Episode 81 – No Car Czar, GM Closer To Bankruptcy, UAW Walks Out On Negotiations

February 16th, 2009 at 12:00pm

Runtime 5:44

There will not be a car czar to restructure the auto industry, instead it will be handled by a team of bureaucrats. GM is considering going into Chapter 11, forming a new company and liquidating all failing assets. UAW negotiators walked out on talks with GM over the weekend. All that and more, plus a look at some of the manufacturing process involved with the Tesla.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. There’s not going to be a car czar, instead we’ll get a team of bureaucrats to manage the auto industry. GM inches closer to a bankruptcy. And the UAW walks out on negotiations.

Up next, we’ll be back with the news behind the headlines.

This is Autoline Daily for Monday, February 16, 2009. And now, the news.

Tough week for the auto industry, especially GM and Chrysler. They have to present their viability plans tomorrow but to whom? The Detroit News reports there will not be a car czar to restructure the auto industry. Instead, it will be handled by a panel headed by Treasury Secretary Timothy Geithner and National Economic Council Director Lawrence Summers, with people from the departments of Transportation, Energy, Labor, Commerce and Treasury, and the Environmental Protection Agency. Is it just me or does anyone else think this sounds like bureaucratic morass? And could it be they can’t get anyone to be the car czar because no one wants to go down in the history books as the guy that oversaw the collapse of the auto industry?

Wait, it gets worse. The Wall Street Journal reports that General Motors is possibly inching closer to bankruptcy (subscription required). Part of the plan includes going into Chapter 11, forming a new company and liquidating all failing assets in a big fire sale. It could also redo contracts that it has with unions, bondholders, dealers and suppliers. Or, it could just get more government money and soldier on as it is now.

But the Detroit Free Press reports that UAW negotiators walked out on talks with GM over the weekend, saying the company is being unfair to workers and favoring bondholders. And all this leads me to believe we’re not going to see a viability plan presented to the Treasury tomorrow, at least not from GM.

Swiss automaker Rinspeed will unveil a concept at the Geneva Motor Show called the iChange, that will be able to transform from a one seater sports car to making room for 3 people. At the push of a button the back end of the roof pops up to create more room for passengers. This allows the vehicle to be as aerodynamic and lightweight as possible with just one passenger. The vehicle runs on an electric motor powered by lithium-ion batteries.

In case you missed it at the 2009 Detroit Auto Show Maserati just made video available of the new Quattroporte Sport GT S. Changes to the new model compared with the Quattroporte S include a more powerful V8 4.7 litre engine, with power increased to 433 horsepower; new gearshift software for more driver enjoyment; and tweaks to the front and rear suspension system and the exhaust system. The new vehicle also features a sportier and more aggressive look.

Coming up next, a look at some of the manufacturing process involved with the Tesla. We’ll be back right after this.

Recently we were able to get inside Tesla and take a look at how it puts its cars together. Isaac Bouchard reports.

Anyway, that does it for today’s show, but one more thing before we go. This Thursday we’ll be doing a must-see live webcast, all about the viability plans from GM and Chrysler whether they’re going to work. Joining me for that live webcast will be Tom Walsh, the business editor for the Detroit Free Press, John Stoll from the Wall Street Journal, and Jim Hall from 2953 Analytics. That’s this Thursday at noon Eastern Standard Time, or 1700 hours, Greenwich Mean Time for all our international viewers.

And that’s it for today’s top news in the global automotive industry. But don’t forget, you can get podcasts, transcripts and a whole lot more on our website, AutolineDaily.com. Thanks for watching, we’ll see you tomorrow.

8 Comments to “Episode 81 – No Car Czar, GM Closer To Bankruptcy, UAW Walks Out On Negotiations”

  1. Steve Salis Says:

    This is more proof that the short term thinking, selfish UAW monopoly must be dramatically reorganized for the good of the biggish three, its members, Southeast Michigan and US manufacturing in general.

    I realize that few UAW members or its leadership has ever taken an economics class and that’s a problem.

    The UAW is like a kid who can’t stop playing with matches. They have happily endured the pain caused by their actions over the last 20 years. They will continue their dangerous behavior until they burn their house down. The sooner this happens, the sooner they will learn to change their ways and begin to behave responsibly.

    John, if you haven’t already done so, I hope you will try to Gettelfinger on as a guest on one of your web casts. I’d love to have the chance to debate that industry killer.

  2. Andy Says:

    Tezzla?

  3. pedro Fernandez Says:

    John: you should have started today’s show with: “Welcome to morose Monday and now the jump off the roof auto news”. Wow its getting real bad for GM, and UAW does’nt seem to realize this. Instead of a car czar, a sort of the buck stops here guy, we get more bureaucrats

  4. Ed Kemmerer Says:

    John,
    Really enjoyed your show this past Sunday on the Carbon Motors cop car but I think the founder’s marketing approach will have to be as slick as his hair if he wants to sell them to municipalities that are already hurting for money and won’t be looking at life cycle costs as much as up front purchase price, which sounds like it will be quite high compared to what is already out there with the Crown Vic. I was also wondering if you had a chance to find out who will be doing the diesel drive line, I’m sure Carbon isn’t developing their own. Thanks for one of the most interesting episodes yet.

    Ed

  5. John McElroy Says:

    @ Ed,

    Bill Li would not go on the record to say where they’re getting the engine. Carbon’s original press material referred to a 3.0 L V-6 turbo diesel, which sure sounds like a Mercedes engine to me. However, the buzz here in Detroit is that they’re going with an in-line diesel from BMW.

  6. Roger Tocchetto Says:

    John, cheer up my friend. UAW resumed conversations with GM Sunday and again today. The government won’t ok the idea of going bankrupt and forming a new company. The government wants GM to become viable because we need the industry to survive, and going bankrupt would kill the effort… I have a feeling the General will soldier on.

  7. JIm Thykeson Says:

    Its time for Sec. Clinton to tell Japan to keep there cars over there. We can’t compete against well built, cheaper to produce, Asian cars. The only way for the American industry can survive is by eliminating foreign interlopers; protectionism, and we need it now!

  8. JIm Thykeson Says:

    Its time for Sec. Clinton to tell Japan to keep there cars over there. We can’t compete against well built, cheaper to produce, Asian cars. The only way the American industry can survive is by eliminating foreign interlopers; protectionism, and we need it now!