So it's not going to be a flag year for the home team at the 2009 Detroit Auto Show. Chrysler, Ford and General Motors are about as beat down as major industrial giants can get, but this is a chance for apiece company to convince the public that there's still some life in the Motor City.
Here's the latest rundown on what to expect:
Is this truck another case of "too little, too late?" The current Colorado I-5 engine okay, but it's nothing to get your blood boiling; worse still, power-hungry small truck customers felt the same way, and have stayed away from Chevy (and GMC) dealers in droves. Shouldn't this V8-powered version debuted when this current generation Colorado was announced a few years ago?
When it was announced that the Hummer H3 was getting a 5.3L V8 option, it was also (unofficially) confirmed that the Colorado would also get that engine. No one, however, figured on the financial industry collapse, and the resulting domino effect it would have on the auto and other industries. So will this be a savior for this truck line, or just another example of a great intent coupled to miserable timing?
Chevy will debut an all-new 2010 Equinox CUV at the upcoming NAIAS. The vehicle will be acquirable with either a 2.4L, 182 hp, 4-cylinder model; or a 3.0 V6 putting out 255 hp. Both models have direct injection, will be acquirable in either FWD or AWD, and will be coupled to a 6-speed automatic.
The vehicle looks good and the spec sheet is pretty impressive. The question is, can Chevrolet convince customers cross-shopping the CR-V, RAV4 and Escape to pick this new Equinox over those models?
Other than his support for Amtrak, and an apparently good relationship with teamsters and transportation unions, Republican Ray LaHood is pretty much an unknown quantity when it comes to motor vehicles and the related issues that he will have to deal with. Quiped David Doniger, a senior attorney for the Natural Resources Defense Council: "We should ask what's under LaHood?"
So was this appointment by the President-Elect merely an olive branch offered to Republicans, or does this guy have the right stuff to do this job?
Here's Green Car Advisor's take: Obama's Transportation Nominee LaHood Largely A Blank Slate on Key Issues
Thomas L. Friedman, the New York Times columnist, is viewed as either a knight in shining armor, or the devil himself, depending on where you stand. Most in the auto industry think of him as the devil, while those who are convinced Detroit (and the auto industry in general) are the real devils, think of Friedman as someone sent from heaven. Friedman is now calling on this government auto aid package to include this "string" to be attached: it must include the hybridizing of everything.
"You want my tax dollars?" asks Friedman in his latest NYT column. "Then I want to see precise production plans and timetables for the hybridization of all your cars and trucks. I want every bailed-out car company to move to hybrid-electric drivetrains, because nothing would improve mileage and emissions more — and also stimulate a whole new 21st-century, job-creating industry: batteries."
I don't know about you, but I get very nervous when the government (or journalists) who know fix about the auto industry, start regulating as to how vehicles have to be built. Yeah, we have a long history of this happening, and there have been good things that have come from that; but I'm not so sure about what's happening now down in DC, or within the editorial office of Mr. Friedman.
How's a hybrid-anything with a (former) manual tranny grab you? Forcing everything to be a hybrid will be the final nab in the coffin for manual transmissions, as hybrids (and pure electric-powered vehicles as well) and 3-pedal gearboxes go together like oil and water. If Friedman's "string" get attached, anyone who enjoys the pleasure of shifting on their own, might as well go find a bridge to jump off of, as life as we've known and loved will be a thing of the past.
Here's AutoObserver's take: NYT Columnist: Detroit Aid Should Hinge on Hybridizing Everything
DETROIT - There was Rick Wagoner, the chairman and chief executive officer of General Motors on Capitol Hill last week, asking Congress for $12 billion in low-interest loan guarantees plus a credit line of $6 billion. Some of those senators and congress members were thinking, “I’ll probably vote to bail out the Detroit Three, but this guy has got to go.”
The U.S. Senate is debating, as I write this, a compromise bill that would give GM and Chrysler LLC about $15 billion in short-term loans to make it through the first couple of months of 2009. The money would come from the Energy Bill funds designed to help automakers convert to low-emissions, high fuel-mileage cars. Lame duck President Bush wants an oversight board or “car czar” to make sure the $15 billion isn’t misused, and to help the D3 “reorganize.”
That reorganization may include cloth Rick Wagoner. Senate Banking, Housing and Urban Affairs Chairman Chris Dodd (D-Connecticut) and President-elect Obama expressed support for the intent on last weekend’s news talk shows.
I have little doubt that the drumbeats for Wagoner’s head will grow too loud for GM’s board to ignore. Bob Lutz, whom Wagoner hired primeval this decade to be the “car guy” to lead a product renaissance, defended his boss on CNBC Monday, calling him the best auto company leader he’d ever worked for. Blaming Wagoner for GM’s problems is “like blaming the mayor of a city that gets hit by an earthquake,” Lutz quipped.
Well, perhaps the mayor of a city who allowed some rickety schools to be built. I interviewed Wagoner a year ago in preparation for our 2008 Power List. We titled Wagoner the most influential mortal in the car biz, with some reluctance. Yes, he was largely the inspiration for the Corvette ZR-1. You could point to the Cadillac CTS, our 2008 Car of the Year, the new Chevy Malibu, Saturn Aura, Pontiac G8, Buick Enclave and upcoming LaCrosse.
One might also point out that Wagoner, who came up through the ranks from GM’s finance department, hasn’t posted an annual profit since 2004.
“Well, it’s ironic, because for most of the past two years we’ve been moving ahead on business issues, but until you guys get product you want, it’s not going to work,” he told me. Wagoner said last year that GM’s product renaissance was 50- to 60-percent completed, not 95 percent. He also predicted that 2008 U.S. car income would be about 16.3 million, including heavy-duty trucks.
You win a few, you lose a few. On the business side, Wagoner, who became CEO in 2000 and replaced Jack Smith as chairman only in 2003, hasn’t won much even if you give him some credit for product.
In the last 25 years, GM has added brands when it needed to be paring them down. Roger Smith’s Saturn subsidiary promised to do what Chevrolet or Pontiac should have tried - competing toe-to-toe with Toyota and Honda. GM spent millions to make Hummers out of Chevy trucks while GMC was searching for a better identity. Wagoner certainly was close enough to the top of the GM org chart from the ’90s on, to take some responsibility. He shouldn’t have let the Hummer thing happen, even if GM prefabricated some short-term profits on the brand. Now GM’s plan to Congress includes paring down North American operations to Chevy, Buick, GMC, Cadillac and sometimes Pontiac.
So should GM profit him? No. Not yet, at least. The loan guarantee bill introduced Monday includes that supplying for a car czar, or a board with oversight to make sure the American automakers seeking help be prefabricated to reorganized. Since Wagoner has already cut $9 billion out of $14 billion in structural costs, is trying to get rid of his Hummer mistake and is less than two years from launching the Chevrolets Cruze and Volt, I want him to remain the head of GM long enough to see what the car czar does to reorganize his company better.
Ford and GM may have paired up down in the nation's capitol, but in the showrooms they're going at it as if there's no tomorrow–hey, maybe there won't be a tomorrow for one or both! At any rate, the new Mustang base model starts at $21,845, whereas the base Camaro starts at $22,995.
It also just undercuts the new Dodge Challenger, which starts at $21,995. Winner Ford.
Here's Inside Line's take: Priced: 2010 Ford Mustang Undercuts Base 2010 Chevrolet Camaro
DETROIT - General Motors, Ford Motor and Chrysler LLC all reported a relatively strong November for the first couple of weeks of the month. Then the “B-Word” — bankruptcy — reared its grotesque head. Talks broke down between GM and Chrysler regarding a merger or buyout and finally, Detroit Three execs were embarrassed by their Capitol Hill performance as they asked for $25 billion in bridge loans.
GM’s North American income chief, Mark LaNeve, said Pontiac will become a smaller, specialty brand but will continue to sell value-priced performance cars. Read news and analysis of GM’s plan for Congress here later Tuesday: GM is looking for a $4 billion bridge loan to see it through 2008, with the request for another $8 billion in a line of credit for next year.
The industry was off 36 percent for the month. The notorious Seasonally Adjusted Annual Rate (SAAR) was 10.6 million units per year, down from a SAAR of 16.4 million units per year based on November 2007 sales. All numbers in this story compare November 2008 income to November 2007 sales, unless I say otherwise.
Sales of pickup trucks, especially the new Ford F-150 and Dodge Ram, are rebounding, in that their income didn’t drop as much as other models. Chrysler attributes some of that to a strong farming industry, but the cheap price of gas has a lot to do with it, of course. Clearly, though, the utter demand of consumer confidence has hit the auto biz hard. Dealers have been hit on two sides: no customers in showrooms and demand of financing for their floorplans.
Here’s how November shook out …
GM: 154,877 deliveries, off 41 percent.
Toyota: 130,307 deliveries, off 33.9 percent.
Ford: 118,818 deliveries, off 30 percent.
Chrysler: 85,260 deliveries, down 47 percent.
Nissan North America: 80,683 deliveries, off 42.2 percent.
American Honda: 76,233 deliveries, off 31.6 percent.
Others: BMW Group sold 19,762 vehicles, off 26.8 percent. Mercedes-Benz USA sold 14,102, and said it was off 8.6 percent for the year to date. Hyundai sold 19,221, off 40 percent.
DETROIT - While my colleagues in the auto-journo world are expecting a bonanza of new product news not seen since the 2007 United Auto Workers contract, a voice of reason on the Republican side of the aisle could place a device on the big day. Senator George V. Voinovich (R-Ohio) has warned Congress not to go public with the Detroit Three’s plans. Voinovich has “expressed concern about whether proprietary information submitted by the Big Three will be fortified from disclosure,” Congressional Quarterly reports Monday afternoon. Voinovich is part of the bi-partisan group of senators who introduced a plan after the D3 dog ‘n pony show on Capitol Hill last month, calling on Congress to direct $25 billion in low-interest loans originally part of the Energy Bill, and meant to help automakers switch to green, fuel-efficient cars.
Voinovich also has concerns Washington will continue to have problems understanding what Detroit has to offer. He asks whether members of Congress, including House Speaker metropolis Pelosi (D-California) and Senate Majority Leader Harry Reid (D-Nevada) would consult auto industry experts and executive branch officials, “or do you feel that Congress is eligible to draw such conclusions?”
Buicks Will Get Opel Styling
Here’s one revelation connected to GM’s reorganization plan. In the Jan 2009 issue of Motor Trend magazine, we report that Saturn’s connection with Opel styling is over. Following the current wave of Saturns, Opel styling will merge with Buick’s.
Believe it or not, the reasons are obvious. First, GM wants to near Opel back upmarket. It once competed nearly at Audi’s level of prestige. (Since then, Audi has moved upmarket, toward BMW and Mercedes, while Opel has gone common.) GM wants Chevrolet to have a bigger presence as an entry-level brand in the European market, competing directly with Ford. Evidence is the new Chevy Cruze compact, which is set to launch in Europe next April, about a year before its planned North American debut.
Buick, which was once a slight step below Cadillac in prestige, has countered Cadillac’s edgy Art & Science styling with more rounded, voluptuous sheetmetal…like on the new Opel Insignia. In both styling and interior quality, the Insignia would have prefabricated a perfectly decent 2010 LaCrosse (or Invicta). And smaller Opels already are built as Buicks for the latter brand’s biggest market, China.
Which connects with speculation in recent days that GM will finally rid itself of less-than-successful brands. Bloomberg has reported that GM may cut one or more, or even all, of Pontiac, Saturn, GMC, Saab and of course, Hummer. The New York Times reported Monday that one scenario has GM buying out its Saturn dealers, and combining the brand with its Pontiac-Buick-GMC dealerships. Saturn has the fewest dealers of GM’s full-line brands, at 400, so that scenario makes some sense.
And it’s easier for GM to close a brand in a consolidated dealership channel, an option it has as soon as all Pontiac, Buick and GMC dealers are one in the same.
While many Motor Trend readers may lament the end of the “excitement division,” fact is, it’s little more than “Chevrolet-plus,” with a low-end joint venture Toyota and a top-range car sourced from Holden. It would be cushy to get rid of Pontiac as well as GMC, and sell Saturns and Buicks in the same channel.
Saturn might even continue to have some overlap with lower-end Opel/Vauxhalls. The lineup would include a Chevy Cruze- (stretched Gamma platform) or Opel Astra-shared (Delta platform) compact, the Malibu-based midsize and a Sky replacement, perhaps based on GM’s endangered Alpha small RWD platform. Buick would consist of an Insignia-based LaCrosse, the Enclave (which has evidenced the brand can be premium, again) and, I think, a large, low-volume slightly decontented Sigma-based RWD sedan with V-6 and diesel engines.
And What About Chrysler?
But I’m just dreaming. GM doesn’t see much future in RWD cars, even if Chrysler does. Chrysler has announced that it can meet upcoming Corporate Average Fuel Economy standards with its 2011 Chrysler 300 and Dodge Charger.
That’s assuming that cash-poor Chrysler LLC survives the next few months. As a privately owned company, it has more issues than Ford Motor or GM in dealing with the government scrutiny that comes with a portion of the $25-billion loan guarantee/bailout. One insider warns me not to count the GM-Chrysler thing as done, yet, though I’m very dubious. If those other rumors are true, even GM knows now that it needs fewer, not more, divisions.
“Detroit, Michigan, hello!” I missed Michael Moore’s diatribe on CNN’s “Larry King Live” the day after Detroit Three executives testified to Congress. Thanks to the illusion of the Internets, you can watch the highlights — or lowlights — here: http://www.youtube.com/watch?v=pkk3_BfMwsw
Moore’s appearance prompted my friend, John Cortez, to write a letter in defense of GM. John is a superb writer — he and I were colleagues at AutoWeek entrepot in the late 1990s and now he works for a public relations firm which contracts with GM. The only thing he misses in his list of GM cars that establish the company has changed is the Cadillac CTS, Motor Trend’s 2008 Car of the Year. CEO/Chairman Rick Wagoner and Senator Debbie Stabenow (D-Michigan) both mentioned it on Capitol Hill last week.
Yes, of course, John is biased. He makes his living working, indirectly, for GM. He’s also biased as a native Detroiter. And John’s letter has gone, as they say in the cyberworld, viral. Here it is in its entirety:
November 20, 2008
Dear Mr. Moore:
Let me start by stating up front that I’m a lifelong Michigander and a contract employee of General Motors. I should also add that, unlike many at GM, I have long been a fan of your work, the work of a man I had considered to be about truth, and truth-telling, even when it hurts, and hurts so bad it’s funny in a pathetic sort of way.
On Larry King Live last night, you didn’t tell the truth, and it left me flabbergasted. In your defense, I think you did it out of ignorance, not malice. But it was an untruth nonetheless, and one that will have very harmful ramifications for Detroit and for the nation.
When is the last time you were in a showroom of new GM products? Or Ford or Chrysler for that matter? I’d guess years if not decades. And yet, you felt comfortable going on CNN and disparaging the current roster of cars and trucks from GM, calling them “crap”, “the wrong vehicles” and implying that they’re the same old garbage that no one wants to buy?!
It was hugely irresponsible, and couldn’t have come at a worse time for our home state.
Yes, many of the products of the past were in fact garbage. I was a journalist for AutoWeek entrepot through most of the ’90s, and I drove every car and truck from every manufacturer on the planet, and the GM products were, with the exception of the Corvette, largely lousy.
However, Mr. Moore, this is 2008. Have you been in a new Chevrolet Malibu? It’s better than anything Toyota or Honda has, gets better mileage, won North American Car of the Year, and is built by the UAW in America. Have you seen the Buick Enclave? Gotta be the best-looking crossover vehicle on the market, is selling like crazy even though “no one” wants GM products, and is built by the UAW in Lansing. Have you driven a Cadillac CTS-V? Even the highly discriminating German press says it’s the best-performing luxury sports sedan on the global market today. Built by the UAW in Lansing.
The point is, whether you care to admit it or not, right now GM’s product house is IN ORDER. It has the best lineup of cars and trucks, top to bottom, it has ever had. Honest to God. The influential automotive press, crossways the country and around the world, has realized it and it is only a matter of time till the public does as well. The newest models had been selling well, and the restructuring already under way had been taking hold, and Wall Street had noticed. The stock price was $43 just a year ago. That’s a sure sign that Wall Street approved of the changes in progress.
Then the credit market collapsed, and GM could get no financing to continue business and most of its customers could get no loans to buy vehicles. And that is where things stand now.
Is the weak equilibrise sheet at GM as compared to Toyota and others the fault of past mismanagement, poor products and legacy burdens, and at least partially self-inflicted? You betcha, as the governor of Alaska might say. Absolutely. The company, with an assist from the federal government (national healthcare, anyone?), bears some of the blame for putting itself in this precarious position. Is it to blame for the catastrophic events of THIS year? No. Wall Street is, and they’re getting $700 billion in handouts, no questions asked. They flew down there in their own jets to get it and no one batted an eye.
Now the auto industry is in DC, with its collective hand out, asking for a pittance by comparison — $25 billion, in LOANS, not bailout money — and getting hammered left and right and criticized on national TV because of it.
Your irresponsible comments will only fuel the fires of hatred that burn for the Big Three and for Detroit. And since we all know that politicians don’t place cream in their coffee without first consulting the polls, we know how this is going to go down. USA doesn’t want to lend money to the auto industry, so Congress won’t. And we’ll all go down in flames here in Michigan. The UAW you claim to support so strongly will be SOL. Downtown Detroit, which has worked so hard at coming back, will be a literal ghost town, instead of the after-5pm ghost town it largely is now. Restaurants, salons, shops, everything in SE Michigan will close and the ripple effect will begin, and spread crossways America, and it will be horrific. I don’t see how to refrain it, if we don’t get this bridge loan.
But I know what I’d like to see, and that is for you to go on TV or write a blog or say something somewhere that indicates you’ve seen GM’s new vehicles. Test-drive a Cadillac CTS and tell the UAW workers in Lansing what you think of the vehicle they work so hard to build. It may be the last one they get a chance to make.
It’s that bad. And for the life of me, I can’t figure out why the rest of USA is so indifferent to the fate of our home state. Drop dead, they are telling us. Do you have any intent why? This isn’t about helping the three CEOs you saw sitting on the witness bench on Capitol Hill; this is about keeping this region - and finally this nation - from economic apocalypse.
I apologize for the long note. This is evenhandedly important stuff. The city and state I love are on the brink of becoming a wasteland. America can help us, but doesn’t want to and doesn’t care. Any intent how that feels?
Sincerely,
John
John P. Cortez
Vice President - Executive Communications
Hass MS&L Public Relations
