"Thick and fast." That's the phrase that describes the opinions, pleas, advice, denunciations, and WTF? going on around the U.S. auto industry right now. Enter Congress, which is trying to figure out how to give Detroit automakers the $25 billion they were promised a few months ago. Congressmen are sounding off almost daily on what kinds of stipulations they want to attach to the loan/bailout/whatever you want to call it -- and that's just the ones who would vote for it at all.
Next up is Senator Bill Nelson, a Florida democrat, who wants U.S. automakers to achieve a fleet average of 50 mpg by 2020. Right now, the CAFE target is 35 mpg by 2020 -- a goal agreed upon only after a huge amount of jockeying in and out of Congress. Nelson asked, "Why should we be pouring taxpayer money into an automobile industry that has continued to resist higher miles per gallon, which has led us in part to the problems we're in?"
While that might sound like a great idea to some, it would cost a terrific sum of money to achieve. The Detroit Three need the money they're asking for just to get to Q2 of 2009, not to create a range of cars that would represent magnificent advances -- based on where we are right now -- in 11 years. There's a good chance nothing will be decided until the president-elect takes office, and by then, who knows what other requests Congress will have.
One door closes, another one opens. Just as Chrysler is working to extricate itself from its deal with Getrag, the Pentastar people are about to announce a deal with ZF Friedrichshafen AG. Chrysler is erecting a plant in Marysville, Michigan that will build axles and employ 900 workers, but word is that the deal will involve ZF signing a long-term commitment to operate the plant.
As far back as September, the UAW said that Chrysler and ZF were getting together. The Detroit Newsreported on the talks at the time, but they were described as a "non-binding discussion" and "a possibility." The Marysville factory, planned to open in 2010, would replace the Detroit Axle plant that currently employs 1,430 workers. Letting ZF run the Marysville location would allow Chrysler to put more focus on getting its survival in order. The announcement will be made at 9 AM EST tomorrow.
The roundabout that was the Chrysler, LLC-Getrag partnership recently came to an end with Chrysler pulling out the deal, citing untenable financing terms. Now Getrag Transmission Manufacturing, the U.S. company that was going to build the dual-clutch transmissions for Chrysler, has filed for Chapter 11. Getrag has done so in order to streamline its handling of claims and creditors.
Of course, it's not over: Getrag is suing Chrysler for pulling out, Chrysler is suing Getrag for not getting the $300 million financing that Getrag was supposed to bring to the table. Other than the lawsuits and bad blood, all that's left are the partial remains of the factory that was to build the transmissions, and Chrysler's need to find a source of dual-clutch transmissions. Just another monument to the turmoil the auto industry is currently mired in.
It may be time to stop holding your breath. The planned deal between Chrysler LLC and the Chery Automobile Company to bring a Chrysler-badged Chery to our shores seems to be completely over... no, really this time. While there was nothing inherently wrong with the concept of importing the small fuel-efficient cars to North America (even if there were near insurmountable obstacles to overcome in the area of safety and emission standards), both companies have been crushed by the economy. According to a former Chery executive, "I wouldn't place much hope on it... both companies have their own problems to deal with, and both have run out of money." As neither company ever offered a public timetable for the arrival of the cars after the initial announcement early last year, the news is unlikely to come as a surprise.
Today's lame-duck Congressional meeting is going to be an important one for Detroit automakers, with House Democrats working on a $25 billion bailout proposal. Passion is high on both sides of the bailout argument, and Democrats are looking to toughen up a bill to help gain crucial votes needed for passage. Among the items being discussed is a taxpayer stake in any assisted automaker, additional restructuring and stiff restrictions on executive pay.
House Republican Richard Shelby is one of many leaders likely to vote against the bill no matter what stipulations are added. The Alabama Republican called Detroit Automakers "dinosaurs" that need to start over. He also called for management to go, but he stated that he wouldn't support a bill even if they did. Michigan Democrat Senator Carl Levin suggested that if GM CEO Rick Wagoner had to step down to guarantee aid, he should consider it. GM is pleading for a bridge loan both in Washington and on YouTube, where the automaker released a four-minute video explaining the importance of its industry.
President-Elect Barak Obama also chimed in on the automaker bailout situation on 60 Minutes Sunday, stating that the loss of Detroit Automakers would be a disaster for the country. Obama also insisted that any loan can't be a "blank check," and that industry leaders, labor, suppliers, lenders, and stakeholders needed to agree on a long term solution that shows that loans aren't merely delaying the domestic industry's demise.
Now that the domestic industry is in dire need of cash, the American taxpayer is being bombarded with facts and figures purporting to show just how vital the industry is for the health of the overall economy. Hundreds of thousands of jobs at the automakers, millions more from suppliers and dealers -- the numbers seem to change each time, but they're always substantial. Problem is, it seems only GM and Ford ever get quoted, so Chrysler went ahead and whipped up its own little video. Hit the jump to view Chrysler's 2:42 docudrama filled with still more numbers touting the industry's importance. For example, active Ford, GM, and Chrysler employees make $22 billion per year in salaries, and the three companies pay $21 billion in retirement and health care costs. Chrysler also states that the amount of people whose wages depend on autos either directly or indirectly are equal to the population of South Carolina.
Executive bonuses are a hot-button issue in these difficult economic times, and for good reason. As companies in every industry teeter on the brink of bankruptcy, paying out millions in bonuses to execs is a breach of trust to those white- and blue-collar workers in the cheap seats who are being asked to sacrifice benefits, retirement security and even their jobs to keep a company solvent. The Detroit Free Press recently discovered that Chrysler LLC has an executive bonus plan in place that will cost the automaker about $30 million at the same time it's asking Congress for federal aid money to keep the lights on. Chrysler's executive vice president for human resources, Nancy Rae, who herself is on the receiving end of $1.6 million in bonus money, tells the Freep these bonuses were designed to keep executives in place after the automaker was sold by Daimler to private equity firm Cerberus. She goes on to say the bonus plan was established by Daimler, not Chrysler, to ease a potential buyer's fear that execs would flee after the sale.
Be that as it may, considering how far Chrysler is from profitability at the moment, perhaps retaining these executives is the last thing it needs. Cutting loose the suits who are partially responsible for this mess and saving millions in the process seems like a more responsible move to us than begging Uncle Sam for bailout money.
When Congress wants to hand out money, it apparently wants to include everybody. Barney Frank, Chairman of the House Financial Services Committee, is likely to propose a measure that lets automakers tap into the $700 billion vein of rescue dollars that's ostensibly intended for financial institutions, yet is being hungrily eyed by everyone.
CEOs from Ford, General Motors, and Chrysler will make the trek to Washington, DC, as will UAW chief Ron Gettelfinger. All will be pleading their collective case for an estimated $100 billion-plus vitamin pill. Many, not the least of whom is Treasury Secretary Henry Paulson, think that automakers should not be allowed to snag some of the cash that's intended for financial institutions. Things look bleak for all three of the brands, but can Congress be moved to offer up some money and prolong the jobs of so many Americans? Even if the automakers get the $100 billion they're seeking, when nobody's buying, it will merely turn into taxpayers funding an increasing glut of product nobody can afford to buy. Even those consumers with money and good credit are holding back as the economy delves into recession, emotional purchases are way down, and most vehicle purchases are driven by wants versus needs. Things will undoubtedly sort themselves out, but not before more pain for Detroit.
In 2001, General Motors needed a revival and Bob Lutz was anointed The One. It was widely accepted that if anyone could breathe life into a struggling car company, it was him.
Fast-forward seven years, and GM is in the midst of a possible government bailout while its stock price sinks faster than a HUMMER's gas gauge on the freeway. It would seem that Maximum Bob's legendary straight-talking reputation for taking no prisoners and slicing through corporate red tape hasn't produced the results his supporters expected.
So if Bob Lutz can't save Detroit, who can? Steve Jobs, that's who. At least that's what Pulitzer Prize-winning Thomas Friedman says in his New York Times column. While some might be averse to the company, its products and/or its leader, Apple has made a ton of money while re-defining the computer, music and mobile phone industries. Isn't innovation what Detroit needs most?
What Friedman proposes is asking Steve Jobs to perform a "national service" for his country by taking reigns of one of Detroit's automakers for a year. The columnist has so much faith in the visionary talents of Jobs, he believes we'll all be lined up for a chance to buy a shiny new Chevrolet iCar. Or a JeepPro. Or a Mercury Lisa.
But we've heard in the past that Apple's CEO has been working for the other teams, so maybe Steve Wozniak could find some time in his schedule.
"Truth-enhanced" car dealer advertising is nothing new. After all, how many times have you seen a newspaper ad for a special on, say, a base model, when the accompanying image shows a fully-optioned, range-topping version of the car instead? It's your job to read the fine print and stay informed so that you're not disappointed by the crank-window special the salesman presents when you get there.
To that end, we'd like to offer a helping hand to potential customers of Lynnfield, MA's Kelly Jeep. If you visit their website and click on "New Vehicle Specials" (under New Vehicles), you'll find a listing for an '08 Chrysler Town & Country. Okay, fine -- but the image that's paired with the listing is the one above. It's the Photoshop love child of the Euro-spec 300C Touring and a Town & Country. In fact, it doesn't look half bad with the 300's front end, big wheels, and flared fenders. One might even be tempted to ask, "Damn, that thing got a Hemi?" Whatever the case, it's more appealing than the blandtacular actual Chrysler Town & Country, which is what the nice man at the dealership will be happy to show you. We understand that the car in the photo above is hidden away in a barn where the owner also keeps a stable of unicorns. Thanks to Koko for the tip (and the laugh).
Gallery: Dealer ad with photochopped 300C/Town & Country Mashup
"Thick and fast." That's the phrase that describes the opinions, pleas, advice, denunciations, and WTF? going on around the U.S. auto industry right now. Enter Congress, which is trying to figure out how to give Detroit automakers the $25 billion they were promised a few months ago. Congressmen are sounding off almost daily on what kinds of stipulations they want to attach to the loan/bailout/whatever you want to call it -- and that's just the ones who would vote for it at all. 
In 2001, General Motors needed a revival and 
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