Episode 128 – Chrysler in Crisis, Honda Outperforms Estimate, Prius Pricing Announced

April 22nd, 2009 at 12:08pm

Runtime 6:03

Chrysler’s banks rejected the government’s request that they slash the company’s debt by 85 percent. Honda’s operating profit is expected to be better than estimated. Toyota finally announced pricing on the 2010 Prius. All that and more, plus John answers viewer questions in the “You Said It!” segment.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. Chrysler negotiations are headed for a crisis. Honda beats the ‘Streets estimates. And Toyota finally announces pricing on the Prius.

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

This is Autoline Daily for Wednesday, April 22, 2009. And now, the news.

Uh-oh. The negotiations over what happens at Chrysler are getting to be contentious. The Wall Street Journal reports that Chrysler’s banks rejected the government’s request that they slash the company’s debt by 85 percent. No dice, say the bankers. They offer to cut that debt by only 35 percent, plus they want 40 percent of Chrysler’s stock, a seat on the board, and they want Fiat to put in $1 billion. They’re also mad that the UAW is supposed to get $3 billion for the VEBA fund, even though the union is much farther down the list of who’s supposed to get paid. And these bankers seem to hold all the aces. They tell the government they think they can recoup 66 percent of their debt if the company is forced into liquidation.

Honda’s operating profit last fiscal year is expected to be better than estimated. According to Reuters, the company’s profit was boosted by a weaker yen and better-than-expected sales in China. Don’t forget, Honda’s motorcycle sales are booming and that’s a key reason why its profits are 10 billion yen more than anticipated even though it’s still an 84 percent drop from last year.

European company Amphicoach is set to launch its 50 passenger amphibious bus. According to Autoblog, the vehicle complies with EU legislation and can be used in fresh or salt water. The bus is made of marine-grade aluminum and has a choice between two diesel engines. Inside it’s equipped like a typical party bus with LCD screens, DVD players and a PA system. No word yet on what it costs to rent one.

Toyota has finally announced pricing on the 2010 Prius. The new model features five different trim levels starting at $21,000 and topping out at $33,000. Obviously that base price model is aimed right at the Honda Insight, which starts at just over twenty grand. But you can’t buy the bare-bones base Prius right now. It will come out later this year. And Toyota must be furious with Honda’s pricing because I don’t think Toyota can make money on the base model. The company expects the most popular model to be the Prius II trim level which starts around $23,000 including delivery.

Airstream, the builder of those iconic, bullet-shaped campers has teamed-up with MINI and the “Republic of Fritz Hansen,” a Danish furniture maker, to do a design study on this, a cool-looking RV. Towed behind a MINI Clubman S, it features a “watersports” theme with a roll-out sun bed and fun, colorful patterns. It’s being unveiled today at the “Salone del Mobile” furniture show in Milan.

Coming up next, it’s time for You Said It!

And now it’s time for some of your feedback.

This is “You Said It!” Every day we get dozens of comments and questions from you, our viewers. “You Said It!” gives me a chance to respond.

Dave E. writes in to say: “I don’t understand GM’s future with Opel. Why would GM want to give it up or dump it?”

Dave, GM doesn’t want to give it up. But it doesn’t have a choice. It’s bankrupt. Opel is bankrupt. General Motors is no longer the master of its own destiny, and reality is dictating what it has to do.

Pedro Fernandez says, John: as reported in Autoweek, experts predict the end of the V8 is coming. To be replaced by more turbos and super-chargers. Do you agree?”

Pedro, I do not agree at all. There may be fewer V8′s but they will be around for a long time to come. The pessimists overlook the ingenuity, creativity, and determination of the engineers in this business.

Tom Cain saw our report on the Tuk-Tuk coming to America and asks: “How do you make a Tuk-Tuk meet U.S. safety regulations?”

Well Tom, it’s pretty easy. The Tuk-Tuk is a three wheel vehicle, meaning it’s officially classified as a motorcycle. Even the 15-passenger versions. To meet motorcycle safety regulations all you need are headlamps, turn signals and a rear view mirror.

Thanks for all your letters and comments. We can’t get to them all, but we do read them all. So your voice is being heard, even if we don’t put it on the air.

Join us tomorrow for the latest live webcast of Autoline After Hours. I’ll be there along with Jason Vines and Peter DeLorenzo, and Matt DeLorenzo, the editor of Road & Track magazine. Hey, are Peter DeLorenzo and Matt DeLorenzo related? Well, if you don’t know, you’ll have to tune in to find out. That’s tomorrow night at 7 pm eastern, or 2300 hours Greenwich Mean Time at autolinedetroit.com.

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

14 Comments to “Episode 128 – Chrysler in Crisis, Honda Outperforms Estimate, Prius Pricing Announced”

  1. G.A.Branigan Says:

    Looks like the demise of Chrysler is imminent,this is sad news but hardly unexpected.John…who is inline to pick up Jeep?

  2. pedro Fernandez Says:

    John: to me it’s amazing that two companies that make the same product can be in such different situations. I guess it’s all about the product and the respect for their customers. I have never seen Honda sell an obviously bad product to their customers and then try to say it’s actually as good as the rest.

  3. Tony Gray Says:

    Just as long as the Amphicoach doesn’t have muzak with Celine Dion singing “My Heart Will Go On!”

  4. Alex Kajdi Says:

    If Chrysler is liquidated, it will probably mean that many more able bodied American Workers will be on the unemployment line. I hope those bankers are happy with themselves.

    We need those unemployed auto workers to go and ralley in front of the White House and Congress.
    Their needs to be some legislation enacted to protect the American Worker from Corporate Greed!

    If our Government allows the Greedy Corporations to send our Manufacturing and Service jobs overseas then what type of work is left for the average American? I got it Farming! We can grow corn and export ethanol.

  5. Tom Cain Says:

    MINI + Airstream??? All I can say is LAME!!! I own a MINI and dragging Airstream behind it would be the worst driving experience on the planet! If I want to pull a trailer, I’ll use my pickup.

  6. Salvador G. Says:

    Man, I must admit I do envy bankers, they get to rip off people, get billions of taxpayer money for it and on top of that demand even more money, and who do you guys think will get even more money after Chrysler and GM goes under?
    HA! and Republicans say this country is becoming a socialist nation, what a joke. :)

  7. JIm Thykeson Says:

    In answer to Pedro’s inquiry about the future of V8′s its simple. If the gas companies would put in the infra-structure for CNG and get off of gasoline we could keep the V8s, trucks, SUV’s and the current combustion engine/drivetrain. The conversion is rather simple but effective. You might not get the same MPG results, but its what you do for the atmosphere. This step is needed…NOW!

  8. Greg Says:

    I Don’t Get It. The Banks And AIG get all the money they want from the tax payers. And now they want more so they liquidate Chrysler. What about my say in the matter. Thats my tax money the government is burning and the banks. I like Chrysler Products, got a JEEP and 3 Dodge trucks. Love all of them.

    One MAD TAX PAYER
    Greg

  9. Andy Says:

    To JIm Thykeson:

    What do you think will happen to the cost of heating homes with natural gas if all these vehicles start using it?

    People who are now paying $200-$300/month to heat their homes with natural gas will probably end up paying $500-$700/month just to heat their homes!

  10. J.W.Ford Says:

    Does anybody remember Ross Perot and the giant sucking sound? I would say we are hearing it clearly right now!

    John

  11. Topics about Aprils-day » Episode 128 - Chrysler in Crisis, Honda Outperforms Estimate, Prius… Says:

    [...] SCVTalk.com added an interesting post on Episode 128 – Chrysler in Crisis, Honda Outperforms Estimate, Prius…Here’s a small excerptThis is Autoline Daily for Wednesday, April 22 … No word yet on what it costs to rent one. … at 7 pm eastern, or 2300 hours Greenwich Mean [...]

  12. Ed Kemmerer Says:

    Hey John,

    How come the Ward’s Automotive Interiors show is advertising on your April 22nd show when the event took place yesterday the 21st? Hope you didn’t charge them too much for that useless spot.

  13. John McElroy Says:

    @ Ed: Look again! The Ward’s Interiors Show is on MAY 21, not April.

  14. Ed Kemmerer Says:

    John,

    You are so right, I guess my senior moments are getting harder and harder to hide, sorry about that. Love the show, keep up the great work.