Is the F150 a Phoenix rising from the ashes or an Icarus once again flying too close to the sun? The Wall Street Journal tell us Ford is betting on a revival of the living dead by “rehiring 1,000 workers to build the company’s 2009 F-150 pickup” at the long suffering Dearborn Truck plant. Perhaps this is an attempt to spin the company’s upcoming November 7th epic horror film release, um I mean quarterly financial announcement. Said quarterly results are going to be horrifically bad. Barn-burner October clearances sales brought truck’s US market share back up over 13.9 percent, a stunning recovery from the sub 9 percent range of this summer and back on track with the rates of this time last year. But those trucks were blown out the door at prices which don’t make money. A horrible economic environment, reduced total sales and high fixed costs mean rivers of red ink. The only good news: Ford’s end of October truck inventories were down from June’s 130k to a skinny 50k. As long ago as August, Edmunds was reporting that buyer research behavior was already moving back away from small cars. Likewise, GM recently cancelled Saturday overtime plans at the Lordstown Cobalt plant. Gas prices are back down in the mid $2s, thanks for a record monthly drop in oil prices. Ford is betting that at least some Americans will revert to type and get themselves a new pickup, even if there isn’t a double scoop of cash on the hood. Meanwhile, FoMoCo CEO Alan Mulally remains committed to small cars…
Category: News Blog
Never a dull moment in the ant-eats-elephant soap, a.k.a. Porsche’s takeover of VeeDub. On the heels of what the newspaper Die Welt called the “craziest week in the history of the German benchmark index DAX,” VW’s stock makes headlines again today. Or, rather, the headlines are made by a minority owner, the state of Lower Saxony. Nearly forgotten in the broo-haha, that German province, home of Volkswagen’s headquarters Wolfsburg, owns 20.1 percent of VeeDub’s stock. By the dubious virtue of the so-called “Volkswagen-Gesetz” (VW law), Wolfburg’s stake gives the state of Lower Saxony veto power over just about anything they like or dislike. Originally, that law was intended to ward-off hostile takeovers by foreign powers. (Remember GM?) Now, it provides the legal means for provincial politics. Niedersachsen’s Governor Christian Wulff declared yesterday: “Profits going to Porsche? Not if you ask me.” And Porsche will have to ask Mr. Wulff. The thick plottenz…
Here’s it comes. Here it comes. Here comes Detroit’s nineteenth nervous breakdown. Will it be their last? Obviously not. But just in case you thought there was a hope in Hell that GM won’t transform itself into American Leyland, sucking taxpayer cash into a black hole for years to come, the Detroit News’ reporter/cheerleader Alisa Priddle presents “Analysts: Big 3 woes imperil U.S. economy.” Otherwise known as rapper 2 Big 2 Fail’s ode Obama’s Your Mama. Priddle assembles the usual chorus of backup singers. “Every direct job at an automaker in the United States creates five more jobs, said Sean McAlinden, chief economist and vice president for research for the Center for Automotive Research in Ann Arbor. Two of the five are related to suppliers or dealers; the other three are spinoff jobs at businesses where auto industry workers spend their paychecks… By contrast, one Wall Street position creates a total of about 2.5 jobs, yet Congress expedited aid to the financial services sector this year.” Yeah, fuck them banker bitches and their $700 bil. “Declining auto sales have contributed to the nation’s economic downturn, but that hasn’t diminished the industry’s importance, said Charles Chesbrough, senior economist for CSM Worldwide in Northville, an automotive market research firm. ‘We won’t see a turnaround in the economy as a whole,’ he said, ‘until we see improvement in the auto industry.'” As Mad Max said, “If it’s all the same to you, I’ll drive that tanker.” Hang on; what’s this? A dissenting voice?
A total of 199 attacks on speed cameras in the UK last year cost operators over £500k (US $800k) in repair cost. The figures, reported by the Mid Sussex Times in response to a freedom of information request, do not include the far more substantial amount of revenue lost before replacement devices could be put in place to resume ticketing. Most recently, a pair of cameras were destroyed in Cambridgeshire on October 25 at around 7pm. One of the devices issued tickets on the A605 Elton bypass while a second was stationed near Peterborough. This represents the third time the A605 camera has been set on fire in the past six months. In the past fiscal year, Cambridgeshire spent £93k (US $150k) repairing cameras. including replacing an automated ticketing machine at Stow-cum-Quy, after an April 14 attack. The replacement cost was £35k (US $55k). Other areas have seen smaller repair bills. Sussex officials spent just £16k (US $25,900) to resume ticketing after fifteen separate attacks. For example, activists in Crawley burned the camera located on the C406 Bewbush Drive in August 2007, while a March 2008 attack merely involved tampering with the lock on the camera housing.
In October 2006, celebrity stock picker Jim Cramer reacted to GM’s cratering stock price by telling his viewers to buy shares in the ailing (not to say doomed) American automaker. And then again in February of this year. Perhaps Cramer’s over-compensating for missing the boat (as in Titanic). The Detroit News reports that the Mad Money maven used the airwaves to argue against subsidizing the GM – Chrysler merger (a bit late on that one Jimbo). “He slammed the idea of government help to make a General Motors Corp.-Chrysler LLC merger work,” the DetN reports. “Because that would result in a ‘bailout’ to Cerberus Capital Management LP. He called that ‘a crime’ that would bring a ‘big backlash.'” Sounds about right (for a change). So what’s the DetN’s problem? Uh, class warfare? “‘They’re just rich people,’ Cramer said, adding that if Cerberus didn’t lose money on its investment it would send the message that it ‘pays to be reckless.’ He said the government should support automakers to protect employment, but only if current auto shareholders ‘were wiped out.'” Not getting it. “Sounds like someone needs a little anger management counseling,” the hometown paper concludes. Or not.
Chinese mothers don’t admonish their one-and-only child to “eat up, there are children starving back in America.” But we’re getting there. Case in point: This weekend, another Rolls-Royce showroom opened in Shenzen, Gasgoo reports. It’s the seventh Rolls Royce retail location in China. Another one, located in China’s industrial center Ningbo, will open its doors in a few months. Rollers are on a roll in China. I counted two Phantoms alone in the underground garage of my Beijing building. At the Shenzen opening, Rolls presented their new Rolls-Royce Phantom Coupé to the Chinese public. It’s their entry model. “Nearly two-thirds of Coupé customers worldwide have not owned a Rolls-Royce before,” said Jenny Zheng, Rolls-Royce Motor Cars’ General Manager for Greater China. BMW are thanking their lucky stars…
Gooooooooood morning U-A-W! In case you were wondering where the United Auto Workers stood during this, Detroit’s End of Days, we can now report [via Reuters] that the union is, finally, bellying-up to the billion-dollar (for a start) bailout buffet. “Alan Reuther, legislative director of the United Auto Workers, said in an interview that the group is proposing lawmakers approve up to $25 billion in new loans for General Motors Corp, Ford Motor Corp and Chrysler LLC. Reuther said the aid would cover pledged contributions to a retiree health care trust, the Voluntary Employees Beneficiary Association [VEBA], which was negotiated last year with the companies.” As odd as that sounds, the UAW bailout bypass makes a certain amount of sense– if a bailout it must be. If the automakers’ call on the public purse is designed to protect jobs, jobs, jobs, why not call their bluff? Or not. “If the companies get the assistance that makes it easier for them to do other things,” Reuther said. “I think the financial markets would look at that and say that helps lift a significant liability and that’s a good thing.” “Other things?” Such as… build cars people want to buy at a price that will make GM enough profit to pay off all its debts and liabilities? Good luck with that.
As Detroit remains bogged down in the Russian winter of their hubris and mismanagement, Nissan is launching a counter-offensive. Not only is Nissan joining Toyota in launching zero-percent financing on select models, they’re even launching factory leases at a time when nearly every finance company is running away from the lease business screaming. Automotive News [sub] reports that zero-percent financing is available on Altima, Rogue, Sentra, Versa and Murano, with all the “qualifying buyers” mumbo-jumbo that could keep many from the deal. Nissan is also launching factory-subsidized $199-a-month leases on the Altima sedan and Rogue, as well as extending a $339-a-month lease offer on its newly redesigned Maxima. If you just want a deal on basic transportation and don’t care much about financing, Nissan is also rolling out a stripped Versa sedan with a MSRP under $10k. “We are making a bold statement to our customers and to our dealers that we’re here for them,” says Nissan Division Vice President Al Castignetti. “If you need financing, we have it. If you want to lease a vehicle, we have it. If you need to buy an inexpensive car, we’ll have it for you.” While feasting on the dying corpses of the Detroit Three.
The Detroit Free Press breaks its self-imposed embargo on genuine reporting on Motown’s End of Days with a startling piece of investigative journalism. The Freep reports that the Bush administration (remember them?) has appointed U.S. Commerce Secretary Carlos Gutierrez gatekeeper to the federal teat. For some reason, scribes Hyde and Higgins (how Dickensian is that?) begin their piece with not one but two sneering references to Gutierrez’ background as the former head of Battle Creek-based Kellogg Co. And no wonder. Other than a couple of “we like this guy” quotes from an “industry leader” and an analyst, they got nothin’. So… let’s quote Bloomberg then. “GM told its U.S. dealers Friday the company was only halfway to its October goal for sales to consumers with just one day left in the month, Bloomberg reported. The so-called retail sales totaled 89,961 vehicles through Thursday, compared with a target of 175,989, the company told dealers.” Hey guys, how about a little context there? No. OK. So… we’ll quote Bloomberg then. “The automaker hasn’t increased annual U.S. sales since 1999.”
Tesla’s heading down the home stretch here on Ye Olde Death Watch. Autocar reports that the Silicon Valley-based EV-maker says its cutting one fifth of its UK workforce. The number of Tesla employees laboring at Lotus’ Hethel factory, where the Tesla Roadster is born, has slipped from 50 to 40, or less. ““We deeply regret the necessity of making redundancies at the Tesla Hethel facility,” said Don Cochrane, UK sales and marketing director at Tesla Motors, who’s still cashing a nice fat paycheck (as far as we know). “It is in the interests of the longer-term health of the company to act prudently now.” Or, perhaps, before. Never mind. Facts never had much currency in Tesla-land, for either the company’s principals or the sycophantic scribes who parroted their PR. For example… “Since the £90,000 Roadster was launched, 125 examples of the groundbreaking electric sports car have been ordered across Europe. All of these are assembled at the Hethel factory at a rate of 40 vehicles per month. Tesla insists this production rate won’t be affected by the staff cutbacks.” Forty a month? Geddowdahere!
“Toyota Motor Corp. trumped General Motors (GM) in total car sales during the first nine months of 2008 to become the world’s top car producer for the first time,” the Mainichi Shimbun reports from Tokyo. “Huh,” say you, “hasn’t ToMoCo trampled GM already?” Not exactly, and not officially. But they are kicking ass and GM to the bottom. Unstoppably, one may add. “GM’s sales between January and September in 2008 were down 5.8 percent to 6,655,751, according to figures released by the company on Wednesday. Toyota’s sales for the same period, including those of subsidiaries Daihatsu Motor Co. and Hino Motors, were 7,051,029, almost unchanged from last year,” writes the Tokyo broadsheet with a kuso-eating grin on their faces, in the same sentence dispelling rumors that ToMoCo had contracted the galloping auto trade tuberculosis. [NB: Mainichi is one of the top three Nipponese papers,thick with Japanese politicos. Two of Mainichi’s CEOs became Prime Ministers of the Land of the Rising Corolla.] And yet the fat lady has not sung…
These are turbulent times. Over the course of the last week, we’ve watched GM PR (a.k.a. “unnamed sources”) pimp a nonsensical merger between The General and Chrysler. Then, at the eleventh hour, the “deal” was retracted without comment (thanks to the U.S. Treasury Department’s refusal to bankroll the pre-bailout orgy). As regular readers will know, Friday afternoon is the witching hour for GM’s bad news, so that the markets can chill-out before dumping yet more GM stock and downgrading GM’s credit [even further] into irrelevance. So now we have an info limbo. Will the deal go ahead anyway? If not, when will Chrysler file the resulting, inevitable Chapter 7 liquidation? Into this void some tipsters step. Deep Throat tells us GM’s putting its research and development facilities on ice– and not just to save a few bob. Nope. It appears that The General is about to kill– as in starve to death HUMMER-style– Saab and GMC. Oh, and commercial trucks. That would leave Chevrolet, Cadillac, Pontiac, Saturn and Buick. (I know: Buick?). Anyway, something’s going down on Monday. The leakage should start tomorrow.
In a “web exclusive,” Newsweek scribe Keith Naughton pens a post-mortem on ChryCo that could have been lifted whole from these very e-pages, right down to the headline (“Chrysler R.I.P“). Former ChryCo CEO Lee Iaccoca’s refusal to talk about his ex-employer’s looming extinction due to melancholy, apparently, is pretty much the only factoid of interest to TTACers. But there’s a forest-from-the-trees thing happening here. If Newsweek’s editors had placed Naughton’s eulogy on the mag’s front cover, the story would have broken-out of its financial press backwaters into the media mainstream. And that would be the final nail in Chrysler’s coffin. Lest we forget, Joe the Carbuyer is still unaware that purchasing a Chrysler product is akin to booking a steerage-class cabin on the Titanic. Which is wrong. Once again, a major media outlet is protecting its advertisers at the cost of its readers’ best interests. Someone should tell potential Chrysler buyers the obvious dangers they face. You know, other than little old us.
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