Episode 14 – GM can’t get Cash, Toyota Talks About an 80 MPG Prius, Honda’s Diesel Fails

October 31st, 2008 at 12:00pm

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GM can’t get government money to merge with Chrysler because it would cause massive job losses. Toyota is talking about an 80 mile per gallon Prius. Honda cancels the Acura TSX diesel because it can’t meet U.S. emission standards. All that and more, plus a look at what would happen if one of Detroit’s automakers collapsed and went out of business.

Transcript and Story Links after the jump . . .

Seeing that today is Halloween, we decided on a new way to present the headlines. GM can’t get government money to merge with Chrysler. Toyota is talking about an 80 mile per gallon Prius. And Honda can’t make its diesel meet emission standards.

Up next, we’ll be back with the news behind the headlines.

This is Autoline Daily for Friday, October 31, 2008. And now, the news.

Here’s the latest on GM trying to get money from the U.S. Treasury so it can merge with Chrysler. The government says “No way.” The Detroit Free Press reports the feds are not going to give money to GM to help Cerberus get rid of Chrysler and wipe out tens of thousands of jobs. So what’s the next move? My guess is the government is going to have to bail GM and Chrysler out individually.

Autoblog reports that the next-generation Toyota Prius could get up to 80 miles-per-gallon. There are also rumblings that the company is working on a smaller, “baby Prius” that would less expensive than the current model. This is probably in response to the upcoming Chevy Volt and Honda Insight. It’s also rumored that the company may create a separate Prius brand.

Is Wal-Mart getting into the used car retailing business? A company called Intelligent Service Group is opening retail outlets within Wal-Mart stores to sell used cars. Called LIVE X, they’re designed to look like the New York Stock Exchange, the Set of ESPN SportsCenter, and Apple Stores. There will not be any cars at Wal-Mart, all buying and selling will be done interactively on a big electronic board, like the NYSE. The system is being piloted in two Wal-Mart Super Centers in Arizona.

Speaking of buying cars, women and minorities pay higher prices than white males. A study by the University of California, San Diego and Autobrag.com sent out 87 pairs of college kids to 35 car dealers in Southern California. They found that women and especially minorities are quoted higher prices. And white salesmen would quote higher prices than minority sales people.

Toyota announced it will begin exporting the American-built Sequoia and Tundra to Latin America and the Middle East. Exports begin this December, and marks the first time either vehicle has been exported from the United States. Toyota is trying to find ways to use the excess manufacturing capacity it has ever since sales of these vehicles dropped drastically in the American market.

In another blow to diesel engines, Honda has canceled the diesel-powered Acura TSX it was planning on bringing to the U.S. (subscription required).  Ward’s reports that the diesel couldn’t meet the strict U.S. emissions standards when equipped with an automatic transmission. Though there’s still a chance the company might bring the car to North America, it’s not likely to happen until after 2010. The diesel TSX is sold in Europe which has lower emission standards.

Up next, I’ll talk with two analysts about what would happen if one of Detroit’s automakers went out of business.

What would happen if one of Detroit’s automakers collapsed and went out of business? That’s one of the topics on Autoline Detroit this weekend, where I’m joined by two top notch automotive analysts: Rebecca Lindland from IHS Global Insight and Paul Haelterman from CSM Worldwide. In the following short preview we discuss the ripple effect that would occur if one of the OEMs goes out of business.

You can see this entire provocative discussion on the Autoline Detroit channel right now.

And that’s it for today’s top news in the global automotive industry, but don’t forget you can get podcasts, transcripts and a whole lot more on our website, AutolineDaily.TV. Thanks for watching, we’ll see you tomorrow.

12 Comments to “Episode 14 – GM can’t get Cash, Toyota Talks About an 80 MPG Prius, Honda’s Diesel Fails”

  1. norman sudduth Says:

    what would happen if a company made a product no one wanted? this is the real issue with the big 3. they may be “big”, but they are left overs. they have not responded with quality and service. is the govt to keep alive Lucus electronics and Jenson Healy automobiles like Britain did in the 60s. they ultimately failed because they were inferior products. the auto encyclopedias are filled with failed automobile manufacturers who couldnt keep up. rewarding GM will not improve their cars. are you going to pay $40,000 for a GM Volt electric car. Are you going to subsidize this questionable product at taxpayers expense.
    wait, i have a better idea. lets just put all the employees of GM, OEM and the “diner across the street” on welfare and let them look for another job. surely among some of them is an intelligent person that can start a new corp and build a decient car someone would willingly buy without govt subsidy.

  2. PEDRO Says:

    Hey John: I’m glad someone still has a sense of humor amidst all the bad news, maybe for Christmas you should be Santa and bring Chrysler to GM.In a serious note Toyota seems to make good decisions like building a mini Prius and perhaps selling a whole line of Prius – like vehicles, minivans, coupes, ect. As far as the Walmart plan, I dont see people buying a car that they can’t touch and feel and drive, this ain’t gonna work folks.

  3. jerry flint Says:

    what would encourage toyota and honda and others to build assembly plants in michigan? seriously, tax credits? subsides? guaranteed non-union status? should the state ask?

  4. John McElroy Says:

    To Jerry Flint,

    Two to three years ago Toyota put out feelers about building an engine plant in Michigan. It asked if it could avoid being organized by the UAW. The word came back, “No way.” So it sent out feelers about getting a Toyota-UAW contract, not a Big 3-UAW contract. Again, the word back was “No way, it’s a Big 3 type contract or nothing.” And so Toyota decided there was no need to go to Michigan since 49 other states would give them almost anything it wanted.

  5. Tom Cain Says:

    Norman Sudduth, are you a Toyota dealer? Why do you spew this hatred toward American car companies? Who says they make a product no one wants? Who says they have not responded with quality & service? My 1995 Chevy K1500 has 255,000 miles and is running strong. I find it MUCH easier to get service on my Chevy than my MINI Cooper! My next vehicle WILL come from GM!

  6. Salvador G. Says:

    Good halloween to you too John…

    Now the trick will be what the CEO’s of this two companies (GM/Chr.) intend to do once they get their bailout money to justified a merger and the tread will be what???

  7. Michael Y Says:

    I’d never approve multi-million dollar compensation for the execs and 6-digit salaries for the middle management of both GM and Cerberus (Chrysler) if our money are to be used to bail them out!

  8. Michael Y Says:

    I’d have hard time understanding why my money has to be used to support multi-million dollar compensation and 6-digit salaries at both GM and Cerberus. Their salaries should not exceed Hyundai’s.

  9. William R. Walling Says:

    “Considering anyone could purchase TWO (2) Toyota ‘Prius’ (starting at $22,000) or Honda ‘Insight’ (reported 2009 entry at $20,000) vehicles for the equivalent cost GM announced estimate of $45,000 for EACH ‘Volt’.”
    Appears serious ‘disinformation’ is being tauted in DETROIT regarding hybrid wares.
    Ever considered why BOTH Presidential candidates have announced ‘generous’ $7,000 buyer incentives for America’s next round of hybrid vehicles.
    There is ‘fact’ from Toyota (soon Honda) on the roadways of America while ‘bluff’ announced by our historic ‘Big 3′ (Chrysler, Ford, GM).
    This ain’t over …

  10. shan Says:

    I work at the Toyota plant in Georgetown and in it’s 20 years, it has never had a layoff. Unions and poor management decisions have all but destroyed the Big Three. There droves of 40k large GM, Ford and Chrysler suv/trucks sitting on most of the dealer lots here in Lexington. I am totally baffled by GM has kept their CEO Rick Wagoner employed while he has managed to sink this company. The problem with the Big Three runs much deeper than horrid management and it boils down to the way their employees are trained and their work ethic. At Toyota we are constantly looking for ways to improve our process and ALWAYS communicating from bottom up to to the top to ensure we become more efficient and improve quality.

  11. sam zuech Says:

    Loved the headless horseman look; do you think it would be possible to do that to all the chief honchos at cerberus?

  12. john allanson Says:

    Maybe its time for the big 3 to change.set up a tribunalof UAW exs,workers from the floor,board of directer members.and top fat cats.Every one is representded equaly.Decsions are made.All employes are alowed to be stock holders.Now everyone is responsible for how the company is run.The tribunal has the power to get rid of the dead weight,no matter the position.In Canada this was done in some Paper Mills and they made money until they were sold to big companies. After some failed again.