The Truth About Cars » money The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Wed, 23 Jul 2014 16:29:19 +0000 en-US hourly 1 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 (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » money Piston Slap: The Butterfly Effect Wed, 09 Jan 2013 12:44:58 +0000
Earl writes:

Hi Sajeev, here’s a question for you and the best and brightest here. ”How might your life have been different had you bought a particular car?”

As for me, it was a Toyota MR2 Supercharged that I let slide for a 91 Pontiac Sunbird (really!). I was driving a 78 Malibu at the time and it was getting worn out. I found the MR2 and was determined to buy. I was also getting married very soon and was also working in a GM dealers at the time. I think I let the MR2 go because some life circumstances had made me extremely risk-averse. Would buying the MR2 have made me more of a risk taker? Would I have gone back to college a lot sooner and thus been farther ahead in the career I now love?

Has the purchase or non-purchase of a car ever had bigger meaning for you?

I’ll bet there are some great stories out there.

Sajeev answers:

I am a firm believer in the butterfly effect, though I don’t know if one car changes most people’s lives. But for me…well, that happened. So here’s story Number One for you.

With a twist: if my parents didn’t buy that used ’83 Continental Valentino I previously mentioned, I wouldn’t be absolutely infatuated with cars as a child. Which I never outgrew: the Valentino became a daily obsession that certainly changed my destiny. Good or bad, I don’t know. I do know that people are taken aback by this madness, but a single dude can foolishly restore this Valentino and not hurt any one. Wasting tens of thousands of dollars in the process ain’t no thang, bit if I was married with a kid?

If the Valentino was instead scrapped 10+ years ago, would I wind up honing my writing skills on Lincoln message forums back in 1999, landing at TTAC (since 2006) and on your computer? Nope. This car was the springboard to my current life.

When we look introspectively at the wonderful, tragic or just plain idiotic moves from our past and how they define our future, shit gets real.

Back to the Butterfly: for me, cars are irrevocably intertwined with every action. It’s a blessing and a curse, and I suspect everyone battles with similar action-reactions at some point in their lives.

Off to you, Best and Brightest.

Send your queries to Spare no details and ask for a speedy resolution if you’re in a hurry.

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Lotus Owes Suppliers Nearly $37 Million Tue, 09 Oct 2012 17:55:10 +0000

A report in The Independent revealed that Lotus owes supplies nearly $37 million and has even asked for tax payment deferments to help manage its cash flow.

The Independent paints a picture of parent company DRB-Hicom having to clean up the mess left by the former management team employed by Lotus.

“DRB-Hicom, the owner of the Norfolk sports car maker, was not available for comment, but sources close to the company said many of the outstanding issues – including payments to suppliers – relate to the previous management. They added that in some cases DRB-Hicom is challenging some of the arrangements with suppliers over previous contracts where there are concerns over quality control. But they also repeated that DRB remains fully committed to the plant at Hethel, its workforce and turning Lotus around into a self-reliant and global brand.”

The Independent does cite internal financial statements view by the paper as confirming that Lotus does owe the $37 million. The report also listed revenues of $72 million, and overhead costs totaling nearly $56 million.

Irrespective of the direction that Lotus is headed in product-wise, their financial situation is precarious at best. While everyone is out arguing over the heritage and authenticity of the brand, the flimsiness of their balance sheet appears to be something that everyone can agree on.

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Fiat Waits For Government Money. Serbia Says It Will Pay Next Year Thu, 30 Aug 2012 12:13:06 +0000 The U.S. government may have to wait a little more until it sees the money it has sunk into GM. The reverse is true in Serbia. There, Fiat has to wait a little longer for the money owed by the Serbian government.

Serbia owns 33 percent of a 1 billion euro joint venture with Fiat to produce the Fiat 500l in Kragujevac. The first cars were produced in July, but Serbia still hasn’t paid its share.  Serbia and Fiat rescheduled payments , says Reuters:

“Serbia will pay 50 million euros ($63 million), or 55 percent of the 90 million it owes Fiat this year, once it has revised the 2012 budget in September. The rest will be paid in 2013.”

A new, Socialist-led coalition government took power in Serbia in July, and it blames the previous government for forgetting to o include payments to Fiat in the 2012 budget.


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Nissan do Brasil Throws Money Away Mon, 22 Nov 2010 08:45:12 +0000

Have you ever wondered what would happen if a man went out in the streets, throwing money in the air? Handing money out to passer-bys? Well Nissan decided to find out and hired an actor to do just that. It has created quite a ruckus! In more ways than one …

The new more assertive and aggressive Nissan do Brazil is pulling a Britney. Ooops, I did it again. In the same vein as their recently launched and pulled campaigns, touting the Frontier and Livina, they have a new one for the Livina. Can’t wait to see how long before Fiat complains at CONAR (the ad industry’s self-regulating body in Brazil). As mentioned in the article hyperlinked above, the last time Nissan went for the jugular, GM, Toyota and VW complained. The previous ads were pulled after about a week. How long will this ad be on the airwaves?

As a way to help you understand the article and ad, the song playing follows the repentista style. This musical style has a long history in Brazil, particularly in the Northeastern part of the country. In it, usually two guys battle off each other, by using simple, rhythmic and poetic language to prove a point (and you think rap is something new and American!). In this case, one is calling the other guy crazy for throwing money away, saying you shouldn’t waste money. Then the second voice comes in and agrees and says he’s going to return his car and buy a Livina since he’s neither crazy nor stupid.

The car shown in the ad is easily recognizable (to Brazilians). It is a Fiat Idea. Nissan’s point is to show how that car, to have the same level of equipment as the Livina, the consumer must pay over R$5,000 (or R$1,8=US$2,778) more. Which is not a small bit of money. So Nissan invites you to think it over and indirectly challenges the consumer, saying they’re either crazy or dimwits.

Assuming consumers are neither they must be thinking about other things besides initial price point. Replacement parts, for example, are a very big biggie for Brazilians – and a problem for Nissan’s reputation down here. Why is it that they prefer to buy the Fiat Idea over the Nissan Livina (at a rate of at least 8 to 1)? Will this ad be enough for consumers to reconsider? Or is Nissan just trying to create a name for themselves in Brazil? Is Nissan desperate?

As mentioned above, Nissan have tried this tactic twice before. Some think the third time is the charm. Will it work this time? Time will tell.

Disclaimer: I have no idea if Nissan was throwing out real money.

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The People Vs The People’s Car Company Thu, 02 Sep 2010 09:34:43 +0000

The Automotive World reports that Ford has agreed to a settlement with non-union employees and retirees who incurred stock losses. The plaintiffs brought the suit against FoMoCo because they lost billions of dollars investing their 401k’s into Ford during 2000-2006; a period when Ford’s stock price plummeted. The plaintiffs argue that Ford should not have allowed them to invest huge portions of their pension plans into the company. Now Ford’s defense (which some say invokes a level of personal responsibility) is that the claimants had plenty of time and opportunity to manage their pension plans and leave if they so desired. Who’s right and who’s wrong here? I’ll leave the Bill O’Reillies and Michael Moores of this world to debate that. Or TTAC’s Best and Brightest, whoever is available sooner…

Ford, despite their plea of innocence, has agreed that if it reinstates company match to retirement plans in the next three years, Ford’s “match” will be in the form cold, hard cash, instead of stock. Ford will also pay the legal fees for the claimants and notifying individuals of the settlement. In addition to all of this, Ford has also agreed to offer free financial advice to the plaintiffs for four years. I was going to insert a “Bernie Madoff” joke but that was too cheap….even for me.

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Mulally, As In Moolah Sun, 27 Jun 2010 08:09:02 +0000

As much as it pains me to admit it, Ford is a company to be admired. When bailouts were handed around like doobies in the Summer of Love, they didn’t partake (argue that point amongst yourselves, but you know what I mean). Their cars are interesting (to say the least) and their reliability is now being thought of in the same vein as Toyota, Honda and Hyundai. All of this is down to one man, Mr Alan “I bet you wish to made me CEO now! Eh, Boeing?!” Mulally. He put forward a vision of Ford divisions and subsidiaries working together to create a global product. He pared down the extraneous brands. He put the axe to Mercury and he didn’t need a bankruptcy to do it. In short, Mr Mulally has done well at Ford. The question is how well?

Business Standard Motoring reports that Alan Mulally picked up $17.9 million in pay during 2009. In comparison, Aiko Toyoda earned less that $1.1 million (this is inferred, because he wasn’t named in a company filing to the Japanese Finance Ministry), Carlos Ghosn picked up $9.9 million, Honda’s Takanobu Ito walked away with $1.3 million. However, what makes this story interesting is that some people think that Mr Mulally’s pay packet is a good thing, something Japanese companies should emulate.

“Because of globalisation, competition is intensifying, and there is a greater importance placed on strong and decisive management,” said Katsuyuki Kubo, an associate professor of economics at Waseda University in Tokyo who specialises in compensation and corporate governance. “Without the pay incentive, Japan could lose out on competitiveness.” Active advocation of higher CEO salaries? Well, Toyota is struggling to keep their image of quality & reliability, Honda is struggling in North America due to its failing “Acura” brand. So maybe Mr Mulally is now starting to look like good value for money. Maybe that could be their next tagline?

“Buy a Ford, they’re great value for money. Just like our CEO!” Well, it’s better than “Drive one”…

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GM Makes Cash-Infusion To Opel. Kindof Fri, 15 Jan 2010 18:05:01 +0000 Rich uncle in America. Picture courtesy

GM sent Opel “an additional $930m in temporary aid until more permanent financing can be found” (good luck with that,) GM disclosed in a filing with the SEC. The total financing GM has provided to Opel now stands at $1.83 b, writes the DetN. It’s not that GM sent the money out of the kindness of their hearts.

The $930m million includes “the acceleration of certain payments owed under engineering services agreements,” the filing says. In other words: GM finally pays some outstanding bills. For more than a year, it had been mentioned off and on that GM owes Opel anywhere between  €1b and €2b for services rendered. That would be $1.43b to $2.86b.

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Porsche To Magna: Take The Money And Run Sat, 19 Dec 2009 09:13:47 +0000 Eat my dust. Picture courtesy

Last year, Porsche gave Magna an eight-year contract to build the Cayman and Boxster models from 2012 on. Then Porsche went to Volkswagen. Then Opel came. VW was miffed and said “us or Opel.” When Magna’s Opel deal went poof, VW said Magna can come home, all is forgiven. Apparently not quite. Volkswagen (or Porsche, hard to say these days…)  want to use the factories of bankrupt Karmann which Volkswagen had bought and cancelled the contract. Magna cried foul and wanted money.

Now, the matter is official, writes Automobilwoche [sub].

Porsche has officially dissolved the outsourcing contract with Magna, Boxster and Cayman will be built somewhere else, most likely in the former Karmann works in Osnabrück.

And Magna? Magna received a nice, but unspecified chunk of money for their troubles from magnanimous Porsche. (Or Volkswagen.)  VW CEO Martin Winterkorn, who is also head of Porsche now, said: “You can believe me, Magna is very happy with the solution. They have been compensated for their work.”  Come 2012, your Boxster or Cayman will not be made in Austria, but in scenic Osnabrück, birth place of the Karmann Ghia.

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