Industry

Breaking: Bob Lutz To Be New Chairman of Opel

By Paul Niedermeyer
November 6, 2009

Spiegel Online reports that Bob Lutz will be named Chairman, and head of the Supervisory Board of Opel. Carl-Peter Forster, who threw in his hat with the Magna buy-out, resigned on the news that GM intends to keep Opel. Forster, the first German to head Opel in decades, was seen to be more independent of Detroit, and respected for his management skills. According to the Spiegel report, managers at Opel are preparing for payback from Lutz, for any prior sins of supporting Opel’s independence and aversion to meddling from RenCen. Opel managers blame Lutz and GM management for pushing cheap Daewoo-Chevrolets in Europe at the expense of Opel, directly contributing to Opels recent problems. For Lutz, aged 77, this is a circular development to his long career which began in Europe with GM Europe (Opel) in 1963.

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Posted in Germany | Industry | News Blog | 32 comments

Sergio’s Plea For Optimism

By Edward Niedermeyer
November 5, 2009

There are plenty of reasons to believe that Chrysler will not survive, let alone thrive the way the firm’s five-year plan foresees, but one of them does not appear to be Sergio Marchionne’s leadership. Though there’s doubtless a good deal of hubris in his plan, Marchionne’s depth of knowledge, personal experience and legendary workaholism seem to indicate that, if nothing else, Chrysler’s leadership is lightyears away from the Bob Nardelli years. Considering he oversaw a turnaround of Fiat that was only slightly less improbable than his current turnaround mission, he’s about as qualified to take on the mess in Auburn Hills as anyone else. Here are his closing remarks from the seven-hour product and business plan event.

Posted in Industry | News Blog | People | 20 comments

Stimulated Toyota Posts Unexpected 2Q Profit, Lower Annual Loss; Denies Floor Mat Cover-up

By Paul Niedermeyer
November 5, 2009

Thanks largely to stimulus programs in the US and Europe, Toyota announced that it has eked out an operating profit of 58 billion yen instead of the average estimated loss of 63 billion yen from five analysts. Toyota now is forecasting a lower operating loss of 350 billion yen ($3.9 billion) for the year through March 31, and is presumably on track to a profitable following year. But with the stimulus programs’ end, Toyota continues to hunt desperately for cost savings, like its recently announced elimination of the F1 program, which cost a tidy $300 million per year. (more…)

Posted in Industry | News Blog | Safety | 8 comments

Breaking: GM Does a 180; Decides to Keep Opel

By Paul Niedermeyer
November 3, 2009

Two days ago, TTAC’s Bertel Schmitt wrote: “GM may not have to sell Opel after all”. How right he was. In the latest twist on the endless Opel saga, GM’s Board of Directors has canceled the planned sale to Magna and Sberbank. With references to an an improving economy (and an uptick in US sales?) and Opel’s strategic importance to the mothership, CEO Fritz Henderson stated: “GM will soon present its restructuring plan to Germany and other governments and hopes for its favorable consideration. We understand the complexity and length of this issue has been draining for all involved.” Magna had no (repeatable) comment. Former bidder RHJ said in October it was no longer interested. (more…)

Posted in Industry | News Blog | 41 comments

Ford Posts $997 Million 3Q Profit

By Edward Niedermeyer
November 2, 2009

Ford turned a profit in the second quarter of this year, thanks to a share offering and other debt-reduction actions which covered a $424M pre-tax operating loss. In the third quarter, however, Ford’s profit needs no such qualification. Pre-tax operating profits were $1.1B, including a $357M from North American operations. For the record, this marks the first Ford North America profit since Q1 2005. Perhaps more importantly, for an automaker that’s mortgaged up to (and including) its logo, Ford’s cash pile grew by $2.8B (on $1.3B positive cashflow), to $23.8B. On the strength of these surprisingly strong results, Ford has revised its 2010 guidance from being “break even or better” to “solidly profitable.” The future is looking far brighter for Ford than any of its cross-town rivals, but there are a few more considerations to keep in mind before we can pronounce Ford officially out of the woods. Even the Blue Oval is warning that its 2010 guidance will be revisited after full-year results are in.

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Posted in High Finance | Industry | News Blog | 39 comments

Opel Workers: Can We Do This Deal Already?

By Edward Niedermeyer
October 30, 2009

GM’s sale of Opel to Magna/Sberbank is being held up by the European Union, which is looking into whether the German government unfairly favored Magna’s bid. But while the interregnum plays out (the EU will decide by November 27th), GM has plenty of time to develop a case of seller’s remorse. After all, GM’s VP for Global Engineering Mark Reuss recently told Autoline After Hours that Opel is completely integrated into GM’s global product development, and that the relationship “won’t change.” Does that, as Business Week’s David Welch asked, mean GM will keep all of Opel’s development capacity while reducing loss exposure to 35 percent? Reuss had to change the subject, but it’s obviously not the case. With Daewoo under fire, GM would clearly prefer to keep Opel’s development capacity integrated, and keep its intellectual property out of the hands of Russian automakers. And with German newspapers reporting that GM’s board is considering a “plan B” to keep Opel within the GM fold, Opel’s workers are threatening to strike.

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Posted in Europe | High Finance | Industry | News Blog | 3 comments

The Detroit Lobby Lives

By Edward Niedermeyer
October 27, 2009

After a dismal PR year for Detroit (if only because lobbying efforts were successful enough to secure an unpopular bailout), the American Automotive Policy Council has been launched to represent the very special interests of Ford, GM and Chrysler. As Politico unironically puts it, “(Debbie) Dingell, the wife of Rep. John Dingell (D-Mich.) and longtime auto industry lobbyist Stephen Collins are leading the new American Automotive Policy Council.” Because former GM lobbyist Dingell, who was moved to an administrative position when she married Rep John Dingell (D-MI) is somehow not a longtime industry lobbyist? Marrying the then-Chairman of the Energy and Commerce Committee is like winning the gold medal for Detroit lobbyists… Dingell just had her number retired. Anyway, the new lobbying council is an offshoot of Automotive Trade Policy Council, a group known for such truth-telling efforts as Driving The Future: The New American Auto Industry [PDF], published in the heady optimism of June 2008. Which is a good indication of what we can expect from the AAPC. First up, a “manufacturing initiative”  intended to “develop credible and reliable information for policymakers.” This is gonna be good.

Posted in Government | Industry | News Blog | 8 comments

GM Buys Up Daewoo Share Offering, Increases Stake to 70 Percent

By Edward Niedermeyer
October 26, 2009

$413 million isn’t a ton of money for one of the largest global automakers, but GM’s purchase of Daewoo’s entire share offering still doesn’t completely add up. After all, GM was barred from spending US taxpayer bailout money on overseas assets. And it’s not like GM wanted to increase its stake from 51 percent to 70.1 percent; GM-Daewoo tells Reuters GM had to step in with the cash when the Korean Development Bank, SAIC and Suzuki declined to participate in the rights offering. But under which sofa did GM find the cash? “The money came from GM’s global operations,” is all Daewoo’s reps will say about the matter. And though we could criticize GM for starving its overseas operations in order to keep the wolf from Daewoo’s debt-riddled door, the reality is that few of GM’s divisions are as important as Daewoo for GM’s global product development now that Opel is on the way out the door. The real problem is that this outlay is hardly the last one GM will have to make in order to keep its small-car development hub.

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Posted in Industry | Korea | News Blog | 10 comments

Fisker Buying Delaware Kappa Plant

By Edward Niedermeyer
October 26, 2009

Fisker’s first car, the Karma, is being assembled by Valmet in Finland, but Fisker is already looking ahead. Following the Tesla model of offering a second sedan at around half the price of the brand’s flagship nameplate, Fisker is negotiating the purchase of the former Solstice/Sky plant where it plans on building a $48k “family-oriented” hybrid. The WSJ report Fisker is eying up to 100,000 units of production, employing 1,500 workers. Fisker is also following the Tesla example for funding; the EV company will spend most of its $528m in DOE ATVM loans developing its new lower-cost model (the Karma will retail for around $90k) and retooling the Delaware plant. Though companies like Fisker and Tesla surely appreciate these loans, one can’t help but wonder if they encourage an unhealthy level of optimism in a company that has yet to bring a vehicle to market, let alone record a sale. Though it’s understandable that fledgling EV companies would begin with a luxury model and work towards mainstream offerings, shouldn’t there be some indication of the flagship’s success (especially if it involves a more-complicated range-extending ICE) before going full-speed ahead for a 50 percent cheaper model?

Posted in Electric Vehicles | Industry | News Blog | 17 comments

GM-Daewoo: Can GM Stop A Chinese Takeover?

By Edward Niedermeyer
October 21, 2009

Reuters reports that GM’s deadline to participate in its Daewoo division’s $424m rights offering has passed without GM putting any money down. But the Korean Development Bank, which GM-Daewoo owes $2b (soon to be closer to $3b), isn’t freaking out yet. “Given that GM is not allowed to take money out of the United States, it seems to have a plan from the beginning to drop the rights and use its units to buy them,” say KDB spokesfolks. KDB will not participate in the offering until GM stumps up some cash, so the betting marker has been passed to GM’s units. But which unit will answer the call? Opel is days away from being sold, so you can rule that out. Holden is a possible white knight, but the Australian division is hardly a piggy bank with which to keep other operations afloat. Which leaves only GM’s South American, Chinese and Indian operations to pick up the slack.

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Posted in Industry | Korea | News Blog | 7 comments