A contact who works for one of Chrysler’s tier 1 suppliers shared an interesting story… “Production at the Newark Assembly Plant (Durango, Aspen) has been ramping down as the Dec. 31 plant closing approaches. As usually occurs just before a model-year changeover, suppliers have been receiving “shortage” orders for their components as Chrysler tries to build out existing stock with a minimum of excess parts. But a recent and unexpected order for 2000 parts raised a few eyebrows. It seems that the Iraqi government has placed an order for 2000 Dodge Durangos to be delivered early next year. The Newark plant is more than capable of building them in time, but some suppliers with longer delivery lead times or full production schedules have been asked to pull off nothing short of a miracle to fill their orders. For certain suppliers, not even overtime will be sufficient to meet their deadline, leading to some logistical nightmare scenarios.
Category: News Blog
Please keep this email anonymous. I currently work for GM Holden in Australia. This is my second stint at Holden. As you may know Holden is an Iconic Australian brand that unfortunately has GM Cancer. Holden has always been successful in delivering pretty good rear wheel drive cars at good prices. Until, however we got caught up in the GM world with the GTO program. My first time at Holden was in 2000. It was a place were everybody was proud of what we did, knew what had to be done. Now it is a shell of its former self, with people totally beaten into submission. The last 18 months doing Camaro has really smashed Holden and its talented workforce. It replaced just about all of the Australian management with Americans with no experience in the Australian market, and could not be told they were wrong.
Over the weekend, Washington Post carmudgeon Warren Brown framed the pro and anti-bailout debate as a form of class warfare, pitting wealthy college-educated selfish bastards (i.e. journalists, Wall Street, Washington) against UAW-protected American-dream-seeking assembly workers (i.e. Detroit). This morning, The Detroit News’ resident poverty and employment policy specialist picks-up Warren’s placard and mans the barricades. In “Washington’s whipping boys,” Amber Arellano bites the hand that’s about to feed. “While Wall Street was welcomed into the front door on a Sunday night and served a bail-out with hot cocoa, Michigan’s auto chiefs have been publicly humiliated before the national press so Congress and the Bush administration can show voters they’re finally holding someone accountable for this disaster of an era.” I said, “While Wall Street’s 1990s orgy of deregulation wrecks the economy and the Manhattan Brooks Brothers set gets a true bail-out of more than $170 billion, the Detroit Three automakers beg for a loan — and get mocked as if they’re janitors at an arrogant New Jersey country club.” You might not agree with Amber’s assertions (here’s hoping), but this girl’s got some spunk!
Thanks to our new feature– What Wrong With This Picture (3WTP)– I am trained in the fine art of anomaly spotting. So when I saw this Autobloggreen (ABG) photo of Emmy Rossum filling-up her Blue Tec Merc with diesel, the cognitive dissonance nearly deafened me. First, check the posture. Emmy’s feet are way too close together for proper pumping. Second, the shoes. Have you ever tried driving an SUV in high heels? (Trust me, it’s not a good idea.) Third, why is she looking at the pump? I highly doubt she’s worried about the price. And if she was worried about nozzle blowback, she’d already be standing away from the vehicle. And then there’s the photog’s reflection. Only professional photogs assume that kind of contorted position, or use such a huge aperture (the camera). And so I read the text, which seemed to indicate that this is some kind of trend: celebs ditching Priora for Mercedes BlueTec diesel SUVs. Which makes no sense whatsoever. “Recently the likes of Naomi Watts, Kyle MacLachlan and Gary Oldman have been turning up driving Mercedes-Benz BlueTec diesels like the ML320 and E320. While these vehicles are not in the same green class as the Toyota, the do offer the other attributes of a Benz with much better fuel efficiency than gasoline-powered alternatives.” Which sounds an awful lot like PR copy to me…
The BS has landed, and WAS is back. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. Warning: If bad news give you heart or stomach conditions, refrain from reading.
Europe doubtful about bailout: Europe’s MSM says the fat lady hasn’t sung the aria of the bridge loan yet. Even if the Senate manages to finalize an agreement in principle on the $15b in short-term loans, it is “uncertain if it would become law,” Reuters says. “Skeptical Republicans could kill such a measure with a procedural hurdle that would need 60 votes to clear.” Germany’s Spiegel Magazine writes that bickering about the car czar is delaying a decision. The antichrist is in the details. In the meantime, the London Telegraph pours cold water on hopes of a quick turn-around. “The last recession, between 1989 and 1992, had a five-year impact on the car industry,” the Telegraph quotes Professor Garel Rhys of the Cardiff Business School.
Fiat too small to survive, enters dating game: Fiat CEO Sergio Marchionne said his company needs company. They are too small to survive alone, Reuters reports. Marchionne said that only six big players would be left following the crisis, and just one of those would be in the United States. After GM left Fiat in the dust and paid $2b to get out of their contract, there’s not much love left between Fiat and Detroit. As far as China goes, Fiat has made baby steps in joint ventures, but managed to step on toes big time with a commercial in which Richard Gere drove from Hollywood to Tibet in 30 seconds. Following that, Fiat had to “extend its apologies to the Government of the People’s Republic of China and to the Chinese people.”
European parts makers go under: Wagon, one of Britain’s largest car parts makers, “has gone into administration,” the Financial Times reports. That’s what the Brits call their bankruptcy. Wagon supplies car parts to Peugeot, Citroën, Mercedes Benz, Renault, Fiat and Audi. Meanwhile in Germany, TMD Friction went to bankruptcy court. “First large parts supplier goes bankrupt,” Manager Magazine writes. Obvious implication: First of many. As we shall see shortly …
The phone lines are running hot between Detroit and Shanghai. Ford is in talks with SAIC, China’s biggest car-maker, in what UK’s Times calls a “desperate attempt to sell its prestigious Volvo brand.” Ford has already tried before, and had been turned down by the Chinese. The Times quotes “a source close to the American motor giant” who says that earlier talks, which took place in summer, broke down over price. Ford had bought Volvo for $6.5b in 1999, and wanted to clear $5.9b. “Mei xi” (no dice) said the Chinese. The Detroit source that’s leaking to the Times (probably with a nod from higher up) says: “Now that Ford is in dire straits this would be a good opportunity for SAIC to snap up Volvo on the cheap. The price has dropped considerably since seeking a sale in the summer.”
According to Aaron Bragman, a car industry analyst with economic forecaster IHS Global Insight, “the sale of Volvo has become part of the conditions of Government assistance.” Ford is being advised by the investment bank JPMorgan Chase.
A spokesman for Ford confirmed that the company is in talks “with a Chinese car-maker,” but declined to name SAIC. SAIC likewise declined to comment. There are other suitors, just to keep SAIC from thinking they are the only game in town …
The nominations for TTAC’s Ten Worst Awards 2008 are now closed. I’ll keep the comments section underneath our two prior posts on this most TTAC of new car awards open, but that’s it: our list is complete. Frank Williams will, in due course, give you some insight into the vehicles selected and the comments used to justify the nominations. Meanwhile, I apologize for our site problems. I know that TTAC’s been as slow as Ford’s panther platform updates, and buggier than a Michigan windscreen on a hot August night. The speed issue is ongoing; we’re still trying to learn how to cope with traffic spikes [pictured]. The second seems ad-related. Any hints or geeky kvetches you can provide below will help our crack team of programmers and dev types, and probably, hopefully, make you feel better. Rest assured, I understand the need to provide our Best and Brightest with the best possible technical interface, and will stay on top of these issues until they’re resolved or the Moller Skycar takes wing. If you’d like to drop me an email about this or any other issue, please use robert.farago@thetruthaboutcars.com. I will reply personally, ASAP. Thanks for your patience, understanding and patronage.
If you think it’s a buyer’s market for new cars, oh man are you right. But you ain’t seen nothin’ yet. Literally. “At the Long Beach port near Los Angeles,” Reuters reports. “Toyota Motor Corp vehicles including Prius hybrids, FJ Cruiser sport utility vehicles and Lexus IS 250 luxury sedans are being stored on a vast construction site that will one day be a new container terminal. The site became a gigantic parking lot when Toyota and Daimler AG’s Mercedes-Benz asked the port for space to store thousands of vehicles that dealerships have not been able to take on due to sluggish sales.” Imagine this. “The port has not counted how many additional cars were being stored, but Wong said Toyota has leased an additional 23 acres of space while Mercedes-Benz has leased about 20 more acres.” So, if the ports are choking on new cars, where are Motown’s unsold machines? Everywhere, our spies tell us. Everywhere. Import or domestic, their products don’t have an idefinite shelf life. There’s only so long the manufacturers can afford to keep these new cars off the market, propping-up new car prices. Bottom line: as predicted here, new car prices are headed for one Hell of a crash. And soon.
The European Union is spending 8.1m Euros (US $10.3m) on wireless tracking systems designed to allow authorities to issue automated tickets. Pilot projects underway in Finland, France and Germany use systems designed by the VTT Technical Research Center of Finland as part of a project called ASSET-Road. Radio Frequency Identification (RFID) is a key component in achieving the goal described as “traffic violations detected in a flash.” “The intention is to elaborate for public authorities new innovative solutions and technology to gather traffic data and utilize it in traffic enforcement and surveillance,” VTT explained in a statement. Prototype units of the Finnish technology issue automated tickets commercial vehicles for violations. Last month, Arizona-based camera vendor American Traffic Solutions (ATS) announced it would begin selling a similar system to jurisdictions interested in ticketing truckers.
In his selfless campaign to save Detroit from, uh, Detroit, Senator Christopher Dodd launched a failure-seeking missile at GM. Needless to say, it had GM CEO Rick Wagoner’s name on it. “You’ve got to consider new leadership,” Dodd told “Face the Nation,” referring to GM not CBS (one presumes). Dodd said Red Ink Rick “has to move on.” Now get this: “GM spokesman Steve Harris said he didn’t interpret Dodd’s comments as making Wagoner’s exit a condition for aid, adding that the company management, employees and dealers ‘all feel like Rick is the right guy to lead us at difficult time.'” Is “difficult time” the opposite of “playtime?” And how else would you interpret Dodd’s remark? When the Senator said, “piss off Wagoner” he actually meant “please continue running GM into the ground so we can blow $15b+ of our taxpayers’ money on this doomed enterprise?” And if Harris really didn’t get the message– a completely fantastic proposition, but there you go– President elect Barack Obama offered NBC dark hints about Wagoner’s curtain call…
Automotive News [sub] reports that the exit of 5,000 salaried employees in the past week has created “chaos” within Chrysler, and bankruptcy rumors have suppliers considering cash-on-delivery demands. According to Chrysler spokeswoman MaryBeth Halprin, “the claim of chaos is unwarranted. There is certainly in this first week without 5,000 employees a transition taking place,” she said in an e-mail to Automotive News. “This is an opportunity to continue the transformation of our company, rethink work processes and focus on core function.” Right. For more on ChryCo’s “transformation,” check out this story from the NYT.
From GM’s ad in Automotive News (Dec 8 edition):
“While we’re still the U.S. sales leader, we acknowledge we have disappointed you. At times we violated your trust by letting our quality fall below industry standards and our designs become lackluster. We have proliferated our brands and dealer network to the point where we lost adequate focus on our core U.S. market. We also biased our product mix toward pick-up trucks and SUVs. And, we made commitments to compensation plans that have proven to be unsustainable in today’s globally competitive industry. We have paid dearly for these decisions, learned from them and are working hard to correct them by restructuring our U.S. business to be viable for the long term.”
Warren Brown is a shameless Detroit cheerleader. The Washington Post’s carmudgeon’s inability to criticize Motown’s products, process or prognosis has provided TTAC grill mist for years. Recently, we chronicled WaPo Warren’s lame, lamentable attempt to play the race card on The Big 2.8’s behalf. “Reluctance to Help Detroit Reeks of Class Bias” takes a different– though equally fabulous– tack. Brown starts by suggesting that anti-bailout journalists are effete intellectual snobs. “The queries [against the bailout] often come from people who earn substantially more than the estimated $71,000 annually in wages and benefits paid to UAW members. They come from people who, having reached upper-middle-class status by virtue of their college educations and communication skills, certainly wouldn’t settle for earning less.” Does Warren know that the UAW has a freelance writers’ branch? Anyway, the main event: “There is a feeling in this country– apparent in the often condescending, dismissive way Detroit’s automobile companies have been treated on Capitol Hill– that people who work with their hands and the companies that employ them are inferior to those who work with their minds and plow profit from information. How else to explain the clearly disparate treatment given to companies such as Citigroup and General Motors?” How else indeed. More WTF after the jump.
BS is on his way back from the Fatherland to Beijing. This Sunday will remain WAS-free. WAS will return tomorrow, after BS has returned. We need a day to digest last week’s news anyway.
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