The Truth About Cars » money http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Wed, 02 Sep 2015 15:02:04 +0000 en-US hourly 1 http://wordpress.org/?v=4.2.4 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 » money http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com Money Isn’t Everything: What an $8,500 Porsche 996 Really Costs http://www.thetruthaboutcars.com/2015/07/money-isnt-everything-what-an-8500-porsche-996-really-costs/ http://www.thetruthaboutcars.com/2015/07/money-isnt-everything-what-an-8500-porsche-996-really-costs/#comments Thu, 30 Jul 2015 15:00:39 +0000 http://www.thetruthaboutcars.com/?p=1129177 About two months ago, I purchased my fourth new-to-me car in as many years — and I still had two of the previous three. Of those three, one was purchased for adventure (a 1977 Porsche 911S that I drove cross-country and back nine days after purchasing it), one because of nostalgia (a Honda S2000, I […]

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About two months ago, I purchased my fourth new-to-me car in as many years — and I still had two of the previous three. Of those three, one was purchased for adventure (a 1977 Porsche 911S that I drove cross-country and back nine days after purchasing it), one because of nostalgia (a Honda S2000, I bought one new and missed it), and the third due to reputation (an Acura NSX, I had never even driven one before buying this one online). Those reasons must be the foundation for some sort of automotive cardinal sins list.

However, I bought the fourth one because it represented such a good value. It was a 1999 Porsche 911 Carrera with about 146,000 miles. It hadn’t had the IMS bearing replaced, but I figured that with such high mileage it probably wouldn’t have an issue. Is this foreshadowing? The seller was a friend who had owned it for about two years but had purchased a mid-eighties 911 Targa recently and didn’t want the ’99 as a daily driver any longer.

Painted a pretty medium blue, the 996 was equipped with a beige interior and GT3 wheels. It drove well and — except for mediocre clearcoat and worn leather, a ‘check engine’ light that appeared intermittently, and a blown speaker — it was a solid performer. I certainly didn’t need the Porsche (nor did I have the space), but at $8,500, how could I go wrong?

Also, I’ve always been of the opinion that anyone who buys a new [insert shitbox automotive appliance here] is an idiot. I read “You Gotta Be Rich to Own a Cheap Car” and agreed with the article.

“Baruth,” I thought to myself, “you nailed it.” But he missed something important, too. I’ll come back to that in a bit.

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My friend and I went for a test drive and then we met up on a Sunday morning for coffee at Deus Ex Machina, in Venice, CA. He signed the title and I signed a check. $8,500 for a Porsche 911. Boom. What’s a Toyota Corolla? I just bought Zuffenhausen’s finest.

On Monday, I called my insurance agent to add the Porsche. “Hmmm. It comes up in my system as a Porsche Boxster.” I frowned. “No, it’s a 911,” I replied.

“Maybe the DMV just has it wrong. But it is a convertible, right?” she asked.

“No, it’s a coupe.”

“Could you go outside and compare the windshield VIN with your title, please?”

Now I was nervous. This was cutting into my valuable automotive journalist cereal-eating time. I walked outside under a bright, blue Los Angeles sky and almost dropped my cereal. The VIN on the title and on the car didn’t match. On closer inspection the title also had the wrong license plate number.

“Let me call you back…”

I called my friend immediately and told him what was going on. He told me that he used to have a 1999 Porsche Boxster that was totaled and that he had probably given the shop that bought it the wrong title.

“Let me call you back…”

After a quick phone call to them, he confirmed this was the case. We met again a few days later to switch titles. The Porsche was now insured, but still not registered.

That was a whole other headache because when my friend gave the shop that bought the wrecked Boxster their half of the title, he mailed his half in that stated that this shop now owned it. Except they didn’t. They owned the 911 because he had mixed them up. Now he’d have to write a letter to the DMV explaining the mix-up. He wrote it promptly and sent it over. In the meantime, I drove the Porsche around enjoying its torquey flat-six, thinking, “Yeah, it’s been a bit aggravating, but it’ll work out. And after all, I got an eighty-five hundred dollar 911!”

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A couple of days later, I went out to run some mundane errand. I jumped in the car, fired it up and lowered the windows. Except the driver-side window didn’t drop smoothly. Then, when attempting to roll it back up, it jammed and stopped — crooked, half-way up. I opened the door and tried guiding it.

“I’ll just use the air conditioning.”

(Don’t forget: This is Los Angeles. We don’t have real seasons.)

Air-con is on, let’s go! Oh. What’s this? A warning light. The check engine light came on again. I was used to that one by now, but now the airbag light was on too.

“At least the car was cheap,” I nervously muttered as I released the clutch.

Following all the registration issues, my threshold for nonsense was much decreased. I had now owned the car over three weeks, but had only driven it about a hundred miles. I called my friend again. It’s at this point that I began to suspect that he had realized that he’d sold me the car for far less than he could get from some joker in Cleveland. He offered to buy the car back for what I had paid.

I told him that I’d like to have it checked out, see what the airbag issue was, and that I’d let him know how I wanted to proceed. He graciously offered to pay for the repairs as he didn’t want me to be pissed. I took it to the shop and they called back the following morning.

“There’s an issue with the airbag wiring harness and also, ummm, the car needs a new window regulator.”

“OK… how much will that cost?”

“Well, we also put it on the rack and there are a few other issues… the clutch will need to be replaced within the next 5000 miles and the water pump is leaking pretty badly. Also, the tie-rods are damaged and there are a few cosmetic issues inside the cabin. Oh and…”

“Let me call you back…”

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My friend and I met up the following Sunday. I handed him the title and he signed a check. In total, I “owned” the 911 for twenty-six days. The IMS bearing didn’t fail during my ownership stint. There were no hard feelings on either side. He’s happy that he can make more money off of it and I’m happy to be rid of the registration issues and mechanical faults.

Which brings me to what Baruth missed. Being rich or privileged isn’t enough to own a cheap car. All those trust-fund enthusiasts — who can’t believe the masses drive around in $10-15K Camrys, Civics, and Altimas — would do well to realize how fortunate they themselves are. Not simply because they can purchase “cheap” performance cars and feel superior to the poor Versa-driving shmucks (“Man, you don’t know what you’re missing! Just get a cheap sports car…”); but because more than the pure financial cost is the amount of time you have to be able to waste attending to issues that invariably pop up.

How much time did I squander between trying to register the Porsche, buying and selling it back, and taking it to the shop? Please don’t tell me. I’m fine spending some money on cars because you can always earn more, sell something, etc… But my time? That is a limited, decreasing asset and, as a car guy, I’d rather spend mine driving.

POSTSCRIPT: You may have noticed that the accompanying photos are not of a medium blue Porsche 996. No, they’re of a GT Silver 40th anniversary 996. That’s because my friend worried that this article might affect his ability to sell the car and hence didn’t allow me to photograph his car (and I didn’t shoot it while I still owned it). But I didn’t want the story to run with one crappy instagram shot so I turned to the forums where a good Samaritan stepped in.

You’ve got to have eye candy, right?

Yoav Gilad is the Principal and Co-Founder of Screen Cartel, a content and production agency. He also has a personal automotive site dedicated to bringing the thrill and romance of cars and travel to the enthusiast, KeepItWideOpen, which has at least two fans: his mom and his wife. His dad doesn’t care for it. He is a car designer by training and was Petrolicious’s managing editor before branching out on his own.

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No Fixed Abode: Fruit Flies Of The Marketplace http://www.thetruthaboutcars.com/2015/05/no-fixed-abode-fruit-flies-marketplace/ http://www.thetruthaboutcars.com/2015/05/no-fixed-abode-fruit-flies-marketplace/#comments Fri, 01 May 2015 11:30:24 +0000 http://www.thetruthaboutcars.com/?p=1054169 I don’t know what you’re doing with your weekend, but I’m spending mine driving a Prius from the Midwest to the East Coast. Next week I’ll tell you all about my experience with the car, but I’ll say this: it hasn’t been what I expected. Not that my opinion on the subject matters to Toyota; […]

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I don’t know what you’re doing with your weekend, but I’m spending mine driving a Prius from the Midwest to the East Coast. Next week I’ll tell you all about my experience with the car, but I’ll say this: it hasn’t been what I expected. Not that my opinion on the subject matters to Toyota; I’m not a customer for a Prius or a hybrid of any type and I am unlikely to become one until the last car that can beat a Prius around a racetrack enters the loving jaws of the Crusher.

Existing hybrid owners, on the other hand, are near and dear to Toyota’s heart. Unfortunately, that affection is being returned in smaller and smaller doses.

It’s the kind of headline that generates clicks the way a Prius going down a hill generates battery power: Gas price fallout: People trading in hybrids for SUVs. And the facts, in this case, justify the hype:

So far this year, only 45% of people that traded in an environmentally-friendly hybrid car purchased another, according statisticians at Edmunds.com. In 2012, that figure was over 60% and this is the first time it has ever fallen below 50%…

Back in 2012, gas prices peaked at $4.67 a gallon. At that price, it would take five years for owners of a hybrid-powered Toyota (TM) Camry to make up for the $3,770 price differential with the brand’s gasoline-powered model. But with today’s gas prices at $2.27 a gallon, it would take about 11 years.

Admit it, your first reaction to the above was, “How stupid can people be? Do they think cheap gasoline will last forever?” That was certainly my reaction. Although many of the B&B picture me as being just to the right of Attila the Hun, I’m a bit of a closet progressive at times and the image my Brooklyn-born brain conjured up when I read the above was an endless line of fat Walmartians trading in their Hy-Higlanders for Yukon XLs while smugly telling their neighbors, “I reckon gas is gonna be cheap forevah.” It’s the kind of image that is thoroughly satisfying for anybody who enjoys thinking of themselves as smarter than the average American. After all, I would never be that stupid, and neither would you, right?

But what if those stupid hicks who can’t wait to get rid of their hybrids are actually pretty good at doing real-world math? After all, using the Camry analogy provided by CNN, even when fuel is close to five bucks a gallon, you’re still looking at five years to the breakeven point. That’s longer than a lot of people keep their vehicles, so if you’re going to keep your Camry for three years and you don’t think fuel will swing past five or six dollars a gallon there’s probably no point.

The problem with that Camry analogy, however, is the standard Camry four-cylinder gets outstanding gas mileage. Very few cars sold in this country are as good as a four-cylinder Camry at conserving fuel on the move. Are buyers really just trading in Camry Hybrids for Camrys, or are they moving to larger SUVs? That’s not something we can know without access to additional data, and it’s not a conclusion that’s directly supported by the CNN article.

What if that is the case, however? Let’s do a few moments’ worth of math, based on the idea of a 15,000-mile year.

Prius (50mpg) v $2.50 = $750/year
Tahoe (16mpg) v $2.50 = $2,343/year
Prius v $4.00 = $1,200/year
Tahoe v $4.00 = $3,750/year
Prius v $6.00 = $1,800/year
Tahoe v $6.00 = $5,625/year

I don’t think anybody expects gasoline to rise past six dollars a gallon in the next decade, assuming the world doesn’t erupt in flames.

With cheap gas, the Prius saves you $132 a month. With four-dollar gas, it’s $212.50. At six bucks, it’s $318.75. This is what I consider “real money” at all three amounts, but let’s put it in context by looking at how much extra car you could get if you put that same amount of money into paying a five year loan on a more expensive car.

At $2.50, you could afford to pay about seven grand more for your car if it has a Prius-Tahoe fuel advantage. At $4.00, it becomes eleven grand. At six bucks? Nearly seventeen thousand dollars. That, too, is real money. Since even the cheapest Tahoe costs twenty-two grand more than a base Prius, however, we can assume that our Prius-to-Tahoe people are ready to spend extra money to drive a Tahoe and that this additional fuel cost is just more money to burn. The math gets much more complicated when you start comparing fundamentally similar vehicles that are available in hybrid or conventional form. That’s the math that killed the Tahoe Hybrid and it’s the math that would kill it again were GM bold enough to bring it back.

After running about fifty more permutations of the above calculations, I’ve come to believe that people who trade in hybrid versions of Highlanders and Altimas for conventional versions are probably making a solid mathematical bet. And I’ve also come to believe that if you trade in a Prius for a Tahoe you’re going to take it in the shorts no matter what fuel costs are, said shorts-taking still being less than the additional amount you’re paying to drive a much more expensive vehicle in the first place. So our putative hybrid-traders are neither stupid nor bad at math, no matter how you slice it.

No, I think the lesson of the numbers is something else entirely. While looking at my fuel-economy spreadsheet, I kept thinking back to my Audi S5. Driven with some spirit, it had an 18-mpg appetite for fuel. Its supercharged replacement might fool the EPA but it doesn’t do much better in the real world. Nor do all the turbo near-luxury and luxury cars the Germans want you to buy. Pretty much anything that will arouse envy in your neighbors nowadays is also unlikely to do significantly better than 20mpg in the real world of mixed-use commuting and daily operation.

That means five thousand dollars a year or more to keep the tank full as fuel costs rise. Which they will. There is no way around it. If you think gasoline will be two dollars a gallon in the year 2035, you are either a drooling moron or the super-genius who will invent cold fusion and make petrol irrelevant for all but the most committed and particular of motorists.

Five grand a year is twenty-five grand in five years. So when I ask myself, “How much will people pay for the electric version of today’s luxury cars?” I now have a solid answer. And I have a second answer to a different question. The question is: “When will electric cars outsell gasoline-powered cars in the American marketplace?” The answer?

“Not as long from now as you think.”

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Piston Slap: The Butterfly Effect http://www.thetruthaboutcars.com/2013/01/piston-slap-the-butterfly-effect/ http://www.thetruthaboutcars.com/2013/01/piston-slap-the-butterfly-effect/#comments Wed, 09 Jan 2013 12:44:58 +0000 http://www.thetruthaboutcars.com/?p=472504 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 […]

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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 sajeev@thetruthaboutcars.com. 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 http://www.thetruthaboutcars.com/2012/10/lotus-owes-suppliers-nearly-37-million/ http://www.thetruthaboutcars.com/2012/10/lotus-owes-suppliers-nearly-37-million/#comments Tue, 09 Oct 2012 17:55:10 +0000 http://www.thetruthaboutcars.com/?p=463241 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 […]

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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 http://www.thetruthaboutcars.com/2012/08/fiat-waits-for-government-money-serbia-says-it-will-pay-next-year/ http://www.thetruthaboutcars.com/2012/08/fiat-waits-for-government-money-serbia-says-it-will-pay-next-year/#comments Thu, 30 Aug 2012 12:13:06 +0000 http://www.thetruthaboutcars.com/?p=458298 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 […]

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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 http://www.thetruthaboutcars.com/2010/11/nissan-do-brasil-throws-money-away/ http://www.thetruthaboutcars.com/2010/11/nissan-do-brasil-throws-money-away/#comments Mon, 22 Nov 2010 08:45:12 +0000 http://www.thetruthaboutcars.com/?p=373832 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 […]

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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 http://www.thetruthaboutcars.com/2010/09/the-people-vs-the-people%e2%80%99s-car-company/ http://www.thetruthaboutcars.com/2010/09/the-people-vs-the-people%e2%80%99s-car-company/#comments Thu, 02 Sep 2010 09:34:43 +0000 http://www.thetruthaboutcars.com/?p=364490 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 […]

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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 http://www.thetruthaboutcars.com/2010/06/mulally-as-in-moolah/ http://www.thetruthaboutcars.com/2010/06/mulally-as-in-moolah/#comments Sun, 27 Jun 2010 08:09:02 +0000 http://www.thetruthaboutcars.com/?p=359605 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 […]

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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 http://www.thetruthaboutcars.com/2010/01/gm-makes-cash-infusion-to-opel-kindof/ http://www.thetruthaboutcars.com/2010/01/gm-makes-cash-infusion-to-opel-kindof/#comments Fri, 15 Jan 2010 18:05:01 +0000 http://www.thetruthaboutcars.com/?p=341955 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 […]

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Rich uncle in America. Picture courtesy blogcdn.com

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 http://www.thetruthaboutcars.com/2009/12/porsche-to-magna-take-the-money-and-run/ http://www.thetruthaboutcars.com/2009/12/porsche-to-magna-take-the-money-and-run/#comments Sat, 19 Dec 2009 09:13:47 +0000 http://www.thetruthaboutcars.com/?p=339681 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, […]

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Eat my dust. Picture courtesy carsspyphotos.com

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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