Episode 905 – Big Three Move South, Fiat Wants Carmakers to Cut Capacity, Fit EV = High MPGe
June 6th, 2012 at 12:06pm
Runtime: 8:09
The Big Three are making a break for the border. GM, Ford and Chrysler close plants in Canada in favor of cheaper U.S. labor. The head of Fiat/Chrysler, Sergio Marchionne, is urging European carmakers to tackle overcapacity issues but the Germans say “nein!” The Honda Fit EV earned the highest efficiency rating of any electric vehicle by the U.S. EPA, Fit indeed. All that and more, plus John answers your questions in “You Said It!”
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Welcome to Autoline Daily for June 6th, 2012, and as you history buffs know this is the 68th anniversary of the landings at Normandy. Now let’s get to the news.
OH CANADA
Canadian auto workers are worried, and with good reason. GM is closing an assembly line in Oshawa, there are rumblings that Chrysler could close its land locked plant in Brampton, Ford closed its St. Thomas plant last year and will close an engine plant next year. So what’s going on? Canadian workers have a good reputation for quality and productivity, but they are expensive. With the Canadian dollar at parity with the U.S. dollar and with the Detroit Three able to hire new UAW workers at much lower wages than the CAW allows, more work is moving south of the border to the United States.
OVERCAPACITY SCHMOVERCAPACITY
Fiat/Chrysler CEO Sergio Marchionne is calling for all automakers in Europe to form a united front to reduce overcapacity, which could reach 2 million vehicles in 2012. But German automakers are NOT playing ball. They’re all pretty profitable right now and don’t feel they need to make cuts. Besides, if Europe does not cut overcapacity it will weaken everyone else, so why should they take steps that would HELP their competitors? Currently BMW, Mercedes-Benz and Volkswagen are running at 90 percent capacity utilization. Other OEMs range anywhere from 60 to 75 percent, with Fiat, PSA and Renault at the bottom of the scale. Analysts doubt anything will change since that would mean job cuts. Some call Marchionne’s plan a “fairy tale.”
FIT AS A FIDDLE
The electric version of the Honda Fit just received the highest rating from the EPA for pure electric vehicles. It has a combined equivalent of 118 miles per gallon and its estimated combined range is 82 miles. The combined range for the Ford Focus Electric is rated at 76 miles, the Nissan LEAF at 73 miles and the Mitsubishi i is at 62 miles. Honda will begin leasing the Fit EV in California and Oregon this summer and then offer it in the East Coast starting next year.
INDIAN GIVER
A few years back there was a lot of hype over Indian truck maker Mahindra selling cheap pick-ups in the U.S. But now the company is being sued for fraud and conspiracy. Yesterday, a number of dealers in the U.S. filed a lawsuit claiming Mahindra intentionally delayed certifying its trucks in the U.S., even though the company claimed the trucks were ready for sale. Dealers spent $60 million on fees and upgrading facilities. The suit claims Mahindra delayed certification so it could break its commitments with dealers and look for other partners.
OIL-BURNING FLAGSHIP
The number of diesel-powered vehicles offered in North America keeps growing, and if a report from Car and Driver is accurate, a luxury flagship will soon join the oil-burning ranks. BMW’s refreshed 2013 7-Series is expected to get a 3.0-liter diesel straight-six. Output could be anywhere from 265 to 308 horsepower depending on which version of the engine is used. It’s reported the company is still waiting on final approval from the U.S. Government to sell the diesel 7.
Coming up next, it’s time for You Said It!
Tony Gray saw our review of the Subaru Legacy which had all kinds of road dirt on it. “Boy, ya think Subaru could have taken five minutes to WASH that car before they gave it to you for your video review.” Actually, Tony, all our test cars are delivered to us gleamingly clean. But as we put those cars through their paces they get dirty. And sometimes we have to shoot them as is, if we don’t have time to take them to the car wash.
Ron Paris says, “What a shame about Johan De Nysschen leaving Audi North America. To me, he was the true face of Audi in America and I always found your interviews with him fascinating. He’s a real class act and a great loss to VW.” All I can say is that Audi’s loss is Infiniti’s gain.
Drew wants to know, “Did anyone else notice in the sales numbers that the Lexus RX outsold all Lexus cars combined?” You’re right Drew, as long as you’re talking about passenger cars. The RX accounted for 49.6% of all Lexus sales last month, but that’s been the case for quite some time. It shows how good a vehicle the RX is, but it also highlights Lexus’s vulnerability. It relies too heavily on one model and if anything happens to take the shine off RX sales, Lexus will be in trouble.
Brent saw our reports that the Mustang outsold the Camaro last month. “Wow, the Mustang finally caught the Camaro. However you can probably attribute that to early release of the 2013 redesign. Expect the Camaro to be on top again once the 2013 comes out.” Brent, it is going to be nip and tuck this year between those two cars. Year to date, the Camaro is only about 2,000 units ahead of the Mustang.
Speaking of the next generation Mustang, one of our viewers Sean Sweeny has been sending us his own renderings of what he would like the next Mustang to look like and I have to say, I really like his vision of what it could become, and I believe he’s got the right design cues for what will actually go into production.
Brett complains that “With the end of production of the Ford Ranger there is no longer a “small” pickup choice for Americans. I spoke with a friend this past weekend who just purchased a used Ranger and he told me he had to pay a premium for it, even with 70k miles.” Well Brett, there is no longer a small pick-up from Ford. But Toyota has the Tacoma, Nissan has the Frontier and GM is going to do face lifts on the Colorado and Canyon, so they’re going to be around for a while, too.
And finally Jim Haines says, “I really liked the Borg Warner ad at the break, I am glad to see somebody promote their products using Indy Cars to do it.” Boy, we just love it when our viewers say they love to watch our sponsors ads.
Be sure to join us for Autoline After Hours tomorrow at 6 pm eastern time. Our guest will be Dan Kapp from Ford advanced powertrain and the guy who will be taking EcoBoost to the next level. Join me and the Autoextremist Peter De Lorenzo for the best insider discussion in the business. And that wraps up today’s report. Thanks for watching, we’ll see you tomorrow.
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Comments (36)
June 6th, 2012 at 12:47 pm
Sean should be hired by the Ford design team, Honda just seems to get the Fit right all the time, maybe they should treat all their cars like that, BTW I’ve seen the new Tacoma and that is NOT a small truck, it is as big as the Tundra used to be.
June 6th, 2012 at 12:53 pm
Props to Brett on that Mustang interpretation. I like it!
I haven’t seen a base design Mustang that made me want one in well over a decade. But this one has got some very desirable and distinguishing characteristics.
June 6th, 2012 at 12:57 pm
When I said “small pickup” I really meant “small pickup” not “smaller than full-size”.
I meant “small” as in the Toyota pickup of the 1980s, the Ranger, etc. *not* the plumped-up “mid-size” trucks like the Dakota, Toyota, Nissan, etc. They’re big enough that they’re basically pointless. You may as well get the full-sized truck instead.
I didn’t think my original statement was that ambiguous. Seriously, why would my friend pay a premium for a Ranger if he could just buy a Toyota or Nissan? Because they’re not small anymore!
June 6th, 2012 at 1:15 pm
I saw a review of the New Ford Electric Focus. The New EV Focus will be priced at $39,995 before Federal and State Tax Credits. The Chevy Volt is in for some stiff competition when that Ford hits the market.
I must say, Ford and Honda are doing EV’s the right way. They are converting current models into EV’s, i.e. Focus and Fit. This must saved themselves both a boat load of money and made it much easier/faster to get these vehicles to market.
Now Nissan just has to reverse engineer the Leaf into a gasoline powered offering, or bring back the previous version of the Versa.
When NAFTA benefited the Canadians they were rubbing it in our faces. Now that the tide has turned lets see if the UAW and CAW are willing to compromise and level the playing field so US Workers do not ever loose their jobs to their Canadian counterparts ever again.
June 6th, 2012 at 1:29 pm
I just learned that there was a concourse d’elegance in Greenwich CT this weekend. I missed it. I’m going to have to be quiet for a while.
June 6th, 2012 at 1:32 pm
Hey, good news for the U.S. with the Detroit Three bringing more of their manufacturing to U.S. soil. But don’t get too excited, as it goes in business these days, ANY company will transfer labor from one locale or country to another as wages fluctuate. I wouldn’t live in anxiety if I was a line worker, but I’d sure be aware that the job I have today may not necessarily be here tomorrow. But then again, I feel that way where at I’m at now, and would so wherever I would go, regardless of the industry.
June 6th, 2012 at 1:46 pm
The Frontier, The Tacoma, and all the others listed…are NOT compact trucks!!
Why is the lack of a compact truck segment constantly skirted?
Love the show!
June 6th, 2012 at 1:54 pm
It’s great to see more luxury diesels coming as I have always been a fan of diesels due to efficiency and longevity. I’m glad to see Luxury models coming but in a sense there is nothing new here; Diesel Benz’s were relatively common in the 70′s and early 80′s – here in Canada anyways. As far as I know, Diesel Benz’s outsold their gasoline counterparts – up here anyways. I am assuming the same or similar diesel power trains were offered in the U.S at that same time?
June 6th, 2012 at 2:22 pm
Wow, a lot of things get me thining, today… The new Mustang looks great, and it really fits with current Ford styling while still keeping the look that says “Mustang”…
Yes, I would like to see a small pickup, too…I have often thought the same way as Brett about these kinds of trucks…However, I think they will be a tough sell in the US as long as the base full-size can be produced to sell for a similar price…I do wish we could get small, like original Toyota or Datsun, pickups with diesel engines in the US…The problem is that too many Americans think “size matters” and while that may sometimes be true, it does not always apply to modern vehicles…
Also, I really do hope we see more manfacturing here in the US (and our own car companies will quit prostituting themselves abroad), and it looks US while we need jobs so bad here in manufacturing (Think the huge auto factories in Mexico)… We need a strong manufacturing base to keep the economy strong…
Yet, I have to wish the Canadian workers well, too, as some may need new jobs…Hopefully, as economies improve in North America, things will improve for all workers in manufacturing…
June 6th, 2012 at 2:31 pm
Woops, looks like I kind of garbled my writing about manufacturing coming to the US…Anyway, it is good to have jobs to allow people to buy more products in made in US factories and keep workers working, buying, and the economy rollin’..I really think this is the answer to the success of car companies: employed workers buy more cars!!!
June 6th, 2012 at 2:49 pm
Hello,
I love your show.
How to download MP3 file so I could listen it on my mp3 player. (ITunes is not working for me)
June 6th, 2012 at 3:32 pm
11 Stitcher. cf above in the left hand margin.
Now, back to silent mode
June 6th, 2012 at 4:55 pm
> The electric version of the
> Honda Fit just received the
> highest rating from the
> EPA for pure electric vehicles.
> It has a combined equivalent
> of 118 miles per gallon and
> its estimated combined range
> is 82 miles.
All well and good, but we have to remember two things: One, we have to be concerned with how much carbon dioxide is coming out the chimney of the electric power plant which is the ultimate source of power for electric vehicles. Two: How energy-economical will these EV’s be, what will be their range, and how much performance can we expect if the government keeps ratcheting up safety requirements?
June 6th, 2012 at 5:01 pm
Well, there is a movement going on to try to get more nuclear plants built in the US. Since Pres Malaise Carter, we’ve had almost no construction of nuclear plants while other countries that supposedly “respect the environment” have gone ahead and build them.
June 6th, 2012 at 5:04 pm
I like the fact that more maufacturers are making increasing efforts towards EV’s with greater and greater ranges. I can only assume charging times remain one of their greatest hurdles. But,when the 3 cyl. Fiesta,@50 mpg miles(predicted) is introduced next year and others makes surely to follow,more buyers will consider twice before purchasing a hybred or twice the cash for an EV.
June 6th, 2012 at 6:30 pm
I feel little rejoyce for the US to gain jobs at Canada’s expence. For as much as we need and welcome these jobs,the $15-17/hr. production worker pay is taking it’s toll on them to make ends meet. Many of them have worked countless overtime hours to compensate,but I have observed they have grown tired. I just heard a report of a reduction of output per man hour and a need to hire more. For me,it is easy to understand why. The ol’addage,”you get what you pay for ” could not be more true and not at fault of the workers. Ample training no longer exists. Since ol’timers no longer exist,2 weeks with a modestly able trainer is simply not enough to produce a “world class” product at expected quantities!. In my my mind,we are surely blessed to gain these jobs, yet I sometimes wonder if we are TRULELY any better off. However,it is said, that the GM plant in Springfield,Tenn. will include the UAW. For all the faux pas the UAW has been making,this may be a last opportunity. A UAW member,myself,I have often had doubts of my need for them and of their usefullness,yet, as I refect upon the future the need for a union is of little doubt and collective barganing a must.
June 6th, 2012 at 7:02 pm
Are we becoming Canada’s Mexico? if that is the case, what do we call the smugglers who will be bringing Americans up there for a better life? Wolves? Moose?
June 6th, 2012 at 7:43 pm
Was that a new Mustang or 2 door Fusion?? Don’t get me wrong I think it’s a nice design ,but not a Mustang to me. Reminds me of when the Probe was to be the Mustang and holy hell erupted about it from the Mustang faithful. A Mustang needs to be styled outside the corporate image. That’s what makes it unique. The Mustang ,Camaro and Challenger all stand alone as they don’t share the corporate faces that adorn each make at present. I think those models need to be above the rest . They are halo cars that anyone can buy.
June 6th, 2012 at 9:15 pm
#16… I found your entry very interesting and the fact that you are an UAW member gives your insight a lot of cred’…I had never really thought about the preparation/experience issue…Having been a longtime union member, I think the problem with unions is leadership that thinks more about social political issues than they do about improving the lives and productivity of workers…I hear all the time complaints that our money goes to political causes the many workers don’t support themselves…I think we must have strong unions in all industries, but they need to get focused on workers needs rather than supporting many liberal, Democratic party causes…
June 6th, 2012 at 10:30 pm
#4,
The electric Focus will have a little more room than a Volt, but will be a toy which can only serve as a second or third car, while the Volt can do most commutes on plug-in power, but is capable of doing road trips and can serve as an only car. Unless the transaction price of the Focus EV is substantially less than that of the Volt, it will be an even harder sell than the much more capable Volt, which isn’t doing exceptionally well.
June 6th, 2012 at 10:35 pm
The current Mustang, Camaro, and Challenger are all retro styled, and to this “baby boomer,” all look good. At some point, though, the styling will need to move on. If Ford does this, while keeping the car as it is mechanically, we will see how it sells. I suspect there are people out there who are ready for a “pony car” sans retro styling.
June 6th, 2012 at 10:48 pm
#14,
I have mixed feelings about nuclear power, but overall, it seems a good thing, as long as you can really and truly avoid serious accidents.
There are rumblings that there may be some new plants built in the U.S. for the first time in many years. At the same time, though, Japan has shut down all of theirs, and Germany and Switzerland plan to do likewise in a few years.
France is the one country which remains very committed to nuclear power, with 3/4 of their electricity coming from nuclear plants.
June 6th, 2012 at 10:53 pm
“Are we becoming Canada’s Mexico? if that is the case, what do we call the smugglers who will be bringing Americans up there for a better life? Wolves? Moose?”
Will the smugglees be called snow birds? Wait, those are people who want to get away from the snow, not go to it.
June 6th, 2012 at 11:02 pm
I, for one, am not a fan of chasing cheap labor, whether from the U.S. to Mexico, from Michigan to Alabama, or from Canada to the U.S. This is short-sighted, and it disrupts and messes up peoples lives. Yeah, it may save the companies a few bucks, but what does it do to the people in Oshawa, Brampton, etc. who have bought homes, etc., with the expectation that they will have these jobs.
June 7th, 2012 at 3:39 am
Finally, a diesel 7. about 20 years overdue.
Makes much more sense than offering an already very fuel efficient 3 with a diesel….
I bet the diesel 7 will be 50% more fuel efficient on the highway than the 750i (30+ MPG vs 20-22) and maybe 30% than the very efficient 6 740i.
June 7th, 2012 at 3:42 am
Lex Says:
June 6th, 2012 at 1:15 pm
“I saw a review of the New Ford Electric Focus. The New EV Focus will be priced at $39,995 before Federal and State Tax Credits. The Chevy Volt is in for some stiff competition when that Ford hits the market.”
Then electric focus is actually quite better loking up front than the regular new Focus, and far, far better looking than the cheap, awkward Volt.
John McELroy correctly said once that it takes the same $ to build an ugly car than it takes to build a pretty one. Subaru and Toyota too, you hear? I believe Toyota is losing billions of dollars a year by not paying attention to the looks of most of its models, but Subaru ugliness is on a much higher level…lol.
June 7th, 2012 at 3:59 am
Bob Grosse Says:
June 6th, 2012 at 1:54 pm
“It’s great to see more luxury diesels coming as I have always been a fan of diesels due to efficiency and longevity. I’m glad to see Luxury models coming but in a sense there is nothing new here; Diesel Benz’s were relatively common in the 70’s and early 80’s – here in Canada anyways. As far as I know, Diesel Benz’s outsold their gasoline counterparts – up here anyways. I am assuming the same or similar diesel power trains were offered in the U.S at that same time?”
In fact even in the USA, Diesel Benzes were 80% of all Benzes sold here in 1980 or so, a number that seems UNbelievable today, but true anyway.
June 7th, 2012 at 4:03 am
Kit Gerhart Says:
June 6th, 2012 at 10:30 pm
#4,
The electric Focus will have a little more room than a Volt, but will be a toy which can only serve as a second or third car, while the Volt can do most commutes on plug-in power,
Right, but the comparison is meaningless. Should compare apples to apples and extended range vehicles to other extended range plug-ins, NOT Pure EVs.
If you compare it to the equally capable and $10k cheaper Prius Plug-in, which is a smash hit saleswise already, it is obvious how inferior the Volt is.
June 7th, 2012 at 6:27 am
Corporations don’t give a flying crap about who or what they hurt as long as they make more money, otherwise, why would manufacturing jobs be moving to places like China, we hardly build anything here and as a result our economy has and will continue to be a mess, not to mention all the oil money leaving as well.
June 7th, 2012 at 8:31 am
Sad, but true. As far as the car companies, it could come back to bite them. The last I knew, the U.S. based companies had higher market share in Canada than in the U.S. That seems likely to change, if they move all the jobs south to save a few bucks.
June 7th, 2012 at 11:00 am
One thing to bear in mind about electric vehicles is that they become “cleaner and greener” as time passes, even after they are manufactured because the source for the electricity to charge them is gradually becoming “cleaner and greener” as we move away from coal to natural gas, solar, wind, and hydro for the generation of electricity.
It’s a damned shame that Ford closed St. Thomas, as well as axed the Panther platform. Fond memories of that 2003 Crown Vic LX Sport I bought. sigh.
I still stand by my observation about the obvious ideological disconnect I witnessed when that retired member fo the VW board was interviewed. When asked about Opel’s problems and how thosed darned German labor unions weren’t going to let GM close down plants to cut costs and losses, he replied (paraphrasing here), “Why doesn’t GM invest in giving Opel competitive, successful vehicles to build and sell instead of putting all of these skilled, dedicated workers out on the street?”
They all just looked at him like he’d replied in Mandarin Chinese. Total non-comprehension of that concept. We are so brainwashed that what the corporations tell us is the only way things can be…
June 7th, 2012 at 12:29 pm
#28,
The Prius plug-in is not equally capable with the Volt, if you are talking about what it will do on plug-in power. The Prius has less than half the electric-only range of the Volt, and does not have full power on electric power. The gas engine will run, even with a full battery, if you accelerate very fast. There’s nothing wrong with the plug in Prius, but it will not operate as an EV, even for short trips of normal driving.
The biggest potential advantage of the plug-in Prius over a regular Prius could be performance in mountains. The extra bsttery capacity can be used to provide more energy for climbing, and store more energy for decending in places like the Colorado Rockies.
June 7th, 2012 at 12:38 pm
#28,
I was comparing Focus EV with Volt, because they are the same price, and would presumably be going after a lot of the same potential customers.
June 7th, 2012 at 12:46 pm
#31,
Police departments still seemed to really like Crown Vic. So did some taxi operators, though they seemed to be moving to more fuel efficient over the last few years. The civilan sales of Crown Vic/Grand Marquis had dropped to almost nothing, but I’d think some reasonable updates could have reversed that.
June 7th, 2012 at 3:14 pm
#34
They spent a decent chunk of change re-engineering the whole chassis in 2003. Hydroformed rails and zero-scrub-radius front suspension with alloy control arms, plus rack-and-pinion steering. Most of that was to fit the 4-cam engine in the Marauder.
I still think that instead of a bucks-up Marauder, they should’ve done a bucks-down Galaxie with simple appointments, lots of HP, and a reasonable price. Damned shame they had to kill it.
My brother’s a bit of a BMW snob (owns two, presently) and was horrified when I bought that LX Sport. When we finally got over to visit them, I put him in the driver’s seat and told him to kick its ass. After ten minutes he admitted that it was a remarkably competent sedan for the $23k I’d spent to buy it.
Hated to give it up finally. Dreamed about taking the whole rear chassis clip from an Explorer with IRS and engineering that into the Vic once the odometer had turned over a couple times.
June 12th, 2012 at 5:08 pm
Sorry John,
I guess it was a hoax worse then the exploding yacht in New Jersey..since BMW denies that there will be a diesel 7 on this side of the Atlantic any time soon if ever…http://www.bmwcca.org/node/4414
The whole diesel thing really gets my goat anyway. The European car manufacturers have all these terrific diesel offerings that would likely do well in the market here, but they insist on bringing in only topline models and that prices them out of many people’s reach. People who would likely opt for Diesel.
Instead of a 7, what about a 320d that is a joy to drive, and in the realm of affordability? And sorry i dont buy the “people wont buy 4 cylinder diesels” argument, not when you’re pushing 3′s and 5′s with twin turbo fours. They bring these topline cars in and then marvel at disappointing sales numbers…Could the fact that a 335d is approaching the price of an M3 have anything to do with it? hmmmmmm But BMW’s not alone. Where’s the VW Passat TDI driver’s uptrade Audi? Hey Mercedes, where’s the B class or C class diesel? VW sells every diesel they bring to this market, and dealers scream for more. Obviously they’ve figured it out, it’s time the other German manufacaturers took a lesson from VW’s playbook.