AD #1279 – Europe on the Mend, GM to Consider a Dividend, Q50 Steer-By-Wire Recalled

December 17th, 2013 at 11:58am

Runtime: 6:42

- Europe on the Mend
- GM Investing Billions in Plants
- GM to Consider a Dividend
- Chinese with Checkbooks
- Q50 Steer-By-Wire Recalled
- Autoline Executive of the Year Panel

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Thank you for joining us for another edition of Autoline Daily. Now let’s get to the news.

EUROPE ON THE MEND
And we start off with what looks like very good news. Sales of new cars in Europe rose for the third month in a row, which is the longest period of growth in four years. Registrations in November increased nearly 1% over last year to almost 1 million vehicles as demand for vehicles from Volkswagen and Renault shot up. Here’s my Autoline Insight. While sales are still woefully weak, this 3 month running average suggests the European car market has finally bottomed out and will slowly start to grow again.

GM INVESTING BILLIONS IN PLANTS
Meanwhile, in North America, automakers are straining to meet demand. But rather than build new bricks and mortar they’re modernizing existing plants and breaking bottlenecks with new equipment. General Motors just announced it will invest nearly $1.3 billion in plant upgrades. The money will be spread across five manufacturing sites in the United States to make a new V6 engine, a new 10-speed transmission and an existing 6-speed automatic.

GM TO CONSIDER A DIVIDEND
And speaking of GM, it looks like the company will start paying a dividend to shareholders. GM shares are up 44% this year, that dividend could drive those prices even higher.

CHINESE WITH CHECKBOOKS
Slowly but surely Chinese companies are buying their way into world class automotive technology. The latest is the Zhuzhou Times New Materials Technology Co., a state-controlled corporation, which just bought the global rubber and plastics unit of ZF, the German transmission company for nearly $400 million. This is a growing trend. Did you know that the patents and manufacturing rights for magneto-rheological dampers, with the trade-name Magneride, is now part of a Chinese company called Beijing West Industries? Yep, the same technology that’s on the new ‘Vette. That’s one of the fall-outs from the bankruptcy at the supplier company Delphi, which developed Magneride. The Chinese know that the fastest way to get the best technology is simply to buy it.

Q50 STEER-BY-WIRE RECALLED
We’ve told you all a lot about the Infiniti Q50’s steer-by-wire system. But like most new technology there’s usually some glitches that need to be fixed once it’s out in the real world. That’s why the company is recalling Q50’s with the system. In freezing weather the power steering software may disable the steer-by-wire system and also may delay the engagement of the mechanical steering backup system. The recall involves very few cars, but Infiniti is telling customers not to drive their Q50’s until it’s fixed, and to have it towed to the nearest dealer to receive a software update.

THE ENVELOPE PLEASE…
Last week we asked you to take a look at the finalists for the North American Car and Truck of the Year awards and vote on which ones you thought should be the winners. On the car side, the Chevrolet Corvette is the runaway winner, with 53% of you choosing it for Car Of The Year. The Cadillac CTS got 30% of your votes and the Mazda3 got 17%. On the truck side it’s not quite the runaway, but 47% of you chose the Chevrolet Silverado as North American Truck Of The Year, followed by 43% of you choosing the Jeep Cherokee. Only 9% of you chose the Acura MDX. Last year we asked you to vote on the finalists and you nailed it. The actual winners will be announced on the morning of January 13 at the Detroit Auto Show, and I can’t wait to see if the Autoline audience got it right again.

Coming up next, I want to introduce you to the next member of my blue ribbon panel for choosing the most outstanding executive in the global automotive industry.

AUTOLINE EXECUTIVE OF THE YEAR PANEL
Last week I introduced you to the executives who made our short list for the first annual Autoline Executive of The Year. That includes Akio Toyoda, Tom Doll from Subaru, Martin Winterkorn from Volkswagen, Alan Mulally from Ford and Mark Reuss from General Motors. Yesterday I told you how Wall Street analyst Maryann Keller is on the blue ribbon panel to choose which one of those executives stands out above the others. Today I want to talk about Dr. David Cole.

I first met Dave in the early 1980s when he was the Director of the Office for the Study of Automotive Transportation at the University of Michigan Transportation Research Institute. He was also a professor at the University, and I was always amazed to meet so many people in the industry who had him as a professor. But Dave also went on to become the founder and CEO of the Center for Automotive Research, one of the best known think tanks that does all kinds of reports and analyses about the industry. More recently he helped create an organization called Auto Harvest, an online database that allows automotive companies to market the patents and intellectual property that they’re not using and which would otherwise be gathering dust on a shelf, or whatever the electronic equivalent of that is.

Dave is also the son of former GM president Ed Cole whose many accomplishments include developing the ‘55 Chevy. The point being Dave Cole grew up in an automotive household, so it should come as no surprise that he is one of the best connected and knowledgeable people in the automotive industry. And that’s why I wanted him on the blue ribbon panel to choose the Autoline Executive Of The Year.

On Friday I’ll reveal who we chose for that award, but that brings us to the end of today’s report. Thanks for watching, we’ll see you tomorrow.

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50 Comments to “AD #1279 – Europe on the Mend, GM to Consider a Dividend, Q50 Steer-By-Wire Recalled”

  1. ColoradoKid Says:

    Q50 recalled ( for drive by wire issues )

    Common Sense – 1
    Technology for Technology’s sake – 0

    —————-

    GM’s ‘ dividend ‘ – Oh yeah ? Really ? So hows about a ‘ dividend’ for the American Tax Payer who lost some $10.5 billion in the ‘ deal ‘ ?

    Oh … god forbid they ( GM ) should take care of those who made us what they are … Nahhh …. lets ( GM ) just keep sucking up to the greedy arsed ‘ shadow ‘ investors ( hint hint )

  2. ColoradoKid Says:

    WHAT ???

    Nothing at all still on the TPP ( Trans Pacific ‘ Partnership ‘ )

    Possibly the single most devastating blow [ should it be passed ] to American manufacturing since the Reagan and NAFTA days ?

    Seriously ALD …. READ the agreement as it stands . Because to put it bluntly …. if that little trade agreement passes …. you might as well begin saying your last goodbyes to ANY and all manufacturing in the US once and for all …. as well as AutoLine Detroit …. seeing as there’ll be no ‘ Detroit ‘ left to speak of

    Want a glimpse of the future ? Have a good long look at what the Clothing / Shoes / Electronic Goods manufacturing industry’s have become after the last two rounds of ‘ Trade ‘ agreements .

    Time to take a Stand .. ALD …. before there’s nothing left to ‘ stand ‘ for … if’n you catch my drift ;-)

    ————-

    And on that note ….. GM’s newest tactic for Holden …. Chinese manufactured Holdens for the Antipodes and Pan Asiatic countries

    Wanna bet that one fails right out the gate ?

  3. pedro fernandez Says:

    Re the Q50 recall, as Mr Scott said in Star Trek, The Search for Spock “The more the overthink the plumbing, the easier it is to stop up the drain”.

  4. Al Jadczak Says:

    In regards to the executive of the year award, I like the fact that you have Mary Ann Keller and Dr. David Cole on your panel. I agree with you that Mary Ann has the knowledge that can’t be surpassed anywhere in the auto industry. I have had the pleasure of meeting and talking with Dr. Cole. I am a retired engineer from GM and I never got to meet his dad, but I sure wish that I had the opportunity to take David’s class when he taught at U of M. David is one of those people that you just enjoy listening to. He is very approachable and I enjoy hearing his incite into all things automotive. Great choice!

  5. Bradley Says:

    Hopefully the GM investment into upgrading factories doesn’t leave a bunch of unwanted robots.

    ie GM’s infamous bad PR commercial of 2007
    http://www.youtube.com/watch?v=b8m9-PgWreE

    So if announcing the GM Dividend is supposed to raise the stock value…why didn’t GM announce the Dividend before the US Government sold back its shares?

  6. Jon M Says:

    Certainly Infiniti will see the steer-by-wire issue as the cost of doing business and bringing the latest and greatest technology to market–no matter how unnecessary the technology might be. But it’s a great example of why I find pointless technology like this a waste of resources. There is a reason the mechanics of a toilet haven’t changed lo these many years. But alas, as they say, the market demands every bit and bauble be the latest and greatest technological marvel. So while Ford’s My Touch and Infiniti’s steer-by-wire demonstrate the nuisance and irritation of so much techno-fluff, automakers will spare no expense to fix things that aren’t broke just because they can.

  7. cwolf Says:

    I think Ackerson made it quite clear the reason GM will not repay the govt. the $10B it lost is not due to a lack of desire, but due to expected lawsuits. If it was clearly understood to be a loan,that would have been a whole different ball game. Instead they settled for stock which could have been sold at a break even point. If you think about it, $10B is nothing when compared to total revenues and expenditures in todays world. There would be so many law suits filed against GM if they re-payed, Toyota’s current lawsuit troubles would be like a walk in the park. It is what it is. Nuff said!

  8. HtG Says:

    Q50

    Ben, ALD may have a bad link to the NHTSA site for the Q50 story.

    Does anyone know why the steering has a problem in very cold air?

  9. cwolf Says:

    I think GM’s investment will include modern robotics and software technologies. I bet we will soon see machines interfacing with one another to increase efficiency and allow the ability to quickly change from one product to another, then back again. On the down side,fewer workers will be required. Germany already has this concept in the trial stage and geared around manufactures on the smaller supplier side of the industry.

  10. pedro fernandez Says:

    I remember when it got very cold in the overnight the steering wheel would be hard to turn until the car got a chance to warm up, and this is hydraulic steering, not this electronic crap!

  11. HtG Says:

    9 you’re prolly right about that. I’m reading more stories about plans to use cheap sensors to allow greater understanding and control of systems like factories. Following parts around, internet connected machines, people with wearable devices. All interpreted by Big Data.(hate on Akerson as you will, he did get IT to become a core competence of the company rather than contracting it) The IT is being built with these intentions; the leading edge isn’t smartphones and tablets anymore.

  12. pedro fernandez Says:

    In a related story, McLaren wants to use some kind of force field to replace wipers, I thought Rain-X was supposed to do that for about $3 a bottle? Can the flux capacitor be far behind?

  13. pedro fernandez Says:

    TTAC has a video of a Hennessey modified C7 doing 200 mph on a closed off Texas highway, amazing that there was no wheel shake whatsover and that the factory speedo was quite accurate.

  14. Bradley Says:

    #7

    I am not shooting the messenger, but if that is true. ie. GM will not repay its debt, because its shareholders will sue. Is a big bunch of Executive Elite BS?

    So with the announcement of the dividend I looked at GMs Annual Report to see how well the preferred share holders will make out.

    Well I was distracted by the fact GM’s Equity nearly entirely built up of Preferred Stock. For each dollar in common stock GM has $742 in Preferred.

    WTF!

    In comparison, Ford has $39 in common stock for each $1 in preferred stock.

    Yet, another reason not to give GM money. They really aren’t a public company, even though they are traded publicly. With that much of their Equity in preferred stock, it doesn’t matter what the common shareholder says.

    Granted I am sure the US Government had a good chunk of preferred stock..but the numbers still are outrageous.

  15. Kit Gerhart Says:

    10,
    Yeah, hydraulic power steering, and even non-power steering would turn harder in cold weather, and the shifter on the ’50 Plymouth would get really stiff, when that 90 weight transmission oil got down to single digit temperatures.

  16. HtG Says:

    Q50

    Here’s a sectíon of a NHTSA letter, that describes how the safety issue affects 23 cars that got some software update to address cold weather. The update had an error that made for a risk.

    November 8, 2013 to November 12, 2013 – Nissan identified a vehicle in Canada that had been reprogrammed to address a power steering assist calibration issue and that subsequently experienced an issue with steering performance. Upon investigation, Nissan was able to confirm that the power steering assist calibration reprogramming contained an error that could affect the Direct Adaptive Steering performance at temperatures below freezing.
    Nissan immediately initiated activities to identify the small number of QSO vehicles that received the reprogramming and reached out to the potentially affected customers.

  17. pedro fernandez Says:

    #15 Kit you can only imagine what happened to an old Beetle with no power anything, trying to shift in close to zero weather. Reverse usually involved driver propulsion and the car felt like it had zero suspension as well.

  18. Kit Gerhart Says:

    It seems that nothing GM could do, except going out of business, would please some people. If they had announced dividends before the government sold the stock, the haters would say GM was “giving away our (taxpayers’) money.” When they announce the dividends after selling the stock, they are accused of deliberately selling the stock at a deflated price. How can they win certain people?

  19. HtG Says:

    Microsoft is now saying they won’t have a new CEO choice until 2014. Reporters may now go on their holiday vacations to Hawaii or Fiji, or wherever they go. Or Utah to ski, even

  20. Kit Gerhart Says:

    17,
    Yeah, I experienced some of that when in Scotland in the Navy. Where I was, it didn’t get colder than the 20′s, but that was enough to really “stiffen things up” with my ’70 Beetle.

  21. pedro fernandez Says:

    Honestly when it comes to the Detroit 3, I prefer to buy a GM over Ford or Chrysler, don’t trust Ford’s engines and transmissions and Chrysler’s use of Fiat and Alfa platforms and powerplants make me uneasy as well.

  22. Chuck Grenci Says:

    The power steering problems described in cold weather were generally when there was a problem with the rack. It was called ‘morning sickness’ and in its early stage would clear itself after warming. The seals were cold and wouldn’t seal well; after being ‘worked’ and heating up, they would swell (slightly) and again seal correctly (thus providing a full function power steering experience). A properly working rack would, perhaps, be a little stiffer (cold) but not to the effect of not working.

    The problem I see with the Infinity system is they answered a question nobody (but themselves) asked.

    And as far as the GM stock, the payback (some here) wish to be paid, just doesn’t work that way; if as said it was a loan, then a payback should be required. What happened was a ‘deal’, for cash payback and a stock option. You don’t change the conditions of the deal/contract after the deal has been stuck. GM fulfilled the requirement (twas the government who chose when to cash in the stock; they could of held it if they wanted to).

  23. HtG Says:

    One wonders if there is a subset of people who will now acknowledge that GM is no longer owned by the govt, and allow themselves to go buy a Chevy. I’ll bet those people are more fun over the holidays.

  24. G.A.Branigan Says:

    I’m glad gm is still around so I can try out the new diesel colorado when it comes out.As for the bailout,I didn’t like it at all,but not one person in washington,or gm for that fact called me to ask me my opinion.How about that ;}>

  25. Bradley Says:

    #18

    Correct. I simply want GM to be a better company so the competition gets better.

    It would take an exceptional product for me to buy one.

  26. Steve Weintraub Says:

    Re: Infiniti Drive by Wire~~~John, I hate to say I told you so but I said previously in this venue that I didn’t trust this concept and you disagreed. This is only the start!

  27. Tony Gray Says:

    Looks like a lot of guys who voted for the NACTOY read Autoweek. They picked the same Chevys.

  28. G.A.Branigan Says:

    The more the oems try to build in ‘driver disconnect’,the more problems will arise of course.But,I still maintain that there is more then enough sick units out there that will hack into the vehicles and cause more trouble then what they are worth.Not to mention a plethora of,imho,justifiable lawsuits.Technology for technologies sake will bite them (oems), in the ass bigtime.

  29. Kit Gerhart Says:

    There is a lot of technology for technology’s sake in today’s cars, like overly complex “infotainment” systems and DGI turbo engines that don’t work as well as port injection non-turbos. “Drive by wire” servo motor steering takes the cake, though.

    What, exactly, is the point of even considering a system like that, except to test it out before using it in autonomous vehicles? Maybe that is why Nissan is using it.

  30. Bradley Says:

    #29

    Yes, all this technology will benefit autonomous cars. However, I believe the original driving forces were reduced weight and reduced costs.

  31. HtG Says:

    29 from what I’ve read, Infiniti’s system will actually do some of the fine steering for its luxury customers. Wind and small deviations in the road are adjusted for without driver input from the luxury customer. Also, the feel of the steering wheel adjusts from actionjackson to numbandnumber for the luxury customer. But then, the demands of the luxury customer are a little out of my ken.

  32. cwolf Says:

    #21 pedro:

    You won’t go wrong with the majority of GM cars. As far as your concerns about Ford’s, be informed the Fiesta ST was chosen Europe’s car of the year. Their “My Ford Touch” must have reached out and and touched those that count.

  33. Kit Gerhart Says:

    32,
    You can get a Fiesta ST without MFT. Maybe the jury tested it that way. The Fiesta ST would be a fun car to drive. In that car, the small turbo works very well, from the standpoint of fun to drive.

  34. G.A.Branigan Says:

    @ Pedro: You might want to take a look at the Cruze.IF…I was looking for a fwd car I would get myself the diesel,but they do have a decent choice of gassers,and it’s a fine looking car inside and out.Chevy has a bit better warranty then ford does,and I think it also might have the first two years of oil changes/maint.Worth a look at any rate.

  35. Kit Gerhart Says:

    31,
    There are some things I am used to, and have gotten spoiled by, like AC and cruise control. Other modern “features” like power windows, I could easily do without. Will this “magic steering” be addicting to many people? I suspect people at all companies building luxury cars are watching closely.

  36. SteveK Says:

    #7 & #14 If I recall my high school business law class correctly a preferred stock is actually a bond with a different name. If the dividend for a preferred stock is suspended then it must be paid before a dividend is paid to the holders of common stock. That is the reason it has it’s preferred name. The holders of preferreds can’t vote like holders of common stock. You are now thinking if holders of preferreds don’t have any say in running the company then how did Obama oust Rick Wagner. That’s a good question. If true, the answer is, not legally.

  37. cwolf Says:

    Kit, my wife’s co-worker just got a Fiesta ST. We followed one another to one of their favorite restaurants. I must say it manuvers and accelerates like nobodys business. Her husband, a semi-ret. doc., who now focuses on rebuilding and racing his several BMW cycles, says it is the most fun car they ever bought. As soon as we get moved into our new abode, I hope to take it for a spin the next time we get together.

  38. HtG Says:

    Bingo! A winner!

    In today’s evening commute, brought to you by the latest snowy icey storm, we have one Audi sedan pasted into the guardrail of an on ramp. Hey boy, you mean Quattro ain’t mean you can juss turn the wheel and git sum rubbin’?

    (He was fine, just kissed the guardrail. Prolly didn’t even total the car, but it was pretty old)

  39. MJB Says:

    35

    Well, you got me on that one Kit. No way I’d do without power windows. My first car had crank windows, and thanks, but no thanks. I’ll take the modern convenience of power.

    Another feature I find indispensable (especially since times out of 100 I’m getting in the car with my hands full and dealing with my two toddler aged sons) is keyless entry and ignition. Especially in the winter months when I’ve got enough to worry about with strapping the kids in the back seats and whatnot. Heck, I even drove off with my tablet on top of my roof around this time last year because of all the gymnastics that regularly go on with getting kids loaded into a car in the winter. I’m convinced that had I, at that time, been driving a car that let me keep my keys tucked away in my pants pocket the whole time, I’d have not been so forgetful about the tablet (which, btw, slid off the roof less than a mile from home and got obliterated).

  40. C-Tech Says:

    @ #37 What a lot of people do not account for is the frame damage lowers the value of a used car. Even an Audi.

  41. HtG Says:

    31,35 Ii like what Jim Hall said about what made a luxury car. It’s that when you drive it, there’s a ‘sense of occasion.’ So abstract, so deep.

    (But I insist on AC)

  42. C-Tech Says:

    @ #35 My Keyless Entry makes my Jeep feel like a luxury car to me. Since I have to turn in receipts for the tolls now, the power windows come in handy. I would not trade the Cherokee for the other half’s X5 – I KNOW the Jeep will get me back from wherever I go.

    Just to follow up from yesterday’s brake discussion, most newer cars the “emergency” brake may have enough to hold you on a hill when parked or slow you down, but it is not gonna stop a runaway engine. If you have 4 wheel disc brakes, the parking brake turns a large screw inside the caliper pistion which pushes the rear pads against the rotor (mostly rear rotors). Some of the other systems use the inner part of the rotor (called the hat) like a small drum brake. There are small brake shoes which press against inner rotor (hat) when you put on the parking brake. Grand Cherokee’s used the “hat” system which is inexpensive and effective. BMW uses the screw-in caliper system with an electronic activator which is expensive and effective.

  43. HtG Says:

    41 thanks for that C-tech. I only knew about the drum type parking brake set up.

  44. Kit Gerhart Says:

    38, 41
    I like the “keyless go” on my Prius, but I wouldn’t pay much extra for it, if it were an option rather than standard.

    I rarely carry passengers, and never carry infants or toddlers, so I don’t use child seats, and my passengers can get in the car and fasten their own seat belts. For me, the “necessities” in a car I use for all types of driving, are a heater, A/C, and cruise control. A radio is nice, but I don’t use it a lot. If I had only one car, and drove in a lot of heavy traffic, I’d probably want an automatic transmission. Power windows and locks are nice, but I’d be fine without them.

    To me, real “luxury” is quietness and a good ride, but none of my cars have too much of either. A base Prius has “features,” like keyless go and auto temp control that were used only on expensive luxury cars not too many years ago, but while it’s quiet compared to my MINI, it isn’t too quiet by today’s standards.

  45. Kit Gerhart Says:

    41, 42
    The drum things are also the only ones I knew about on disk brake cars. I hope my MINI has those, rather than the X5 type, though it doesn’t matter if it works or not. I never use the “emergency,” or parking brake anyway.

  46. C-Tech Says:

    That GM 10-speed transmission better offer something better than the 7 and 8 speed trans now being offered by the competition.

    It will be interesting to see if the Chinese can offer Magnaride tech in the aftermarket.

  47. C-Tech Says:

    @ #44 Kit I suggest using it every month or so just to keep the system from rusting or seizing up.

  48. Kit Gerhart Says:

    46, Thanks for the suggestion. Yeah, I guess it would be good to exercise the cables, etc. once in a while. The only time I ever use the brake is when I park on an unusually steep hill where first or reverse might not completely keep the car from rolling.

  49. ColoradoKid Says:

    Life is Good … with common sense perhaps prevailing ;

    http://jalopnik.com/reports-of-the-death-of-the-vw-microbus-may-have-been-a-1485549668

    At least for the moment … or until the noontime headlines come out ;-)

    ” Truckin … got my chips cashed in ……. “

  50. Bradley Says:

    #43

    Our new VW has “keyless go” and my Yaris doesn’t. Suddenly digging for my Yaris’ keys is now a chore.