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Archive for April, 2010

Fisker Supplier Gets $529 Million from Taxpayers

Some private capital was also required to qualify.

by on Apr.27, 2010

Henrik Fisker with his plug-in hybrid, the $87,900 Karma, set for a debut later this year.

Quantum Fuel Systems Technologies Worldwide Inc., supplier of the hybrid-drive system for the Fisker plug-in hybrid has closed on a Department of Energy loan for $528.7 million.

The DOE loan to Fisker will be used for the development and production of two models of plug-in hybrid electric vehicles, including the Karma, a four-door sports sedan, and a line of family-oriented models being developed under Fisker’s Project Nina program, Quantum officials said.

The DOE loan, first announced last fall, was contingent on the ability of Quantum and Fisker to raise additional capital from private investors.

Fisker’s plans call for the Nina project to reach a broader audience than the premium car the company is launching later this year. When full production of the mid-sized vehicle is reached in 2015 at the company’s assembly plant in Delaware, Fisker estimates sales could reach 115,000 vehicles annually, a volume that seems wildly optimistic for a car that has yet to appear.

The DOE also approved a more than a half billion for Tesla, which is preparing for an initial public offering of stock.

Ford Delivers Strong $2.1 Bil Q1 Profit

Maker planning boost to production.

by on Apr.27, 2010

Ford CEO Alan Mulally's One Ford strategy is yielding results - but he and Ford's products will be tested in the months to come.

Intent on showing last year’s positive numbers weren’t a fluke, Ford Motor Co. weighed in with another solid earnings report, this time going $2.08 billion into the black for the first quarter of 2010.

The profit, which amounted to 50 cents a share, comes as a striking turnaround from the same period in 2009, when Ford reported a $1.43 billion loss, equal to a deficit of 60 cents a share.  More significantly, the 2010 figures come in at more than double the $1 billion – or 31 cents a share – the consensus of industry analysts surveyed by Thomson One Analytics had predicted.

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The latest numbers give hope to observers who are waiting to see if Ford can weigh in with another full-year profit.  Net income for 2009 came to $2.7 billion – the first time the maker had been in the black for a full year since 2005.

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GM to Spend Nearly $900 Million on Plant Upgrades

Move will save 1,600 jobs.

by on Apr.27, 2010

The latest GM investment will help produce a new, more efficient line of V8s.

Barely a week after announcing big investments in plants in Kansas and Detroit, General Motors is ready to invest another $890 million in five more North American factories – a move that sources say should save or add 1,600 union jobs.

The primary investment, totaling about $400 million, will go into GM’s V8 engine plant in Tonawanda, New York.  It’s part of an effort to launch an all-new powertrain for products like the Chevrolet Silverado.

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Other plants on the list include an aluminum foundry in Bedford, Indiana – where employment had plunged, in recent years, from 1,200 to just 366 – Bay City, Michigan, Ste. Catherines, Ontario and Defiance, Ohio.

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Marty’s Marketing Minutia — Behind the Chevy Ad Shake-up

Why there's still baseball, apple pie and Chevy, but no CE.

by on Apr.27, 2010

With performer Dinah Shore, Campbell-Ewald created one of the most memorable ad campaigns in automotive history.

Campbell-Ewald has had one helluva long run as the advertising agency of record for the Chevrolet division of General Motors. An impressive 90 years. 4,680 weeks. 32,850 days. Millions of billing hours. 1,000+ current employees. Thousands of talented and semi-talented alums.

These are more than just numbers, they are representative of the dedication, passion and reliability of the company and the people that shaped and helped make the Chevrolet brand the one-time market leader and the biggest generator of bottom line profits for General Motors.

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From personal experience I can say, without fear of contradiction, “it was a great place to work!”  The hours were good, the pay rewarding, benefits reasonable, liberal vacation time, good expense accounts and for the most part the “C-group” – CEO, COB, CAS, CCO, CFO — of executives were real pros.  Of course there were exceptions.

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Reinventing the SAE World Congress

by on Apr.27, 2010

The annual gathering of auto engineers, the SAE World Congress, has been shrinking for years. But the 2010 event was intentionally downsized, claim its organizers.

If the SAE World Congress looked smaller to those attending the industry’s premier automotive engineering event at Detroit ‘s Cobo Center earlier this month, that’s because it was smaller – by design, according to conference organizers, though recent history shows the once massive event has been shriveling on its own for a number of years.

Some 300 companies exhibited at the event last year but the 2010 World Congress saw just 103 firms on the floor, according to Andrew Brown Jr., chief technologist at Delphi Corporation and president of the SAE for 2010. The number of papers presented at the conference was smaller, as well – about 1,090 versus 1,370 in 2009 – and attendance was down from 16,000 to somewhere beyond 10,000.

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“The food court was nearly as big as the displays,” complained one participant, asking not to be named, but echoing a comment heard repeatedly during this year’s show.

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April U.S. Retail Auto Sales Projected at Slightly Up

Economy remains stuck in park; jobless recovery continues.

by on Apr.22, 2010

April new-vehicle retail sales are expected to come in at 804,200 units, which represents a seasonally adjusted annualized rate (SAAR) of 9.8 million units, according to J.D. Power and Associates.

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U.S. Sales and SAAR Comparisons, April 2010

April 2010 March 2010 April 2009
New retail 804,200 units (+22% April 2009) 849,735 units 659,458 units
Total vehicle 1,008,800 units (+23% April 2009) 1,063,987 units 819,126 units
Retail SAAR 9.8 million units 9.6 million units 8.0 million units
Total SAAR 11.5 million units 11.7 million units 9.2 million units
J.D. Power and Associates. Figures for April 2010 are forecast based on the first 15 selling days of the month.

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When compared with an admittedly bad April 2009, retail sales are projected to increase by 22% in April 2010, and the selling rate is expected to increase by 1.8 million units.

Retail transactions are the most accurate measurement of true underlying consumer demand for new vehicles, according to Power, which gathers real-time transaction data from more than 8,900 retail franchises in the United States.

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U.S. Automobile Industry Makes $500 Billion Dollar Contribution to the Economy

Latest study shows more than eight million jobs created.

by on Apr.22, 2010

There are sound economic reasons why all industrialized nations, except the U.S., protect their auto industry.

The U.S. auto industry provides a substantial contribution to U.S. economic health, according to the latest study released this morning by the Sustainable Transportation and Communities group at the Center for Automotive Research (CAR).

The non-profit research organization looked at the economic and employment impact of automakers, parts suppliers, and dealerships in contributing to the economies of all 50 states.

The automotive industry spends $16 to $18 billion dollars a year on research and product development, half a trillion dollars on employee compensation, and is the major leader of the overall manufacturing contribution to the gross domestic product.

“It is difficult to imagine manufacturing surviving in this country without the automotive Sector, said Kim Hill, director of the Sustainable Transportation and Communities group at CAR, and the study’s lead.

“The industry’s impact is huge on a host of other sectors as diverse as raw materials, construction, machinery, legal, computers and semiconductors, financial, advertising, health care and education. In this time of national introspection concerning the value of the U.S.-based auto industry, it is clear the value is quite high,” Hill said.

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China to Maintain Number One Auto Market Spot

Five-year outlook predicts 55% growth, as U.S. languishes.

by on Apr.22, 2010

China claimed the global sales crown for 2009 and will likely retains it for years, if not forever.

Sales of passenger vehicles in China  are expected to increase from 8.7 million units in 2009 to 13.55 million units in 2015. This increase in sales of passenger cars, SUVs and minivans of more than 55% does not include the sale of millions of light commercial vehicles annually.

If the forecast by J.D. Power and Associates holds true, China will easily remain the world’s largest auto market during the decade to come.

Last year China surpassed the U.S. as the world’s largest auto market as a result of targeted government incentives and aggressive bank lending, which lasted all year, while U.S. politicians wrangled for six  months over what was a short lived but effect Cash for Clunkers program.

Worse, U.S. banks stopped lending to consumers, even as taxpayers poured billions of dollars into them. Most U.S. market forecasts see it languishing in the 12-13 million unit range for the next five years. (See Chinese Auto Market Grows to 40 Million Annually? )

Automakers have recorded substantial profits during  the past few years in China, whose industrial policy requires joint ventures and substantial investment  by western automakers. Moreover, the Communist party controls the hiring in joint venture plants, thereby ensuring the loyalty of workers.

It is the stated policy of the Chinese government to consolidate the auto sector around Chinese companies, while diminishing the role of western automakers’ once they have learned all they can from them.

Thus far the clearest evidence of the plan is state owned SAIC taking 51% controlling interest of Shanghai GM late last year by forcing a cash-starved GM to sell 1% if its 50% share. (See SAIC Takes Controlling Interest of GM Joint Venture)

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Cadillac Brings XTS Platinum Hybrid Concept to Beijing Motor Show

Caddy puts a green spin on its platinum sedan.

by on Apr.22, 2010

Platinum goes green? The 2010 Cadillac XTS Platinum Concept showing in Beijing uses a hybrid powertrain.

What was once an insignificant auto show on the edge of the automotive world is rapidly becoming a place where the industry’s leading players are pulling out all the stops.

So, no surprise to see General Motors’ high-line brand take what will soon become its flagship sedan to the 2010 Beijing Motor Show, here putting an even more exclusive patina on the new model in the form of the Cadillac XTS Platinum Hybrid Concept.

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The “base” XTS made its debut a little more than three months ago, at the Detroit Auto Show.  The rear-drive sedan is, for the moment, still described as just a concept vehicle, but it is, in reality, due to hit market in 2012 as the replacement for both the old STS and DTS models that had served as Cadillac’s biggest and most expensive sedans.

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Has Toyota Kicked Off New Incentives War?

Givebacks could position Japanese maker as #1 in market.

by on Apr.22, 2010

Toyota's big incentive campaign could make it #1 in the U.S. market for April - and touch off an industry-wide incentive war.

After suffering huge sales declines during the first two months of 2010, Toyota could be positioned to pull off a miraculous recovery for April, possibly even pushing past General Motors to become the nation’s top-selling automotive manufacturer for the month.

If that happens, the still-troubled Japanese maker will owe credit to some of the most lucrative incentives it has ever offered in the U.S. market, something the maker had sworn to avoid until its safety scandal sent sales tumbling.

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The question is whether Toyota’s new-found fascination with rebates and other givebacks will wind up touching off the sort of profit-killing incentive war that the industry had hoped to avoid as it emerged from the most devastating downturn since the Great Depression.

“Clearly, when a major competitor pulls out all the stops (we) can’t sit idly by and watch that happen,” warns Bob Lutz, General Motors’ soon-to-retire vice chairman.

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