand factories. ‘We are three words away’ from an agreement, said Sen. Bob Corker, R-Tenn. He said workers wouldn’t accept a 2009 deadline for the parity demand.” And why would they? They’ll get less of a “haircut,” and more power, in bankruptcy court. Meanwhile, GM released a statement on the bill’s failure…
Topgear.com/us/blog reports that NBC has decided not to add the U.S. version of the British car show to their prime time line-up. Well, to any part of their lineup. “We have a scoop on the much-anticipated U.S. version of ‘Top Gear’: BBC has decided to take the show to cable, where presenters’ funny mouths, from which often spill foul words, will be more at home. There are no hard feelings and NBC will be sharing custody of ‘Top Gear’ dog. A number of cable networks were delighted with the news… watch this space.” Yeah right. NBC killed it– I mean the BBC “moved it” to cable because of swear words which, as everyone knows, can’t be deleted or bleeped and would cause NBC’s twenty-four prime time viewers to change channels. And the presenters couldn’t be happier with all this. In any case, given Top Gear US’s phenomenal, NBC-funded budget, we’re looking at one of two possibilities. First, Top Gear US will air on cable, and then die. Second, it will air on cable, and then live– as a MUCH smaller-budget program. And then die. Meanwhile, the mess is so bad, the Top Gear blog is distancing itself from the wreckage. “This gives us an opportunity to clear up some of the confusion regarding why TopGear.com is here. Lots of people, judging from comments and discussions in the forums, think we’re the support website for an American ‘Top Gear’ television show. We’re not. Heck, we couldn’t even discuss a pilot that was allegedly filmed at some point last summer somewhere much warmer than the frigid climes that surround our office in New York.” If you think it’s cold now…
I’ve been watching the polemics coming from the media within Fortress Detroit with increasing fascination. As the bailout bill has stumbled, faltered and face planted; the hometown cheerleaders’ tone has evolved from arrogant and bombastic, to arrogant and vindictive, to plain old vindictive. Detroit News carmudgeon Daniel Howes has always been one of the less aggressive of this cohort. His commentary has consisted of equal parts commiseration, head shaking and exhortation. Now that the Detroit bailout bill is DOA, Howes is struggling to put what Jalopnik calls the “carpocolpyse” into palatable perspective. Last night’s column, written as the bill went up in flames, frames the defeat as a North – South deal. “[The unions’ Political Action Committees] ignored the Republicans, even auto state Republicans, who represent the so-called ‘New American Manufacturers’ in places such as Kentucky, Tennessee and Alabama… Stripped bare and put in the regional context of union vs. nonunion and domestic vs. foreign, the toughened conditions pushed by Sen. Bob Corker, R-Tenn., are legislative cruise missiles aimed directly at Detroit’s business model, the UAW’s Solidarity House and 70 years of Big Three bargaining tradition.” While Howes considers Southern senators’ attempt to force the UAW to modernize is “understandable,” given “given Detroit’s glacial pace of change,” he predicts bad, bad things. In that “don’t tug on the tiger’s tail” kinda way…
It’s high time to start a new TTAC category: China Buyout Watch. It’s good for at least a post a day. The latest: “SAIC is likely to be the potential buyer of Saturn,” says Gasgoo after reading the print edition of China Automotive Review. They cite an email letter that has told Saturn dealers that interested buyers were ready to buy Saturn. A Detroit-area dealer for Dodge and Saturn said GM was seeking buyers in China. According to the report, GM tries to package Saturn and Hummer together. A price has not been named.
After last night’s Congress cruelty, there might be government help after all. From the Chinese government. In China, the interest of Chinese automakers has grown far beyond the rumor stage. Today, government-controlled China Daily (THE English speaking news outlet for the official party-line) runs a long article on the Chinese aspirations to snap up juicy bits of Detroit. Actually, as China Daily sees it, it’s Detroit that’s making the advances to China. The headline says it all: “Big 3 look for Chinese medicine.”
After issuing the appropriate CYA cautionary notes, as in “Chinese companies should exercise caution when it comes to acquiring US assets,” China Daily lists a virtual speed-dating session between Chinese and Detroit automakers …
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