July 22nd, 2011 at 12:00pm
Fiat reached a deal with the Canadian government to buy its stake in Chrysler, which makes the Italian automaker the majority owner in Chrysler. Saab announced that it’s postponing production once more. Some Ford Raptor owners are complaining that they have managed to bend the frames of their trucks, which obviously should not be happening. All that and more, plus a preview of this week’s Autoline about classic cars in Cuba.
This is Autoline Daily for July 22, 2011. And now, the news.
FIAT TAKES MAJORITY STAKE IN CHRYSLER (subscription required)
It’s official. Fiat now controls a majority stake in Chrysler. The Italian automaker reached a deal with the Canadian government to buy its stake in Chrysler, and it already did that with the U.S. government. Fiat now holds a 53.5 percent stake in Chrysler. The rest is owned by the UAW’s retiree trust fund. Now CEO Sergio Marchionne will announce the new management structure at Fiat-Chrysler. We’ll get that announcement on Tuesday.
SAAB POSTPONES PRODUCTION…AGAIN (subscription required)
It’s déjà vu all over again. Saab announced that it’s postponing production once more. The company blames suppliers taking their summer break as the reason, but according to Ward’s, Saab hasn’t built any vehicles at its plant in Trollhattan, Sweden since April. Worse still, the company had an eye-popping 295-day supply of vehicles in inventory. The company got a bridge loan last month and it’s still waiting for regulatory approval to get cash infusions from two Chinese companies. But at this point, it’s hard to imagine that Saab can turn this around.
RENAULT EXPANDS IN RUSSIA
Renault is on the warpath in Russia, expanding its operations in the country. The linchpin of its strategy is a partnership with AvtoVAZ, maker of the affordable and immensely popular Lada brand. Renault paid $1 billion for a 25 percent stake in the outfit, which accounted for 45 percent of Russia’s vehicle production last year! Nissan-Renault is also gunning for another 25 percent of the company. Competitors like Ford and Volkswagen are expanding in the country as well, but Renault’s partnership basically makes it untouchable. One Deutsche Bank analyst said Russia could be a China-like market for the company. Neither Napoleon nor Hitler could conquer Russia, but it looks like Renault just might.
MERCEDES EXAGGERATES INVESTMENT
This next story should involve truth in advertising. Car companies constantly exaggerate how much money they’re investing in an assembly plant or a community. The latest example is Mercedes-Benz, which claims it’s investing $2 billion in its plant in Tuscaloosa, Alabama. Let me be the one to assure you it’s not putting nearly that much money into that plant. A totally new plant these days typically costs less than $1 billion. So there’s no way Mercedes would dump $2 billion into an existing facility. The company builds the M-Class, the GL and C-Class in the plant. So that $2 billion likely includes all the product development costs and all the tooling, and the vast majority of that money was spent in Germany, not Alabama. Look, all the car companies do this, not just Mercedes. They want to make the politicians believe that all those tax credits and subsidies they gave away are really paying off.
RAPTOR BENT FRAME COMPLAINTS
Ford could be in some trouble. In an exclusive report, Autoblog interviewed the Special Vehicle Team’s Chief Nameplate Engineer about problems with the SVT Raptor pickup. It seems some owners have managed to bend the frames of their trucks, and that’s not supposed to happen on an off-road performance machine. The number of Raptors involved is small – maybe 10 trucks– but still, this is not supposed to happen. The pickups affected seem to have been modified, with owners swapping out suspension parts and changing the programs on their engines’ computers to remove the speed limiter. These alterations change how the suspension gets loaded and allows them to drive MUCH faster over bumps. Even so, the frames shouldn’t be bending.
EXECUTIVES TRASH TALK COMPETITION
The industry is all abuzz about a new book out that quotes executives at different car companies trash talking each other, in an especially vulgar way. It quotes Jim Farley from Ford as saying “F___ GM. I hate them and their company and what they stand for.” The book is called “Once Upon a Car — The Fall and Resurrection of America’s Big Three Auto makers — GM, Ford and Chrysler” and was written by Bill Vlasic from the New York Times. It also goes on to cite nasty words from Dieter Zetsche, Sergio Marchionne and others. But I say, where’s the news? My goodness, do you mean to tell me that car executives swear? That they trash talk the competition? Let me tell you, this is an industry, from the shop floor to the executive suites, that has always talked like this going back to the earliest days of the horseless carriage.
Coming up next . . . why don’t we go down to Cuba and see what’s going on down there?
THIS WEEK ON AUTOLINE
On Autoline this week I’ve got a documentary running about all the classic cars in Cuba. Going there is like stepping into a time machine and going back about half a century. Here’s a little taste of what the show is all about.
You can watch that entire documentary about all the classic cars in Cuba on our website right now at AutolineDetroit.tv
Be sure to catch a LIVE episode of RoundAbout tonight with special guest Jeff Gilbert of WWJ Newsradio 950. Tune in to find out about an amphibious Mini that’s ready for your pool party, and you’ll learn what eccentric Bugatti owner’s name is visible from space. Plus they’ll play “Versus” – the only game show that makes you defend the cars you hate and attack the cars you love. That’s tonight at 6:30 Eastern at AutolineDetroit.tv.
And that wraps up a week’s worth of helping you keep on top of what’s happening in the auto industry. Join us again on Monday, won’t you? We’ll have more news then.