Episode 791 – Former UAW Officers Doing Time, True Car Inflames Dealers, Audi and Skoda Share

December 20th, 2011 at 11:30am

Runtime: 8:01

Two former UAW officers were just sentenced to prison for extortion.  A company called True Car is infuriating dealers because the method it uses to turn leads into sales is killing profits.  The next-generation Audi A3 is going to share some pretty significant parts with Skodas . . . and tens of other vehicles!  All that and more, plus a look at how Lexus is getting the word out about its brand-new GS sedan.

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This is Autoline Daily for December 20th. And now, the news.

UNITED AGAINST WORK
Two former UAW officers were sentenced to prison for extortion. As the Detroit Free Press reports, in exchange for ending a strike at a GM truck plant 14 years ago, the UAW officers demanded that family members get hired as skilled tradesmen, even though they weren’t qualified to do the job. After an 87 day strike GM capitulated, but the FBI got involved and while the wheels of justice grind slowly, UAW officers Donny Douglas was sentenced to 18 months in prison while Jay Campbell was sentenced to 12 months and one day. And when people wonder why GM had a hard time bargaining with the UAW, this is one example of what they had to put up with.

UNCLE PENNYBAGS
Plug-in hybrid maker Fisker hasn’t sold many vehicles, but that’s not stopping people from investing in the company. According to Bloomberg, the company just raised $133 million in private equity and now has more than $766 million in funds, including government loans. It’s kind of funny how Fisker is able to raise cash, while Saab, which is much more established, couldn’t find any investors and is now bankrupt.

TRUE CAR INFLAMES DEALERS (subscription required)
Maybe you’ve seen the ads on TV. A company called True Car says it can show you what other people paid for the car you’re interested in buying. True Car is getting that data by providing dealers with sales leads, but the dealers only have to pay for those leads if it turns into a sale. That sounded too good to pass up, so lots of dealers signed up. But now it’s turning out to be too good to be true. In the fine print, dealers have to give True Car access to their transaction prices. That’s how the company can tell you what others are paying for cars. But it’s ruining dealers’ profit margins. Wardsauto.com reports that dealers are furious with True Car and feel they’ve been hoodwinked. True Car is run by Scott Painter, an entrepreneur who specializes in online pricing and selling. True Car also owns Automotive Lease Guide.

SHARING IS CARING
Oh, how times have changed! Bloomberg reports the next-generation Audi A3, which is due to be revealed next year, will share components with Skodas! Heresy, I know! It’s expected to be one of 40 different models using the same basic parts, including chassis bits, steering columns and axles. All of this sharing is expected to save Volkswagen some 5 billion Euros per year, about six-and-a-half-billion dollars. But the move is not without risk. It could water-down the high-flying Audi brand, AND if it has any problems with these parts, that means 40 models will have to be recalled.

KAMIKAZE SUBARU
A Subaru product hasn’t flown this far since Nakajimas were roaring through the skies 70 years ago! KHOU, a CBS affiliate in Houston, Texas reports police are looking for a guy that drove his car through the roof of a building! Apparently the man was traveling about 90 miles and missed a turn. He then hit a railroad embankment, which sent his Subaru flying some 100 feet through the air, and then through the roof of a septic business . . . a pretty crappy place to land. After the accident he called police to report the vehicle stolen, but officers managed to coax a confession out of him. He still hasn’t turned himself in. Thankfully no one was hurt, except, of course, the roof. Damage is estimated at about $25,000.

Up next, Lexus is introducing a brand-new version of its GS sedan. Find out what the company is doing to get the word out about this car. Hint: it’s BIG.

2013 LEXUS GS
Lexus is trying to reinvent itself with the 2013 GS. The brand is focusing on building more passionate, fun-to-drive vehicles and this car is the first of that new breed. To spread its message, the company is doing something it’s never done before . . . EVER.

I look forward to seeing what they’ve cooked up for the Super Bowl. You’ve got to go BIG and you’ve got to take risks to succeed. Does Toyota have the stomach to make a truly great ad? February is just around the corner. In the meantime, we’ll have a full review of the 2013 Lexus GS in the coming weeks so stay tuned for that.

And don’t’ forget to join us for a special Christmas edition of Autoline After Hours. Peter Delorenzo, David Welch and I are going to play Santa Claus, handing out presents and lumps of coal to the best and the worst in the automotive industry, based on how they behaved this year. It’s going to be fun and informative, so join us Thursday night at 7:00 p.m. Eastern Time at Autoline.tv.

And that wraps up today’s report. Thanks for watching, we’ll see you tomorrow.

Thanks to our Partners for embedding Autoline Daily on their websites: Autoblog and WardsAuto.com

53 Comments to “Episode 791 – Former UAW Officers Doing Time, True Car Inflames Dealers, Audi and Skoda Share”

  1. LS ford Says:

    Never cared much to own a lexus since the late 90′s. I think the performance characteristic has been vacant until the ISF. I am very curious to see and feel this new GS and see if this is a true return to the enthusiast market.

  2. Autos101 Says:

    I never cared much for Lexuses (or Lexi) either, especially the ones other than the LS400-430-460, which at least is not yet another overpriced Toyota clone. The styling of this one seems to have too many unnecessary wiggles for my more serious, teutonic taste.

    My realtor a few years ago had an ES350, which is 100% a camry clone. It is not even a true luxury car, with an interior that had a few touches of wood and leather but was otherwise full of dreary grey plastics.

    Why not save $10k and get the equivalent Camry instead? Better yet, get an Accord or a Passat diesel.

  3. Jesse Says:

    Crooked UAW people??Imagine that!!!

  4. Autos101 Says:

    This was a sickening story re the UAW crooks.

  5. HtG Says:

    Here’s a link to that TrueCar piece. Ward’s server let me read it on the Chrome browser without a sub.

    http://wardsauto.com/home/1212dg_truecar/

    But I don’t get it. Dealers didn’t read their contracts carefully? Say that real slow.

    REFUND!?

    Are dealers just upset that transaction prices are being shown to buyers? I’ve seen those figures, and simply not believed they were really being given out. I also wonder what a transaction price means if there is a trade-in or financing.

  6. tj Martin Says:

    Better yet , just buy the Camry and leave the unreliable VW as well as the out of date Honda on the lot ;-)

    FISKER

    So $538 million of that is ours ( tax payers money ) leaving some $228 million coming from some ‘ More Money than Brains ‘ fool living up to P.T. Barnum’s old saying .

    Why , in light of the fact that FISKER has not delivered on a single promise , can barely give their cars away , in spite of their pretentious Product Placement attempts on TV , not one of their cars ( not that there are many ) hasn’t had more than a fair share of reliability problems , and even TESLA’s investors are currently making a run for it …..

    ….. would anyone invest in a Burned Out former car designers Company ?

    ” …. a Fool and His/her money ….. ” not even coming close !

    ———-

    @ HtG – Hint ; Where’s Tj ?

    This country manufactures one of …. if not THE best STOHL aircraft in the World

  7. Autos101 Says:

    The Accord, even tho it’s 3-4 years old, is a FAR superior choice than the Camry, for anybody who enjoys DRIVING.

    Its styling is pretty good too. With the exception of the nose heavy front (grille), the rest of it could have been mistaken for a 5 series. Not surprising that HtG’s Civic looks like an older 3 series from some angles too.

    The alleged VW unreliability: It seems to be a US thing. Over in Europe, it is considered quite reliable and high quality for its class.

    The New Passat is NOT built in Mexico or overseas but in the US, so it’s apples and oranges to compare its EXPECTED reliability to any alleged poor reliability of unrelated models and plants.

  8. HtG Says:

    6 Norge

  9. Autos101 Says:

    Funny I just emailed the Norsk Research council to see if they processed my fees for a Research Center evaluation job I and three colleagues did earlier

  10. Brett Says:

    Wow, craven and venal behavior by union officals! Oh, my!

    Good thing you never see that sort of behavior in politicians, corporate executives, military leaders, religious leaders, etc!

    Oh, wait…

  11. Autos101 Says:

    These guys have billions coming out their ears, and it is ironic because 150 years ago they were dirt-poor and emigrated to the US by the millions.

  12. john787 Says:

    I think we all really know why Saab could not raise the cash it needed to stay in business. GM did not want to transfer it’s intellectual property whereas the other companies did not have such a deal breaker. You could say Saab found the cash, but GM was not willing to follow through.

  13. Autos101 Says:

    Saab lost its way 20 years ago, after one could buy its vehicles for $10k-$20k less as Lancias and Opels.

    Rebadging came back and did haunt them!

  14. Autos101 Says:

    John McELroy:

    WHat is the big deal for Audi sharing parts with Skoda?

    Hasn’t Audi shared parts with VW (and probably also with Seat in Spain) for decades already?

    Aren’s Skodas and Seats thinly disguised VW clones?

  15. HtG Says:

    I remember a few years ago at Saab’s booth in the NY Autoshow, two v nice looking gals were the Product Specialists. As one gave her presentation, I swear nobody, but nobody was paying any attention. Except me and my empathy. It was painful to watch her being ignored, and I told her partner that she was very brave.

  16. Autos101 Says:

    “Kamikaze Subaru”

    Why did Kamikaze pilots wear helmets?

    (George Karlin)

  17. Chuck Grenci Says:

    Fisker: Take out the motor, put in an engine, then I might be interested; uh, maybe not.

  18. Autos101 Says:

    I’d never risk buying from a total amateur like Fisker.

    Especially given the sickening corrupt deal they got from the failed Obama Admin… SOlyndra II.. or 1,000…

  19. cwolf Says:

    NOTICE TO ALL FISKER INVESTORS: I am now seeking investment to build exclusive ski resort in the Sahara Desert. Don’t miss out on this once in a life time opportunity and great profits. Please send CASH to CWolf today!

  20. cwolf Says:

    I wonder how many children the UAW officers had? Hmmmmm….I think I may work with a few of them!!

  21. Autos101 Says:

    A preview of tomorrow’s show news:

    SAAB has just suspended warranty claims on US vehicles.

    Some retard in the Auto News site demanded that… GM (aka us the Taxpayers!) take the responsibility to pay these claims in full!

  22. Autos101 Says:

    “I am now seeking investment to build exclusive ski resort in the Sahara Desert.”

    Will a Nigerian princess with a $20,000,000 gift for me be part of the deal?

  23. cwolf Says:

    What’s the use of having a 4 whl. drive Subaru if yer gun’na fly in it,anyway? Betcha he got better gas mileage,though!

  24. cwolf Says:

    Sure,Auto,as long as you don’t mind rupees and an 87 yr. old princess with no teeth and arm pit hair down to her ankles.

  25. Autos101 Says:

    I specified US dollars. What do INDIAN rupees have to do with Nigeria or the Sahara?

  26. W L Simpson Says:

    extortion is the heart & soul of union bargaining

  27. cwolf Says:

    Quite being a smart a$$,it’s the only worthless curreny I could think of at the moment. See the humor,not the err,Grasshopper.

  28. Autos101 Says:

    Hey, YOU started with the nasty stuff in #24 (trying to make us all trrow up???)in response to MY humor!

  29. Autos101 Says:

    throw up?

  30. NannieState Says:

    The UAW Representatives were greedy and appointed family members who didn’t earn their place. The lesson for all is that, as Americans—not union vs. non-union people—but ALL Americans, we always should do the “right” thing. That, my dear, is what makes America great. Honesty, integrity and earning your way.

  31. pedro fernandez Says:

    How is it that the UK being smaller. less populated than us, has so many more brands to choose from? Skoda, Seat, Renault they’re all available over there, I guess what they don’t have is the home-brewed stuff, except for the high-end variety.

  32. tj Martin Says:

    A Christmas Poem from TJ

    ( posted this on a UK site last year )

    Enjoy !

    Twas Winter in the Mid-West
    And all thru the Roads
    Not a Ferrari is seen
    Not even a Rolls

    No Lotus or Maser
    Lamborghini devoid
    Not even an Aston
    To Bring us some Joy

    But what is this ?
    What do my eyes see ?
    But a brand new Porsche
    RS GT3

    Caymans and Boxsters
    Carreras Galore
    Cayenne we won’t count
    GT2′s and more

    Turbos and Cabrios
    356′s too
    All driving so merrily
    Thru Cold and the Snow

    AHA ! Says St. GearHead
    This I now know
    Its Porsches and owners
    That drive thru the snow

    All others just poseurs
    Cars All Winter kept
    Their traction too slippy
    Their drivers inept

    Happy Holidays to all

  33. tj Martin Says:

    @ HtG

    grrrrrrrr ! Does Pilatus give you a clue ?

  34. cwolf Says:

    tj,sorry for jumping in,but how about Stuttgart or Geneva local?

  35. Kit Gerhart Says:

    #30,
    The “mainstream” of the UK market is Golf size and smaller, and all those companies make cars that size. The power trains would be the same as for the cars sold in continental Europe.

    The thing that surprises me a little, though, is that they build right hand drive versions of most European cars, mainly for the UK market. A few of the French cars, VW’s, and others are sold in other RHD markets, like Japan and Australia, but not a lot.

  36. Autos101 Says:

    pedro fernandez Says:
    December 20th, 2011 at 2:10 pm

    “How is it that the UK being smaller. less populated than us, has so many more brands to choose from? Skoda, Seat, Renault they’re all available over there”

    The only mid-priced Euro brand that could make it in the US is VW. (the others are luxury or near luxury makers). Others have tried and failed. Peugeot, Renault, FIx it again TOny (twice failed now!) Alfa ROmeo, the works.

    Skoda and Seat are probably too low-rent for the US market.

    The US car market is the most competitive in the world. Not every maker can make it here. Even in Canada they had these atrocious Russian Fiats, the Ladas. Not here!

  37. HtG Says:

    33 Where the further east you go, the less they laugh? Where all the Cayenne’s are? Enjoy yourself, tj.

  38. MJB Says:

    Glad to see Lexus making a serious effort at building performance automobiles. The IS was the closest they’ve managed to come to date.

    One would have thought the 1st gen SCs would have fit the bill, but alas, they were never on par performance wise with the BMWs and the like.

    I distinctly remember test driving one back in 1992. Incredibly quiet. Incredibly luxurious. Incredibly powerful (back then @250HP). But also incredibly isolating from the road and devoid of any true performance characteristics. Even though the model I tested was a manual tranny, it STILL had no serious bite to it. Not even an exhaust note.

    All that being said though, I still bought one and am sublimely happy with my SC400 to this day.

  39. pedro fernandez Says:

    We got the big trucks and SUV’s which barely sell abroad, if it wasn’t for them, car sales would be much higher

  40. Andrew Charles Says:

    Pricing is a key factor. Taxes on vehicles and fuel have pushed vehicle sizes down and prices up. This makes larger European cars expensive, partly due to the lower volumes produced, and partly due to the high equipment levels. Costs are further increased by a proliferation of model variants. In the US one model may have perhaps two or three engines, keeping volumes high. In Europe you would expect at least five engine choices, and some models have as many as ten. This makes it hard to meet cost targets for the US market without bumping up against BMW, Audi and Mercedes (and even in Europe the biggest-selling mid-large cars are often BMWs or Audis).

    In Australia and other markets this is not so much a problem. Previously high tariffs and luxury car taxes have left prices for expensive European cars three, four or five times what you’d pay in the US. That leaves plenty of room for European brands like Peugeot, Citroen and Renault to come into the market at a premium to Toyota, Nissan, Holden and Ford etc..

  41. RS Says:

    OK, since the “unions” topic has come up – again…

    A dedicated union worker was at a convention in Las Vegas and decided to check out the local brothels.

    When he got to the first one, he asked the Madam, “Is this a union house?” No,” she replied, “I´m sorry it isn´t.”

    “Well, if I pay you $100, what cut do the girls get?” “The house gets $80 and the girls get $20,” she answered.

    Mightily offended at such unfair dealings, the union man stomped off down the street in search of a more equitable, hopefully unionized shop.

    His search continued until finally he reached a brothel where the Madam responded, “Why yes sir, this is a union house. We observe all union rules.”

    The man asked, “And if I pay you $100, what cut do the girls get?” “The girls get $80 and the house gets $20.”

    “That´s more like it!” the union man said. He handed the Madam $100, looked around the room and pointed to a stunningly attractive blonde. I´d like her,” he said.

    “I´m sure you would, sir,” said the Madam, “but Ethel here has 53 years more seniority and she´s next.”

  42. Andrew Charles Says:

    Audi currently shares basic floor-pan and structural design of the A3 with the VW Golf, Skoda Octavia and SEAT León. Transmissions and powertrain options are also shared, so under the hood an A3 is already the same as a Skoda or SEAT (not even the RS3 gets a unique engine). No negotiation, no discussion. For the last two generations (until the VW Up!, Skoda Citigo and SEAT Mii) they’ve been allowed more freedom in exterior and interior styling, so that a SEAT didn’t look like a VW or Skoda (VW even slapped VW badges on the old SEAT Cordoba and called it a Polo sedan in some markets). Of course there’s no reason why even more components may be shared already—such as window lift motors, wiper motors, yaw sensors, ABS systems, traction control systems, suspensions etc.

  43. Bob in Atlanta Says:

    RS: Remember the good old days when everyone pumped Ethyl – tetraethyl lead that is?

  44. HtG Says:

    A German court has ruled that Bernie Ecclestone did pay a bribe for F1.

    schuldig

    http://www.telegraph.co.uk/finance/financial-crime/8969048/Payments-by-F1s-Ecclestone-were-a-bribe-judge-rules.html

  45. Kit Gerhart Says:

    #42,
    The A3 has been built on the A4 and A5 platform, but there have been VW’s built on what are basically Audi platforms. The ~1997-2005 B5 Passat was built on a longitudinal engine platform used by the Audi A4.

  46. Kit Gerhart Says:

    #45, That was probably confusing. By A4 and A5 platform, I mean fourth and fifth generation Golf/Jetta platform, called “A” platforms, not Audi A4 and A5, which use a different, “B” platform with a longitudinal engine.

  47. ken hutzal Says:

    John sorry to take the wind out of your sails but Subaru(Fugi Heavy industries) currently does build an aeroplane and many of the Boxer engines are used in the aviation industry. Would have liked to see a dash cam of that recent flight. I would have reported my car stolen also.

  48. Bob in Atlanta Says:

    I saw my first Fiat 500 in the Decatur, GA area – it had a “Budget Rent-A-Car” tag. Can you say – FLEET SALES? I drove by the FIAT dealer in NE Atlanta on Peachtree Industrial Blvd last week – the out-front building (sales?) is larger than the VW, Audi, Hyundai and Kia stores. Lots of Mexican iron on the ground though. The building complex is too small to be a Wal*Mart and too large to be a GM dealer. Will it become another “Buy Here – Pay Here” next year?

  49. Dave Moore Says:

    Audi has been using parts from other divisions in the greater VW empire for decades. You can recognise plastic switches and other details used by Audi, Skoda, Seat and VW in most models, and all four of these brands have shared engines, transmissions and suspension parts, not to mention whole platforms, since Skoda first came into the VW fold. This no bad thing, in customer satisfaction surveys and reliability studies from Europe, Skoda always finishes ahead of the other three brands. So it’s nothing to be horrified about at all!

  50. Jon M Says:

    While True Car may be beneficial for consumers in getting a good deal, a back lash may more dealers refusing to negotiate on pricing. CarMax (short for Car Maximum pricing), though not a new/used dealer, does not negotiate. Saturn, once a new/used dealer did not either. They tout it as THE way to shop, when it actually puts the consumer at an extreme disadvantage and subject to paying too much. Hopefully, dealers will not retaliate by a role reversal tactic to fill their coffers at the consumer’s expense.

  51. pedro fernandez Says:

    When I compared TRUECAR to my old stand-by Carsdirect.com I thought the prices were just too damn low, once again if it sounds to good to be true, it ain’t.

  52. Autos101 Says:

    http://www.insideline.com/features/100-worst-cars-of-all-time.html

    I am going down the list as I write this. Sure to raise a lot of eyebrows.

  53. Kit Gerhart Says:

    #50,
    That list is “interesting,” but very silly. The Aztec was the worst car of all time, and the Trabant was only number 9? Yeah, Aztec is ugly, but was a good value for a practical tall wagon. It barely belongs on the list at all, even at #100.

    The list continues to be “curious” as you look through it, but it’s entertaining. Thanks for the link.