October 31, 2008

Treasury says no cash for GM, Chrysler merger talks stalled, Renault hookup rumors persist

The tumultuous storyline of the GM - Chrysler merger reads like a script fit for Hollywood. Both need each other to survive.
Neither can make it alone.

But parties on both sides have a lot to lose.

And with today's news from the Treasury, the White House — and even Renault — the story gets messier by the minute.

Will they? Won't they?
Read on..

Yesterday, it seemed a forgone conclusion that General Motors and Chrysler LLC would merge within the next month, despite the consequences for nearly all Chrysler's models.

Now, the US Treasury and the Bush administration are adamant, saying they will not broker a merger deal or heed GM CEO Rick Wagoner's request for more money. Speaking with Reuters, a Bush administration official said that the "Treasury is not negotiating with the automakers, the administration is working to get the $25 billion Congress already authorized to the industry."

Instead, the Bush administration and the Treasury will speed the distribution of $25 billion in federally-backed, low-interest loans, drawn from an aid package approved by Congress last month.

Automotive News reports that both GMAC and Chrysler Financial - finance agencies owned jointly by GM and Chrysler's owner, Cerberus Capital Management — would qualify to sell their distressed assets to the Treasury under the $700 billion Troubled Asset Relief Program.

"An unmanageable disaster" for Rust Belt states
While the sale of troubled debt will help GM's overall cashflow, it doesn't help the underlying problem that drove GM to seek Chrysler in the first place: a lack of financing. Without new borrowing or asset sales, GM is in danger of running dangerously low on cash in 2009, analysts have said.

Hoping to draw attention to the dire need for capital, the governors of Michigan, New York, Ohio, Kentucky, Delaware and South Dakota wrote the Bush administration in a plea for further assistance. Facing pressure from a surge of unemployment claims and a decline in state tax revenue, the "economic crisis" facing automakers "threatens to create an unmanageable disaster at the state level," the letter said.

Michigan's congressional delegation — lead by Energy and Commerce Committee chair John
Dingell — has also lobbied the Bush administration to free up funds for the Big Three.

Ford joins the bailout fray, seeking "degree of parity"
And just when this couldn't get more complicated, here comes Ford. Reuters reports that FoMoCo has been angling for their own piece of the financial aid pie. If the government provides a direct injection of capital into either GM or Chrysler, Ford want their fair share as well.

Speaking with reporters, Mark Fields, Ford's president of the Americas said the company wants to "make sure that whatever happens, there is a degree of parity."

But for now, any aid — or merger negotiations — will be delayed until after Election Day.

So what happens now?
With the GM-Chrysler talks stalled, Renault pops back into the picture. As NMM reported two weeks ago, French automaker Renault has expressed interest in buying Chrysler's Jeep division outright from Cerberus.

Recently, Renault has backed away from the table, playing down rumors of a three-way partnership between Chrysler, Renault and it's Japanese partner Nissan Motor Corporation.

Nonetheless, the lack of progress with General Motors opens the door to new talks between Cerberus and Renault. Sources close to the early discussion said that Cerberus has considered a deal with Renault and Nissan as a favorable alternative to a full buyout of Chrysler by GM.

The sources declined to be named as they were not authorized to discuss the private talks. General Motors and Cerberus both declined to comment.


October 30, 2008

Report: GM-Chrysler merger likely to decimate Chrysler lineup, trigger more layoffs

The fallout from a merger between General Motors and Chrysler LLC will lead to the closure of many as half of Chrysler's factories and the elimination of nearly all Chrysler models, according to a report released by consulting firm Grant Thornton LLP.

The report comes a day after General Motors canceled a $2 billion program to replace its trio of aging full-size SUVs and Chrysler culled its two full-size hybrid SUVs after only three months of production.

Merger and more layoffs seem inevitable
Despite the gloomy forecast, a GM / Chrysler merger seems highly likely at this point. Reuters reports that GM and Chrysler have resolved the major issues in a merger agreement and that the final form of a deal will depend on financing and federal support.

The New York Times reports that the Department of Energy was working to release $5 billion in government-backed low-interest loans to GM so it could complete a deal with Cerberus Capital Management, the majority shareholder of Chrysler LLC. The $5 billion in loans would come directly from a $25 billion pool of funds approved last month by Congress in an effort help Detroit retool as a maker of more fuel-efficient cars.

And while a merger may save the two embattled automakers, it most certainly will not save all their employees.

Speaking with Automotive News, Kimberly Rodriguez, principal of Grant Thornton's automotive practice said that a deal also could result in a loss of 100,000 to 200,000 jobs at the two automakers, their suppliers and other industry shareholders.

According to the report, the majority of job cuts would come as most of Chrysler model lineup is phased out. Chrysler's sedans have failed to outsell their domestic competitors and both the Dodge and Jeep division are heavily invested in SUVs and light trucks.

Massive consolidation of models, factories
Currently, Chrysler operates 14 factories, with two of them scheduled to close at year's end. During the summer, Chrysler has offered its Viper model lineup for sale, along with the Detroit plant where they are made.

In the report, Grant Thornton says that four more factories could close in the aftermath of a merger with GM. Those on the hit list produce the Chrysler Sebring and the Dodge Avenger in Michigan, the Jeep Liberty and Dodge Nitro in Toledo, Ohio, the Dodge Ram in St.Louis, Mo. and Dodge's heavy-duty truck plant in Saltillo, Mexico.

As production of these models wound down, a second wave of layoffs would then hit the third-party suppliers that provide transmissions, windows, dashboard assemblies — all of the primary components unique to each Chrysler, Dodge and Jeep model.

All told, the lost work to these suppliers would put hundreds of companies at risk. Up to 50,000 additional non-Chrysler jobs could be lost if Chrysler were to close the plants Grant Thornton expects.

Timing is critical; contraction is inevitable
If a GM-Chrysler merger is completed, it may take years to phase out all of the models listed in the Grant Thornton report. Some platforms may be eliminated through attrition; left in production until they cease to turn a profit. Some plants could be closed as early as the holiday shutdown and others could take years to close, said Rodriguez.

It is, in your humble author's opinion, a "damned if you do, if you don't" scenario.

Neither GM or Chrysler can survive alone in this market. While Chrysler has more cash on its books, they are in the worst position to capitalize on high gas prices. Worse yet, they lack the resources to improve their CAFE rating without aid. And while GM has a more fuel-efficient lineup, they are burning through their cash on hand at an alarming rate.

If either fails, far more jobs could be lost than those through the merger of these two former titans.

For more punditry on this unholy mess:
NYT: Views on a GM-Chrysler merger


October 29, 2008

As a merger draws near, GM and Chrysler cull the SUV herd

In cattle ranching parlance, culling the herd is a process of selective slaughter. It is a metered and carefully planned elimination of the weak and unfit, done to protect the rest of the herd either from disease or in hard times, from starvation.

General Motors and Chrysler both sharpened their fiscal axes today and took drastic steps to ensure their continued survival. Upon unanimous approval by the board of directors, GM announced it has cancelled Project CXX, a $2 billion program to replace the aging Cadillac Escalade, GMC Yukon and Chevrolet Suburban sport-utility vehicles.

“It would have been very difficult in today’s environment to spend a couple of billion dollars to do a replacement,” said Bob Lutz, GM’s vice chairman and head of product development in a statement.

All three full-size sport utes — which a decade ago were icons of a resurgent GM — are now living on borrowed time. With the recent truck plant closures in Ohio and Wisconsin, the current generation of sport-utes will only be built for as long as sales volume remains self-sustaining.

Sales of sport-utility vehicles have steadily waned since 2004. As the highly profitable market shrank, losses continued to mount at all of the Big Three. And after posting a $18.8 billion loss in the second quarter of 2008, GM is reported to be in the final stages of a merger with embattled Chrysler LLC. While 2008 hasn't been kind to any domestic automaker, GM will likely suffer the worst in the coming months; its passenger cars were often sold as loss-makers and the company staked it's continued success on its line of sport-utes.

Layoffs at GM plants are set to continue, with Janesville, the firm's oldest and most reliant on sport-ute production, set to close by Christmas. If the Chrysler merger goes through, further layoffs are expected.

Chrysler pulls plug on Aspen & Durango hybrids
Earlier this week, Chrysler announced it would close its Newark, Del. plant nearly a year ahead of schedule. As a result, the Dodge Durango and Chrysler Aspen Hybrid sport-utes will be culled before they complete their first full model year.

Production of the two full-size hybrid sport-utes began two months ago, just in time to be scorched in September, the worst month of U.S. auto sales in 15 years.

Speaking with Automotive News, Chrysler spokesman Todd Goyer said the company had no plans to move the Aspen and Durango hybrids elsewhere. "Keeping the plant open for the hybrid versions isn't a sound business decision," he said.

1,000 Chrysler employees will be laid off when the final shift is completed on Dec. 31, 2008.

The Detroit News reports there are no signs that Chrysler will commit to another body-on-frame full-size sport-ute. Ford has already committed to a unibody layout for the next Ford Explorer, following the lead established by Honda with their Pilot sport-ute and Ridgeline pickup truck.

Unibody layouts used stamped steel sections that are welded together to form the structure of an automobile. Commonly used to build passenger cars, unibody designs are typically 10 to 20 percent lighter — and hence, can be more fuel-efficient — than a similarly sized body-on-frame vehicle.


October 28, 2008

2010 Camaro orders heavily favor V8 SS, production delays possible

Since the books opened two weeks ago, Chevrolet has received 6,000 orders for the forthcoming 2010 Camaro.

In a time when consumer confidence is at an all-time low and wallets are clamped shut from coast-to-coast, 6000 sales in 14 days is a decent response for an all-new model.

But depending on who you listen to, filling all those orders may be a bit difficult.

When the time came for GM to decide how many V6 and V8 Camaros would be built, crude oil prices were pushing $130 per barrel with no sign of retreating. Expecting an early rush to the more fuel-efficient V6 models, GM settled on a 50-50 split.

In recent months, oil prices have done what once seemed unthinkable, plummeting to nearly$70 per barrel. And as gas prices have slowly fallen, a flood of orders have come in for the V8-equipped 2LT and 2SS trims. With 84 percent of orders-to-date requesting a V8 Camaro SS, demand may outstrip supply for the first year of Camaro production.

What we don't yet know is how quickly GM can clear the potential backlog.

In 2006, when the 2010 Camaro was announced, GM said that 80,000 units would be built in the first year of production. But as time has passed, that number has slipped. Unconfirmed reports now suggest that as few as 20,000 units will be built. If demand remains high for the V8 models, it may take weeks for GM to meet the demand.

Since production efficiency is the crux of the issue, it's worth pointing out that V8 Camaros will use different engines depending on the chosen transmission. Stick-shift models will use the 422-hp 6.2-liter LS3 V8, while automatic-equipped models will use the 6.2-liter 400-hp L99 V8 with Active Fuel Management.

This is still a developing story, so this post will be updated as more information becomes available. One thing is for sure; if you're interested in a 300-hp V6 Camaro LS or LT, get to your local Chevy dealer. There will plenty of room on the production line.

[GM, Camaro5.com]

October 27, 2008

Volvo and Orrefors team up on S60 Concept for Detroit Motor Show

No matter how you slice it, Volvo has not been having a good sales year.

The brief bump in sales of the C30 hatchback and C70 convertible this spring have been offset by an awful third quarter. Last month, sales were down more than 50 percent compared to a year ago.

In an effort to spark some interest in their mid-size S60 sedan, Volvo has teamed up with Orrefors Crystal — the famous Swedish glassworks known best for high-end glassware — to build a customized S60 sedan for the Detroit Motor Show next January.

Today, we have the first teaser pics of the concept car's interior centerpiece.

Cast in three pieces, the S60 concept will feature a center console topped by a crystal glass panel stretching from the instrument panel all the way to the rear seat backrest in a graceful flowing arch. The panel is backlit by color LCD lights which can be adjusted to suit the driver's mood.

"If you want to explore the full scope of Scandinavian design, Sweden's glassworks are a natural source of inspiration. Large glass areas are also very much part of modern Swedish architecture, creating the special, light transparency," said design director Steve Mattin.

"The undulating, slightly twisted shape and the precise dimensional requirements were two exciting challenges we had to face." 'explained Orrefors design manager Gunilla Arvidsson.

In an homage to tradition, Orrefors craftsmen used hand-carved lengths of alderwood to create the molds for each of the three large panels. After casting, each panel was hand-polished before being delivered to Volvo's concept car workshops where they were joined into one panel.

Mattin said that the crystal panels were unlikely to make it into full-scale production, but that Volvo designers are looking for ways to include crystal glass on a smaller scale for future production models.

Hints of an S60 coupe?
With the recent introduction of the four-seat Passat CC, the trend of slinky, coupe-like sedans has begun to trickle down to more affordable cars. Volvo desperately needs a hit to help counter weakening sales figures and the S60 is due for a clean sheet redesign.

If the four-seat layout adopted by the S60 concept is any indication, I'm willing to go out on a limb and say that Volvo may be planning a four-door coupe of their own. Such a car would be the perfect shot in the arm for a sedan range that has become almost too homogenized.

[Volvo, ABG]

October 24, 2008

Friday, Bloody Friday: Chrysler to cut 25 percent of salaried workforce

Not to oversell the situation, but we may very well be witnessing the end times for Chrysler as an automaker.

One in four salaried workers at Chrysler will be out of a job by year's end, according to a statement released by Chrysler this morning.

The statement did not identify how many jobs the automaker will eliminate but spokesman Michael Palese said the cuts will total 25 percent of the company's salaried workforce.

According its own figures, Chrysler employs nearly 17,300 salaried workers. So today's cuts may total more than 4,300 jobs.
The first round of job cuts will come with voluntary retirement and employee buyout offers, according to the statement. Even still, layoffs are expected to come before the end of the year.

Discretionary spending and operating overhead will also be cut to the bone as Chrysler's owner, Cerberus Capital Management negotiates for a potential sale to General Motors. As reported earlier, Cerberus is also courting Renault for a potential sale of the Jeep division.

A hailstorm of pink slips
Today's news comes a month after Chrysler cut 1,000 salaried jobs and a day after the announcement that it would close its plant in Newark, Del., and cut a full shift from the Toledo, Ohio Jeep plant, trimming 1,825 more jobs in the process.

Since February 2007, Chrysler has eliminated 35,000 jobs. GM is also rumored to announce another round of salaried job cuts by the end of the year.

Speaking with Bloomberg, Dennis Virag, president of Michigan-based Automotive Consulting Group said Chrysler and General Motors have to do all they can to stem the outflow of cash from the organization.

Chrysler CEO Bob Nardelli released a statement attributing the latest job cuts to the fastest contraction ever in auto industry sales. "These are truly unimaginable times for our industry," said Nardelli in the statement. "We continue to be in the most difficult economic period most of us can remember."

Doubts emerge over Renault deal
Meanwhile, Reuters has reported that Renault is downplaying rumors of a potential partnership between Chrysler, Renault and its Japanese partner Nissan. Renault had recently expressed interest in purchasing Chrysler's Jeep division; the reaction by Renault may be a sign that the French automaker is no longer interested in the Jeep lineup.

Speaking with Reuters, UBS analyst Tatsuo Yoshida said Nissan and Renault have little incentive to spend the human and fiscal resources needed to aid the ailing American automaker.

[Chrysler, AN]

October 23, 2008

204-hp electric MINI E to debut at LA Auto Show

Late last spring, MINI’s parent company BMW announced plans to build and lease a fleet of 500 MINI Cooper-based electric vehicles starting in the spring of 2009.

After many months of highly secretive R&D, BMW has released photos and full specifications on the MINI E, the company’s first pure-electric vehicle.

Based on the 2009 Mini Cooper, the Mini E ditches the stock 1.6-liter 118 horsepower DOHC four for an electric motor producing 204 horsepower and 162 pound-feet of torque.

Inside, the rear seat has been displaced by an air-cooled bank of lithium-ion batteries with a total storage capacity of 35 kilowatt-hours, enough to cover about 150 miles on a full charge.

The tradeoffs don’t stop there; as you might expect, the batteries impose a penalty when it comes to weight. Whereas the flyweight MINI Cooper comes in at a scant 2700 pounds, the electric MINI E tips the scales to more than 3,200.

MINI stresses that the MINI E has been designed to preserve the Cooper’s unparalleled agility. The MINI E uses unique dampers and springs tuned to compensate for the extra weight. Also, the E’s battery pack was intentionally moved to the rear seat in order to concentrate the car’s mass near the center of the wheelbase. Even with the batteries for ballast, the MINI E can scoot quite well. MINI quotes a 0-62 mph time of 8.5 seconds, roughly on par with the naturally-aspirated MINI Cooper.

The E uses a single-speed transmission in lieu of the Cooper’s six-speed box, a decision made to simply production. Since electric motors produce maximum torque at zero rpm, the added gears are superfluous for a city car. Accelerating is simply a matter of stomping on the “gas” pedal and steering.

While the MINI E features regenerative braking to help sustain the batteries, the car doesn’t have an on-board generator. Once the batteries are depleted, the car must be recharged by plugging into a wall socket.

Those who lease the MINI E next spring will also receive a high-current charging station to speed the recharging process. Using the station, MINI claims it can fully recharge the MINI E’s battery pack in two and one-half hours.

Instantly a MINI, yet unmistakably unique
From the outside, the MINI E carries all the visual cues to associate it with it’s petrol-burning brothers. A small stylized “E” badge is mounted to the front grille. Where the standard Cooper features ornamental grilles on each front fender, the MINI E receives a pair of numbered plaques.

All MINI E will wear the show car’s metallic Dark Silver paint, offset by the roof, which is painted in Pure Silver.

Most of the iconic MINI design cues remain inside as well. The most readily apparent change is the E’s exclusive yellow interior trim. A large battery charge and regenerative braking gauge replaces the standard Cooper’s steering column-mounted tachometer.

Both the speedometer and charge / regen meter use yellow lettering on a charcoal grey background. Even with the battery back replacing the rear seat, the E still offers a generous amount of space for cargo.

500 MINI E up for lease in Spring 2009
Production of the E fleet has already begun.

500 MINI E’s will begin life on the main MINI production line in Oxford, England. There, the Es will be fully assembled aside from their engines, transmissions and related wiring. Each E will then be whisked away to a special assembly line at the BMW plant in Munich, Germany, where they will receive their electric motor, transmission and battery pack and drivetrain wiring.

And starting early next year in California, New York and New Jersey, BMW will start leasing the fleet of 500 MINI Es to the public through the MINI dealer network.

Lessees will be asked to provide feedback to BMW on a regular basis to gauge real-world performance and driver satisfaction.
In addition to making a capital investment in gas-free motoring, BMW is using the MINI E program to learn more about future electric vehicles and how driver behavior will influence their design.

In each market, BMW will establish a set of specially-staffed and custom-equipped service centers to handle maintenance on the MINI E, which includes an early inspection at 3,000 miles and a battery (pardon the pun) of tests once the customer's lease term is up.
We'll have more details on the lease term and cost as they become available. Stay tuned.

Type: Three door, two seat compact hatchback
Length: 3.714 mm (146.2")
Width: 1.683 mm (66.3")
Height: 1.407 mm (55.4")
Curb weight: 3,230 lbs
Weight dist. F/R: 1,651 lbs/ 1,575 lbs

Wheelbase: 97.1"
Track F/R: 57.2" / 57.5"
Turning circle: 35.1 feet

Front: Single-joint McPherson spring strut axle with anti-dive control
Rear: Longitudinal link with centrally mounted control arms.
Steering: Rack and pinion with electric power steering assist, total ratio 14.1:1

Front: Vented disc, 11.6" dia.
Rear: Solid Disc, 10.2" dia.

Asynchronous electric motor: 204 hp, 162 lb-ft @ 0 rpm; 12,500 rpm maximum speed.
Transmission: Single-stage helical gearbox, derived from the Cooper S helical gearbox

Electrical System
Battery: Lithium ion, 5,088 cells. Air cooled via temperature-, load- and speed-sensitive fans
Peak current: 900A

Battery capacity: 35kWh
Battery weight: 573 lbs
Charge time: 2.9h @ 240V/48A

Power-to-weight ratio: 9.76 kg/kW
Acceleration 0-100 km/h (0-62 mph): 8.5s
Top speed: 152 km/h (95 mph)
Range: 240 km (150 miles)

Energy use: 0.12kWh/km (0.19 kWh/mls)
CO2 Emissions: 0 g/km


October 22, 2008

Amidst dealer protests, GMAC seeks quiet retreat from lending business

In a move that has angered dealers and strained relations with General Motors, GMAC Financial Services has begun its retreat from the business of financing automobiles.

The first step came on Monday, when GMAC announced it would
only offer financing to customers with FICO credit scores of 700 or higher.

Cerberus Capital Management, who owns a controlling 51 percent stake in GMAC, has tightened lending terms as the global credit market has ground to a halt. General Motors owns 49 percent of GMAC. Throughout history, GMAC has been the financier of most General Motors' retail sales.

California dealer group irate over new GMAC policies
The unilateral move to distance GMAC from risky auto loans has strained dealer relations so sharply that the California New Car Dealers Association
put their objections in writing to GMAC Financial Services CEO Alvaro de Molina.

On its website, CNCDA
says it represents over 1,350 franchised new car and truck dealers. The Sacramento Bee reports that among them, CNCDA represents 400 GM dealerships, located throughout California.

In their letter to GMAC, CNCDA President Peter Welch wrote that "Unless immediately stopped, GMAC's actions will directly lead to the insolvency of a number of our GM dealer members and will significantly erode GM's California market share." Welch said that 40 percent of California vehicle buyers will be cut off from GMAC financing under the new lending restrictions.

Compounding the problem, GMAC is now giving dealers less time to pay off their inventories.

Dealers often take out revolving lines of credit to replenish their lots with new vehicles. Depending on the terms of the credit line, dealers usually have from 90 to 120 days to pay the invoice price for the vehicles they order. But as new car sales have tanked this fall, inventories have languished with hardly any buyers in sight.

For dealers who finance their operations through GMAC, they now have fewer customers to sell to, since only those with above-average credit will qualify for an in-house loan from GMAC.

Financing that Fits... from someone else
And while dealers are being squeezed, General Motors has launched a new marketing campaign to reassure buyers that financing is available -- from someone else.

Called "Financing that Fits", the campaign will promotes the ease with which buyers will find financing at their local GM dealer, as well as large cash incentives on remaining 2008 models.

Speaking with
Automotive News, Jim Campbell, GM's director of marketing and incentives said the ad campaign is aimed at potential buyers who are put off by news that financing isn't easy to come by. To aid the process of securing a loan, GM dealers will have access to Route One, a new web-based system that connects dealerships with a network of outside lenders. The new ad campaigns won't mention Route One specifically.

And as the ads hit the airwaves, GMAC is desperately seeking ways to cut its exposure to high-risk loans. So much so that minority stakeholder GM will quietly off incentives to dealers to arrange loans with outside lenders.

Automotive News reports that the program will pay up to $250 in incentives for every non-GMAC loan. Salespersons will get $100, sales managers will receive another $100 and dealers can designate an employee of choice to receive another $50. The length of the incentive program isn't clear.

According to the memo, all 2008 and 2009 Chevrolet, Pontiac, Buick, GMC, Hummer, Cadillac and Saturn vehicles will qualify.

1, 2, 3, SacBee.com, Edmunds.com]

October 21, 2008

Dodge Challenger SRT10 Concept may hint at post-Viper halo car

While the 2010 Chevrolet Camaro has been crowned the official car for this year's SEMA show in Las Vegas, Nevada, a plethora of modified 2009 Dodge Challengers are headed to the gala as well.

Leading the pack is the Dodge's own Challenger SRT10 Concept.

A creation of Chrysler's in-house tuning division, the one-off concept based on the new 2009 Dodge Challenger SRT8 ditches the stock 6.2-liter 425 horsepower V-8 for the 8.4-liter V-10 normally found under the hood of the Viper SRT10 ACR club racer.

With the swap comes 600 horsepower and 560 pound-feet of torque. Consequently, the Challenger SRT10 needs little provocation to convert tire rubber into thunderhead clouds of smoke.

Accompanying the motor swap, the SRT10 Concept has received a thorough suspension and brake overhaul. Bilstein shocks and stiffer springs have been installed at all four corners. The stock 14.2 and 13.9-inch diameter rotors and 4-piston calipers have been replaced as well, likely using calipers and rotors taken from the Dodge Viper SRT10 ACR.

The rest of the tuning package is a retro-modder's visual feast, composed of Tornado Red paint and a healthy dose of carbon-fiber for the shaker hood, front splitter and trunklid. The red-orange paint is reminiscent of the classic Hemi Orange worn by the 1970 HEMI Cuda. The interior features a host of carbon fiber accents, as well as a set of custom sports seats.

All together, it's an impressive presentation.
But the bigger question is whether Dodge intends to put a V-10 Challenger into production.

About a month ago, Dodge's parent company Chrysler LLC was angling to sell the Dodge Viper off to a third party. At the time,
Autoblog.com posited that aftermarket tuners Saleen and Roush were among those interested in buying the Viper roadster and coupe.

While those talks seem to have cooled, the Viper remains an endangered species.

Currently, there are no production plans for the Viper beyond 2011. If the Viper is not replaced or given a stay of execution, the Challenger SRT10 concept may take over as Dodge's halo car -- and as Dodge's competitor to the 540 horsepower
Shelby Mustang GT500KR.


October 20, 2008

Dodge, Ford to offer deep discounts on newest trucks

If you are waiting to replace your 1978 Ford pickup and you've got the cash or credit to close the deal, there are big bargains to be found in big trucks.

It's no secret that pickup trucks have been Detroit's financial bedrock for decades. Even through the 1973 OPEC embargo, the Big Three have relied on the steady cadence of truck sales to keep the coffers full. In an effort to reverse the paralyzing decline in sales last month, both Ford and Chrysler announced new discounts this fall on their newest trucks.

Chrysler LLC will offer a $2000 cash discount on the all-new 2009 Dodge Ram. The incentives seem to be working; the Ram's market share increased last month to nearly 16 percent from a low of 8.6 percent in May. Discounts vary by trim level and market; in Southern California, Dodge currently offers a $5000 incentive on the base model Ram 1500.

According to the Financial Times, Ford will offer a $2,500 incentive for every trade in for a 2009 F-150 pickup.

The new discounts come as a result of launching the two all-new trucks in a very difficult market. The downturn in home construction has pulled the rug out from underneath many contractors and builders, both of whom are core customers for large pickups. Discounts are usually a tool of last resort, used most often to clear dealer lots of outgoing models.

Since it's introduction in 1948, the Ford F-series pickup has become a sales legend. For 31 years, the F-series was Ford's best-selling vehicle; in 2007, sales of the F-series made up 27 percent of the automaker's annual sales volume. But as high oil prices sapped demand during the spring and worried lenders and faltering finances curtailed loans this summer, sales of the F-series have fallen sharply. Sales of the F-series were down 39 percent in September compared to a year ago.

Sales of the Dodge Ram were off by 28 percent for the same period, according to the Financial Times.

CSM Worldwide, a Michigan consultant firm, expects the US truck market to shrink next year and in 2010, bringing annual sales down to about 1.3 million units, about half of 2001’s peak.

Bond, Ollila step down from FoMoCo board
In other Ford news, the Financial Times reports that Sir John Bond and Jorma Ollila have stepped down from Ford Motor Company's board of directors. In a statement, Ford said that Bond, who had previously been head of HSBC, and Ollila, chairman of Nokia and Royal Dutch Shell, “believe they could not devote the additional time and international travel that would be required of them as the company responds to the unprecedented external environment and rapidly changing auto industry”.

Shares of Ford traded lower, down 4.12 percent to close at $2.33 per share.
Dodge is not publicly traded. Dodge is a subsidiary of Chrysler LLC, a privately held company controlled by equity management firm Cerberus Capital Management. The firm maintains a controlling stake in Chrysler's three brands: Chrysler, Jeep and Dodge.

October 17, 2008

Cerberus courting all bidders, may break up Chrysler, Jeep divisions

Just weeks after Chrysler's EV dog and pony show, majority stakeholder Cerberus Capital Management is courting a deal an effort to sell their stake in Chrysler LLC to General Motors, according to the Wall Street Journal and Reuters.

According to the Wall Street Journal, GM execs are receptive to the notion of a buyout and want to close the deal by the end of the month. Meanwhile, Reuters is reporting that French automaker Renault S.A is pursuing their own deal to purchase Chrysler's Jeep division, widely regarded as the single most valuable asset in Chrysler's portfolio.

Both Reuters and the Wall Street Journal report bankers are encouraging a GM-Chrysler deal. J.P. Morgan is the largest holder of Chrysler debt and is also a major banker for GM.

But here's where things get complicated.

Cerberus is not interested in exiting the auto business.
Cerberus wants to continue to own a stake in a future Chrysler - GM conglomerate. This has become a point of contention for some board members at GM who have as yet gone unnamed.

Plan B? Sell Chrysler a la carte
Reuters has reported that if a full buyout cannot be agreed upon, GM may instead choose to pick at the bones of the Chrysler portfolio. GM has expressed interest in buying Chrysler's minivan line — a niche Chrysler pioneered some 25 years ago and one where GM has had trouble competing ever since.

GM may also buy Chrysler's truck manufacturing plant in Coahuila, Mexico – a purchase that seems at odds with the GM's decision in July to idle the Oshawa, Ontario truck plant.

Other potential sales and mergers include spinning off
Chrysler Financial to merge with GMAC, General Motor's captive finance unit. Cerberus currently owns a controlling 51 percent stake. Alternatively, Cerberus may buy out GM's remaining 49 percent share to sweeten a struggling buyout deal.

Chrysler's MOPAR parts division is rumored to be for sale. So too is Chrysler's engineering division, which recently unveiled a plug-and-play electric-gasoline drivetrain the company says will be
on the road by 2010.

All of these deals — and the future of Chrysler as an automaker — hinge on whether Cerberus decides to sell the company off piecemeal and whether GM, Renault and other bidders can secure financing to complete their acquisitions.

Shortly after this blog was launched, I expressed my doubts that Cerberus would treat Chrysler as a long-term investment and whether Chrysler itself could survive. That was before the near total seizure of inter-bank lending and the worst month of retail car sales in 15 years.

While the ink has yet to dry on any of these deals, the decision by Cerberus to start shopping now speaks volumes.
If Chrysler has any future at all, it will likely be one far removed from it's Hemi-powered days of glory. Which — to nostalgic old salts like me — is an awful thought to consider.


October 16, 2008

MPG-o-rama! 2010 Prius leak confirmed; Toyota speaks on Scion iQ rumors

Fuel misers rejoice! We've got a double shot of Toyota MPG-centric news for you tonight.

Last night, while I was off waxing poetic about the British and their victory in the Nevada desert 11 years hence, the internet was boiling over with rumors that the 2010 Prius had done the full-monty strip show.

After weeks of execrable teaser shots, it's true. The design of the 2010 Toyota Prius has indeed been revealed in its entirety.
It all started at PriusChat.com, where member bossdowner posted four pictures of the third generation Prius.

After a day of speculation, the truth was revealed when the lads at Jalopnik sat down with Toyota's PR reps. They confirmed the pictures were legit, but declined to comment further.

So we have no other information about the car at this time. Instead, we'll all have to wait until the car's official unveiling at the Detroit Motor Show in January.

Or until the next leak gushes forth.

Toyota engineer confirms iQ under review for sale in USA
In other news, one of Toyota's top engineers has confirmed the Japanese automaker is considering selling the new iQ subcompact in the United States.

Speaking with Automotive News, Hiroki Nakajima said that Toyota is investigating the idea and that he expects a launch date before the iQ is given a mid-model refresh. Sales of the iQ begin in Japan on November 20; the tiny Toyota is a 2+2 competitor to the 2-seat Smart forTwo subcompact.

While the JDM model is powered by a 1.0-liter SOHC 12-valve inline-3, Nakajima said there is plenty of room to install the 1.5-liter DOHC 16-valve four currently used in the Toyota Yaris compact hatchback.

The iQ's unique transmission - which sits below the engine rather than behind the engine - would carry over, as it is crucial to maximizing space within the iQ's 77-inch wheelbase.

And as we reported earlier this week, the iQ is quite thifty. While the EU testing regimen differs from ours, 65 mpg is quite a feat. Even if that figure drops by 15 percent due to added weight and a larger motor, the smart forTwo would have face stiff competition in a market it currently owns.

But first, a reality check. Tossing aside the rose-colored glasses for a moment, there are a few hurdles the iQ must clear before we see it stateside.

A number of changes must be made to the iQ unit-body structure. Speaking with Automotive News, Nakajima said the iQ's airbags would need to be redesigned and the bumpers would need to be strengthened to pass federal safety standards.

Another issue is price. The 118-inch long iQ might be dinky, but the price tag isn't. In Japan, the iQ retails for between $13,860 and $15,840 (¥1.4M - ¥1.6M). It's a safe bet to add another $1,000 to cover the cost of shipping and retooling the iQ to meet US safety standards.

And even though the rumor mill has the iQ pegged as a new Scion, it doesn't really change the marketing math. Assuming the iQ is priced near $16,000, the subcompact will fight it out with the Honda Fit Sport, Toyota's own Yaris sedan and Scions' own xD hatch.

At the bottom end of the market, profit margins are often very slim. And the entire industry is headed into a very turbulent economy. With sales of new cars tanking this year and 2009 expected to be just as bleak, the iQ might only steal sales from within the Toyota family.

But then again, I might be the one who's off base. After all, I was rattling on about supersonic rocket cars — humming Rule Brittania [MP3]— while all this came to pass.


October 15, 2008

A tribute to Thrust SSC: still the fastest machine on wheels

Against the sun-scorched craggy peaks surrounding Nevada's Black Rock desert, a cloud of dust emerges out of the distance. Amorphous at first, the cloud narrows into a contrail as the ground below starts to tremble.

The thunder swells. In moments, a raven black dart shoots past and with it, a thunderous boom that rewrites history.

Eleven years ago today, RAF pilot Andrew Green drove Thrust SSC — a British-built 54-foot-long earthbound missile — faster than any who had come before him. Setting a 2-way average of 763.035 miles per hour on October 15, 1997, Green drove into history as the first man to drive faster than the speed of sound on land.

Thrust SSC was as much about a car as it was about the goal -- to solidify Britain's grasp on the land speed record and be the first to break Mach 1 in the process.

To do it required the complete dedication of Richard Noble, Ron Ayres and their team of fabricators, technicians and aerodynamicists. Fewer than 50 people worked on the Thrust SSC project, yet by virtue of the feat they accomplished, fewer teams were more unified in their effort.

As for the car itself, Thrust SSC was constructed largely from aluminum. Some 54 feet long, 12 feet wide, Thrust SSC weighed just shy of 11 tons. Powered by two afterburning Rolls-Royce Spey turbofan engines, Thrust SSC was propelled by 50,000 pounds of thrust, rolling on wheels were hewn from solid billets of aircraft-grade aluminum.

During the record-setting runs with the engines at full thrust, Thrust SSC burned 4 imperial gallons of aviation gasoline every second. When translated into miles per gallon, Thrust SSC averaged four hundredths of a mile per gallon at 763 miles per hour.

In other words at top speed, Thrust SSC burned a gallon of aviation gas every 211 feet, 2 inches.

In recognition of the teams achievement, official recognition came from the governing World Motor Sport Council four weeks later:

The World Motor Sport Council homologated the new world land speed records set by the team Thrust SSC of Richard Noble, driver Andy Green, on 15 October 1997 at Black Rock Desert, Nevada (USA). This is the first time in history that a land vehicle has exceeded the speed of sound. The new records are as follows:

* Flying mile 1227.986 km/h (763.035 mph)
* Flying kilometre 1223.657 km/h (760.343 mph)

In setting the record, the sound barrier was broken in both the north and south runs.

Paris, 11 November 1997.

Today, both Thrust SSC and its predecessor Thrust2 are on display at the Coventry Transport Museum in Coventry, England.

In the intervening years, much of the world has changed. Brazen attempts like those by Richard Noble's and challenger Craig Breedlove have grown more distant. Breedlove retired from his 1997 attempt after his
Spirit of America could do no better than 676 mph. The car was sold in 2006 to Steve Fossett, who died in an airplane crash while scouting for an area to run Breedlove's car and stage a record-challenging run of his own.

[Picture Credit:
Andrew Graves]

October 14, 2008

Does Scion's future lie in Toyota's new iQ?

In the years since Scion introduced the second generation xB, the once-booming Toyota division has watched sales go stagnant. While rising gas prices have helped sales of the xB and xD hatch, both models are less fuel-efficient than their predecessors. Consumers and reviewers alike have lamented the loss of the lighter and more nimble Scions of years past.

Late last week, MotorTrend reported that Toyota is considering sending their IQ subcompact to US shores as a new Scion model. According to sources inside the Japanese automaker, the rebadged iQ will debut at the Los Angeles Auto Show.

The Toyota iQ was developed for the Japanese and European markets as a 2+2 competitor to the two-seater Smart for Two. At nine-feet, nine-inches long, five feet high and five-feet, five-inches wide, the front-wheel-drive IQ manages to squeeze in a diminutive rear seat that unfolds from the flat load floor.

While the rear seats aren't particularly spacious, the additional capacity make the iQ a more palatable prospect as an urban runabout for a single-car household.

The city car meme is reinforced by the iQ's exceptional fuel economy. When equipped with the 1.0-liter VVT-i SOHC inline-three and a five-speed manual, the iQ delivers a combined fuel economy of 65.7 mpg in the EU test cycle.

The iQ is also stuffed to the gills with safety features. In addition to usual alphabet soup of antilock brakes, side and front airbags and electronic traction control systems, the iQ offers the world's first rear passenger airbag. Since the rear seats occupy most of what would otherwise be the trunk, Toyota equipped the iQ with a rear curtain airbag which deploys in a rear-end collision if the rear seat is in use.

If the rumors are indeed true, the Scion-branded iQ would likely be offered with the 1.5-liter four offered in the Toyota Yaris, backed by either a five-speed manual or a version of the European market MultiDrive CVT automatic.

Ideally, the Scion iQ would be priced at about $16,000, putting it in direct competition with the Smart ForTwo passion coupe.

The logic behind selling the iQ stateside is that the city-friendly runabout would lend credibility to the brand's targeted urban demographic -- a concept that seems lost considering that the xB and xD are larger and heavier than their predecessors.

A 65 mpg commuter car with such quirky styling would go a long way toward granting the Scion brand a new, buzz-worthy model.

On a personal note, while I'm hesitant to give voice to the rumor mill, I would be pleasantly surprised if this one comes true. Speculation is inevitable in an industry where automakers rely on secrecy, but the rumor mill has also been used as a tool to lead competitors astray. Even though all the marketing logic adds up, take all of today's news with a grain of salt.

Naturally, as the Los Angeles Auto Show draws near, we'll be watching this one closely. Stay tuned.


October 13, 2008

2010 Chevrolet Camaro priced to sell from $22,995

After touring the show circuit in concept form and a run a starring role in the 2007 summer blockbuster Transformers, GM has announced pricing for the 2010 Chevrolet Camaro.

The V6-powered LS Camaro will sticker for $22,995, while the V8-powered SS will retail for $30,995. Both prices include the $750 destination charge.

The V6 engined Camaro LS comes straight from the Cadillac CTS 3.6 DI. Featuring dual overhead cams with variable valve timing and direct fuel injection, the 3.6-liter motor produces 300 horsepower and 273 pound-feet of torque. A six-speed manual transmission is standard equipment; a six-speed automatic is optional.

Camaro SS buyers who chose a six-speed manual transmission will have 422 horsepower and 408 pound-feet of torque, courtesy of the 6.2-liter overhead-valve LS3 V-8. Those who opt for the six-speed automatic SS receive the L99 overhead-valve V8, rated at 400 horsepower and 395 pound-feet of torque.

The L99 V8 is based on the LS3, but it also includes GM’s Active Fuel Management system, which can shut down up to four cylinders at highway speed to save fuel - an activity that seems at odds with the Camaro SS raison d'ĂȘtre.

In early testing, the LS Camaro delivers 27 mpg on the highway, the SS automatic returns about 23 mpg.

Both models feature a fully-independent rear suspension, four wheel antilock disc brakes (with a Brembo brake upgrade optional on the SS). StabiliTrak traction control and 18 inch wheels come standard, with a 19 and 20-inch wheel upgrade available on the SS.

Six air bags come standard on every Camaro, including head curtain side-impact air bags and front seat-mounted thorax side air bags. Other options include bluetooth hands-free cellphone support, remote start, USB-audio connectivity, OnStar and XM Satellite Radio.

Camaro LS models can also be ordered with the RS appearance package, which includes HID headlamps, a rear lip spoiler, chrome-trimmed taillamps and 20-inch wheels.

Customers can visit their local Chevrolet dealer and place an order starting this evening.
Production will begin next February at GM's Oshawa, Ontario plant and the first dealer orders will be filled in early March.