November 19th, 2008 at 12:00pm
Bailout money looks unlikely until Barack Obama is sworn in as President. Steel prices are plummeting along with demand. Honda will build the CNG Civic in Indiana starting next year. All that and more, plus John answers viewer questions on why the auto industry will turn around in 2010 and what would happen to the Volt if GM were to go bankrupt, in the “You Said It!” segment.
Transcript and Story Links after the jump . . .
Here are today’s top headlines. Bailout money looks unlikely. Steel prices are plummeting. And Honda will build the CNG Civic in Indiana.
Up next, we’ll be back with the news behind the headlines.
This is Autoline Daily for Wednesday, November 19, 2008. And now, the news.
Bailout money for the auto industry doesn’t look good, but that shouldn’t surprise anyone. This is a lame-duck session in Congress, one where many members who lost in the last election are only back in Washington this week to pack up their belongings and empty out their offices. And most of them are Republicans who are very angry at the UAW for helping them get thrown out of office. I said from the very beginning that getting a bailout in this Congress is extremely unlikely. But I’d say it’s almost a slam dunk they’ll get the money after Barack Obama is sworn in as president.
Along with everything else, demand for steel is plummeting, and the price is crashing. Over the last two years prices of steel and iron ore more than doubled. But the Wall Street Journal reports that steelmakers are now suspending contracts with their raw material suppliers (subscription required). Other metal prices, including aluminum, copper, and nickel are also plummeting, which will provide some relief to automakers and suppliers.
One problem facing the Detroit automakers is that they can’t charge as much for their cars than competing brands. In a report from the Wall Street Journal, the typical Ford Focus and Chevy Cobalt sell for three to four thousand dollars less than the average Honda Civic. When you add the numbers up, Honda earns $3 billion more per year selling the Civic than Ford makes from the Focus.
Autoblog is reporting that more spy photos of the Mercedes-Benz SLC Gullwing supercar have been posted to the web. This batch of pictures finally shows the car’s interior, though the image quality is pretty poor. Right now there’s not a whole lot that’s for certain about the new car. It’ll probably be the performance successor to the SLR McLaren, though it may not even be badged a Mercedes. Instead it might get an AMG label.
Bentley just introduced the Azure T convertible with 20-inch, 5-spoke wheels, ‘Le Mans’ front wing vents, dark tint matrix grille and a sculpted, retractable Flying ‘B’ mascot. Under the hood the Azure T is equipped with a twin-turbocharged V8 that produces 500bhp. What’s it cost? Merely an arm and a leg.
Honda will build the natural gas powered Civic GX at its plant in Indiana beginning next year. The plant began manufacturing the 4 cylinder Civic last month. Honda will only sell about 1,000 GX’s this year, so it looks like it plans to increase that number.
Coming up next, it’s time for You Said It!
And now it’s time for some of your feedback.
This is “You Said It!” Every day we get dozens of comments and questions from you, our viewers. “You Said It!” gives me a chance to respond.
The first came in anonymously.
Can you tell me how much subsidy the various states gave to the foreign automakers to build plants in their state?
Almost all the 50 states try to lure automakers to build plants there. They don’t care if they’re foreign or domestic, they just want the plants.
The next question comes from Alex Kajdi, from Rye Brook, N.Y.
I have been waiting to get my hands around the wheel of a Volt! If the bailout is not successful and the price of gasoline remains low, what happens to the Volt?
The Volt is going to get built no matter what happens. Even if GM has to go into bankruptcy, it’s going to survive in some way or another and the Volt represents the best prospect for GM in the future.
And David Sprowl asks:
I have seen and read about 2010 being the “magic” year where our troubles will start to wane. How is it that 2010 will be the finish line?
Economists believe the world economy will start to pick up by 2010. And if it doesn’t, it doesn’t matter, we’ll all be in the bread lines.
Don’t forget that all this week you can enter for your chance to win a special-edition Autoline 10th Anniversary DVD and an Autoline coffee mug. All you have to do is sign-up for our free e-mail newsletter. I’ll be picking the winner Friday on “Autoline Daily” so sign-up today!
That’s it for today’s top news in the global automotive industry.