The Truth About Cars » High Finance http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Wed, 29 Jul 2015 21:00:37 +0000 en-US hourly 1 http://wordpress.org/?v=4.2.2 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars » High Finance http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com/category/news-blog/high-finance/ Ford Posts $1.9B Second Quarter Profit, Largest Since 2000 http://www.thetruthaboutcars.com/2015/07/ford-posts-1-9b-second-quarter-profit-largest-since-2000/ http://www.thetruthaboutcars.com/2015/07/ford-posts-1-9b-second-quarter-profit-largest-since-2000/#comments Tue, 28 Jul 2015 17:00:07 +0000 http://www.thetruthaboutcars.com/?p=1126521 Ford announced that it made a $1.9 billion net-adjusted profit in the second quarter of 2015, marking the largest gain for the automaker since 2000, according to Automotive News. The profit represents a 44-percent gain over last year despite dipping global sales and a stronger U.S. dollar hampering exports. Ford said it was selling cars for […]

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2015 Ford F-150

Ford announced that it made a $1.9 billion net-adjusted profit in the second quarter of 2015, marking the largest gain for the automaker since 2000, according to Automotive News.

The profit represents a 44-percent gain over last year despite dipping global sales and a stronger U.S. dollar hampering exports. Ford said it was selling cars for more money and offering fewer incentives, despite recent reports of F-150 incentives topping nearly $11,000 in some places.

Ford said revenues in North America surged 10 percent, which helped the company beat Wall Street’s expectations.

The 10-percent gain in revenue in North America is despite Ford’s slower-than-average sales compared to the overall industry average. Automotive News reported that the automaker achieved a 1.7-percent increase in sales for the second quarter compared to the industry average of 3.3 percent.

A slowdown in production of the F-150 is partially to blame for the sales shortfall. Building the redesigned F-150 at both of Ford’s plants has gone slower than normal, the automaker said, and inventory levels should return to normal in September.

The automaker said it increased its global market share one-tenth of a percent to 7.6 percent. Twelve of its 16 planned global launches have happened already this year, and Ford said the rest were on track. The company said it was still on track for an end-of-year, pre-tax profit of between $8.5 billion and $9.5 billion.

Ford posted a net loss in South American, European, Middle Eastern and African markets, but posted a $33 million gain in the Asia Pacific region, a 20-percent improvement over last year.

Ford Credit posed a $506 million pre-tax profit for the second quarter, a 17-percent gain.

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No, Fiat Chrysler Probably Won’t Go Broke Buying Back Used Cars http://www.thetruthaboutcars.com/2015/07/no-fiat-chrysler-probably-wont-go-broke-buying-back-used-cars/ http://www.thetruthaboutcars.com/2015/07/no-fiat-chrysler-probably-wont-go-broke-buying-back-used-cars/#comments Mon, 27 Jul 2015 22:00:49 +0000 http://www.thetruthaboutcars.com/?p=1126033 After this morning’s announcement that Fiat Chrysler Automobiles would be subject to one of the largest civil penalties for an automaker, reports that the automaker could be on the hook for $2.5 billion in cars aren’t true, the automaker said today. “While such amounts may exceed the $20 million, contrary to certain reports, FCA US does […]

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After this morning’s announcement that Fiat Chrysler Automobiles would be subject to one of the largest civil penalties for an automaker, reports that the automaker could be on the hook for $2.5 billion in cars aren’t true, the automaker said today.

“While such amounts may exceed the $20 million, contrary to certain reports, FCA US does not expect that the net cost of providing these additional alternatives will be material to its financial position, liquidity or results of operations,” the automaker said in a statement.

In other words, expect to find some screaming deals on Ram trucks in the next few months.

The automaker announced on its website that not all customers would participate in the buyback plan and that 60 percent of the affected vehicles had been repaired already. That leaves roughly 200,000 cars that could be eligible for free repairs or to be purchased by FCA.

Those vehicles would be purchased at “a price equal to the original purchase price less a reasonable allowance for depreciation plus ten percent,” according to the automaker.

The manufacturer said under the guidelines of the penalty, it would be allowed to resell the recalled trucks to the public.

The vehicles that may be eligible for repurchase are:

• 2009-2012 Ram 1500s

• 2008-2012 Ram 1500 Mega Cab 4×4, Ram 2500 4×4, 3500 4×4, 4500 4×4, 4500 4×4

• 2009 Chrysler Aspen and Dodge Durango

• 2009-2011 Dodge Dakota

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Car Building in Ontario Could Die, and They Probably Can’t Save It http://www.thetruthaboutcars.com/2015/07/car-building-ontario-die-probably-cant-save/ http://www.thetruthaboutcars.com/2015/07/car-building-ontario-die-probably-cant-save/#comments Mon, 27 Jul 2015 21:00:15 +0000 http://www.thetruthaboutcars.com/?p=1125985 Ontario’s debt is swelling and as home to eight manufacturing plants — the largest complex in North America — automakers may have a tough time keeping plants open in Canada’s most-populous province. According to a story by the Financial Post, Ontario is moving forward with an ambitious plan to revamp roads and mass transit systems despite its debt being downgraded […]

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Chrysler Brampton Assembly Plant

Ontario’s debt is swelling and as home to eight manufacturing plants — the largest complex in North America — automakers may have a tough time keeping plants open in Canada’s most-populous province.

According to a story by the Financial Post, Ontario is moving forward with an ambitious plan to revamp roads and mass transit systems despite its debt being downgraded by Standard & Poor’s bond index. The broad public spending plan also extends to other sectors, despite high unemployment numbers and slumping manufacturing jobs.

Automakers such as Fiat Chrysler Automobiles have called on the provincial government to cut back on public programs and reduce costs on utilities in an effort to keep car building in the province profitable. This year, Chevrolet will shift production of its Camaro to Michigan. On the whole, Oshawa GM production has a dark cloud lingering overhead until the company decides what to do with the facility in 2016.

Ontario’s debt is twice that of California’s with only half the population, the Financial Post reported.

Last month the province reported that 5,200 manufacturing jobs left the region, which prompted local business leaders to sign a petition asking the government to reconsider its proposed pension plan that FCA CEO Sergio Marchionne said this month could hamper growth.

“We’re fully aware of the fact that this proposal on pensions and cap and trade and all this stuff … these are all things that add cost to the running of operations, they don’t come for free,” Marchionne said, according to the Toronto Sun.

Already, automakers such as Volvo and Land Rover have turned down Ontario in favor of operations in the United States and it’s unclear if swelling debt and rising costs of operation will cost the province more jobs in the future.

Other automakers that already have facilities in Ontario are making changes. Honda and Ford are both positioning their plants to manufacture vehicles for export markets. Toyota, on the other hand, will end Corolla production in Ontario in favor of Mexico. The company stated it will “switch from producing Corollas to mid-sized, higher-value vehicles” at their Canadian plant. The replacement product has not yet been announced.

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TrueCar Shares Plunge on Missed Earnings Call http://www.thetruthaboutcars.com/2015/07/truecar-shares-plunge-on-missed-earnings-call/ http://www.thetruthaboutcars.com/2015/07/truecar-shares-plunge-on-missed-earnings-call/#comments Sat, 25 Jul 2015 17:00:47 +0000 http://www.thetruthaboutcars.com/?p=1125137 TrueCar CEO Scott Painter said his company will miss expected earnings for the second quarter, and said the company needed a “wake-up” in his call, Automotive News is reporting. The news sent shares of TrueCar plummeting more than 35 percent. TrueCar closed Friday down 3.81 down to $6.87 per share. Painter said a lack of […]

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TrueCar CEO Scott Painter said his company will miss expected earnings for the second quarter, and said the company needed a “wake-up” in his call, Automotive News is reporting.

The news sent shares of TrueCar plummeting more than 35 percent. TrueCar closed Friday down 3.81 down to $6.87 per share.

Painter said a lack of marketing was to blame for the company’s struggles in the second quarter, not the recent highly publicized split with AutoNation.

Painter said the revised earnings would lower their overall revenue for the year around $20 million to $30 million this year.

In addition to fewer consumers buying fewer cars through TrueCar, the company said spending on its mobile platform and weak marketing. True car said it lost $15 million in the second quarter of this year.

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Fiat Chrysler Files IPO to Spin-off Ferrari http://www.thetruthaboutcars.com/2015/07/fiat-chrysler-files-ipo-spin-off-ferrari/ http://www.thetruthaboutcars.com/2015/07/fiat-chrysler-files-ipo-spin-off-ferrari/#comments Thu, 23 Jul 2015 19:00:47 +0000 http://www.thetruthaboutcars.com/?p=1124177 Fiat Chrysler Automobiles formally filed its initial public offering on Thursday to spin off Ferrari into its own separate company. The filing doesn’t specify price or number of shares to be offered when the shares are publicly available sometime after Oct. 13. Roughly 10 percent of the company will be publicly traded, with the rest of the […]

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Fiat Chrysler Automobiles formally filed its initial public offering on Thursday to spin off Ferrari into its own separate company.

The filing doesn’t specify price or number of shares to be offered when the shares are publicly available sometime after Oct. 13.

Roughly 10 percent of the company will be publicly traded, with the rest of the company remaining under control of existing FCA shareholders and Piero Lardi Ferrari, Enzo Ferrari’s son and current vice chairman.

The IPO documents offers an exhaustive glimpse at the supercar maker’s finances and income. The Maranello-based manufacturer said they made €2.7 billion ($2.96 billion) in revenue in 2014 with profits of €265 million ($295 million). About 70 percent of the company’s revenues came from cars they produced, 11 percent came from engine sales to Maserati and the rest came from sponsorships and commercial revenue.

Sergio Marchionne, who is CEO of FCA, will stay on as chairman of the new company to be based in the Netherlands. The company will keep its Maranello factory and Formula One team based in Italy.

Ferrari’s F1 team and consumer-facing business — aside from cars — figures heavily into the future company’s success. In the IPO, the company mentions that its F1 program and sponsorships would factor into the viability of the future business. The company also mentions that its low-volume production strategy would remain, keeping its cars exclusive to well-heeled buyers.

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Magna Completes $1.9B Acquisition of Transmission-maker Getrag http://www.thetruthaboutcars.com/2015/07/magna-completes-1-9b-acquisition-transmission-maker-getrag/ http://www.thetruthaboutcars.com/2015/07/magna-completes-1-9b-acquisition-transmission-maker-getrag/#comments Fri, 17 Jul 2015 17:05:01 +0000 http://www.thetruthaboutcars.com/?p=1118633 Supplier and sometimes-assembler Magna International will buy German transmission-maker Getrag for roughly $1.9 billion, the Detroit News is reporting. The deal would firmly plant Canadian-based Magna International as the world’s second-largest parts supplier behind Robert Bosch GmbH and ahead of ZF, which recently purchased TRW Automotive for $12.4 billion earlier this year. “The trend among the […]

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Getrag

Supplier and sometimes-assembler Magna International will buy German transmission-maker Getrag for roughly $1.9 billion, the Detroit News is reporting.

The deal would firmly plant Canadian-based Magna International as the world’s second-largest parts supplier behind Robert Bosch GmbH and ahead of ZF, which recently purchased TRW Automotive for $12.4 billion earlier this year.

“The trend among the suppliers is that we now have to be bigger as the auto makers go to us to do more for them,” Magna Chief Executive Don Walker told the Wall Street Journal on Thursday.

Magna is well-known for their Austrian subsidiary, Manga Steyr, which assembles cars for BMW including X5 and 5-Series, and will produce vehicles for Jaguar Land Rover.

Getrag produces transmissions for Ford, BMW, Renault, Volvo and Daimler. In addition to its significant contracts with those automakers, Getrag has a substantial business footprint in China that Magna needed, according to the Detroit News. In addition to being the largest automotive market in the world, China is the fastest growing market for dual-clutch transmissions, which Getrag produces.

The acquisition is the latest in a flurry of auto-supplier mergers and purchases. It’s the sixth major deal this year for auto parts suppliers.

Getrag produces about 4 million transmissions annually and employs about 13,500 people in Europe, Asia and North America. Magna generated about $36.3 billion in sales last year and employs around 133,000 people in 29 countries.

Walker told the Detroit News that the company would consider more acquisitions in the near future.

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Volvo Buys Polestar, Maybe Won’t Be Unicorn After All http://www.thetruthaboutcars.com/2015/07/volvo-buys-polestar-maybe-wont-unicorn/ http://www.thetruthaboutcars.com/2015/07/volvo-buys-polestar-maybe-wont-unicorn/#comments Tue, 14 Jul 2015 15:00:26 +0000 http://www.thetruthaboutcars.com/?p=1115105 Volvo has purchased Swedish high-performance tuner Polestar, the automaker announced Tuesday. The company will own and operate Polestar as an in-house performance division much like Ford’s SVT division or Subaru’s STI group (anything other than another Mercedes-AMG or BMW M Division reference). You could be forgiven for thinking Volvo owned Polestar already — the Swedish […]

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Volvo has purchased Swedish high-performance tuner Polestar, the automaker announced Tuesday. The company will own and operate Polestar as an in-house performance division much like Ford’s SVT division or Subaru’s STI group (anything other than another Mercedes-AMG or BMW M Division reference).

You could be forgiven for thinking Volvo owned Polestar already — the Swedish automaker already exclusively contracted with the Swedish tuner in 2013 to produce the V60 and S60 Polestar editions and the two have worked together since the 1990s.

Volvo said in the medium-term it would double output of Polestar branded cars — which could mean more than 80 sedans and 40 wagons a year coming to the United States.

Polestar’s racing team, which races in the Scandinavian Touring Car Championship, won’t be included in the deal. This shouldn’t come as a surprise. Volvo Global Marketing Vice-President, Alain Visser, stated last year, “Motorsport does not conform with our brand, where we stand for smaller engines and safety. We are therefore pulling out of STCC, for example, as soon as the contracts permits.”

Christian Dahl, now former-CEO of Polestar, will remain as the team’s principal and the touring car team will be renamed.

“We are extremely satisfied with the way the performance business with Volvo has developed. But we are a racing team first and foremost. This is an opportunity to return our full attention to our core business – to develop and race Volvo cars,” Dahl said in a statement announcing the deal.

Volvo said Polestar would be involved with the automaker’s plug-in hybrid cars in the future.

Financial details of the deal were not disclosed by Volvo.

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Ferrari Filing ‘Days Away’ Says FCA Boss Marchionne http://www.thetruthaboutcars.com/2015/07/ferrari-filing-days-away-says-fiat-chrysler-boss-marchionne/ http://www.thetruthaboutcars.com/2015/07/ferrari-filing-days-away-says-fiat-chrysler-boss-marchionne/#comments Sat, 11 Jul 2015 15:00:42 +0000 http://www.thetruthaboutcars.com/?p=1113401 Speaking to reporters in Toronto on Friday, Fiat Chrysler Automobile chief Sergio Marchionne said the official filing to spin off Ferrari could happen within the next few days. “We are days away from filing the prospectus,” Marchionne said, according to the Detroit News. The future standalone supercar maker will make available 10 percent of the company through […]

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Speaking to reporters in Toronto on Friday, Fiat Chrysler Automobile chief Sergio Marchionne said the official filing to spin off Ferrari could happen within the next few days.

“We are days away from filing the prospectus,” Marchionne said, according to the Detroit News.

The future standalone supercar maker will make available 10 percent of the company through its initial public offering, which is widely expected in October. The remainder of the company will be held by Fiat investors and Enzo Ferrari’s son, Piero Lardi Ferrari, who is vice chairman of the company.

The move to spin off Ferrari is part of a larger plan to reinvest $61 billion back into FCA to fund future development for its range of vehicles.

Last week, Marchionne said Ferrari could be worth about $11 billion, or around 60 percent of FCA’s current market cap value. Analysts predicted the Maranello-based car maker would be worth roughly half Marchionne’s estimate. Despite building around 7,000 cars a year, Ferrari generates considerable profits for parent-company FCA.

Marchionne also denied that FCA would make a hostile bid to takeover General Motors in an effort to consolidate costs and boost profits. Marchionne has been looking for a partner — particularly GM — to offset rising investment costs.

“There are other, less optimal combinations,” he said.

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Ferrari Worth Over $11 Billion, Says FCA Boss Sergio Marchionne http://www.thetruthaboutcars.com/2015/07/ferrari-worth-11-billion-says-fca-boss-sergio-marchionne/ http://www.thetruthaboutcars.com/2015/07/ferrari-worth-11-billion-says-fca-boss-sergio-marchionne/#comments Mon, 06 Jul 2015 16:00:50 +0000 http://www.thetruthaboutcars.com/?p=1108185 Speaking at an unrelated Fiat 500 reveal last week, Fiat-Chrysler chief Sergio Marchionne said Ferrari is worth about $11 billion and he expects the prancing horse’s IPO to garner about $1.1 billion went it goes up for sale in October. “There are clear expectations from ourselves as Ferrari brand is unique,” Marchionne said, according to […]

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Picture courtesy blogs.reuters.com

Speaking at an unrelated Fiat 500 reveal last week, Fiat-Chrysler chief Sergio Marchionne said Ferrari is worth about $11 billion and he expects the prancing horse’s IPO to garner about $1.1 billion went it goes up for sale in October.

“There are clear expectations from ourselves as Ferrari brand is unique,” Marchionne said, according to Bloomberg News. “There is also a scarcity value as we are just selling a 10 percent stake.”

Marchionne’s estimate is roughly double what brokers said the Maranello-based manufacturer could be worth almost a year ago.

The $11 billion valuation before its October IPO may be ambitious, but so is Marchionne’s overall plan for FCA. He announced the move to spin off Ferrari last year as part of a larger plan to invest $61 billion back into FCA. The sale is made up of a 10-percent offer of Ferrari on the NYSE and a redistribution of FCA’s remaining 80-percent share to the Agnelli family, who also own about 30 percent of Fiat. The non-FCA owned 10 percent of Ferrari will stay with Enzo Ferrari’s son, current Ferrari vice chairman Piero Lardi Ferrari.

When it goes to sale in October, the IPO may raise about $1.1 billion for Ferrari. The company has said it won’t build any more than 7,000 cars per year, wouldn’t change its current business model nor would it be likely that anyone could takeover controlling interest.

That doesn’t mean it’s a bad investment. As a company, Ferrari is wildly profitable and will still sell you a $50 T-shirt if you can’t afford a share in October.

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Mahindra-Pininfarina Deal Rejected By Creditors http://www.thetruthaboutcars.com/2015/06/mahindra-pininfarina-deal-rejected-by-creditors/ http://www.thetruthaboutcars.com/2015/06/mahindra-pininfarina-deal-rejected-by-creditors/#comments Tue, 30 Jun 2015 17:00:07 +0000 http://www.thetruthaboutcars.com/?p=1102857 Mahindra’s attempt to buy Italian design firm Pininfarina collapsed over the weekend due to opposition by the latter’s creditors. According to Italian newspaper Il Messaggero, three or four banks holding Pininfarina’s €87 million ($97 million USD) debt rejected a deal by the Indian company to buy the design house with the idea of writing off […]

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Mahindra XUV 500 W6 2013

Mahindra’s attempt to buy Italian design firm Pininfarina collapsed over the weekend due to opposition by the latter’s creditors.

According to Italian newspaper Il Messaggero, three or four banks holding Pininfarina’s €87 million ($97 million USD) debt rejected a deal by the Indian company to buy the design house with the idea of writing off half of said debt, Reuters reports; Mahindra and Pininfarina had worked on SUVs and concepts in the past. Pininfarina will now seek a new debt restructuring agreement.

Had Mahindra’s deal been approved, the company would be the latest to acquire ownership of an Italian company in a series of foreign takeovers, such as ChemChina’s purchase of tire manufacturer Pirelli earlier this year, amid Italy sorting itself and its economy out.

(Photo credit: RL GNZLZ/Flickr/CC BY-SA 2.0)

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Mass Transit In Greece Free This Week Due To Economic Crisis http://www.thetruthaboutcars.com/2015/06/mass-transit-in-greece-free-this-week-due-to-economic-crisis/ http://www.thetruthaboutcars.com/2015/06/mass-transit-in-greece-free-this-week-due-to-economic-crisis/#comments Mon, 29 Jun 2015 17:00:30 +0000 http://www.thetruthaboutcars.com/?p=1102009 Some transit authorities offer free service to encourage ridership. Greece is offering free service this week because no one has money. As a result of Greece’s banks shutting their doors and ATMs for the entire week in order to prevent potential bank runs at the expense of their customers — in turn the result of […]

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Electric Bus In Athens, Greece

Some transit authorities offer free service to encourage ridership. Greece is offering free service this week because no one has money.

As a result of Greece’s banks shutting their doors and ATMs for the entire week in order to prevent potential bank runs at the expense of their customers — in turn the result of the failing bailout of the nation’s economy — transportation minister Christos Spirtzis declared transit service in Athens would be free to all until next week, Business Insider says.

The move would affect only those in the greater Athens metro area, where 40 percent of the nation’s population call home; the next-largest city, Thessaloniki, can’t waive its fares because its system isn’t fully run by the Grecian government. Meanwhile, Greece stands to lose €4 million ($4.44 million USD) as a result of the declaration; typical fares are around €1.20 ($1.33).

(Photo credit: hans-johnson/Flickr/CC BY-ND 2.0)

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Toyota’s Akio Toyoda Banked $2.84M In 2014 http://www.thetruthaboutcars.com/2015/06/toyotas-akio-toyoda-banked-2-84m-in-2014/ http://www.thetruthaboutcars.com/2015/06/toyotas-akio-toyoda-banked-2-84m-in-2014/#comments Wed, 24 Jun 2015 18:00:11 +0000 http://www.thetruthaboutcars.com/?p=1099217 In a regulatory filing made Wednesday, Toyota President Akio Toyoda made ¥352 million ($2.84 million USD) in total 2014 compensation. Toyoda’s 2014 payout is split between his standard ¥103 million ($830,000) salary and a bonus of ¥249 million ($2 million), Reuters reports. The 2014 bonus is nearly double the ¥127 million ($1.02 million) paid in […]

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In a regulatory filing made Wednesday, Toyota President Akio Toyoda made ¥352 million ($2.84 million USD) in total 2014 compensation.

Toyoda’s 2014 payout is split between his standard ¥103 million ($830,000) salary and a bonus of ¥249 million ($2 million), Reuters reports. The 2014 bonus is nearly double the ¥127 million ($1.02 million) paid in 2013.

Though Toyoda’s compensation still bests Honda’s Takanobu Ito’s ¥150 million ($1.21 million) thus far, Renault-Nissan’s Carlos Ghosn dominates the Tohosan Zaibatsu on the Nissan side alone, having banked ¥1.035 billion ($8.39 million) in 2014; Renault added €7.2 million ($8.17 million) for his part of the Tricolore Français.

Toyota’s fortunes rose in 2014, as well. The automaker reported a 19 percent boost in net profit for the year ending this March, pulling in a total of ¥2.17 trillion ($17.5 billion), a new record for the third consecutive year.

(Photo credit: Toyota)

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Renault-Nissan’s Carlos Ghosn Banks $16M In 2014 http://www.thetruthaboutcars.com/2015/06/renault-nissans-carlos-ghosn-banks-16m-in-2014/ http://www.thetruthaboutcars.com/2015/06/renault-nissans-carlos-ghosn-banks-16m-in-2014/#comments Tue, 23 Jun 2015 16:00:52 +0000 http://www.thetruthaboutcars.com/?p=1097801 Renault-Nissan CEO Carlos Ghosn did well for himself in 2014, banking around $16 million in compensation compared to the salaries of other automotive CEOs. Breaking down the numbers, Nissan paid Ghosn ¥1.035 billion ($8.39 million USD) during 2014, Reuters says, up 4 percent from what he made in 2013. On the Renault side, Ghosn took […]

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Carlos Ghosn

Renault-Nissan CEO Carlos Ghosn did well for himself in 2014, banking around $16 million in compensation compared to the salaries of other automotive CEOs.

Breaking down the numbers, Nissan paid Ghosn ¥1.035 billion ($8.39 million USD) during 2014, Reuters says, up 4 percent from what he made in 2013. On the Renault side, Ghosn took home €7.2 million ($8.17 million), bringing total compensation to $16.56 million.

Ghosn’s combined paycheck is in line with compensation paid to two of the Detroit Three’s CEOs, where both Ford CEO Mark Fields and General Motors CEO Mary Barra made $16.8 million and $16.2 million respectively at the end of their first year helming their companies. Meanwhile, FCA CEO Sergio Marchionne’s compensation paints a complex portrait, with figures ranging between $8 million and $72 million depending on the source.

Among the rest of the ToHoSan Zaibatsu, Toyota’s Akio Toyoda made ¥229 million ($1.84 million) in 2014, while Honda’s Takanobu Ito brought home ¥150 million ($1.21 million).

In Germany, the Teutonic Trinity’s CEOs took home €6.57 million ($7.35 million – Audi’s Rupert Stadler), €7.25 million ($8.11 million – BMW’s Norbert Reithofer) and €9.35 ($10.5 million – Mercedes’ Dieter Zetsche).

Finally, under the remaining stripes of the Tricolore Français, PSA Peugeot Citroën CEO Carlos Tavares received €2.75 million ($3.07 million).

(Photo credit: Nissan)

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General Motors, FCA Recruit Advisors Amid Merger Standoff http://www.thetruthaboutcars.com/2015/06/general-motors-fca-recruit-advisors-amid-merger-standoff/ http://www.thetruthaboutcars.com/2015/06/general-motors-fca-recruit-advisors-amid-merger-standoff/#comments Thu, 18 Jun 2015 15:00:22 +0000 http://www.thetruthaboutcars.com/?p=1095169 The Lifetime movie starring FCA has reached the “dangerous stalker” phase, as the automaker and General Motors recruit advisors amid a merger standoff. Despite GM and CEO Mary Barra both rebuffing FCA’s and CEO Sergio Marchionne’s attempts to consolidate the two automakers and their respective resources, the former has brought aboard Goldman Sachs and Morgan […]

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Abarth 500

The Lifetime movie starring FCA has reached the “dangerous stalker” phase, as the automaker and General Motors recruit advisors amid a merger standoff.

Despite GM and CEO Mary Barra both rebuffing FCA’s and CEO Sergio Marchionne’s attempts to consolidate the two automakers and their respective resources, the former has brought aboard Goldman Sachs and Morgan Stanley for advice in handling the latter’s attempts to force the issue, Reuters reports. FCA is being advised by UBS, with help from Lazard via the automaker’s founding Agnelli family.

For months, Marchionne has been beating the drum of consolidation, going as far as to recruit GM investors to force the automaker’s board to meet FCA at the negotiation table. His reasoning amounts to reducing costs involved in developing platforms and technologies for new vehicles by spreading those costs throughout two or more merged parties.

However, for FCA to make GM theirs forever and always, sources close to the matter claim the automaker would need to pay $77 billion in an all-stock transaction, based on GM’s shareholders demanding a 35 percent premium regarding market capitalization, as well as a significant payout on their shares.

The hostile takeover would put FCA under financial strain, as well. Its market value — most of which is linked to Ferrari, which is set to strike out on its own later this year — is around $57 billion, while capitalization is $20 billion, much smaller than GM’s respective figures of $84 billion and $57 billion.

(Photo credit: Shane Hayes/Flickr/CC BY-ND 2.0)

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Billionaire Investor Kirk Kerkorian Dead At 98 http://www.thetruthaboutcars.com/2015/06/billionaire-investor-kirk-kerkorian-dead-at-98/ http://www.thetruthaboutcars.com/2015/06/billionaire-investor-kirk-kerkorian-dead-at-98/#comments Tue, 16 Jun 2015 19:00:31 +0000 http://www.thetruthaboutcars.com/?p=1093817 Billionaire investor Kirk Kerkorian died Tuesday at the age of 98, leaving behind a legacy which included the automotive industry in his twilight years. Aside from his numerous holdings in Las Vegas casinos — including MGM Resorts International — air charter businesses, and movie studios, Kerkorian held shares among all of the Detroit Three, Bloomberg […]

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1989 Chrysler TC
Billionaire investor Kirk Kerkorian died Tuesday at the age of 98, leaving behind a legacy which included the automotive industry in his twilight years.

Aside from his numerous holdings in Las Vegas casinos — including MGM Resorts International — air charter businesses, and movie studios, Kerkorian held shares among all of the Detroit Three, Bloomberg reports.

Though he once sold one of his businesses to Studebaker — only to buy it back two years later — Kerkorian’s dealings in Detroit began in 1990, when he acquired nearly 10 percent of Chrysler’s stock after being impressed by then-chairman Lee Iacocca. Five years after, he and Iacocca were rebuffed by the automaker and its then-new chairman, Bob Eaton, when the duo sought to buy the remaining 90 percent of the automaker for $22.8 billion; Daimler AG would buy Chrysler three years later.

Though he initially supported the so-called “merger of equals” — his outside analysis helped lead the two companies down the aisle, Automotive News says — he sued DaimlerChrysler for $3 billion in damages in 2000 for misleading him with said merger. Kerkorian would ultimately lose his suit in 2005, his appeal of the federal trial verdict also proving unsuccessful.

Two years later, Kerkorian sought to buy Chrysler once more, offering $4.6 billion to Daimler before being outbid by Cerberus.

Around the same time of the Cerberus bid, he bought nearly 10 percent of General Motors shares, selling them back a year later after his patience ran out with the automaker’s management when he failed to convince then-CEO Rick Wagoner to join forces with Renault-Nissan. He also lost $600 million in 2008 selling his 6.5 percent stake in Ford — citing a lack of confidence the Blue Oval could turn its fortunes around — which he had purchased for over $1 billion in the same year.

[Photo credit: Greg Gjerdingen/Flickr/CC BY 2.0]

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Mexico, Southeastern US Besting Canada, Detroit In Auto Manufacturing http://www.thetruthaboutcars.com/2015/06/mexico-southeastern-us-besting-canada-detroit-in-auto-manufacturing/ http://www.thetruthaboutcars.com/2015/06/mexico-southeastern-us-besting-canada-detroit-in-auto-manufacturing/#comments Tue, 16 Jun 2015 18:00:30 +0000 http://www.thetruthaboutcars.com/?p=1093441 Despite being unified on the trading front, Mexico and the Southeastern United States are besting Canada and Detroit in the automotive industry game. Presently, Mexico’s contribution to overall North American annual production came to 18.8 percent in 2014, Detroit Free Press says, double the percentage of vehicles the country’s burgeoning industry made back in 2004. […]

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National Flag of Mexico

Despite being unified on the trading front, Mexico and the Southeastern United States are besting Canada and Detroit in the automotive industry game.

Presently, Mexico’s contribution to overall North American annual production came to 18.8 percent in 2014, Detroit Free Press says, double the percentage of vehicles the country’s burgeoning industry made back in 2004. Conversely, Canada’s percentage fell from 16.9 percent a decade earlier, to 14.1 percent last year. The U.S. also lost production volume over the years, rebounding to 67.1 percent in 2014 after its seven-year-decline from a peak of 73.6 percent ended in 2011.

While the U.S. still makes the most vehicles per year, more production is heading south of the Mason-Dixon when not crossing the border entirely. DesRosiers Automotive Consultants president Dennis DesRosiers says “over half the capacity and 80 percent to 90 percent of investment dollars are going to the U.S. South or Mexico,” leaving Detroit and the Canadian auto industry out in the cold.

DesRosiers adds Canada’s industry could downsize to five automakers with a single factory each over the next 10 to 20 years, while Mexico could grow volume to an additional 1 million or 2 million units per year, thanks to heavy investments — $7 billion alone in 2014 — from North American and foreign automakers alike.

Meanwhile, IHS Automotive Consulting managing director Michael Robinet expects production volume in the Southeastern U.S. to grow to 5 million units, while volume in the Midwest will remain around 6 million units/year. Said growth is fueled by a combination of lower labor costs compared to Detroit, a nonunionized workforce at the ready, and state and local financial incentives meant to lure transplants to bring jobs to the region.

As for Canada, the nation’s industry has dwindled from 20 assembly plants — all established under the 1965 Auto Pact trade agreement between the U.S. and Canada — to just 10 in 2014 under the North American Free Trade Agreement. As a result, 2.1 million units of volume were lost since 1992, and is expected to jump to 2.6 million when General Motors ends some production at its plants in Oshawa, Ontario next year. More could be lost if FCA decides to move production of its full-size vehicles out of Canada, as well, a move which some believe will decide the ultimate fate of Canada’s industry.

No matter the projections, all three parties to the trade agreement will continue to fluctuate as far as investment is concerned. GM North America president Alan Batey said as much, stating the automaker wants to maintain a “balanced presence” in all three nations to better handle currency fluctuations and shipping costs, a view held among the manufacturers investing their resources into North America’s overall auto industry.

[Photo credit: iivangm/Flickr/CC BY 2.0]

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Straubel: Tesla Model 3 Hitting Showrooms In Sedan, Crossover Variants http://www.thetruthaboutcars.com/2015/06/straubel-tesla-model-3-hitting-showrooms-in-sedan-crossover-variants/ http://www.thetruthaboutcars.com/2015/06/straubel-tesla-model-3-hitting-showrooms-in-sedan-crossover-variants/#comments Tue, 16 Jun 2015 14:00:10 +0000 http://www.thetruthaboutcars.com/?p=1093257 Tesla dropped a bombshell at a conference in Washington Monday, when Chief Technical Officer J.B. Straubel said the Model 3 would be two separate models. Per Straubel, not only would there be a sedan to take home, but a crossover Model 3, as well, Wall Street Journal reports, complimenting the Model S and upcoming X […]

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Tesla Model S Center Stage

Tesla dropped a bombshell at a conference in Washington Monday, when Chief Technical Officer J.B. Straubel said the Model 3 would be two separate models.

Per Straubel, not only would there be a sedan to take home, but a crossover Model 3, as well, Wall Street Journal reports, complimenting the Model S and upcoming X at the entry-level starting price of $35,000. Both models are due in 2017, and will give owners 200 miles to enjoy the silence with every charge. No other details were given at this time.

Meanwhile, Straubel says Tesla is working on new models set to come after the Model 3 — no details were given here, either — and reiterated CEO Elon Musk’s statement of selling 500,000 units annually by 2020, adding there would be 1 million Teslas on the road around the world by then, as well.

The announcement comes on the heels of the automaker receiving a secured revolving credit line of up to $750 million in an agreement with Bank of America, Credit Suisse, Deutsche Bank, Goldman Sachs, J.P. Morgan Chase, Morgan Stanley and Wells Fargo. The line of credit is meant to give Tesla some breathing space as it prepares to launch the long-awaited Model X, expected to hit showrooms this fall barring (yet) another delay.

[Photo credit: Tesla/Facebook]

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Survival Of Canadian Auto Industry Hinging On FCA Brampton Reinvestment http://www.thetruthaboutcars.com/2015/06/survival-of-canadian-auto-industry-hinging-on-fca-brampton-reinvestment/ http://www.thetruthaboutcars.com/2015/06/survival-of-canadian-auto-industry-hinging-on-fca-brampton-reinvestment/#comments Mon, 15 Jun 2015 19:00:08 +0000 http://www.thetruthaboutcars.com/?p=1092793 The fate of Canada’s auto industry is linked to whether or not the nation’s leaders can convince FCA to reinvest into its Brampton, Ontario facility. The Brampton Assembly plant is home to three of FCA’s biggest draws, the Chrysler 300, Dodge Charger, and Dodge Challenger. Yet, the high rate of production and quality found there […]

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2015 Chrysler 300S

The fate of Canada’s auto industry is linked to whether or not the nation’s leaders can convince FCA to reinvest into its Brampton, Ontario facility.

The Brampton Assembly plant is home to three of FCA’s biggest draws, the Chrysler 300, Dodge Charger, and Dodge Challenger. Yet, the high rate of production and quality found there clashes against the oldest paint shop the automaker has in North America, an aging line of assembly robots, and the trio themselves looking for a major makeover, Automotive News reports.

There’s also the fact FCA is already investing $2 billion into the Windsor Assembly facility in Windsor, Ontario, where a new generation of minivans are expected to begin production in 2016. The Brampton facility needs $1 billion to modernize, something CEO Sergio Marchionne may be wary of doing.

According to the Windsor Star, Marchionne approached the Canadian and Ontario governments last year with a request for a financial incentive package totalling $700 million to augment the $3.6 billion he planned to put into Windsor and Brampton. He explained his reasoning before reporters during the 2015 Detroit Auto Show:

This commitment that we’re making is a multibillion dollar commitment. We have to resolve the issue about the competitiveness of this investment in Windsor. So, I have to make sure the environment and the conditions that support the investment are adequate to ensure a proper return on our capital. That means labour costs, that means everything.

Months later, Marchionne backed down from moving forward with the proposal, choosing to invest in Windsor on his own while Brampton remains left out in the cold.

Unfortunately for those holding onto hope Brampton will remain, the business case may not be there to continue. Despite exchange rates between Canada and the United States providing a level playing field regarding unionized labor costs for now, nonunion factories in the Southeastern U.S. and Mexico offer both competitive incentive packages and labor-cost advantages.

Finally, Marchionne’s preference toward running factories flat-out through three shifts may prompt a reallocation of production if another model couldn’t be added to Brampton’s schedule. Thus, FCA could send the three full-sizers to either Toluca or Saltillo, Mexico, with the latter more likely than the former as a result of supplying engines like the 3.6-liter Pentastar V6 and 6.4-liter HEMI V8 to Brampton.

The only issues with either location amount to retooling Toluca and sending Fiat 500 production elsewhere — the Dodge Journey will move to Windsor to join the new-gen minivans next year — or adding a new line to assemble the cars in Saltillo.

[Photo credit: Chrysler]

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Attractive Leases Mean Lower Mileage Caps In Exchange For Low Payments http://www.thetruthaboutcars.com/2015/06/attractive-leases-mean-lower-mileage-caps-in-exchange-for-low-payments/ http://www.thetruthaboutcars.com/2015/06/attractive-leases-mean-lower-mileage-caps-in-exchange-for-low-payments/#comments Thu, 11 Jun 2015 19:00:52 +0000 http://www.thetruthaboutcars.com/?p=1090729 Leases are red-hot these days, but those signing up for temporary ownership of their rides will be facing lower mileage caps in exchange for low payments. According to Experian Automotive, 31 percent of all U.S. new-car sales during Q1 2015 were leases, CarsDirect writes, with monthly payments entering the sub-$150 range for small cars after […]

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Sunset Chevrolet Circa June 2014

Leases are red-hot these days, but those signing up for temporary ownership of their rides will be facing lower mileage caps in exchange for low payments.

According to Experian Automotive, 31 percent of all U.S. new-car sales during Q1 2015 were leases, CarsDirect writes, with monthly payments entering the sub-$150 range for small cars after paying $1,999 at signing, $199/mo. for midsize models upon cutting a check for the same amount at the dealership.

However, those deals are coming with a price: in order to keep residual values healthy, annual mileage caps are being trimmed.

The publication looked over the mileage caps of 300 leases, finding the average cap figure came to 10,900 miles per year; Edmunds adds caps have fallen below 11,000 miles/year for the first time ever in Q1 2015. One lease advertised by General Motors dropped the cap from 12,000 miles/year in 2014, to 10,000 miles this year, with the now-extra 2,000 miles amounting to $1,500 for a three-year agreement plus an overage fee of 25 cents/mile.

CarsDirect says concerns over caps aren’t a new thing, akin to data caps on smartphone plans, but adds consumers should keep the new lower caps in mind, lest they end up spending more money than originally thought.

[Photo credit: Sunset Chevrolet/Facebook]

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Kitsap Transit Eyeing Liquor Advertising To Improve Bottom Line http://www.thetruthaboutcars.com/2015/05/kitsap-transit-eyeing-liquor-advertising-to-improve-bottom-line/ http://www.thetruthaboutcars.com/2015/05/kitsap-transit-eyeing-liquor-advertising-to-improve-bottom-line/#comments Tue, 19 May 2015 20:00:22 +0000 http://www.thetruthaboutcars.com/?p=1070978 Faced with a potential budget shortfall in the coming years, Kitsap Co., Wash.-based Kitsap Transit is eyeing liquor adverts to help with the bottom line. The move to place said adverts on its fleet came as a suggestion from the authority’s advertising partner, Titan Outdoor, KOMO-TV reports. The ad agency takes half of all revenue […]

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Kitsap_Transit_2004_Gillig_Low_Floor_774-a

Faced with a potential budget shortfall in the coming years, Kitsap Co., Wash.-based Kitsap Transit is eyeing liquor adverts to help with the bottom line.

The move to place said adverts on its fleet came as a suggestion from the authority’s advertising partner, Titan Outdoor, KOMO-TV reports. The ad agency takes half of all revenue made on ad sales related to Kitsap Transit, and is also in charge of the authority’s mobile ad program.

Executive Director John Clauson admits it would be hard to estimate how much additional revenue adding liquor advertising to the buses — adverts are only part of its budget, alongside local taxes and fare collection — but adds if doing so “adds an extra $20,000 a year, it’s tough to just walk away from it and say no.”

While the proposal would mandate “tasteful” advertising of liquor products and include responsible-drinking disclaimers, critics warn said adverts could encourage teenagers to drink. However, most riders are welcome to the idea, with reasons ranging from keeping fares low as a result of the increase in revenue, to freedom of speech for all advertisers.

The decision to go forward with the proposal may come as soon as the authority’s next board meeting June 2. If approved, Kitsap Transit would be the first transit authority in Washington state to allow liquor advertising on its fleet.

[Photo credit: Zargoman/Wikimedia Commons/CC BY-SA 3.0]

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Takata Close To Installment Agreement With Automakers Over Airbag Recalls http://www.thetruthaboutcars.com/2015/05/takata-close-to-installment-agreement-with-automakers-over-airbag-recalls/ http://www.thetruthaboutcars.com/2015/05/takata-close-to-installment-agreement-with-automakers-over-airbag-recalls/#comments Thu, 14 May 2015 19:00:43 +0000 http://www.thetruthaboutcars.com/?p=1068634 Like consumers making payments over several months for their purchases, Takata is asking automakers to pay its part of the airbag recall in installments. The automakers are reportedly close to sealing the deal that would grant the beleaguered supplier the ability to spread its financial responsibility for the recalls instead of paying everything all at […]

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Takata TTAC Style

Like consumers making payments over several months for their purchases, Takata is asking automakers to pay its part of the airbag recall in installments.

The automakers are reportedly close to sealing the deal that would grant the beleaguered supplier the ability to spread its financial responsibility for the recalls instead of paying everything all at once, Bloomberg reports.

Takata is also meeting with its bankers to ensure it has the cash flow needed to make good on those payments, with an anonymous source stating the supplier hasn’t created the conditions that would merit a call-back of its loans by the banks during FY 2014.

The deal follows an ongoing recall action of Takata’s airbags, affecting over 28 million vehicles from 10 different automakers around the globe, with Honda bearing the brunt of the crisis as the supplier’s biggest customer.

[Photo credit: Takata]

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General Motors Investing $1B Into Warren Tech Center, Adding 2,600 Jobs http://www.thetruthaboutcars.com/2015/05/general-motors-investing-1b-into-warren-tech-center-adding-2600-jobs/ http://www.thetruthaboutcars.com/2015/05/general-motors-investing-1b-into-warren-tech-center-adding-2600-jobs/#comments Thu, 14 May 2015 18:00:15 +0000 http://www.thetruthaboutcars.com/?p=1068602 General Motors announced Thursday it will invest $1 billion into its Warren Tech Center in Warren, Mich., adding 2,600 jobs through 2018. The investment will see renovations, expansions and new additions to the tech center, with work set to start this month, The Detroit News reports. Included in the investment are new design studios, an […]

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Renaissance Center Circa May 2009

General Motors announced Thursday it will invest $1 billion into its Warren Tech Center in Warren, Mich., adding 2,600 jobs through 2018.

The investment will see renovations, expansions and new additions to the tech center, with work set to start this month, The Detroit News reports.

Included in the investment are new design studios, an IT building, additional parking and testing facilities, and revamped R&D buildings, as well as “extensive office upgrades” and other interior remodeling through most of the buildings at the center.

The 2,600 new jobs coming into the campus are expected to be salaried positions in engineering, IT and design, though GM didn’t state whether any of the jobs were transfers from other locations, as well as when those jobs would begin appearing.

The announcement follows one made last month involving a $139.5-million investment into the Tech Center’s Pre-Production Operations facility, a part of GM’s overall $5.4-billion investment plan to modernize its plants through 2017.

[Photo credit: Robert Emperley/Flickr/CC BY-SA 2.0]

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Oil Bull Market Rally Could Soon Falter Without China http://www.thetruthaboutcars.com/2015/05/oil-bull-market-rally-could-soon-falter-without-china/ http://www.thetruthaboutcars.com/2015/05/oil-bull-market-rally-could-soon-falter-without-china/#comments Wed, 13 May 2015 19:00:09 +0000 http://www.thetruthaboutcars.com/?p=1067698 Those hoping to make it big on oil commodities would do well to bet against the bulls on parade, as China won’t be around to keep prices afloat this time. During the early days of the Great Recession, oil prices quickly regained footing thanks to China’s then-booming economic standing, Bloomberg reports. However, fuel use in […]

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PetroChina-Station

Those hoping to make it big on oil commodities would do well to bet against the bulls on parade, as China won’t be around to keep prices afloat this time.

During the early days of the Great Recession, oil prices quickly regained footing thanks to China’s then-booming economic standing, Bloomberg reports. However, fuel use in the nation has slowed by half of what it was in the previous decade, following global trends of decreased consumption.

Global demand is expected to grow 1.3 million barrels/day to 94.58 million in 2016 according to the Energy Information Administration, with China taking 11.34 million barrels/day; the U.S. will use 19.44 million/day, lower than what was used in 2008. The figure is an increase of 3.1 percent over this year, yet pales when compared to the 11-percent jump in 2010. The spike delivered a boost to oil prices of 15 percent.

Combined with rising oil production pushing toward a glut in supply — to the tune of 1.8 million barrels/day in inventory currently, and 900,000/day during H2 2015 — China’s economic power faltering despite the government’s best efforts, and technological advancements reducing overall oil consumption, the global demand for oil will remain low for some time to come.

[Photo credit: Otebig/Wikimedia Commons/CC PD 1.0]

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General Motors Set To Announce Major Investment For Warren Tech Center http://www.thetruthaboutcars.com/2015/05/general-motors-set-to-announce-major-investment-for-warren-tech-center/ http://www.thetruthaboutcars.com/2015/05/general-motors-set-to-announce-major-investment-for-warren-tech-center/#comments Wed, 13 May 2015 16:00:23 +0000 http://www.thetruthaboutcars.com/?p=1067370 General Motors is expected to announce Thursday its plans for the Warren Tech Center, including its proposed $1-billion investment into the facility. Both Warren, Mich. city officials and inside sources have stated GM could invest up to $1 billion throughout the entire campus, The Detroit News reports. The proposed investment would follow the $139.5-million investment […]

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GMTechCenter

General Motors is expected to announce Thursday its plans for the Warren Tech Center, including its proposed $1-billion investment into the facility.

Both Warren, Mich. city officials and inside sources have stated GM could invest up to $1 billion throughout the entire campus, The Detroit News reports. The proposed investment would follow the $139.5-million investment made to the Tech Center last month for a new body shop and improvements to the stamping plant at the facility’s Pre-Production Operations wing, part of the automaker’s overall $5.4-billion investment plan for its plants in the United States.

According to GM’s tax abatement application to the Warren City Council, the automaker is considering putting $419.4 million into expansion and renovation of the Tech Center, including $180 million for the design studio, a total of $117.7 million for a yet-to-be-determined building and unidentified parking, and $20 million for renovation and expansion of the center’s Advanced Engineering Center lab. The overall project would retain 3,800 employees and add 2,600 more in engineering, IT, R&D and other categories over the years.

Though details surrounding the announcement are scant, representatives have stated the 50-percent tax abatement approval — meant to save GM $97 million in property taxes over the next decade and beyond — was key to getting the project off the ground.

[Photo credit: Local hero/Wikimedia Commons/CC BY-SA 3.0]

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Riviera Tool’s Old Penny Stock Erupts After Tesla Purchase Announcement http://www.thetruthaboutcars.com/2015/05/riviera-tools-old-penny-stock-erupts-tesla-purchase-announcement/ http://www.thetruthaboutcars.com/2015/05/riviera-tools-old-penny-stock-erupts-tesla-purchase-announcement/#comments Fri, 08 May 2015 18:00:47 +0000 http://www.thetruthaboutcars.com/?p=1064322 Tesla’s announcement Thursday of its purchase of Riviera Tool LLC sent shares of the supplier’s old penny stock soaring, but it may have been for nothing. In over-the-counter “pink-sheet” trading, the penny stock for Riviera Tool Co. — the former name of the Grand Rapids, Mich.-based supplier — jumped 10,000 percent from less than a […]

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Perepetual Penny Calendar

Tesla’s announcement Thursday of its purchase of Riviera Tool LLC sent shares of the supplier’s old penny stock soaring, but it may have been for nothing.

In over-the-counter “pink-sheet” trading, the penny stock for Riviera Tool Co. — the former name of the Grand Rapids, Mich.-based supplier — jumped 10,000 percent from less than a penny to a peak of 60 cents a share, Detroit Free Press reports. The old stock would later close at 22 cents, an increase of 4,400 percent when compared to its worth hours earlier. The OTC trading saw 16 million shares exchange hands after a lull in activity lasting over a month.

However, the shares may not hold much value at all. In 2007, an investment into the supplier by Laurus Master Fund, Ltd. took Riviera Tool off the American Stock Exchange trading floor, though a number of public shares landed in the pink sheet market, where traders buy and sell low-value stocks. Riviera became an LLC once taken off the market, rendering the old shares as little more than keepsakes.

Riviera Tool is responsible for producing stamping parts for Tesla, and will be renamed Tesla Tool & Die by its new owner.

[Photo credit: Windell Oskay/Flickr/CC BY 2.0]

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