Episode 441 – Ford Posts Q2 Profit, GM To File IPO In August, Autonomous Electric Vehicle
July 23rd, 2010 at 12:00pm
Runtime 7:32
Ford posted a higher than expected net income of $2.6 billion in the second quarter of the year. Sources say General Motors will file an initial public offering next month after it releases its second-quarter earnings. Earlier this month Italian engineers launched two autonomous electric vehicles that will travel from Rome to Shanghai. All that and more, plus a preview of this week’s Autoline Detroit about the state of the automotive industry.
»Subscribe to Podcast | 
| 
| 
| Listen on Phone 
Transcript and Story Links after the jump . . .
This is Autoline Daily for Friday, the 23rd of July, 2010. I’m Murray Feldman, Fox 2 News, Detroit, taking another turn in the Autoline Daily anchor chair for John McElroy who will be back next week. Here are today’s top stories.
FORD POSTS Q2 PROFIT
There are some glimmers of hope that the economy is recovering. Yesterday we reported that Chrysler will announce a second-quarter profit sometime next month, and today it’s Ford’s turn. The blue oval posted a higher-than-expected net income of $2.6 billion for Q2. Its pre-tax operating profit totaled $2.9 billion, or 68 cents per share, which blew-by analysts’ estimates of 40 cents. Adding to the bottom line, each of the company’s business units posted a profit for the quarter. Its North American operations made $1.9 billion while Ford Credit brought-in nearly $890 million. The company expects the second-half of the year to be less profitable than the first, but it estimates 2011 will be better than 2010. Behind the numbers–people! People talking. It’s the power or perception. When I talk with people all over the country about autos–the guy on the street knows Ford..as the company that did not go bankrupt. That kind of talk goes along way..today it’s worth more than 2 billion bucks.
MORE EXPLORER NEWS
In a related story, Ford continues to taunt us with photos of its redesigned Explorer. The company released yet another teaser shot of the 2011 model on Facebook, this time giving us a peek of the grille. The new Explorer will be built in Ford’s Chicago Assembly Plant alongside the Taurus and the Lincoln MKS. The company estimates that production will create around 1200 jobs at the factory and another 600 jobs at parts suppliers around the country. The 2011 Explorer will be exported to more than 90 countries when it goes on sale this winter.
GM TO FILE IPO IN AUGUST
There’s been a lot of speculation as to when GM will go public again, and according to Reuters, it will happen next month. Sources with knowledge say the company will file its IPO the week of August 16th which will be right after the company releases its second-quarter results which are expected to show it generated cash for a second-consecutive quarter.
LEASING INDUSTRY LOSES BILLIONS
A new report says the auto leasing industry in the U.S. has been hit hard over the last several years. According to Reuters, a study done by CNW Research says the leasing industry has lost over $10 billion dollars since 2005 because they overestimated the resale values of vehicles that were leased.
NEW KIA SPORTAGE
The already crowded crossover segment just lost a little more elbow room this week as Kia took the wraps off its all-new sub-compact CUV, the Sportage. With the Kias all poised to go exploring the streets of San Francisco and beyond, journalists got a deep dive on not only this latest new product, but also the continuing evolution of Kia here in North America. But the best way to sell a car is to get it out there and put it through its paces so that’s just where the Sportage went … driving around Chinatown … climbing up to the Russian Hill area … and even taking a break at a luxury hotel to brag about its latest package of features and technology.
COUPLE ACCUSED OF STEALING GM SECRETS
Less than one year after a Ford engineer was accused of stealing trade secrets and selling them to Chinese companies, GM may be the victim of similar industrial espionage. According to The Detroit News, a Chinese engineer and her husband were charged in federal court with conspiring to steal more than $40 million worth of hybrid technology secrets. Allegedly they intended to sell them to Chery Automobile, but none of the documents and papers ever made it to the Automaker.
AUTONOMOUS ELECTRIC VEHICLES
Earlier this month Italian engineers from Vislab, a spin-off company from the University of Parma, launched two autonomous electric vehicles that will travel from Rome to Shanghai. The trip will take three months and cover over 8,000 miles, that’s 13,000 kilometers. A solar panel on the roof powers the autonomous driving system, which includes things like cameras, computers, and laser scanners. The first vehicle will have limited human intervention to define the route and make any other adjustments. The second vehicle follows the first and requires no human intervention. The vehicles can travel around 100 kilometers, that’s a little over 60 miles at about 40 miles an hour on a single charge. If you want to learn more…. or follow the team’s progress just click the link in today’s transcript.
After the break, a preview of this week’s episode of Autoline Detroit. We’ll be back in just a few seconds.
Joining John McElroy in-studio this week to discuss the state of the automotive industry is a panel of experts including Rebecca Lindland from IHS Global Insight, Erich Merkel from Autoconomy and John Wolkonowicz, also from IHS Global Insight. Together they talk about some of the big trends affecting the business. In the following preview they get into some of the forces at work in the used-vehicle market and why premium small cars may prove to be a dud in North America.
As always you can watch that entire episode of Autoline Detroit on our website AutolineDetroit.tv.
And that wraps things up for this week. I’m Murray Feldman from Fox 2 News, Detroit, signing off. Take care, have a great weekend … and as his company expense account runs dry, I imagine John will be back … maybe Tuesday.
Thanks to our Partners for embedding Autoline Daily on their websites: Autoblog, The Auto Channel, Car Chat, WardsAuto.com and WWJ Newsradio 950
Share
Embed
Permalink
Comments (24)
July 23rd, 2010 at 1:41 pm
It is just me, or does anyone out there really care about what the new Explorer is gonna look like, perhaps its all the bad news that we get daily and with all the problems facing this world, teaser shots from upcoming cars? just show the whole damn thing or don’t show anything. (like Honda does)
July 23rd, 2010 at 2:09 pm
Official launch for Explorer is Monday; teasers have always been the norm (of late). What Ford needs is a new Explorer that doesn’t scream SUV (because, unfortunately, that has almost become a dirty word) even though, we Americans, surely still want fairly large vehicles.
July 23rd, 2010 at 2:18 pm
I care what it looks like, but I agree these teasers are annoying. I guess it is a new marketing trend seeing how many manufacturers are doing that now.
July 23rd, 2010 at 2:53 pm
The fact that people are talking about the teasers is proof that the marketing is workint. I promise you that when the entire thing is shown more people will pay attention as apposted to if the showned it a mouth ago with no build up. You guys say it is annoying but you are going to pay attention when it is shown aren’t you.
Point proven
July 23rd, 2010 at 5:11 pm
KIA Sportage rides on Elantra Platform believe it or not.
Its going to be a nice product for this company. Now if only they added direct injection on the 2.4. I still think they are scared of cannibalizing Sonata/Optima sales.
I say let the market decide, and stop forcing sedans on us. Tuscon Sportage could have became the new Camry/LS. Sedans are a late 1950s piss poor space utilization exercise. Sedans were concieved in a world of unlimited prosperity, where it was ok to waste, and there was no such thing as political correctness.
Sedans are a rellic of a bygone era that Americans still stubbornly continue to hold on to. CAR GOD, please make gas $5 a gallon so buyers can get into Subcompact and Compact cars, and demand them all to be hatchbacks? Please make gas $5 a gallon so we can finally kill this era of Midsized Sedans, and provide 35 MPG+ CUV Alternatives.
Sedans should only be Sports Sedans, and Boutique Cars.
If GM Killed that God Awful Next Gen Malibu (Cough, Cough,… Camry), just think of that extra R&D that could be used to get Equinox/Terrain/Enclave to 37 MPG?
The car companies can get a Small SUV to 35 MPG+, but they dont want to rock the boat on their precious Midsized YAWN Factories.
This thing is cheaper than a Top Spec Elantra Touring by the way. That next gen Elantra Touring will be sweet VERY rakish on the inside and out, and more appropriate for this market. In Europe they will give it the Emasculating title of MPV (MPV-A title worthy of a good Vomit), while in America it will be treated like a big Hatchback, NOT WAGON.
If you think the Sedan looks hot, that Elantra Hatch will look a lot better.
July 23rd, 2010 at 6:17 pm
So that electric van get 60 miles to a charge and is going 8000 miles. well that’s 134 charges to get there. I hope it is a fast charge .
Hey Smoke,
Better layoff the pipe again. $5 gas are you F***ing serious? $4.50 just about broke the country and were still trying to recover from it. Maybe you have more money than you know what to do with ,but I don’t. and I’ll have less to buy a car that gets better than the 30 MPG I get with both my Escorts. You will never force people to buy small if they don’t want small. I personally don’t want a SUV/CUV or any other UV ,because I don’t need one. Those that like them great but to say let’s kill the mid size sedan no matter how boring they are is rediculous.They aren’t forcing sedans on anyone. You either buy it or not. Personally I like 2 door coupes and nearly every car I have ever owned has been one . Yes there are not many choices ,but you just pick the best available.
July 24th, 2010 at 5:50 am
XA351GT,
$5.00 is actually a more moderate desire. There are some Americans who wish this was Europe with $8.00 a gallon gas. $8.00 a gallon is pretty much the world standard.
You know the rest of the world treats B cars like we treat D cars.
There are many people of course who think Gas Prices are either fine, or they need to drop as well. The more Moderate Opinion is that Gas should be $5 a gallon. That at least will be enough to get Americans to treat C Cars like D Cars, get larger B/C cars (Fiesta, Aveo/Verano, Accent/Rio) treated like C/D Cars, and get C Car drivers into B or B/C cars. That would also spur on the upmarketing of those B, B/C, C, C/D cars even faster as more people will demand Premium Small Cars.
The Larger D, D/E, E Granny Sedans would fall by the wayside, and most of them will evolve to become trendy Modern products(Boutique Cars-Regal/CLS/Sonata/VW CC/Mondeo), Sport Sedans (C-Class, or Solid Grocery Getters that gets everything right (Camry/Aurion/IS/Old School Toyota (Chevy) Malibu, Fusion/MKZ, Superb, Altima, Accord, Optima). Those cars would become even more important than they are now.
Then Cars like La Crosse, 300C, Azera, Genesis, Equus would have to have M Division like power to even be relevant. If Hyundai, Buick, Chrysler fail on this their plans will fail. If they Succeed Hyundai, Buick, and Chyrsler could become the new Cadillac, Lexus, and Audi-over the long term. They have to come out with sweet small and large cars though.
They (Hyundai, Buick, Chyrsler) need sweet small cars to get new customers roped in, and old customers satisified with their gas sipper. They need Big cars that can get new customers to aspire to the future, and old customers who paid their dues satisfied.
People will want to spend less on premium too as $5.00 a gallon gas will spur Inflation. You will look ridiculous driving a Benz or BMW in the future. You will look like youre sooooo flaunting Money. Not because of how the cars will look, but because of the brand name. That will force Benz and BMW to move up the Rolls Royce, and Maybach Status.
Cadillac will Supplant Benz, Buick will supplant Lexus, Lexus will be the New Buick, Hyundai will be the new Audi, Audi will be the New BMW, and Chrysler if they fix themselves could replace Cadillac.
In 5 years Its going to be riduculous to drive a $70K sport (Merc/BMW) sedan when your workers make only $14 an hour. That’s unless you’re a Big Mogul sporting like you have a Rolls in 1956. Smart Companies like Hyundai, VWAG, and even GM see this. There’s nothing Merc and BMW can do about it either. They want that mass market so bad, but the badge says heritage and needs to be moved upmarket to the Rolls/Bentley class of car now. Merc and BMW will be forced to move upmarket. A C Class should be $50K to start for example. I find it laughable that a prestigious Brand like Merc has a C-Class so weak a that Sonata Turbo can easily nuke ALL NON AMG Variants. Hyundai Uncensored Quote in Sonata, “I feel so lame for Spending all of that money on a Mercedes.”
Its only the beginning too Hyundai WILL take down A/B-Class too.
Merc has earned that prestige-its time to exercise it. Stop cheapening your image Merc and BMW, and start selling Rolls Royces and Bentleys.
Mercs and BMWs should only be for the real high rollers.
Cars like Taurus, Cadzenza, Impala would have to be those monster working class sedans similar to the Monaro.
Compact and Subcompact CUVs will become the new Big Boys. Big Boys will be just commerical products, or used.
That’s at $5.00 a gallon.
July 25th, 2010 at 6:39 am
Just read an article online on the disappearing middle class in America where basically states that the rich are getting richer and the poor, poorer and then you wonder why new car sales are so bad, just passed by a couple of local rental car lots this Sat: EMPTY, everything had been rented out, as I’ve said before the old buy a car, take a vacation, is just about gone, people still want to go away, so they rent a new, reliable car.
July 25th, 2010 at 11:14 am
I’ll be willing to place a huge wager that those that want $5-8 @ gallon gas aren’t ordinary working folks. Probably rich enough or own a business to right it off on their taxes. Think back ,the economy began to tank when gas got to $4 a gal. Alot people did dump there big vehicles that they really didn’t need ,but wanted. Face it most families today don’t need a 8 passenger SUV ,but like it for the size and room it offers .Europe gets by because they have small streets in cities that were built 700 years ago and not designed with cars in mind. They also have a better grasp on public transportation and support it ,because they can’t afford to own a vehicle that needs $8 gas. Where I live there is no mass transit. those kind of prices would hurt me and many otheres worse than anyone would know. in fact I’d be willing to say many people would have to debate whether or not they could afford to go to work. It’s easy to say well they need to buy a more gas friendly car ,but many can’t afford it . So you just keep brying them under. The rich get richer and the poor get screwed.
July 25th, 2010 at 1:04 pm
Those who want $5-8 gas, please raise your hands, are you kidding? I just heard on Autoline Detroit that Mass. voters were outraged at a higher gas tax proposal, but were ok with an increase in sales tax. I also agree with the guest who said most young buyers would rather buy a 3 yr old Bimmer than a new Fiesta for the same price. That’s the big obstacle that automakers have selling these small cars, for the same money you can get a 2 or 3 yr old better, more substantial car.
July 25th, 2010 at 1:11 pm
Maybe city folks that can make a tank of gas last a month won’t see a big deal in 5/8$ per gallon,but us country folk can’t afford to do that.And I’m not talking about living in the country and commuting to the city to work either.Those of us that live out in the country also work there,but do drive to the city for shopping.We could very easily stop doing that and buy everything except groceries off the internet.It’s cheaper to pay S/H then to fill up.
July 25th, 2010 at 1:36 pm
The problem with raising gas prices is that EVERYTHING goes up, cause every single item you buy at a store gets there by using gas, then shipping fees will also rise and those in rural areas are the hardest hit financially so, while city folk might be able to walk to a store, or take a bus, the people living out there don’t have that choice.
July 25th, 2010 at 1:39 pm
I see higher gas prices benefiting mass retailers like Wal-Mart with their all-in-one mega stores where you can buy anything, including services for your car, in one trip.
July 25th, 2010 at 6:24 pm
I don’t know why the number $5-8 is getting much talk. It only took 4 dollar gas to change behavior, hurt plenty of people, and twist the economy. I remember Boone Pickens saying the real killer would be when it cost $100 to fill a tank.
One reason I bought a Civic in 2001 was anticipation of driving the car at least ten years, when I thought we’d be living in a different fuel cost environment. But then, working at times for oil cos(seismic survey) gives you anger at how cheap gas is.
July 25th, 2010 at 6:37 pm
Many people do not want $5 a gallon gas I understand. Let’s be realistic, it’s going to happen.
I got my license in 1999, and my first fill up in New Jersey (Anti gas Tax state) gas was $.76.
1. After 9/11 Gas went from $.76-$1.25 in many parts of the US ALL THE WAY UP TO $1.75/$2.00. THIS WAS JUST 9 YEARS AGO GUYS!!! Then gas settled down to $1.50.
2. During the Iraq War gas went from $1.50/$1.75 to $2.50/$3.00, then back down to $1.75 for 2 SECONDS.
3. Due to China’s/India’s Growth Gas Slowly Creped up to $4.50 a Gallon from $2.50 a gallon.
4. The Economy is poop and Gas is still $2.75. As the World’s Economy starts to warm up Gas will go back up to the World Demand Price=$4.50/$5.25. ITS JUST THAT SIMPLE!!!
July 25th, 2010 at 7:15 pm
Smoke ,
That very well be the case it still doesn’t change the fact most of us can’t afford it. Your right the economy is still hurting at 2.75 ,can you begin to imagine how bad it’ll be if it reaches 4.50 again. we already have 9% unemployment that number will only go up as people stop buying things that they really don’t need. Those businesses that lose business will layoff more people and the cycle just continues to spiral out of control. I worked for a trucking company unloading trucks and watched business slow to a trickle as fuel pices rose. Business is just now getting back but still no where near where it was.
July 25th, 2010 at 11:22 pm
XA351GT,
Exactly most people cant afoord it, but you know market forces. They dont care at the slightest that people cant afford such things.
Take myself for example. My Accent is a $4 a Gallon gas car. At $4 a gallon with the Accent’s fuel economy that’s my limit. Knowing this will change in the Future, I will have to upgrade my Accent. There will be a Hybrid for the Next Gen, and Im going to get one.
Such Prices will create another economic crisis, and its Gas my firend that will be the next Bubble holding this Global Economy Hostage.
Then the Government Will have the leverage to:
1. Hike gas Taxes to discourage high consumption and force drivers to change their habits-including buying a more efficient product.
2. Hike Taxes on Anything larger than a KIA Sportage, or a Ford Fusion to discourage large product buying habits.
3. Make Car companies charge the same for Hybrids as conventional ICEs, like they did with Diet and Regular Products, and like they are in the process of doing in the Food Industry with Organics and Non-Organics.
Dont you guys see its all about control? Its not just Dem-I-cants and Repooplicans, its all forces working together. For one objective-Control.
Yeah they hire psychologists, etc.. to help create a marketing strategy that makes people “Need” a larger product for their “Baby”. They get you to buy all of these larger products, and then the real rulers of America and the World hit that Gas price hike swtich.
All of you fools who bought a bigger product than a Fusion are Screwed if gas hits $5 a gallon. You are royally Screwed, unless youre very well to do. With Transporation Cost hikes, you guys will not be able to afford not to replace that big product with something smaller.
Im not about control, but I am about the Social engineering that is involved here. Yeah, Social engineering.
Its going to be about where you live too. Oh, yes it will, about 10 years out people will start pouring into the Cities and small towns like gangbusters.
Do you think with $5+ a gallon the American Suburban lifestyle will continue? Americans will move back to the Cities and those Dying Small towns in droves. Its already happening, do a search on kids of Baby Boomers moving back to cities and small towns.
Suburbs will actually become Slums and Ghettoes like in Europe and mostly everywhere else, while Cities and small towns are the nice places to live.
Some ways this will be good, as neighborhoods will become more segregated by class as opposed to other factors like race.
$5+ a gallon gas will force a large migration, even larger than the Sunbelt Migration. Las Vegas is an Archetype of this, as it is the Largest city in America that is only segergated by class.
This will force people to leave Sparsely populated Sunbelt Cities, with wide long expansive Boulevards where you have to drive 5 miles just to get a Snickers at 3AM. This will force all night transit, this will force all night commerce to cut down in daily congestion at peak hours.
Yeah, America will have to become a 24/7 country as our population grows. Its like that in LA and NYC, and its starting to move that way in many other cities. Look at the proliferation of 24 hour stores in places such as Detroit, Dallas, Chicago, etc… Hell, it will be like that in Cow Butt, Arkansas too. Walmart is already spreadng the trend rural. Nearly 1 Billion by 2075 here, think about that. 15 years 435 Million, 35 years 650 Millon, counting all the way up to nearly 1 Billion by 2075.
Were going to have to radically change the way things are done here. It will be for bad at first, then it will be for good.
July 25th, 2010 at 11:34 pm
People talk about population control, but trust me we will need a ton more people. At least enough people to build a 250 Million man+ army. The rest of the world wants to get rich, and if its at America’s expense the they see it as tough. I cant blame them at all. We did the same too.
We turned this place from a Hillbilly 3rd World Hellhole, where docs didnt wash their hands and bled people with leaches into the most powerful superpower ever in a timeframe of 40 years with Jets, Nukes, etc…. on the other side.
China acts as if it wants to do it in 20 years. India in 30.
We did it by War, they will copy off their American Role Models in the same way too.
Like I said we will need every head we can get.
July 26th, 2010 at 4:59 am
“# pedro fernandez Says:
July 23rd, 2010 at 1:41 pm
It is just me, or does anyone out there really care about what the new Explorer is gonna look like, ”
No, it’s not just you, on this matter I agree 100%. I never gave a raqt’s ass about the obese breadvan on stilts, and I will sure not give a damn about its castrated crossover wimpy reincarnation.
People with any smarts will go buy a wagon or a small minivan instead.
I predict the new Explo will be a gigantic flop, and Ford KNOWS IT, bECAUSE they have planned for a production of a small fraction, a tiny fraction of the 400,000++ pieces the old Explorer used to sell in 2000-2001.
“perhaps its all the bad news that we get daily and with all the problems facing this world, teaser shots from upcoming cars? just show the whole damn thing or don’t show anything. (like Honda does)”
Absolutely. Oh, and Ford, in any case, what may work for Ferrari and Lambo exotics will not work with your fatass crossovers!!!!
July 26th, 2010 at 5:02 am
“pedro fernandez Says:
July 25th, 2010 at 1:36 pm
The problem with raising gas prices is that EVERYTHING goes up, cause every single item you buy at a store gets there by using gas”
Correction: replace “gas” with “DIESEL”. NONE of the items you buy are transoorted in gas vehicles, all 18 wheelers (and of course all trains and ships) run on diesel.
July 26th, 2010 at 5:11 am
“XA351GT Says:
July 25th, 2010 at 7:15 pm
Smoke ,
That very well be the case it still doesn’t change the fact most of us can’t afford it.”
Like with large homes, if you really can’t afford it, don’t buy it, and if you do, DOWNSIZE. Our oil IMPORTS are half our enourmous trade deficit! Did you know that? I bet you all believed our trade deficit is due to “widgets” from China, Japan and Korea and luxury items from Europe. NOT so.
” Your right the economy is still hurting at 2.75 ,can you begin to imagine how bad it’ll be if it reaches 4.50 again.”
You can have 4.50 IF you make commuting miles (up to a certain limit, not 200 miles a day!) TAX DEDUCTIBLE. TYhen you mostly tax DISCRETIONARY Driving.
The OPPOSITE will be a huge disaster. If the govenrment subsidizes fuel to bring it down to $1 today (equivalent to $0.25 when I got my licence in 79), its consequences will be truly HORRIBLE.
1. Out of control budget deficits asnd national debt.
2. People will DRIVE MORE MILES if gas is dirt cheap, and will move further away from their work, urban sprawl and all that hell.
3. People will go back to the godawful 10 MPG SUVS and further increase the AMOUNT of oil imported.
Here is an idea if you play the “rich vs poor” or the “urban vs rural” game. Make PREMIUM and plus gas far more expensive, and keep regular unleaded at $3. That will sure hit the wealthy owners of top luxury cars pay far more than those that own Ford Fiestas.
July 26th, 2010 at 5:19 am
“# HtG Says:
July 25th, 2010 at 6:24 pm
I don’t know why the number $5-8 is getting much talk. It only took 4 dollar gas to change behavior, hurt plenty of people, and twist the economy.”
Before 2007, everybody and his mother in law was saying that even $3 would do the trick, but it did not happen. Only when it crossed the $4 did it improve buyer behavior, but it did so in a BIG way. May 2008 sales were EXCELLENT. Instead of frauds buying F-150s they never needed, just to POSE as urban cowgirls, the no 1 best seller was the CIVIC with 53,000 units, DOUBLE its current healthy levels. And the nos 2-4 were the Corolla, the Camry and the Accord!!! The F 150 was 5th and the Silverado who cares!”
” I remember Boone Pickens saying the real killer would be when it cost $100 to fill a tank.”
No, because it may happen when $100 is not worth even $10 in 1979 $ when I first put gas at $1.30 (in today’s $, probably over $5!)
“One reason I bought a Civic in 2001 was anticipation of driving the car at least ten years, when I thought we’d be living in a different fuel cost environment. ”
(Good move. BTW, many 3 series BMWs of that year had excellentg MPG, 30s highway. )
“But then, working at times for oil cos(seismic survey) gives you anger at how cheap gas is.”
It is obviously competitively priced, if not, we’d all be driving stupid Leafs witrh 100 advertised and 50 ACTUAL miles range.
July 26th, 2010 at 11:23 am
Nick, I believe I will always think gas is cheap, at least compared to how it is brought to market and its social costs; viz Nigeria; viz our military responsibilities. We pay for petroleum more ways than at the pump.
July 26th, 2010 at 2:41 pm
Nick, Agreed. I cant argue with that at the slightest. If I rememeber such a thing was suggested during the 2008 Gas Price Hike, and of course you vant do such a thing in America because- “It’s Socialism.”