December 22nd, 2010 at 12:00pm
Cerberus is going to recoup close to 90 percent of its investment in Chrysler by selling the automaker’s finance arm. Honda successfully completed the first flight-test of its small business-airplane called the HondaJet. Trainees at the Mercedes-Benz plant in Rastatt, Germany have assembled a one-off B-Class with a 5.5-liter V-8 between the front fenders. All that and more, plus a look at how Lotus is making a comeback.
This is Autoline Daily for December 22, 2010. And now, the news.
CERBERUS SELLS CHRYSLER FINANCIAL
Cerberus pretty much lost its shirt when its founder, Stephen Feinberg, bought Chrysler from Daimler. But now Bloomberg reports the investment company is going to recoup close to 90 percent of that investment by selling Chrysler’s finance arm. In fact, a lot of analysts said at the time that the finance arm is the real reason why Cerberus bought Chrysler. It paid $7.4 billion for the automaker in 2007. It will sell the finance arm in a deal worth about $7.1 billion. At the time, Feinberg said he was trying to save an American icon and preserve jobs for the working man. But all Cerberus did was slash new-product development, cheapen up the interiors and drive Chrysler into the ground.
BUFFETT REMAINS BULLISH ON BYD
When billionaire investor Warren Buffett bought a chunk of Chinese automaker BYD it made headlines around the world. Buffett paid $84 dollars a share, that’s Hong Kong dollars. But today those shares are down to $42. In other words the $230 million he poured into BYD is now worth $115 million. Yet, Reuters quotes Buffett as saying he’s still confident he’ll ultimately turn a profit because of BYD’s technology in electric cars and busses. Sounds like a variation of an old joke. How do you make a small fortune in the auto industry? Start with a big fortune!
HONDAJET PASSES FIRST TEST
Honda successfully completed the first flight-test of its small business-airplane called the HondaJet. Conducted at North Carolina’s Piedmont Triad International Airport, the HondaJet remained in the air for 51 minutes while its flight characteristics and performance were analyzed and systems were checked. This was the first step for the company to receive certification from the Federal Aviation Administration. Honda must complete more tests before the jet is cleared for take-off and has a total of five planes to get that certification. Honda plans to start building the HondaJet in 2012 at a yet-to-be-finished facility in Greensboro, North Carolina and already has 100 orders for the plane. What’s it cost? Only $4.5 million.
VW EXPANDS IN MALAYSIA
Earlier in the week we reported that Volkswagen wants to be No. 1 in China in electric vehicles in its effort to pass Toyota as the largest automaker in the world. And now the company will expand in Malaysia to help reach its goal. According to Bloomberg, VW will start building Passats in the country next year. Malaysian automaker and distributor DRB-Hicom will assemble the vehicles, which already does assembly for Mercedes-Benz and Honda.
IIHS TOP SAFETY PICKS
There’s some good news to report on the safety front. The number of vehicles awarded top honors by the Insurance Institute for Highway Safety more than doubled for 2011. 66 vehicles have received the “Top Pick” accolade compared to just 27 for the 2010 model year. The list includes 40 cars, 25 SUVs and one minivan. Volkswagen as well as Hyundai/Kia received the most accolades at nine apiece. GM, Ford and Toyota each had eight winners. Of course the safety advocacy group is quick to point out that last year traffic fatalities in the U.S. were the lowest since 1950. All of this is fine and dandy, but it comes at a price. Meeting the new roof-crush standard is making A-pillars – and the blind-spots they cast – HUGE, plus the jaws of life are having trouble cutting through the high-strength steels automakers are using to meet those roof standards.
MERCEDES B-CLASS SLEEPER
It’s good to know hot-rodding is still alive. Trainees at the Mercedes-Benz plant in Rastatt, Germany have assembled a one-off B-Class. This popular European hatchback is usually known as an efficient family car, but apparently there’s enough room under the hood to have some fun. Following an age-old recipe, the trainees dropped a big-honkin’ engine in it, and the “B 55” as it’s called, was born. Amazingly, a 5.5-liter V-8 fit between the front fenders, but the students had to get creative when it came to routing the exhaust and steering systems. Now normally the B-Class is front-wheel drive, but that wasn’t an option here. The engine’s 388 horsepower is routed to the back wheels through an old E-Class rear end. It also received upgraded brakes as part of the transformation. Overall this hi-performance hatchback looks like a regular B-Class, which was the team’s goal from the start. Although no formal tests have been done, it’s estimated that the B 55 can sprint from 0 to 100 kilometers an hour in less than six seconds.
Coming up next, a look at how Lotus is making a comeback, and doing it in a big way.
LOTUS MOUNTS COMEBACK
At the L.A. Auto Show a month back we got a chance to catch up with the folks at Lotus. If you watched or listened to our podcast at the show, you know we interviewed the new CEO of Lotus, Dany Bahar. But correspondent Isaac Bouchard also got a chance to talk to the top technical and design guys at Lotus, and learn how they are coming out with so many new cars at once. Let’s go to that right now.
It is mind blowing that Lotus will come out with five new cars. When I went over to the Lotus display, I ran into Jaguar’s top designer, Ian Callum, who was shaking his head in wonder at five new models. He told me, “I don’t know how they’ll do it.” We’ll know if Lotus can pull it off in the not-too-distant future.
Don’t forget to tune in to Autoline After Hours tomorrow night. We’ll be handing out presents for the best automotive happenings in 2010, and lumps of coal for the worst. Have you got any suggestions? If so, we’d love to hear about them. Just email them in to firstname.lastname@example.org
And that brings us to the end of today’s reports on the top news in the global automotive industry. Thanks for watching, we’ll see you tomorrow.