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Episode 105 – Suppliers Get Aid, Chrysler Says It’s Better Off Than GM, Tesla Electric Sedan

March 20th, 2009 at 12:00pm

Runtime 7:39

The U.S. Treasury is going to give $5 billion in aid to automotive suppliers. Chrysler’s chief financial officer, says the company is better positioned to deal with the recession than GM. Tesla gets ready to unveil its electric sedan. All that and more, plus a preview of this week’s episode of Autoline with Tesla management.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. Suppliers are going to get money from the U.S. Treasury. Chrysler says it’s in better shape than GM. And Tesla gets ready to unveil its electric sedan.

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

This is Autoline Daily for Friday, March 20, 2009. And now, the news.

The U.S. Treasury is going to give $5 billion in aid to automotive suppliers, and no sooner did it announce that then two Senators voiced their opposition. The Free Press Reports that Senators Bob Corker of Tennessee and Judd Gregg of New Hampshire, both Republicans, are against this aid. The Senators say that the Obama Administration promised the auto industry would not get more aid until after a comprehensive restructuring. They say this is a violation of trust by the Administration and that it will make it harder to win congressional support for further aid.

But back to the $5 billion in aid. If the Administration is giving aid to the suppliers, then there’s little doubt it will give more aid to GM and Chrysler. The Wall Street Journal reports that the money will go to the major Tier 1 suppliers for the two automakers, which will give them enormous power to decide who survives and who doesn’t. Ford says it will not participate in this program because it’s not missing payments to suppliers. I’ve got to imagine more money is coming. $5 billion is too little, too late. Suppliers say they need $25 billion. I think we’ll learn next week of a comprehensive plan to save the industry.

We’ve all known Tesla is going to build an all-electric sedan called the Model S. Autoblog reports that the base price will be right around $58,000, which is significantly cheaper than the Tesla roadster which starts north of 100 grand. When federal tax credits are factored in, the price of the sedan drops to a hair less than 50 thousand. Tesla is expected to formally reveal the car next week.

Ron Kolka, Chrysler’s chief financial officer, says the company is better positioned to deal with the recession and is a safer investment for taxpayers than General Motors. The Detroit Free Press reports that he says the company can earn a profit and repay its loans at lower sales levels than GM can. So much for that “We’re all in this together” attitude that prevailed before they got any taxpayer money.

Kia confirmed that the next generation of its Sorrento will use a unibody frame (subscription required) instead of a body on frame platform. According to Ward’s, this may also result in a name change for the vehicle as well. It will be the first model built at Kia’s new Georgia plant and production is expected to begin this December.

Everyone has seen “Wash Me” written on a dirty car window. But artist Scott Wade has taken it to a new level. According to Jalopnik, he was at an art festival in San Antonio recently showing off his dirty car art on a Ford Flex. It’s quite impressive especially since he only uses his fingers and a few brushes to make his drawings. You can check out more of Scott’s work at, dirtycarart.com.

Coming up next, a preview of this week’s episode of Autoline, we’ll be back right after this.

On this week’s edition of Autoline Detroit we take an in-depth look at Tesla, the Silicon Valley-based maker of electric sports cars. In the following preview I chat with the company’s CEO and main product architect Elon Musk about its recent battery partnership with Daimler.

If you liked what you saw you can watch the entire episode of Autoline Detroit on our website right now. Just go to AutolineDetroit.tv or follow the link in today’s transcripts.

And that’s it for today’s show, except for one more thing. I’ve got to announce the winner of this week’s trivia challenge. We asked you to name the two American luxury automakers that this guy, Henry Leland, founded. And the correct answers are – Hupmobile and REO. No, just kidding! Of course the right answers are Cadillac and Lincoln, as most of you correctly responded. As always my crack team randomly selected today’s winner from the pool of correct responses. Pookie, the envelope please! And the winner is… Gerald Thompson of Leesburg, Florida! Congratulations Gerald, you’ve just won a GMAC-branded wine and bottle opener.

And that’s it for today’s top news in the global automotive industry except for this important message.

14 Comments to “Episode 105 – Suppliers Get Aid, Chrysler Says It’s Better Off Than GM, Tesla Electric Sedan”

  1. pedro Fernandez Says:

    Frankly, I don’t see Tesla being anymore than a grown-up toy factory, it’s too expensive, unproven technology, and just a start-up operation. Unfortunately only bringing in inexpensive, battery powered Chinese cars is gonna get people into buying this technology

  2. Episode 105 - Suppliers Get Aid, Chrysler Says It’s Better Off … Says:

    [...] Episode 105 – Suppliers Get Aid, Chrysler Says It’s Better Off … [...]

  3. craigerzgt Says:

    Sounds like Bob Corker and Judd Gregg should sit down and shut up unless otherwise necessary. If they properly understood the situation at hand and worked to the country’s best interests, they wouldn’t be spouting their mouths and playing political games like that.

    Bravo for Tesla planning on releasing another (and cheaper!) vehicle. This is likely a better alternative to hydrogen, as long as the technology is quickly (already?) being generated to have long-lasting reliable batteries in these types of cars. Hopefully it looks nice too.

  4. Alex Kajdi Says:

    John McElroy:

    I am so glad you heard my suggestion about doing a in-depth report on Tesla Motors, Thank you.

    I believe Tesla Motors should think about
    it’s future manufacturing and dealership networks. Elon Musk should contact the Department of Energy for funding from the Obama Administration to buy the Spring Hill (Saturn) Assembly Plant and ramp up production of his EV sedan. I could see Tesla turning out former Saturn SL’s with electric drive system technology. This would create jobs for those plant workers and get us all closer to driving down on a “Greener” highway.

    Tesla also needs to establish a dealer network and should partner with the remaining Saturn Dealerships around the country. Saturn supported the original EV1 for General Motors. If GM cuts Saturn loose, Elon Musk would have an enormous opportunity to grab Saturn’s share of the market with his electric vehicles, especially with a sedan and than a
    CUV to follow in the not to distance future.

    I believe that Loyal Saturn Customers would embrace an all electric vehicle, as they did with the EV1. He could even re-run those old mysterious TV commericals about the EV1 and incorporate the new Tesla Technology Powered Public Relation Spin. I also think that Elon Musk should contact Roger Penske regarding this suggestion. The Penske Group owns several Saturn Dealerships in the New York, Tri-State area, and no doubt in other areas of the country.

    I will keep my fingers crossed!

  5. Gerald Thompson Says:

    John–I’ve been entering your contest since day one and I’m shocked to see that I won!

    I looked at a Tesla at an electric vehicle event in south Florida a couple weeks ago when we were showing our PHEV (a123 converted Prius). I sure didn’t see $110,000 + no dealer service in that vehicle.

    Keep up the great work!

  6. Dave Kopitzke Says:

    John,
    Is Ron Kolka saying Chrysler is in better shape than GM any different than Allan Mullaly stating that Ford doesn’t need any government money now?

  7. Salvador G. Says:

    Thanks John Mc.
    and autoline Detroit

    That was a most insightful interview on Tesla, althought; you forgot to asked… Why Lotus???

    I was curious to know who is the car guy inside Tesla who said ‘Let’s go with Lotus”
    or it just happen to be the most fit company for what Tesla wanted, since Lotus is also a small car company???

  8. pedro Fernandez Says:

    I think the answer is: they don’t care about substance but just looks,Lotus is known for their handling and nothing else, I think this is as ingenious as that flying car that was tested this week, its gonna be a “niche car” not a mainstream car. Just ask Chrysler how much money is made on “niche” cars. (viper/prowler)

  9. ib6ub9 Says:

    When the suppliers go out of business due to lack of enough aid where are all the southern transplants going to get their parts from? I don’t think Corker has enough brain cells to fathom this concept.

  10. Salvador G. Says:

    Pedro, I think Lotus is a little more than that, from Formula 1 since 1950′s to the present sport cars competition.

    The Lotus Elise is a small fast and cheap super car and almost obvious choice for Tesla but that is not my question, my question is more on the lines of– WHY — did they try others cars before the Lotus, the process of elimination prove Lotus to be the best and WHO was the car guy inside Tesla (probably beside Tesla CEO) who said ‘Yes to this choice’ and ‘NOt to that one’

  11. Drew Says:

    Government subsidies (aka the taxpayers) to the rescue again……Whatever happened to the idea that if you don’t run your business efficiently and competitively, you shouldn’t have a business??

  12. pedro Fernandez Says:

    Salvador: Lotus is not known for reliability, they are known for fun to drive, go to the track and have a ball car. This is not a mainstream, everyday go to work car, the idea here is to make an electric PRACTICAL everyday car. ex. Prius, Insight, and maybe even Chevy volt. The Tesla is not going to make a dent in the market, if you got that kind of money, you go Porsche, Vette, Bimmer Audi ect. Not some car that if it breaks, who fixes it? You gotta ship it back to the company, which then becomes a hassle. These people should have thought of that first. I remember Daewoo tried to do it without a dealer network and they failed. And those were dirt cheap in comparison

  13. Salvador G. Says:

    The Idea of Tesla is to make a fast electric car to push forward the technology in electric car development, I get that; my question is what came first the Tesla porpuse/design or the Lotus base.

  14. Jared Says:

    The Tesla roadster is a lightly modified Lotus. It is a very small and simple car. Yet Tesla is losing money on each one, even though they are selling it for over $100k.

    Now Tesla says it will produce a much larger and more complex sedan for $58k. Not gonna happen.