Let them fail!

[GAP]

The worst thing they could have done was the $4500 subsidy....everybody came out of the woodwork, got their deal and the others will simply wait....did they think people wouldn't react this way?

 

[a_majoor]

Downward spiral for Government Motors:

http://www.slate.com/blogs/blogs/kausfiles/archive/2009/11/16/when-gm-says-here-s-your-money-back-they-mean-it.aspx

When GM says 'Here's your money back,' they really mean it!

GM "says it will begin to pay back U.S. loans." But of course it's paying back that debt to taxpayers with money from ... taxpayers. Even the new, nicer Truth About Cars isn't falling for it. GM got $50 billion from the government, after all, mainly for a 60% share in the company. It's planning to pay back $1.2 billion in December--basically a PR attempt, TTAC speculates, to erase its negative consumer image as a bailout baby. The only hope for the taxpayers actually being repaid for their entire $50B investment is an IPO. TTAC pinpoints 2010 as the ideal year, when the innovative Chevy Volt will be conveniently not yet released. "GM’s hail-mary will provide a speculative upside to GM’s value as long as it’s still just around the corner." ...

P.S.: Also, these financial results are not GAAP-ready. "North American Operations are still bleeding cash. And, as Henderson has admitted, the fourth quarter results for 2009 are only going to bring worse news." [TTAC again]  ...  P.P.S.: But GM will launch a company-wide sale this week to clear excess U.S. inventory. A sure sign of success!

And an upward spiral for China! (Via Next Big Future)

 

[a_majoor]

Results are in:

http://volokh.com/2010/01/05/ford-sales-surge/

Ford Sales Surge

Jonathan H. Adler • January 5, 2010 2:03 pm

Ford Motor Company’s December 2009 sales were up 33 percent from December 2008.  By comparison, Chrysler’s sales were down 4 percent.  GM has yet to report.  One factor is almost certainly the quality of Ford’s product — my wife certainly loves her Ford Edge and hopes we’ll get another when the lease runs out — but I suspect Ford’s position as the only major U.S. automaker to neither go bankrupt nor take bailout money is another.

UPDATE: GM December sales were down 6 percent.  Most foreign automakers posted December gains.  Honda, for instance, reported a 24 percent increase in December sales; Nissan an 18 percent gain.

 

[zipperhead_cop]

Results are in:

http://volokh.com/2010/01/05/ford-sales-surge/

So what you are saying is that we should have given them a bigger bailout?  Can we give them another one? 

 

[a_majoor]

So what you are saying is that we should have given them a bigger bailout?  Can we give them another one?

I hope the sacasm smiley was supposed to be on that post!

Ford. $0 bailout; sales up 33%
GM.  $50 billion destruction of taxpayer wealt after post bailout writeoffs; sales down 6%
Chrysler: Billions of dollars in bondholder value destroyed by US government's takeover of firm, sales down 4%

So going by that formulation, a $0 bailout will provide the most impressive results!

 

[a_majoor]

Says it all:

 

[a_majoor]

One of the first cars I ever owned was a SAAB 99 Turbo, so this news really puts a warm feeling in my heart. Now that SAAB is out of the clutches of Government Motors, there may be a revival:

http://www.carlustblog.com/2010/01/its-officialsaab-saved.html

It's Official--Saab Saved!
by Chris Hafner on January 26, 2010

I'm taking a few seconds off from dancing in my cubicle to help spread the word--GM's rumored sale of Saab to small Dutch carmaker Spyker is now official. As always, Saab United is the right place to go for the latest news and analysis.

The rumored deal seemed to have picked up momentum over the last few days, but now, with Saab's $564 million loan from the European Investment Bank guaranteed, the $400 million sale has been finalized.

I love this quote from the Reuters story linked above; it's not often you see commentary as scathing as this in a Reuters news story:

"It's a really brilliant brand. It's probably one of the biggest brand mismanagement stories in the history of the automotive industry," said Tim Urquhart, analyst at IHS Global Insight. "Saab could have been the Swedish Audi if it had been taken on in the right way 20 years ago. It's been completely mismanaged, underinvested in by people who don't understand what the brand means, and what it has the potential to mean."

It's too soon to know exactly what this means; it's hard to imagine that a tiny company like Spyker will have the resources to keep (make?) Saab a relevant mainstream brand. But, if Saab traded volume for quirkiness, I for one would be satisfied. And right now, I'm just pleased that the brand is surviving.

 

[a_majoor]

Government ownership of private industry. What could go wrong?

http://www.examiner.com/examiner/x-12977-Cars-Examiner~y2010m2d24-Thirtyone-House-Dems-quizzing-Toyota-execs-got-UAW-campaign-cash

Thirty-one House Dems quizzing Toyota execs got UAW campaign cash
February 24, 5:34 PMCars ExaminerMark Tapscott

Two committees in the U.S. House of Representatives are holding hearings this week concerning allegations of sudden acceleration problems in Toyota cars and trucks sold in this country.

Among the witnesses appearing today at the hearing of the Committee on Oversight and Government Reform was Toyota CEO Akido Toyoda, grandson of the company founder. On Tuesday, James E. Lentz, Toyota USA's top sales executive, appeared before the Committee on Energy and Commerce.

There is a combined total of 59 Democrats serving on these two panels, which hold potentially life-and-death power over Toyota's ability to continue offering its products to American consumers. So far this year, 31 of the 59 have received re-election campaign contributions ranging from as low as $500 to as high as $10,000 from the United Auto Workers union.

Why is that significant? Because the UAW is a major stockholder of Toyota's top U.S. rival, General Motors. Also, Toyota has successfully resisted UAW attempts to organize the Japanese firm's estimated 31,000 assembly line workers employed in five plants here in America.

Democrats have been telling America for years that special interest money corrupts government. I wonder if that is not the case now in these hearings in which Toyota executives are being grilled and are being subjected to an avalanche of negative coverage in the Mainstream Media.

Coincidentally, Toyota sales are down and GM sales are up. Nothing to see here, folks, now move along!

Here are the names of the 31 recipients, their home states, and the amounts they have received in 2010, according to OpenSecrets.org:

Committee on Oversight and Government Reform:

Elijah Cummings, Maryland ($1,000)

John F. Tierney, Massachusetts ($1,000)

William L. Clay, Jr., Missouri ($1,000)

Gerry Connolly, Virginia ($3,000)

Michael Quigley, Illinois ($10,000)

Patrick J. Kennedy, Rhode Island ($1,000)

Danny K. Davis, Illinois ($1,000)

Chris Van Hollen, Maryland ($1,000)

Paul Rhodes New Hampshire ($2,500)

*Chris Murphy, Connecticut ($5,000)

*Peter Welch, Vermont ($1,000)

Judy Chu, California ($500)

Committee on Energy and Commerce:

Henry Waxman, California ($2,500)

John Dingell, Michigan ($1,000)

Rick Boucher, Virginia ($1,000)

Frank Pallone, New Jersey ($2,000)

Bart Stupak, Michigan ($2,000)

Elliot Engel, New York ($1,000)

Gene Green, Texas ($1,000)

Diana DeGette, Colorado ($1,000)

Lois Capps, California ($1,000)

Mike Doyle, Pennsylvania ($1,000)

Jan Schakowsky, Illinois ($5,000)

Charles Gonzalez, Texas ($1,000)

Jay Inslee, Washington ($1,000)

Mike Ross, Arkansas ($1,000)

Baron Hill, Indiana ($5,000)

Doris Matsui, California ($1,000)

*Chris Murphy, Connecticut ($5,000)

Bruce Braley, Iowa ($1,000)

*Peter Welch, Vermont ($1,000)

* Murphy and Welch are members of both committees, but received only one contribution from the UAW, of $5,000 and $1,000 respectively.

 

[a_majoor]

Such trustworthy sources. I seem to racall another American news network once rigged pyrotechnics in a pickup truck to "prove" the fuel tank was unsafe.

Based on the integrity of the reporter I am convinced it is perfectly safe to buy and drive a Toyota now:

http://news.ca.msn.com/top-stories/cbc-article.aspx?cp-documentid=23621295

ABC admits tinkering with Toyota report

Toyota Motor Co. has recalled millions of cars worldwide due to concerns that the accelerator pedals could become stuck. (Associated Press)

Associated Press

Toyota Motor Co. has recalled millions of cars worldwide due to concerns that the accelerator pedals could become stuck. (Associated Press)

ABC News has admitted it used visuals in a report on acceleration problems with Toyota vehicles that didn't demonstrate what was actually happening.

The network's handling of a Feb. 22 World News story about potential problems with computer systems in Toyotas has raised journalistic ethical questions and intensified bitter feelings the besieged automaker already had toward ABC.

The automaker has had to recall many of its cars because of problems associated with sticky gas pedals.

ABC has now admitted to a misjudgment and swapped out the brief dashboard video in its report, which continues to be available online.

Its story illustrated a report by David Gilbert, a Southern Illinois University professor who suggested that a design flaw in Toyotas might leave a short-circuit that could cause sudden acceleration undetected by the car's computer system.

Correspondent Brian Ross's report showed him driving a Toyota with Gilbert that was rigged to quickly accelerate. Even though he knew it was coming, Ross said the incident left him shaken, and he had a hard time getting the car to come to a stop.

Tachometer shot needed to be steady

Briefly during the drive, ABC cut to a picture of a tachometer with the needle zooming forward. The impression was that the tachometer was documenting the ride Ross was taking. Instead, that picture was taken from a separate instance where a short-circuit was induced in a parked car.

ABC said that editing was done because it was impossible to get a good shot of the tachometer while the car was moving because the camera was shaking. The camera shot was steady when it was taken in a parked car.

"The tachometer showed the same thing every time," said ABC News spokeswoman Emily Lenzner.

Toyota spokesman John Hanson disputes that, saying tachometers react much more dramatically when short-circuits happen in a parked car than a car that is moving. Tachometers measure engine speed.

It all points to problems that are created when visual journalists try to alter reality in order to get a better picture.

"Any time you give the audience any reason to doubt the honesty of the piece, that's a serious problem," said Charlotte Grimes, a Syracuse University journalism professor who specializes in ethical issues.

"Do they honestly think that a company like Toyota, with all the resources that it has, would not be looking at these things?" Grimes asked.

'Misjudgement' in editing: ABC

Toyota recognized the differences right away: the shot showed the car's speedometer was at zero, the parking brake was on and no one was using the seat belts — while Ross wore one on the test drive, Hanson said.

Online discussion of the differences began almost immediately, and the website Gawker.com wrote about it last week.

ABC edited the online version of its story shortly after that story appeared and wrote a note on its website explaining why.

"This was a misjudgment made in the editing room," Lenzner said. "They should have left the shaky shot in. But I want to make clear that the two-second shot that was used did not change the outcome of the report in any way."

Hanson said he wished Toyota could have been invited to see the simulation conducted by ABC.

The Associated Press

 

[a_majoor]

Lets see the results of the current bailout:

http://www.theatlantic.com/business/archive/2010/04/gm-more-troubles-coming-down-the-road/38603/

GM: More Troubles Coming Down the Road

Apr 7 2010, 3:02 PM ET
The Government Accountability Office has a report out today on the unfunded liabilities of the GM and Chrysler pensions.  The most controversial aspect of the bankruptcy reorganizations orchestrated by the Obama administration is that the companies reaffirmed their obligation to their retirement plans, which are often terminated when a company undergoes a bankruptcy.

    For the most part, the terms of the restructuring called for current levels of employee benefits-- including pension benefits--to remain in place for at least 1 year. Specifically, the master sale agreements for both companies stipulate that, in general, union employees are to be provided employee benefits that are "not less favorable in the aggregate" than the benefits provided under the employee pension and welfare benefit plans, and contracts and arrangements currently in place; nonunion employees are to receive current levels of compensation and benefits until at least 1 year after the date the agreements are signed.


A lot of people--including me--regarded this as a gift to the UAW, at the expense not only of the bondholders who had lent the firms money, but also of the company's future chances at profitability.

The GAO report offers a rather dour picture of the plans' funding status:

    Nevertheless, according to GM's projections utilizing valuation methods defined under PPA, large cash contributions may be needed to meet its funding obligations to its U.S. pension plans beginning in 2013 (see fig. 4). GM officials told us that cash contributions are not expected to be needed for the next few years because it has a relatively large "credit balance" based on contributions made in prior years that can be used to offset cash contribution requirements that would otherwise be required until that time.47 As of October 1, 2008, GM had about $36 billion of credit balance in its hourly plan and about $10 billion in its salaried plan. However, once these credit balances are exhausted, GM projects that the contributions needed to meet its defined benefit plan funding requirements will total about $12.3 billion for the years 2013 and 2014, and additional contributions may be required thereafter. In its 2008 year-end report, GM noted that due to significant declines in financial markets and deterioration in the value of its plans' assets, as well as the coverage of additional retirees, including Delphi employees, it may need to make significant contributions to its U.S. plans in 2013 and beyond.

    Similarly, Chrysler's management expects that contributions to meet minimum funding requirements may begin to increase significantly in 2013, but are projected to be relatively minimal until then (see fig. 5). Chrysler, like GM, intends to use credit balances to offset the contribution requirements for some of its plans. As of end-of-year 2009, Chrysler had credit balances of about $3.5 billion for its UAW Pension Plan and about $1.9 billion across the other eight plans for which it provided funding information. In addition, Chrysler also has $600 million in payments from Daimler to help meet its funding requirements over the next few years.49 Nevertheless, Chrysler's funding projections reveal that about $3.4 billion.


As Pete Davis notes:

    GAO notes the complicated role played by the federal government, which guaranteed those pensions and now owns GM and Chrysler. GM and Chrysler bought union peace by overpromising pension benefits, knowing that the taxpayers stood behind those promises. Now what should the government do, take it out on the auto workers or hit the taxpayers to benefit the auto workers? Your elected officials will have little difficulty making this decision, invariably hitting future taxpayers to benefit favored constituents, like the auto workers.


Too true, but how likely is that?  There are a lot of scary big numbers floating around about the potential unfunded liabilities of the Pension Benefit Guarantee Corp., which guarantees private sector pensions.  They are indeed huge, and I think it more likely than not that the PBGC will eventually need a bailout.  But not for the total amount of its potential unfunded liabilities; many of those companies will keep operating.

So the important question is, will GM be among the problem children who actually dumps its pension obligations on the taxpayer?  As luck would have it, GM's numbers are just out, and . . . um . . . they're losing a lot less money than they used to!!!  Only $4.3 billion since they emerged from bankruptcy.  And the CEO says they might even make a profit in the near future, maybe.

To be fair, that includes whopping dose of one-time charge.  On the other hand, there's a lot of grim news lurking deeper in the reports, according to The Truth About Cars:

  Of course, you have to dig into the numbers to find the bad news, like the $56.4b in "cost of sales," or the $700m interest cost, or the 48 percent North American capacity utilization in 2009, or the 16.3 percent US car market share.


Make no mistake, these companies are still on life support.  The CBO expects that the lion's share of the government's losses on TARP will come, not from anything the Bush administration did, but from the Obama administration's decision to bail out the automakers and to a lesser extent, its bailout of homeowners.  It seems that a big chunk of our cost may come from picking up the gold plated pensions . . . "Cadillac Plans", if you will . . . of the automakers.  And lest you think I'm picking on unions over management, it was management that used the UAW as a prop to extract these gargantuan sums from the pockets of innocent taxpayers.

I feel like we ought to get a little something back, here.  At the very least, they could offer everyone in America that OnStar service that sounds so great in the commercials.

Look for them coming cap in hand in 2013...

 

[a_majoor]

I want one of these to replace my 03 Caravan!

http://nextbigfuture.com/2010/04/toyota-will-have-lithium-ion-battery.html#more

Toyota will Have Lithium Ion Battery minivan Version of the Prius Hybrid

In the picture is the Toyota Estima hybrid minivan that has been available only in Japan

Toyota Motor Corp (7203.T) will launch competitively priced Prius hybrid minivans using lithium ion batteries early next year, the Nikkei business daily reported.

    The new Prius minivan will offer a spacious interior and improved fuel economy, and will likely feature three rows of seats for carrying five to seven people, the paper said.

    The company will initially manufacture lithium ion batteries at its Teiho factory in Aichi Prefecture, and later plans to produce them at Panasonic EV Energy Co, a battery joint venture with Panasonic Corp (6752.T), the Nikkei said.

    A lithium-ion battery can pack more electricity than a nickel-metal hydride counterpart, enabling a hybrid car to run longer on a single charge

Toyota Estima Hybrid Minivan Sold Only in Japan
Estima Hybrid has offered fuel consumption of 5.0 l/100km (47 mpg US) on the Japanese 10-15 cycle and CO2 emissions of 116 g/km (2006 redesign of the hybrid minivan available only in Japan since 2001.

 

[Kat Stevens]

I just bought my daughter a 1990 Chevy Sprint.  It gets 55 MPG, never has to be plugged in to the wall, and doesn't have 1000 lbs of batteries to dispose of.  I got it up to 130 KMH with lots of pedal left, it doesn't look like it designed by Elroy Jetson, and it's 20 year old technology.  Progress my lily white English arse.

 

[a_majoor]

I just bought my daughter a 1990 Chevy Sprint.  It gets 55 MPG, never has to be plugged in to the wall, and doesn't have 1000 lbs of batteries to dispose of.  I got it up to 130 KMH with lots of pedal left, it doesn't look like it designed by Elroy Jetson, and it's 20 year old technology.  Progress my lily white English arse.

My family is bigger, so I need the room 

 

[Kat Stevens]

More of a shot at the alarming lack of progress than anything else.  All the green talk in the world and we can't do better than a 20 year old internal combustion engine that anyone could afford?

 

[zipperhead_cop]

More of a shot at the alarming lack of progress than anything else.  All the green talk in the world and we can't do better than a 20 year old internal combustion engine that anyone could afford?

Actually, with rotary engines, efficient fuel systems and modularity there is no reason current vehicles couldn't be 100% better.  But that doesn't make auto makers any money. 

 

[a_majoor]

The company profiled here expects to start delivering to engine makers by 2014.

25% improvement in fuel milage for diesel engines and an incredible 40% + for otto cycle engines, but no word (yet) on who is going to introduce this first.

 

[Kat Stevens]

Actually, with rotary engines, efficient fuel systems and modularity there is no reason current vehicles couldn't be 100% better.  But that doesn't make auto makers any money.

Just another part of the rip off that is the Great Green Movement.  We have two (yes, two!)  grocery stores in the relatively nearby town that serves as my admin centre, Sobey's and Extra Foods.  Extra Foods doesn't give a rodents rectum whose reusable grocery bags I use.  The Sobey's,  after ringing up $250+ in groceries inform me that I can't use my EF bags there.  So I say, quite loudly "so, you're not really interested in saving the planet, just selling grocery bags?" Manager comes over, it gets heated, I take my unacceptable bags and leave the groceries piled up at the till.  Have a nice fucking day to you too!

 

[PMedMoe]

Just another part of the rip off that is the Great Green Movement.  We have two (yes, two!)  grocery stores in the relatively nearby town that serves as my admin centre, Sobey's and Extra Foods.  Extra Foods doesn't give a rodents rectum whose reusable grocery bags I use.  The Sobey's,  after ringing up $250+ in groceries inform me that I can't use my EF bags there.  So I say, quite loudly "so, you're not really interested in saving the planet, just selling grocery bags?" Manager comes over, it gets heated, I take my unacceptable bags and leave the groceries piled up at the till.  Have a nice fucking day to you too!

Unbelievable!  Are you going to write a letter to their head office?  I would. 

 

[Kat Stevens]

Nah, the local manager is an obsequious little toad who would just slither out of it.  He's slowly bringing about his own demise with inane policies like this one.  Torches and pitchforks are still pretty common in this part of the world.

 

[xo31@711ret]

Write the letter anyway Kat; get the little s**t-bubble canned.