Episode 91 – GM to Sell Part of Opel, Big 3 Capacity Under 50%, Hyundai Pours On the Spending

March 2nd, 2009 at 12:00pm

Runtime 5:49

GM is looking to sell off 25 to 50 percent of Opel, which could legally separate it from the company. Production capacity in North America for the Big Three could drop below 50 percent this year. Hyundai plans to invest nearly $6 billion this year on facilities and research and development. All that and more, plus a look at the brand-new Shelby GT500 Mustang.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. GM may sell off a chunk of Opel. North American production capacity will fall to 50 percent. And Hyundai pours on the investments.

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

This is Autoline Daily for Monday, March 2, 2009. And now, the news.

Forty-four billion dollars. That’s what GM’s request for government aid is up to right now, when you count money it wants to get from governments in North America and Europe. The Wall Street Journal reports GM is also looking to sell off 25 to 50 percent of Opel (subscription required), which could legally separate it from GM. The German government is reluctant to loan GM money, but is under pressure from labor unions to save jobs.

Ward’s reports the production capacity in North America for the Big Three could drop below 50 percent this year (subscription required). And other manufacturers in North America are only expected to hit 55 percent capacity. That is an alarming number. A general rule of thumb in the industry is that automakers need to hit 80 percent of capacity utilization just to break even. Ward’s also forecasts that even by 2012 the Big Three will only hit 75 percent capacity utilization.

A year or two ago Ford announced that it was going bring some of its European products to North America to help it create a more globally-consistent product lineup. Now Autoblog reports that company’s plant in Louisville will build the Kuga crossover, it was initially expected to get the next-generation Focus. This is good news for the 3,000 or so folks down in Kentucky who currently assemble the slow-selling Explorer.

And it looks like the economic recession is going to claim another casualty. WardsAuto.com reports that GM’s highly-anticipated diesel engine for light-duty pickups may get canceled (subscription required). The 4.5-liter Duramax V8 was expected to debut in 2010 model Silverado and Sierra trucks, but the whole program may get pushed to the wayside as GM asks for more taxpayer aid.

And while other automakers are slashing spending, Hyundai plans to invest nearly $6 billion this year. According to Reuters, two-thirds of it will be spent on facilities while the rest is planned for research and development. Hyundai said the R&D spending will focus on “green” vehicles.

Dacia, the low-cost brand from Renault, will unveil its first crossover concept at the Geneva Motor Show, called the Duster. It has a very futuristic look. It has one door on the driver side but there are two doors on the passenger side. And even though it’s a four passenger vehicle the passenger seat can slide under the driver’s seat to create more cargo room. The Duster is equipped with a 1.5 liter diesel engine that gets the equivalent of 44 miles-per-gallon.

Coming up next, a look at the brand-new Shelby GT500 Mustang, we’ll be back right after this.

Ford premiered its redesigned 2010 Mustang at the LA Auto Show late last year, but it saved the hottest version of the car for its hometown show in Detroit.

Carroll Shelby himself was even on hand to help introduce the new GT500 to the international media.

It takes a lot of muscle to power the new Shelby to the top of the Mustang stable, but that’s just what its engine delivers. Like before, it’s a 5.4-liter supercharged V8, but for 2010 its horsepower has jumped to 540.

Bolted to the engine is a six-speed manual transmission with revised gear ratios for better performance and an estimated two more miles per gallon on the highway.

The exterior of the new GT500 shares the same basic shape with lesser Mustangs, but its styling has been tweaked for a meaner look and better aerodynamics.

In keeping with the updated body, the interior is also all-new – and light-years ahead of any previous Mustang. The soft dashboard is accented with real aluminum trim while the seats are covered with leather and Alcantera.

The latest Shelby GT500 should arrive at Ford dealerships sometime this spring. No word yet on the price, but you can bet it’ll cost at least twice as much as an entry-level Mustang.

Autoline Daily reaches a wide audience ranging from top decision makers in the industry to every-day consumers. They all have one thing in common. They love the auto industry, the cars it makes and the technology that goes into them. We have thousands of viewers from 140 different countries in the world. If you’d like to advertise your company or product to these people, contact our director of sales, Jim Moskus, using the info on your screen or click “Contact Us” at AutolineDetroit.tv.

And that’s it for today’s top news in the global automotive industry. Thanks for watching, we’ll see you tomorrow.

9 Comments to “Episode 91 – GM to Sell Part of Opel, Big 3 Capacity Under 50%, Hyundai Pours On the Spending”

  1. John Says:

    “Ward’s also forecasts that even by 2012 the Big Three will only hit 75 percent capacity utilization.”

    If we’re lucky. It seems that common sense and basic math are not skills of the morons driving the USA over a cliff.

    Decades of job destruction is the root cause of the problem. Not according to the moronic leaders and experts in DC, they think the root cause is houses and banking.

    The lack of jobs IS WHY the U.S. Consumers standard of living has been in decline and, IS WHY the U.S. population extracted “paper” equity out of their homes.

    Gas prices pushed the ignition button.

    So, for the morons, let’s review this one more time.

    1. U.S. jobs destroyed due to globalization.

    2. U.S. reduced earning power leads to “paper” equity extraction of home equity.

    3. Gas prices raise all prices to the breaking point and start the foreclosures.

    4. Foreclosures lead to lower home prices and more foreclosures.

    5. Massive Foreclosures lead to banking crisis.

    And, here we are.

    This problem will never be solved until it is described correctly and a targeted remedy is efficiently focused to correct it.

    At the rate we are going 2012 is optmistic.

    Read this:

    http://blogs.law.harvard.edu/doc/2009/02/12/stimulus-bill-qs/#comment-134649

  2. Dan Clemons Says:

    A 40 billion dollar loan is not going to save GM. Even a 100 billion dollar loan is not going to save GM. Shareholders have been wiped out, GM owes too much in debt already, which is like a cancer, on top of that it owes to much to retired employees. The UAW is not going to let GM survive so I think the handwriting is on the wall for the once great company. Consumers Reports says GM is second to last in reliability. That combination of all these factors is a death sentence for GM.

  3. pedro Fernandez Says:

    GM and Chrysler are very sick companies indeed, While Ford announces new products on the way, All we hear form the other 2 is: gloom and doom and give us more taxpayers money. Same for AIG I sell insurance and have not been able to sell one single AIG policy since this mess started with them

  4. Salvador G. Says:

    First of all, 2012 Big Three??
    Thats just optimistic… Hey, John, did you mean TOYOTA, FIAT and FORD(hopefully)

    And Second.
    With all due respect, Carol Shelby should stop put his name on everything just for money, there was a time when Carol Shelby made cars, the Cobra, the Super Snake and he, he beat Ferrari, I wish my life was a half of that; but now he just an old man who put his name on Fords boring remakes.

  5. Derrick G Says:

    In episode 78, you said you say “HUN-DIE” because the U.S. is the only country where the marketing department says to say it “HUN-DAY”. Couple of questions, then:

    -Why do dealers in Canada, including headquarters in Ontario, answer “HUN-DAY”. Is Canada not a separate country from the U.S.?

    -Do you know why on TV in Korea, they say “huh-YUN-DAY”? For example, here’s a Hyundai Motor commercial from Korea:

    http://www.youtube.com/watch?v=B3iH3fFV44Q

    Here’s one for their finance division:

    http://www.youtube.com/watch?v=g9mJEyd9tvA

    Note that the guy on the sofa says “HUN-DAY” while the male announcer says “SHUN-DAY” but no one ends it “DIE”.

    And here’s one from the card division of Hyundai Capital:

    http://www.youtube.com/watch?v=VTDA821ZJWE

    Lastly, their part-owned gas station company:

    http://www.youtube.com/watch?v=__AOf4EOsFE

    Never do I hear a “DIE” at the end. Think you could get some of those Korean execs on video saying “DIE” and then explaining why they do since it doesn’t seem to be the official corporate pronunciation?

  6. Julius Lambert Says:

    GM still needs to manufacture that smaller diesel for light trucks, vans,crossovers etc.Diesel is for the near future.With the UREA system go for it NOW.

  7. Ed Says:

    Derrick G, you need to get a life, you have way too much time on your hands if all you can obsess about is how Hyundai is pronounced. Let me guess, you’re part of the UAW, or more commonly known as U Aint Workin.

  8. Richard Tait Says:

    I see where John (not McElroy) above is giving his take on what caused the US economy to collapse. I invite all and sundry to read the following lines, taken from Sun Tzu’s “The Art of War”.

    “When doing battle, seek a quick victory.”
    “If the army is exposed to a prolonged campaign, the nation’s resources will not suffice.”
    “When weapons are blunted, and ardour dampened, strength exhausted, and resources depleted, the neighbouring rulers will take advantage of these complications. Then even the wisest of counsels would not be able to avert the consequences that must ensue.”
    “I have heard of military campaigns that were clumsy but swift, but I have never seen military campaigns that were skilled but protracted. No nation has ever benefited from protracted warfare.”
    “Those skilled in doing battle do not raise troops twice, or transport provisions three times.”
    “A nation can be impoverished by the army when it has to supply the army at great distances. When provisions are transported at great distances, the citizens will be impoverished. Those in proximity to the army will sell goods at high prices.”

    I think GM really needs to get that diesel to market, perhaps with a slightly smaller displacement, though. That should give slightly better mpg.

  9. Derrick G Says:

    Ed, your comment doesn’t even make sense. Why, if I were part of the UAW, would I want it said correctly? John gave an arrogant reply to this matter in the first place, he’s not saying it correctly, he doesn’t seem willing to admit that he’s not, and I’m not going to stop complaining about it until he at least says it like they actually do in Korea and if it bothers you, oh well. Doesn’t bother me that it bothers you.