AD #1445 – Volvo Reveals XC90, AutoVaz in Trouble, Subprime Concerns Overblown?

August 27th, 2014 at 11:45am

Runtime: 7:12

- Volvo Reveals XC90
- AutoVaz in Trouble in Russia
- Anti-UAW VW Workers to Form own Union
- Subprime Concerns Overblown
- GM’s Corrosive Issue

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Hello and welcome to Autoline Daily. I’m Murray Feldman from Fox 2 News in Detroit here once again filling in for John McElroy for the next two days. But now let’s look at today’s top stories.

We’ll start across the pond as it were with our friends at Volvo who — for the first time in about 4 years — are revealing a new car, the XC90 and it’s about time. The old one has been with us for about 13 years more than double the usual lifecycle of a vehicle like this. And from the looks of it, it’s quite an upgrade. Lower, wider and longer with more cargo and interior space, the 2016 XC90 is built on a brand new scalable architecture called SPA which will handle a variety of future Volvo vehicles. But for now, this one, due in dealerships next April, might be noted — at least early on — for its signature interior feature a 12-inch tablet-like touchscreen display. And we should probably mention the 400-horsepower T8 plug-in hybrid powertrain that you can order as well. And heck, they’ve even update the iconic Volvo Iron Mark on the grill. And if a new car wasn’t enough on its own, Volvo is producing a loaded special edition that sells for about 66-thousand. But there’s only a run of 1,927 — an homage to the year the company was founded — so if you’re interested you can go online starting tomorrow — August 28th — to place your order.

Meanwhile, staying in Europe for the moment, Russia has more issues than just its dust-up with the Ukraine. Bloomberg reports that AutoVaz — the maker of Lada cars, the country’s top nameplate since the days of the Soviet Union — continues to lose market share, much to the chagrin of Renault-Nissan, the company’s controlling investors. So far this year AutoVaz only has about 15 and a half percent of its own market and new CEO, and former GM executive, Bo Andersson says the goal is 17. Safe to say it doesn’t look like it’s going to happen this year but what is on the docket is — step one — reducing the company’s workforce by nearly 20 percent and — step two — cut what Andersson calls unnecessary bureaucracy in management as well. Sounds like a different business attitude than the old Soviet Union days, eh?

The battle to organize VW’s Chattanooga plant just took a strange twist. Last week we reported that the UAW has nearly enough members in its new local union at the facility, to be recognized by VW as the exclusive bargaining agent for the plant. But now Reuters reports that workers who don’t want to be represented by the UAW are attempting to create their own union, called the American Council of Employees. The anti-UAW workers hope that VW will allow employees to hold a new vote to choose which union they prefer. We’re not sure how much of a chance the anti-UAW crowd has because it looks like VW would prefer to go with the UAW.

Last week Honda stirred up a storm about big jumps in subprime lending to car buyers. Honda criticized its competitors for making loans to subprime buyers and other media sources have warned about a subprime “bubble.” But now Equifax, one of the major credit agencies, says this whole subprime brouhaha is way overblown. Equifax says many people, through no fault of their own, lost their job or their home during the Great Recession, and were downgraded to subprime status. But it says that now many of those people are getting back on their feet financially. And as long as they make their loan payments on time they could eventually get back to a prime credit rating. Equifax points out that if these car buyers can’t get a loan, they will never be able to build up their credit scores. Besides, with today’s tighter lending standards, Equifax says a 620 credit score in 2014 is a lot better than it was in 2007. And it says that’s a key reason why delinquencies are at one of the lowest rates we’ve ever seen.

Coming up next, a look at GM’s corrosive issue.

Every automaker says that it’s a good idea to inspect brake lines every so often to make sure they’re still in good shape. But could this maintenance practice ever be turned into a recall issue? Here’s Sean McElroy with that report.

Back in July the Center for Auto Safety called on GM to recall around 6 million trucks and SUVs from the late 90’s to early 2000’s due to corroding brake lines but GM shot back saying it’s a maintenance issue that affects every automaker and these vehicles are way out of warranty. And, of course, plenty of other makes and models have had brake lines wear out. So, why is the Center for Auto Safety going after GM and who’s right?

In my mind, GM clearly has an issue with rear brake lines corroding on those vehicles, especially in states that salt roads during the winter, and I think you can even include the automaker’s vans from the same years. This is not breaking news either. I have been replacing brake lines on these GM vehicles for years, so a recall could have been argued for well before they were out of warranty.

The one area where GM has a leg to stand on is the part about this being a maintenance issue. Checking for corroded brake lines on any make or model is good practice and necessary but it’s a little bit harder to check on the vehicles in question than the average car or truck. The most common area for failure is a small section between the frame and the gas tank, which can make it very difficult to see all of that section of brake line, so the gas tank may have to come out. But if you do have to replace the brake lines the gas tank should to be removed for a proper fix anyway.

In the end though this is more than just a maintenance issue. It’s poor design. The area where the lines sit in the C-notch of the frame and the brackets that hold them down allow dirt, water and salt to accumulate, which is why it’s such a common failure. And to hammer my point home that this is a poor design. The fuel lines that sit in the same C-notch in the frame and share the exact same brackets as the brake lines are almost as likely to rot through.

For Autoline Garage, I’m Sean McElroy

Thanks for that report Sean.

But that brings us to the end of today’s show. I’m Murray Feldman from Fox 2 News in Detroit, thanks for watching and we’ll see you tomorrow.

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18 Comments to “AD #1445 – Volvo Reveals XC90, AutoVaz in Trouble, Subprime Concerns Overblown?”

  1. Lex Says:

    Great Jobs Murray & Sean!

  2. dcars Says:

    Judging the attitude of the current Russian political climate I would guarantee that at least one person will leave Autovaz ……and that’s Bo Andersson.

  3. Mike Says:


    How are you going to get people to check for rusting brake lines when half of them don’t check the oil or the tires? The technology to prevent rusty brakes lines is well known; it is a question of scrimping pennies on the galvanizing to try to hold down the price of the car. As a safety issue, this problem should have been solved or better yet, never allowed to happen.

  4. BobD Says:

    Off topic, but what did others think of the just completed Motor City Masters series on TruTV that was previewed on AutoLine?

    I was skeptical of how this show was going to play out, but I must say it kept my interest and I hope it returns for another season. The designers were unbelievable, especially 20 year-old student Darby.

    I would suggest they tone down some of the forced drama (it distracts from focusing on the true talent of the cast) and Jean needs to give up on her silly hats.

  5. Chuck Grenci Says:

    Sean, does GM use a different base stock for their brake lines or do you think that the location is the root cause? It might be that GM thought they were doing the right thing by protecting the lines from exterior damage/road-debris and ended up shooting themselves in the foot by allowing crevices and limited access areas actually to compound the problem. Perhaps a warning (in the owners manual) should include yearly (or post winter driving in the snow/salt belt) to flush the undersides (particularly in the channels that cradle these lines.

  6. HtG Says:

    I could have had some fun here, Sean, but maybe a flexible scope is the ticket.

  7. Oolly Says:

    It should be noted that other manufacturers have recalled for rust issues. Very recently Subaru just expanded a recall for rusty brake lines. Many years ago I had a Ford recalled for Rusty bolts and washers. GM had a similar attitude with their ignition switch. They claimed it was not a safety issue since the car could be restarted, but while people were dying in GM cars more than 90 recalls were conducted by other manufacturers for stalling. GM needs to get a clue and try harder keep their existing customers alive. They are not bringing in new customer fast enough to let existing customer die.

  8. Kit Gerhart Says:

    This brake line thing is no big deal. When a brake line rusted through on my ’64 Dodge Dart, I had no brakes at all, except for that really feeble parking brake. Luckily, I didn’t crash. Dual braking circuits, mandatory since 1968 or so, were a great idea.

    As far as the GM trucks, it sounds like the lines have more than their share of rust outs in the road salt areas, because there is a location in the routing where salt and dirt collect. Maybe that section should be replaced with stainless steel.

  9. pedro fernandez Says:

    Jay Leno’s Garage coming to CNBC 10pm Sundays, can’t wait! Bye bye US Top Gear.

  10. DH Says:

    That “Leno Garage” show looks like a once and done deal. It isn’t meant to replace or compete with the weekly Top Gear show.

  11. cwolf Says:

    It seems to me, GM’s decision to move the Caddy SRX from Mexico to Tennessee should have been given mension. Just as worthy of note is that suppliers are also moving close to the plant. This means job retainment and/or additional growth for the workers and for the U.S. economy.

    Conveyed was a positive spin for subprime lending, but is the practice more harmful than good? Most of these loans are now at a higher interest rate and for a continued long duration. In the long run, this only siphons more money from these buyers which could be better used for other necessities, plus the practice widens the fure replacement cycle for the entire industry. It just doesn’t sound like a healthy practice to me. Perhaps more encouragement is needed for some to buy used.

  12. cwolf Says:

    error: should read,”widens future replacement …” and any other sp. errs.

  13. XA351GT Says:

    Due to the serious results from a total failure due to a ruptured or rusted brake line it should be mandatory for them to made from stainless steel. Seeing as brake fluid is hydroscopic and can absorb a great deal of moisture over time they can rust out from the inside out like most exhaust systems do.

  14. XA351GT Says:

    Leno’s garage is a regular fixture on Youtube. So if it goes well on CNBC I could see it be a regular show.

  15. HtG Says:

    If the CNBC producers can get Jay to let the guests be ‘the ham’ for a bit, they might just have a show. I love Leno plenty, but dang if he doesn’t step on his guests sometimes.

  16. Enn Norak Says:

    I would gladly pay a premium to get stainless steel brake lines as original equipment. It’s a cost-effective way to avoid corrosion worry and incremental inspection and maintenance expense. fuel lines should also be made of stainless steel. Back in the day, I recall driving an Audi all the way from Palm Beach to Jacksonville just to get a leaky corroded fuel line replaced at reasonable cost. Some 30 gallons of gas leaked out on I-95 during that drive.

  17. Dave Foley Says:

    The addition of an ACTUAL automotive technician to the Autoline program is great upgrade. We’ve seen Sean as host many times, and in his role in the Autoline Garage, but today’s segment really hits home on why his input and presence is so important.

    As most of us sit here and pontificate on which car is good, and which one is bad, having someone able and willing to honestly comment on given maintenance issues of the day, is a huge benefit. It’s not heresy, it’s what actually happens.

    After all, test drivers never have to deal with the parts failures or wear issues of the cars they test. To my mind, those issues are far more important that the immediate ‘cool’ factor, or whether a given brand is the darling of the media types.

    Keep up the good work!

  18. Kit Gerhart Says:

    Sean, or anyone who might know, does anyone use stainless steel brakes lines on their cars. It would seem that might be the case on some expensive cars like S-Class, or especially any extraordinarily expensive cars like Rolls-Royce. Of course, no one drives Rollers in the road salt anyway, so they wouldn’t have a problem with brake lines rusting.