According to Karey Wutkowski at Reuters, the “The Treasury Department is considering aid of at least $5 billion, which could include direct capital injections and government purchases of auto loans.” The usual anonymous source claimed the decision could be made this week. Wutkowski reports that GM and presumably Chrysler have been lobbying the Bush administration for the money, no doubt made easier because Cerberus’s chairman, John Snow, is the former Bush-appointed Secretary of the Treasury. Purchase of bad auto loans is likely to anger many, but the “direct capital injection”– a suitcase full of freshly-minted money– is something else altogether. Will you, the new shareholders get any stock in GM-Chrysler? Of course not. Nor is there likely to be any accountability to the government beyond a nebulous promise by Rick Wagoner that “he’s working hard.” The kicker? The $5b is only the beginning. “People briefed on the merger discussions have previously said GM would need a minimum of $5 billion to start restructuring Chrysler’s operations. The total amount needed could reach $10 billion.”
The Detroit News reports that the White House wants the feds to cover GM, Ford and Chrysler’s bad paper. “White House spokeswoman Dana Perino said that GMAC, Ford Motor Credit and Chrysler Financial could be part of the Trouble Asset Relief Program — the $750 billion Wall Street rescue package approved by Congress. ‘It’s possible that some of those financing arms could be a part of the rescue package — the TARP, as they call it at the Treasury Department. So that’s why — that’s one of the reasons Treasury has been in contact with them.'” (The other: to buy 5k Trailblazers on the cheap.) Meanwhile, The Energy Department named a senior career U.S. Treasury Official named Lachlan W. Seward to oversee the Department of Energy’s $25b low-interest-for-20-year-old-or-more-auto-plant-retooling loan program. (Either that or buy Siberia from the Russians.) Parenthetical asides aside, it looks like TTAC’s Ken Elias was on to something. Something that smells BAD. “People familiar with the matter said General Motors Corp. chairman and CEO Rick Wagoner was in Washington last week for meetings with U.S. Treasury officials. GM spokesman Greg Martin declined to confirm or deny the visit. Bloomberg News reported that GM had offered to swap an equity stake in the company in exchange for federal help.” Looks like I was right about the race against bailout fatigue, as well.
Toyota outsold GM globally last year. Of course, GM took the low road and claimed they were still number one by dint of their minority partnerships with Chinese automakers. This year, ToMoCo will lift the crown as the world’s largest automaker– joint ventures or no. Anyway, here in the real world, that gig’s been up for a while. More than a year ago, GM CEO Rick Wagoner declared that Toyota’s title-taking didn’t matter. OK, it did, a bit. But it really didn’t; ’cause we don’t have time to worry about that shit [paraphrasing]. After all, we’ll be profitable by…. uh… hey! Is that an SSR? Well, Red Ink Rick’s going to get another chance to play spin the news. CNBC’s Phil LeBeau reports that Toyota’s three U.S. brands could outsell GM’s eight brands in October. “This week is not only the last one of the month. It’s also the week that could determine if GM holds on to the top spot in monthly auto sales in the U.S. Initial reports of October retail auto sales show Toyota outpacing GM and Ford. If that trend holds for the full month, we could be looking at the day many in Detroit have feared for years.” Even if GM doesn’t, Phil worries about the psychological impact of the smack-down.
As bailout after bailout sucks the federal teat dry, the ethanol lobby is finally doing the patriotic thing by taking its insatiable greed for public money to China. Green Car Congress reports that General Motors and its cellulosic ethanol partner Coskata are making the pitch for US-style ethanol subsidies in the Happy Shiny Peoples Republic Of China. At the World Biofuel Symposium hosted by Beijing’s Tsinghua University, GM and Coskata announced that China could produce 45-49 billion gallons per year (BGPY) of cellulosic biofuels by 2030… with the proper subsidies. And though the 45-49 BGPY would be 60% derived from agricultural residue, 20% from grasses, 10% from forest residue and 10% from “other,” China’s capacity is estimated (by GM and Coskata) at only half that amount without government incentives. E10 mandates in several of China’s largest provinces have already increased grain-based ethanol production from 100 million gallons in 2004 to about 500 million in 2008, but the Chinese government is also trying to limit grain-based production for all of the obvious reasons. Hence GM and Coskata’s attempts to hype their cellulosic ethanol approach, despite not having plans to open a commercial demonstrator plant before 2011. Meanwhile, “GM will continue to advance its strategy of ‘in China, with China, for China‘ to help China develop diverse automotive energy solutions and commercialize such energy solutions, according to GM China VP David Chen. All we can say to China is, beware of Americans bearing biofuels and patriotism. Then again, better you than us. But don’t say we didn’t warn you.
From the land of speed cameras and license points comes news that a new generation of GPS satellite navigation systems could be the Next Big Nanny to take all the fun out of driving. The Times reports that TomTom and Navteq are developing Advanced Driver Assistance Systems (ADAS) which will take GPS far beyond its current navigation-only capabilities… with dismaying results. The new systems will reportedly tell motorists when to change gear, at what speed to take a corner and even how to drive more economically, while providing 3-D navigation and refined destination-seeking capabilities. Needless to say, the prospect of having a computer yell at you for taking corners too fast on a windy mountain road is hardly the stuff of gearhead daydreams, but as usual a higher power is at play here. Navigation system makers have been dealing with the legal reprecussions of uncritical reliance on GPS systems, such as the woman who got her SL500 stuck in mud when her sat/nav told her that a ford over the river Sence was navigable. By issuing constant feedback about driving style and possible damage to the car’s internals while improving the three-dimensional mapping, these firms hope to prevent future lawsuits. And annoy the hell out of anyone who happens to enjoy the occasional spirited drive.
The Edmonton Sun reports that a judge has cleared the last remaining participant in the city’s photo radar bribery scandal. Sergeant Tom Bell, 50, accepted lavish gifts from Affiliated Computer Services (ACS) between 1998 and 2004 while the company was attempting to land the right run the city’s lucrative speed camera operation.While several other Edmonton Police Service employees, including Staff Sergeant Kerry Nisbet and former Chief Darryl da Costa, accepted similar benefits, Bell alone stood accused of returning the favor. On March 1, 2004, Bell wrote a memo falsely stating that ACS alone was capable of running Edmonton’s speed camera program; the company should be awarded a no-bid contract worth $90m. Court of Queen’s Bench Justice Bryan Mahoney believed this amounted to ordinary conduct and that it did not amount to a “serious and marked departure from the norm.” For that reason, he could not find Bell guilty of taking bribes despite “some poor choices and errors in judgment.” Mahoney discarded the testimony of Bell’s ex-wife, who asserted that Bell’s wrote the false memo in the hopes that he would be rewarded financially after leaving the police force.
As a website that started a General Motors Death Watch on April 3, 2005, and published its 208th episode this morning, TTAC is no stranger to the idea that GM has been heading for a Chapter 11 bankruptcy for quite some time. We’ve also reported that The General has refused to contemplate the possibility, nay, utter the word “bankruptcy” for lo these many years. About a month ago, we brought this Voldemort problem to our reader’s attention. And now GM Car Czar “Maximum” Bob Lutz brings it to ours [via the Detroit Free Press]. “Bankruptcy for GM certainly is not an option,” Lutz announced at the Public Relations Society of America. “The board has never talked about it… It’s not something that we consider would be constructive or would solve any problems for anyone.” While you’d expect an ex-marine aviator to tell the world “failure is not an option,” the idea that GM’s Board of Bystanders are sleep-walking towards disaster is as predictable as it is lamentable. [thanks to Polishdon for the link]
We’ve counted ourselves among the many who laughed bitterly when Volkswagen first announced that it was campaigning to overtake Toyota as the top volume automaker in the world. Well, Automobilwoche Editor Guido Reinking has penned a column for Automotive News [sub] arguing that VW’s Mission: Improbable might just stand a chance. Surprisingly, the column is not a paean to German sachlichkeit in the nationalistic mold of most mainstream German auto journalism. Instead, Reinking makes a bold claim: Toyota, long the 800 pound gorilla of global automakers, may be losing its aura of invulnerability. First he points unconvincingly to Toyota’s 32 percent drop in US sales for the month of September, “worse even than the fall taken by sickly General Motors.” Sure Guido, but keep in mind that those are previous-year percentages, not apples-to-apples… Read More >
When Mercedes took the desperate brave decision of rolling out what is now called the first modern four door coupe, they were only hoping to boost a little the sales in the executive sedan segment. But the success that followed exceeded all their expectations and gave birth to a trend that now includes Porsche, Volkswagen, and Aston Martin (and to a lesser extent Jaguar’s XF). The only “loser” in this expansion is the E-Class, which looks suddenly misplaced: not as luxurious and exclusive as the S, nor as seductive and exotic as the CLS. Now Mercedes is preparing for round two with the CLS…
It was just a month ago that Edmunds was falsely claiming they had the “World’s First Test of the VW Jetta TDI.” Now Edmunds InsideLine is at it again, this time lying about the Nissan 370Z. The article lead, which appears on the InsideLine home page, says “First Photos of the 2010 370Z Convertible.” Except that under the pictures, the caption reads: “This photo illustration offers an early look at the future Nissan 370Z convertible. (Photo illustration by Nick Wilcox).”
The phrases “photo” and “photo illustration” don’t mean the same thing. If they did, the Weekly World News would be unbelievably successful and Sarah Palin really would be holding that baby and gun in her bikini. And by the way, even if “photo” included “photo illustration,” Edmunds wouldn’t be first; Japanese car magazines have been photoshopping the 370Z for several years already.
With a new VW plant under construction, Chattanooga’s local media is hunting down every last detail available on the new D-class, America-only model to be built there in 2011. WRCB TV even sent a reporter to a recent VW presentation in Berlin, at which a few more facts were released about the closely-guarded NMS (New Midsize Sedan) project. Those of us who consider VW’s current American-market engines a slap in the face (and I’m with you there, JB) will be happy to hear that the “NMS” will come with Fuel-Stratified Injection (FSI) gas and diesel options, mated to a dual-clutch transmission. Size, legroom, trunk volume and the number of cupholders are planned specifically for the US market, so expect proportions to be more Passat than Jetta. Oh, and it will have something called “dynamic powertrain acceleration” too. Whatever that is.
We now have it confirmed from two– count ’em two– inside sources close to the story familiar the matter who can’t speak publicly for fear of getting their asses canned: GM is shutting off voicemail for certain employees and contractors. One anoymous person who wishes to remain anonymous but really does exist (or so he thinks) estimates that about half of those working in GM’s RenCen HQ will be affected, mostly in manufacturing. “A lot of it had to do with redundacies between office phones and GM provided smart phones.” Although, it should be said, not all.
The British Government’s love for cameras of all kinds is well known, and its passion for speed cameras is a story we’ve followed at TTAC for some time. Until now, the news we’ve reported has been consistently bad, unless you happen to be a big fan of increasing government surveillance for revenue-building purposes. But the Times of London reports the speed camera onslaught may have reached its zenith, as the town of Swindon has become the first British municipality to ban the automatic speed traps. The Tory-led council of Swindon banned the devices, for a variety of reasons, although it seems that the “blatant tax on motorists” angle may have taken a back seat to the camera’s half-million-dollar annual maintenance costs in the decision. Hysterical opponents of the move wail that the council would have “blood on its hands” when the first person is killed by a speeding driver.
Bloomberg reports that the American Revolution may have to continue (start?) without America’s small town atheletes. “Chevrolet will stop promotions tied to college sports and only advertise during games, said Philip Caruso, national promotions manager. The brand will also eliminate partnerships with some of the smaller sports such as skiing, he said.” When you’re shutting off escalators and limiting voice mail to save some money, excising a big chunk of change like this makes sense. That said, check this out. “The economy is making us re-look at everything we do,” Caruso said in an interview after awarding Major League Baseball’s Roberto Clemente Award at the World Series in Philadelphia. “It’s cutting back mainly spending in the sports area and promotions as a whole, and then reallocating in some of those areas that help grow our business.” So, does that mean the previous ad spend wasn’t helping them grow their business? D’oh!
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