At its annual shareholder meeting in Melbourne, Australia yesterday, Redflex announced it had become the largest photo enforcement vendor in the world. Redflex officials cited worsening US economic conditions as a key factor in its success, as municipal leaders across America face declining income and property tax receipts. Desperate to find new sources of revenue, mayors and city councils have sought out the company’s turnkey red light camera and speed camera systems. Redflex Chairman Chris Cooper told shareholders that such expansion in a down market was a sign of the company’s strength. “Clearly the world’s commercial situation is at this time extremely unstable and indeed to many nothing less than frightening,” Cooper said. “Despite this general scenario the good news is that Redflex continues to grow strongly in its business pursuits around the globe… with post-tax profit rising by a very pleasing 44 percent.”
Category: News Blog
Detroit has had some time to get used to watching the hometown team lose. After the D3 Execs’ dismal performance in DC, most of the country feels confident that federal moolah won’t flood Motown, but for the Detroit dead-enders, hope springs eternal. And their congressional enablers are standing by to keep expectations wildly unrealistic. The Detroit Free Press, home of Detroit doom denial, is running a cruelly hope-inspiring story this morning in which Democrat congressional leaders raise the possibility of another attempt at bailout before the year is up. Senate Majority Leader Harry Reid (D-NV) today “raised the prospect” of calling the Senate back into session in December, while Speaker of the House Steny Hoyer said it was “possible” that the House could come back in December as well. With a TARP raid off the table, Senators Carl Levin (D-MI) and Christopher Bond (R-MO) are working on a compromise bill which would accelerate the already-approved $25b retooling loans. There’s even a chance that such a compromise could be attached to an extension of unemployment bill which may call congress back after its Thanksgiving recess anyway. After Motown’s shameless display before the House Financial Services Committee over the last two days, we’d be pretty surprised to see this happen. But, y’know, whatever it takes to avoid facing reality.
The Automotive Lease Guide has released its projections for the vehicles most likely to retain their value three years from now, and they’ve awarded the top honors to three compact(ish) cars, the Scion xB, the Honda Fit and BMW’s MINI. The MINI took the overall prize, with ALG predicting that a new Cooper will retain 64.5 percent of its retail value after the average 36-month lease. The xB won the mid-compact category with a projected retention of 63 percent of its new value, while the Fit topped the compact class with a residual value estimated at 59.8 percent. ALG president John Blair tells Automotive News [sub] that price, design, new-vehicle incentives and fleet sales all went into the projections, with special consideration paid this year to Detroit’s woes. “The public needs to have confidence that the companies are solid and they’re going to be around to service the vehicles and provide a pathway for warranty work,” Blair said, by way of explaining why US firms ranked so low in the rankings. Read More >
Last year’s Green Car of the Year award was a cynic’s dream come true. Bestowing the annual eco-accolades upon the ginormous, environmentally challenged Chevrolet Tahoe Hybrid could persuade even the most optimistic tree hugger to hang up his Birkenstocks for good. (Full disclosure: I do not now own, nor have I ever owned, a pair of Birkenstocks.) The current roster includes nominees that are both more credible and more diverse than the last. The 2007 event provided the choice of a hybrid, a hybrid, a hybrid, a hybrid or a hybrid. Now we have a couple of oil burners (BMW 335d, VW Jetta TDi) and something that could fit inside a duffel bag (smart fortwo), as well as a pair of the customary gas-electric hybrids (Ford Fusion Hybrid, Saturn Vue 2). Drum roll, please: congratulations go to the VW Jetta TDi.
The cynical amongst you will see this as a direct rebuke to Detroit: a shot across the bow of the Big 2.8 execs who sat in front of America’s duly elected representatives and refused [almost] point-blank to take a pay cut, whilst asking for a $25b federal “bridging loan.” And so it is. But anyone who thinks Toyota is trying to make Motown look bad– a pursuit in which they need no special assistance– doesn’t have a grasp on the “Toyota Way.” Even before this auto sales meltdown, the Japanese automaker’s top ten execs earned less money COMBINED than Ford’s Alan Mulally, Chrysler’s Bob Nardelli and GM’s Rick Wagoner (individually). In fact ALL of Toyota’s execs together earned 3.92b yen. That’s $40.5m. And now Yomuiri reports “Toyota Motor Corp. will consider cutting the pay of its directors in fiscal 2009, it was learned Wednesday. The aim of the nation’s top automaker is to clarify the executives’ management responsibility after the company announced last week that it expected a 73.6 percent dive in group operating profit for fiscal 2008, due to sluggish new car sales resulting from the global economic downturn. Toyota also expects reducing the remuneration of its directors to set an example as the company prepares to embark on thorough cost-cutting.”
OK, that headline’s a bit, uh, controversial. But the new Cayman/Boxster revealed at the LA Auto Show is the beginning of the end of the 911. And why not? The “entry level” Boxster is, fundamentally, a better car than the 911. Well duh: mid-engined vs. ass engined. Porsche realized this, uh, discrepancy from the beginning, and hamstrung the Boxster’s powerplant– until the introduction of the “Why the Hell is this More Expensive than the Convertible?” Cayman. By slotting in a 3.4-liter six amidships. the Sultans of Stuttgart finally pumped-up the volume on both the Boxster AND the Cayman. And now, amazingly, they’ve done the right thing. TTAC commentator and new contributor 993C4S reports that “Porsche’s 911 Carrera can hit zero to sixty in under 5 seconds. Well guess what, so can it’s baby brother, the new Cayman S (so long as it’s equipped with PDK and optional Sports Chrono Package). Here’s the skinny…
The Detroit Free Press has been watching Bloomberg TV (who has the time?). And who should they see but Red Ink Rick Wagoner, the GM CEO whose testimony in front of the Senate gives new meaning to the words “clutch player.” Apparently, late in the game, Mr. Wagoner is ready to float away to Aruba on his golden parachute and take one for the team. Maybe. But he sure as Hell wouldn’t recommend it. [Quick aside. Never mind Rick Wagoner’s Gulfstream flight to Washington. Anyone want to bet that his compensation package includes free flights on the company’s planes AFTER his retirement? And what about golden Blue Oval Boy Alan Mulally’s family’s free jet travel? And Bill Ford’s access to the company planes? Where do you think HE goes with the jet and what exactly does HE do to keep Ford’s head above water?] “I’ll always do what’s right for the company,” Wagoner told Bloomies, boldly ignoring the prima facie case against the validity of any such assertion. “But even more critical during a difficult time period is having the best possible management team. We have a good team at GM. That’s not what I would recommend.” He wouldn’t recommend having a good team at GM? Ipso bloody facto.
Speaking of the new Lexus RX350, the Audi Q5 has made its North American debut at the LA Auto Show. This cute ute was used by Audi execs to poke fun at the hybrid and electric car pushers (they’re look at you Carlos Goshn). With a nearly unique interior, the Q5 is sure to please new car shoppers who want a perfect interior and the ability to trundle down a manicured dirt road in style while feeling a bit better that they are not in a full-size off roader. With Q7 sales somewhere slightly north of non-existent, Audi dealers will surely welcome a down-sized, less-priced variant. Now that Porsche has gobbled up the Volkswagen Group (of which Ingolstadt is a part), will we see a pint-sized Porsche Cayenne version? How about a Lambo variant? The brand boggles.
Lexus took their mantra of being “wildly inoffensive” down new [soft] roads at the LA Auto Show. The new RX350 and 450h now both use the 3.5-liter V6 from the Lexus family. The RX350 churns out 275hp while the Atkinson cycle powered hybrid setup powers up 295hp combined. With electric all-wheel-drive, all five passengers will enjoy the flat floor and electronic wizzardry. Outside, not much is new. On the inside, a new jumbo-sized nav/car controller operates similarly to the pointer stick you find on some laptops, which is just as annoying. Carrying on Lexus’ latest trend in interiors, the RX’ seems to take a bit too much from the Camry’s design studio.
When America gets out of bed, Tokyo is heading home in crowded subways, and Europeans still finish long lunches. While America Slept (WAS) is a daily round-up of the news that happened in other continents and time-zones. TTAC provides round-the-clock coverage of everything that has wheels. Or that has its wheels coming off. Due to popular demand, today, no sordid jokes. Get A1 if you want spice.
Aussie wants SAIC to buy Holden: In the SAIC-buys-GM saga, Melbourne-based publisher of GoAuto.com.au, John Mellor, said to Gasgoo that “Holden could wind up in the hands of SAIC and being Asian-owned could help springboard the local industry into the growing Asian car markets.” While Dear John was at it, he also opined that Australia could be bought by the Indian-based Tata Group.
Opel stunt a derivates play? As reported, the German company SolarWorld AG offered €1b to buy Opel Germany. German wags think the SolarWorld is a “marketing stunt” at best. Other think, SolarWorld lost their mind. For sure, SolarWorld’s stock tanked on the news. SolarWorld’s CEO Asbeck denies this morning via Reuters allegations that the matter was a derivatives play. Asbeck still claims he’s serious, and that he has “received a different answer from GM HQ than from Opel.” Opel yesterday said: “Nein.”
Opel survival guaranteed: In its final hour, the parliament of Hesse approved up to €800m in loan guarantees for Opel, writes the Rhein-Neckar Zeitung. After the money was approved, the parliament dissolved itself. New elections are scheduled for January. The loan guarantees are in place for the unlikely case that GM goes bust. Wait, there’s less …
The Detroit News reports that Senator Harry Reid has thrown in the proverbial towel for the Detroit bailout bill– at least for this week. Thanks to less-than-stellar Congressional testimony by Ford, Chrysler and GM CEOs, their plan to carve-out and carve-up $25b from the fed’s existing $700b bailout fund seems to have, as the Brits put it, come a cropper. “Senate Majority Leader Harry Reid said that he wanted to figure out some way to help Detroit’s struggling Big Three but that efforts to do so had stalled.” That’s a Gulfstream’s gas tanks’ worth of not good for Motown’s mismanagers. Taken literally, it means Reid won’t be following President Bush’s suggestion and perverting the intent of the existing $25b Department of Energy loans– for a quick-fix capital injection. Still, the federal trough is never totally closed to those who spend ten million plus on lobbying. “A bipartisan group from auto industry states is working to cut a deal on a scaled-down aid package. If agreement can be reached, Reid said the Senate could still vote on it as part of a measure to extend jobless benefits.” As the hearings over the last two days established, even $25b isn’t enough to see the D2.8 through next year. Which means that anything less is… a death sentence. Will GM CEO Rick Wagoner sleep well tonight, knowing that it’s game over? “It’s completely due to the credit crisis,” Wagoner said at today’s Senate hearing. So, yes, Tempurpedic bliss for the bailout boys. How messed-up is THAT?
The new electric-powered MINI E has the same shape, size and style of a regular MINI. In other words, the MINI E is small. This creates a dilemma: lithium-ion batteries that are large enough to power a car are big. BMW has tackled this problem as only a team of engineers could: by removing virtually every square centimeter of usable space from the vehicle. It’s fortunate if you have no friends or children, because the back seat has been replaced by a rather prominent, sizable hump. Cargo space in the hatch area is adequate– as long as your shopping needs are limited to the occasional six-pack and baguette. Then again, who cares? The Mini E is a limited production evaluation vehicle available to just 500 early adopters, whose enthusiasm will burnish the brand but good. In case any ultimate drivers are interested, BMW claims a 150-mile range, 2.5-hour recharge time, and a 0 – 60 time of 8.5 seconds from its 204hp motor, with a top-speed limited to 95 mph (to avoid range claims in the double digits).
The Chair of the National Automotive Dealers Association, Annette Sykora, sought to distance her fellow dealers from the less likable elements of the industry (OEM CEOs, Gettelfinger) who preceded her in testimony before the House Financial Services Committee today. Calling dealers “the face of the industry,” Sykora advocated for what she termed “the unique role of dealers, most of whom are independent businesspeople who have invested their own money in their stores,” according to Automotive News [sub]. More pressingly, she has a tiny little problem with the proposed $25b bailout legislation, namely the provision calling on automakers to “rationalize” their operations, including “manufacturing work force, suppliers and dealerships.” “Dealership reduction is not necessarily the equivalent of dealership rationalization or dealership optimization,” said Sykora, echoing the subtly (or not) self-interested tone of UAW boss Ron Gettelfinger. The dealer’s wheeler-dealer went on to suggest that sales-boosting clunker-culling programs and SBA loans to dealers would be nice. And not for the first time. We get it. Nobody wants to do what it takes to make the D3 competitive, let alone save the taxpayer a buck. That much is clear. But how do any of these public displays of short-sighted self-interest make taxpayers any more likely to fork over $25b?
In testimony before the House Financial Services Committee, Chrysler CEO Bob Nardelli agreed to match Lee Iacocca’s $1 per year salary if Congress would only give his firm their $7b chunk of the proposed automaker bailout. Ford’s Alan Mulally told the Committee he is “fine where he is,” and noted that he needs to make sure his executive team is “well motivated,” given the fact that the company is so not of the woods its deep within them. As usual, the worst performance was put on by GM CEO Rick Wagoner, who claimed to have cut his own salary by 50 percent. Not that he was lying, he just conveniently forgot to mention that he had reinstated it. To make matters worse, he played the Curly card (“I’m a victim of coicumstance!”). Red Ink Rick complained that he’d purchased GM stock “with my own money” which was now “worthless.” I’m paraphrasing here– I can’t take notes while having my mind blown. The idea that a CEO would buy his own company’s stock, oversee its demise and then complain about the losses to Congress in an attempt to get bailout bucks for the company that he flew into the ground is… awesome. This is the guy who has overseen eight years of lost profit, lost market share and cratering market cap. A Gulfstream jet setter who’s refused to step aside as a theoretical condition of a theoretical bailout. Then again, who’s surprised?
Update: Wagoner’s direct quote was “I have a significant amount of General Motors stock, including a lot which I’ve bought myself, which basically is valueless. ” Hear that stockholders? That’s leadership. Hat tip to ABC Political Radar
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