Episode 882 – GM Q1 Disappoints, Volvo Big Rig Sets Speed Record, Renault Sees a Lada Potential

May 3rd, 2012 at 12:05pm

Runtime: 8:49

It looks like GM is still the world’s biggest automaker, but VW is nipping at its heels with massively more revenue to show for it. Volvo’s hybrid semi-truck sets a world speed record. Renault-Nissan will take a majority stake in AvtoVAZ in order to polish up the Lada brand. All that and more, plus John McElroy responds to your questions and comments in this week’s edition of You Said It!

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Welcome to Autoline Daily for May 3rd. I’m John McElroy and here’s the news.

General Motors reported its first-quarter earnings this morning and the numbers are disappointing. Worldwide vehicle sales grew by 97,000 units for a total of 2.4 million vehicles, which means GM is probably still the world’s largest automaker, just edging out VW, which sold 2.2 million vehicles. But, GM’s revenue was just under $38 billion, compared to VW’s whopping $61.5 billion. Worse, GM’s net profits fell one-third compared to a year ago to only $1 billion. VW, by comparison put over $4 billion on the bottom line. GM’s profits fell because it had a one-time charge of $600 million, but mainly because its costs and expenses rose by $1.5 billion.

Wow, a 200 MPH Camaro! Lingenfelter Performance Engineering managed to crack the 200 MPH barrier with a souped up 2012 Camaro ZL1. Of course, to push a Camaro to that speed takes a lot of power, and this car cranks out an eye-popping 720 horsepower and 650 lb-ft of torque. That’s thanks to a Lingenfelter camshaft, CNC ported cylinder heads, a custom air intake plus a more powerful supercharger.

Speaking of fast vehicles, Volvo just set a world speed record in a modified hybrid semi-truck it calls Mean Green. From a rolling start it hit 147 MPH or about 236 km/h in a 1,000 meter course — that’s about 3,280 feet — and from a standing start it reached 95 MPH or about 153 km/h over the same distance.

As we reported yesterday, Chrysler’s sales keep soaring so the company just announced it will skip its traditional two-week summer shutdown. Four factories that make the Jeep Grand Cherokee, Dodge Durango, Jeep Compass and Patriot, the Dodge Dart, Dodge Journey, Fiat 500 and Fiat Freemont will not shut down this summer. Chrysler also said two more plants will close for just one week.

Remember the Lada? Renault-Nissan just announced it will take a majority stake in AvtoVAZ, which builds the Lada. Renault-Nissan will invest $750 million in AvtoVAZ to polish up the Lada brand and hopefully boost sales in Russia’s booming car market.

Earlier in the show we talked about GM’s disappointing earnings. So how is GM’s next generation of leadership going to turn the company around? Well that depends on who gets the top job. This week we’re presenting you with the race to replace Dan Akerson and today we take a look a Steve Girsky, who spent most his career with Morgan Stanley on Wall Street, where he was ranked the top automotive analyst for 14 years in a row. Girsky, who is 50 years old, also served as an advisor to GM chairman Rick Wagoner in 2005, and was later hired by the UAW to advise it on its VEBA negotiations with GM and Chrysler. In fact, in 2009 the UAW named Girsky to represent it on GM’s board of directors, a seat he continues to hold. And in 2010 he was named vice chairman of GM with all product planning and purchasing reporting to him. All this puts him in a perfect position to become the next CEO of the company, except for one thing. While others in the company wanted to dump Opel, Girsky argued in favor of keeping it. Opel is now holding GM back financially, with no solution in sight to fix it. Unless or until Girsky, who now sits on Opel’s board, can figure out a way to show significant progress on turning Opel around, GM’s board may want to look at a candidate who has a track record with more recent successes.

Coming up next, it’s time for You Said It!


And now it’s time for some of your feedback.

C-Tech had a few comments of his own on our review of the Toyota Yaris. “It appears the Yaris is one Toyota that sells on the Toyota reputation. It may only be a matter of time before it is overtaken by the competition.” C-Tech, it’s already happening. Last month the Hyundai Accent, Ford Fiesta, Chevy Sonic and Nissan Sentra all outsold the Yaris. However, Toyota continues to build up inventory levels of the Yaris, so we’ll have to see if it can move past the competition in the months to come.

Jim Thykeson is puzzled why GM would link up with Isuzu again. “GM needs to learn from past experience; their relationship with Isuzu did not reveal any good things, why would you go there again?” Jim, Isuzu is very good at medium-duty trucks and diesel engines, and that part of its relationship with GM on a worldwide basis was pretty good. But why GM thinks it needs to take an equity stake in the company is something it hasn’t explained very well.

Cynthia, like us, was saddened to see the passing of Dan Knott at Chrysler. “Dan Knott was, indeed, one of ‘the good guys.’ He was also kind, caring, funny, a terrific engineer and a consummate gentleman with impeccable integrity. Those who were lucky enough to work with him will never forget him. Please keep his family in your thoughts and prayers.” Amen, Cynthia, we truly lost one of the good guys.

Jumadepe saw our report that the new Ford B-Max does not have a B-pillar and wonders why we thought this was news. “John, removing the B pillar is not new. There are some mini minivans in Japan without the B pillars.” You’re right Jumadepe, pillarless cars and vans are nothing new, but the early versions never had to meet today’s side impact and rollover standards. That’s why we haven’t seen pillarless cars in a long time, and that’s why it’s impressive to see that Ford figured out how to meet those standards without a B-pillar.

fperkins17 says, “It’s great to see Autoline Daily going HD! This is the single best channel for learning about the automotive industry. Please extend HD to the other programs in the Autoline world. Way to go guys!” Thanks fperkins17, we’re working on it, and it’s great to see that you appreciate the continuous improvements we’re making to Autoline.

Thanks for all your letters and comments, we love getting them. Don’t forget to join me and that outrageous, bodacious, Autoextremist Peter De Lorenzo tonight for Autoline After Hours. We’ll have Bill Coughlin from Ford explaining how they’re going to use TechShop Detroit as an incubation lab for coming up with new ideas between Ford and its suppliers. This could be a breakthrough approach to R&D. that’s tonight starting at 6PM Eastern Time at Autoline.tv.

And that wraps up today’s report, please join us again tomorrow.

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27 Comments to “Episode 882 – GM Q1 Disappoints, Volvo Big Rig Sets Speed Record, Renault Sees a Lada Potential”

  1. Chuck Grenci Says:

    Looks like GM has the same syndrome as mentioned by John Mc when evaluating Chrysler’s profits; pretty high revenue, poor return on profit margin. But to GM’s credit, they have a lot of new introductions upcoming (that may have suppressed profits due to incentives) and this may correct itself when the new Malibu, Impala, ATS, XTS, Silverado are released. Something to consider anyway.

  2. Lex Says:

    Is it the Opel Nameplate or the products they produce or manuafacturing and labor costs or it’s reputation causing them to loss money for GM? It seems to me that no one is addressing the root problem. If all the above are causes then they should jetison the brand. I understand that the Opel and Buick brands share platforms and products so why not rename Opel to Buick in Europe Market? Re-introduce it as an American / Chinese Brand in Europe. In this way Buick can go global. Buick is doing well in both North America and China. I have not seen an Opel on the streets in the USA for decades.

    I agree with you John. VW will overtake GM is the near future because of the their vehicles have good/clean styling, shared components and drivetrains which appeal to those drivers looking for ease of operation, good fuel economy and quality German Engineering.

  3. Lex Says:

    The Federal Government is still has a 1/3 ownership position in The New Gernal Motors. The New GM IPO price was $33/share. GM Stock is currently trading around $23/share. We the US Taxpayers will take a real hair cut if the Federal Government sells it stake in Government Motors. Is GM Management keeping their profits down in the hope of the Federal Government will dump their shares on the stock market so GM can buy them up at a hefty discount?

  4. Ed Says:

    I think gm has a problem with domestic sales to individuals I till they are no longer ” government motors” it has worked for Chrysler . The net loss is most worrying, can you list where it was eaten up?

  5. pedro fernandez Says:

    Forbes autos reports the Yaris is one of the most improved new cars this model year, yet it has been panned by just about every review I’ve read, I guess you just believe everything you read online, even by so-called experts.

  6. pedro fernandez Says:

    TTAC has an article written by an engineer describing all the inherent problems and issues with GDI engines, as used in Hyundai and Kia cars and I tell you just based on that, I would never buy one of them. All nice when new, but as the miles pile on…………. complications and repairs and such.

  7. Bob in Atlanta Says:

    At least it’s good to see GM making some money and paying its fair share of taxes… right?

  8. victor ceicys Says:

    Girsky. Ah, Girsky, as Peter might say, a whole lot of no good for GM. Another financial guy, a bean counter who has been in bed with the UAW, a lot of no good for GM. I guess they will never learn from their mistakes. Pity, a real pity. So who will be the ultimate foreign buyer? Sergio/Fiat already has Chryler. Quo vadis GM? VW?

  9. cwolf Says:

    RE #6 @ pedro

    Good day Amigo! You know I have a strong dislike for Hyundai/Kia,but their GDI’s are no worse than the others. If I am not mistaken,VW and Merc or BMW are more prone with build up,injector problems and/or fuel pumps. For sure diesels,since most are dir. inj’d,are most problematic. Using good quality gas and injector cleaner is a must,so says my mechanic friend.

    Yet,not wanting a used Hyundai is not baseless. Not too long ago I asked a Ford used car manager why there were no hyundais on the lot. He said the repair costs were too high to make them worthy,so they are sent to the auction. He also noted that there were not a lot of lookers for the brand unless it was a high end model with few miles.

  10. pedro fernandez Says:

    Well, but they do have that 100k mile warranty, unless they come up with some excuse of poor maintenance on the part of the owner to deny the claim, from reading that report, Hyundai does NOT allow for the use of E15 on those engines, so if they make the switch, I don’t know what is gonna happen to those cars. You know what? Scotty Kilmer a well known and respected Youtube car tech guru, has a couple of mid 90′s Toyota for his personal use, I think that says a lot!

  11. cwolf Says:

    #10 But we all know you’re a Toyota nut! And that’s just fine!!

  12. pedro fernandez Says:

    No actually I am a coco-nut

  13. cwolf Says:

    Did you read that the new fuel efficiency std’d,which talks begin in July will cost YOU in the end. As a result of expected fuel reduction,it was accepted reasoning that the gas tax will increase at least a nickle/gal and talk of upwards of 18 cents/gal. Nothing’s free!!

  14. pedro fernandez Says:

    Government mandated new car regulations are gonna keep increasing the price of new cars to levels that will put more and more people out of their reach, thus less new cars, more fuel wasted by older cars it is a catch-22 situation. also they will make the cars heavier and thus more thirsty even, I don’t know what the hell they expect from engineers, miracles?

  15. Kit Gerhart Says:

    VW has been building GDI engines for years, the common one in the U.S. being the 2.0 turbo. I haven’t heard of any particular problems with them, but I don’t see that they have any big advantages over gas engines with regular port injection. The GTi engine puts out a nothing-special 200 hp, and gets a nothing-special 21/31 EPA gas mileage ratings, and on premium gas.

    Then, there are the non-turbo “mainstream” cars. The Hyundai Elantra with its GDI engine actually gets worse mpg in CR’s tests than a Toyota Corolla, which not only lacks GDI, but has a, by today’s standards, archaic 4 speed autobox. What, exactly does GDI buy you?

    Maybe these GDI systems will be reliable, but they have something to deal with that diesel injection systems don’t. Gasoline is not a good lubricant for the fuel injection parts, but diesel fuel is pretty “oily.”

  16. pedro fernandez Says:

    Kit did you read the TTAC article?

  17. Kit Gerhart Says:

    Not yet, but I plan to.

  18. Kit Gerhart Says:

    I just read the TTAC article, and it makes me even less likely to want GDI in my next car.

  19. pedro fernandez Says:

    You know, people criticize both Honda and Toyota for not being up to date as far as transmissions and engines, but the fact is that most of this new technology has yet to prove itself and like you expressed in #15, the diff in mpg’s is not worth the xtra $$ or the possibility of reliability issues as the years pass and thus affecting resale values and overall long term dependability.

  20. HtG Says:

    I have to agree, Pedro. I ask the question, ‘will the car do ten years,’ to judge my own confidence level. The more I see things like GDI, or the complexity of Audi engines, the more I grip my Civic. (Interestingly, Ford had a booth at the NY show, where they were displaying a disassembled Ecoboost engine to demonstrate how little worn it was after 20K miles. Perhaps Ford knows about people’s misgivings)

  21. pedro fernandez Says:

    #20 htg what the heck is 20k miles? I drive that much every year so what does that mean to me? in one yr your engine will not have any wear, duh! and what about third world countries that dont have the maintenance or quality oils and gas that we have here? these cars will be even more of a gamble, I foresee that folks will be clamoring for older , more reliable and easy to maintain technology, if you look at most third world Mercedes models there, the don’t have the level of electronics we have here and in Europe

  22. HtG Says:

    I know. Perhaps I don’t recall the figure correctly either, Pedro, but I did think the mileage was low for demonstrating wear. Wouldn’t a microscope have been the correct instrument for an examination? Out of all the company reps, this booth had the guy I managed to wind up, no matter how hard I tried not to be a jerk. Truly, it was laughable.

  23. pedro fernandez Says:

    Also it assumes you will change the oil as suggested, but I’ve heard horror stories about lease returns that after 3 yrs still had the factory oil filter, and assuming the factory oil as well, based on how black and thick it was. I met a guy once who had a company which took in cars after the lease was over and prepared them for sale.

  24. HtG Says:

    Isnt’ this one reason BMW pays for all maintenance on new cars? People reach for cars they can’t afford to take care of, or have a devil may care attitude about the next owner?

  25. pedro fernandez Says:

    24 exactamundo, that is exactly why, most of the neglected cars were indeed Bimmers, and they knew that, so they did this for their own good, a car without an oil change for 3 yrs will surely have problems later on

  26. Kit Gerhart Says:

    Sorry I missed that booth. It would have been interesting.

  27. HtG Says:

    Actually, no, Kit. I tried to give the PS opportunities to explain what they were trying to show, but he struggled. They just had a partially disassembled engine laid out, “to show how little wear there was.” The interesting thing was when the PS showed the small well formed into the piston head to concentrate the burn near the direct injection nozzle. If I recall, the feature improved cold start burning.