Episode 130 – Ford’s Improving, Chrysler Heads For Chapter 11, Making Hybrids Noisier

April 24th, 2009 at 12:00pm

Runtime 6:31

Ford lost $1.4 billion in the first quarter, about half of what it lost this time last year. The Obama Administration is preparing a Chapter 11 bankruptcy for Chrysler. A proposal in Congress aims to protect people from getting hurt or killed by silent-running hybrid and electric vehicles. All that and more, plus a preview of this week’s Autoline Detroit with Johan de Nysschen, the President of Audi of America.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. Ford loses money, but not as much. Chrysler prepares for Chapter 11. And hybrids will have to be noisier.

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

This is Autoline Daily for Friday, April 24, 2009. And now, the news.

Good news. Ford only lost $1.4 billion in the first quarter. Yes, as strange as it seems, that’s good news. That’s about half of what it lost this time last year. Yet, the company’s revenue dropped by more than $14 billion. So even though revenue dropped, the company didn’t lose as much, which is thanks to lower interest payments, lower labor costs, and a lot of internal cost cutting. The company also increased its cash position by more than $7 billion, but that came from tapping into its line of credit.

The Obama Administration is preparing a Chapter 11 bankruptcy for Chrysler, the New York Times reports. It would protect pensions and health care costs for UAW employees. That’s going to put pressure on Chrysler’s debt holders, because the union is now somewhat protected if the company goes into bankruptcy. Those debt holders just rejected the government’s latest deal and a counter offer is expected soon.

More drama between Volkswagen and Porsche. According to Autoweek, VW’s supervisory board is considering a reverse takeover of Porsche to relieve the company of debt it acquired when taking out loans to purchase Volkswagen. Porsche revealed it had 9 billion Euros in debt, or $11.7 billion but said dividend money it will receive from VW and its own operating profit would be able to cover this years payment.

Last week we showed you a Geely shown at the Shanghai Auto Show that was an obvious Rolls-Royce knockoff. Now, according to the UK’s Telegraph, it looks as though the British carmaker may take legal action. The company has consulted lawyers and said its “keeping its options open”.

If you’re “ridin’ dirty” we’ve got some good news. The LA Times reports that the U.S. Supreme Court has put some new limits on police searches. Until now, law enforcement has been able to search a vehicle WITHOUT A WARRANT if the driver or a passenger was arrested. In a 5-4 decision, the court overturned a 1981 opinion allowing this. It’s the view of the court that merely arresting a driver does not “provide a police entitlement” to search a vehicle without a warrant. Under the new decision, officers can only search a vehicle if weapons are potentially within reach of the suspect or if they believe the car contains evidence related to the arrest.

U.S. Senators John Kerry and Arlen Specter have introduced a new pedestrian safety bill. It aims to protect people from getting hurt or killed by silent-running hybrid and electric vehicles. The proposed legislation would require the government to conduct a study on how to protect people from this potential danger. As we’ve reported, Lotus is already tackling this problem by developing external vehicle speakers.

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

This week on Autoline I’m joined by Johan de Nysschen, the President of Audi of America, and by Scott Burgess of the Detroit News and David Welch of BusinessWeek. In the following preview Johan talks about Audi’s participation in motorsports.

As always, you can watch the rest of this episode of Autoline on our website right now. And if you can’t get enough of the show, check out the Extra. It’s an internet-only addition to Autoline.

And now I need to announce the winner of this week’s trivia contest. We challenged you to tell us what the letters in the acronym “SPC” stand for. And the correct answer is … Statistical Process Control.

As always, my crack team has randomly selected today’s winner from the pool of correct responses. And the winner is… Lew Barrish of Delanco, New Jersey! Congratulations Lew, you’ve just won a leather-bound notebook emblazoned with the Lincoln logo.

And that’s it for today’s top news in the global automotive industry. But don’t forget, you can get podcasts, transcripts and a whole lot more on our website, AutolineDaily.com. Thanks for watching, we’ll see you next week.

28 Comments to “Episode 130 – Ford’s Improving, Chrysler Heads For Chapter 11, Making Hybrids Noisier”

  1. Tom Martin Says:

    Good news about Ford, and if GM and Chrysler go into Chapter 11, one would expect Ford to benefit with increased sales.

    A liquidation of Chrysler would also boost Ford sales. I love my Chrysler 300M and hope Chrysler survives, but chances seem slim.

  2. pedro Fernandez Says:

    Good luck, Rolls Royce, take a number and wait your turn. Maybe you’ll have better luck if you go to Judge Judy.

  3. DC Says:

    John, the supreme court’s new ruling for searching vehicles without a warrant is a moot point because the police can still search your car if they have probable cause or reasonable suspicion.

    Bottom line is, that if the police suspect you are carrying something you shouldn’t be, they can search your car with or without your consent.

  4. G.A.Branigan Says:

    I’m still wondering who,if anybody,is in line to pick up the jeep line.

  5. Alex Kajdi Says:

    John,

    The Obama Administration is probably putting together a Chapter 11 Restructioning Plan not a Liquidation. I would hope that a restructing would retain a sizable portion of Chyrsler’s workforce and not cause a huge increase on the unemployment lines. If all those Chyrsler employees would loss their jobs, can you imagine the increase in house and credit card
    foreitures and personal bankruptcy claims.

    The Obama Administration has a vested interest in maintaining Manufacturing jobs in the USA.
    These were the people who got him elected.
    These job need to be preserves and protected. If the US Workers is without a job, who will
    be able to repay our debts to China? Does The United States simply declare bankruptcy to get out from under our national debt?

    Corporate Executives need to take a class in leadership. They need to understand that executive compensation must be based upon true performance and value added to the company, country and global economy. Cooking the books to show short term profits is unaceptable to the American Public. I heard the numbers concerning Ford and would like to shake Bill Ford’s hand for following the ideals of his Great Grandfather Henry Ford. The Ford Motor Company is the only true American Automobile Company. General Motors has sold us out to China, and Chyrsler should have gone bankrupt back in the 80′s before Damilier could get their hands on it. Fiat would be making a big mistake attempting take over Chyrsler.

    F-O-R-D = Founded On Real Determination!

  6. Tom Cain Says:

    Jeep?? Tata or Mahindra are my bets.

  7. pedro Fernandez Says:

    I really wish that the American car industry could survive, but there are so many problems that need to be overcome, that it seems to be an impossible task w/o massive government intervention and taxpayers money involved. These are problems that go back decades and at least Chrysler and to a lesser extent GM are just not prepared to forge ahead.

  8. pedro Fernandez Says:

    John: autoweek just reported that their sources are saying that GM will anoounce Pontiac’s demis next week. Do you concur?

  9. Salvador G. Says:

    I’m curious of what type of noise would be good for hybrids and electrics???

    Anybody got a good suggestion, what would sound good for a Toyota Prius or a Tesla and any other hybrid I’m forgetting???

  10. Kit Gerhart Says:

    pedro F.,

    I just heard on CNN that it would be officially announced Monday that Pontiac will get axed. Meanwhile, the completely redundant GMC will survive. Go figure.

    Anyway, while Pontiac has had a colorful history, as did Oldsmobile, the G8 is the only product really unique to the brand, and it can be slightly restyled and carry on as an Impala SS. If there is a new G6 in the works, it could be made into a Chevy as well. The present G6 is about at the end of its life cycle, and if there is no replacement planned, can just go away with the Pontiac brand.

  11. Kit Gerhart Says:

    How about an angry dog sound for a hybrid at low speed under electric-only power?

  12. Paul MacLean Says:

    Mr Johan de Nysschen is not a race fan. If he was he would know it’s not race on sunday sell on monday…it’s WIN on sunday sell on monday.
    Maybe he’s not the man for the job.

  13. diffrunt Says:

    If the deadbeat capitol bldg seatwarmer would step out of his Secret Service equipped Limo & stand on the curb for just a moment, he might discover the only sound that usually emanates from any vehicle today is tire on pavement. I might suggest that his hairbrained idea is the height of something or other , but it,s really just another day in Foggy Bottom.

  14. Salvador G. Says:

    Ok Kit, what type of dog???

    To JohnMcElroy.

    John, I would like/ I suggest to you to include a way to make it easier for us to add suggestions specifically for Autoline/detroit/daily/afterhours, maybe an AutoSuggestion Box, you know something apart from the questions and comments/audio or video, we usually leave, and I do mean suggestions ONLY.

    You know, like suggest a question for a future guest of Autoline Detroit, suggest a segment for Autoline Afterhours….
    or what we think about new cars like the Scion IQ concept(which makes me wonder, where the keys goes in that?) and stuff like that.

    Anyway, Thanks JohnMc.
    great shows

  15. Chris Hail Says:

    Hybrid sounds: Since all of the sounds will be synthesized, how about giving drivers a choice?? Throaty American motorcycle, Formula 1 car, 60′s era musclecar, etc? It’ll be fun!

  16. G.A.Branigan Says:

    For as silly as the whole concept of making an electric vehicle have some noise,how about one of those battery powered fart machines.When the car gets below 25mph,it lets one rip.Pull into wally world parking lot,looking for a space up close,and your car is “tootin’” right along.I know it sounds dumb,but then again,so does the idea of adding noise.Have fun with it…..I am.

  17. Greg Richard Says:

    Chris: best suggestion I have heard yet. Way to go!!

  18. pedro Fernandez Says:

    Does this mean that electric cars wont be able to have those annoying, illegal loud-ass subs that homeys use? wont they run out the battery quickly? I have become an electric car fanatic all of a sudden.

  19. Bob Says:

    Regarding the Hybrid Sound Safety Issue; I believe that the most appropriate sound should be “The Amplified sound of the Power Cord Recoil” and this should give the Idiots In the Big House something to ponder about. No wonder the politicos have great difficulty finding a solution; when there’s no problem to begin with. Enough said!!!

    Have a Great Weekend!!!

    Cheers.

  20. JIm Thykeson Says:

    You don’t need electric! Convert to CNG (natural-gas). There was a comment the other day about electric utilities becoming unaffordable because using CNG as the new fuel would put a shortage on the commondity. That would be the truth if we didn’t sit on a veritable ocean of the stuff. Russia and the U.S. have the largest deposits on the globe. Can you imagine not having to re-tool your auto industry and still have cleaner, better, save the atmosphere, kiss off the middle east and save the $700 bill we ship off every year! As for Chrysler and GM just think of 10 mill workers and retirees getting workers unemployment benefits, plus all the retirees being transferred over to the Pension Guarantee program. And the gov’t. thinks it has problems now! Plus they won’t get any taxes from those unemployed, disenfranchised, workers and retirees…oh well. I think one of the reasons we can’t compete might be the fact that we invited Honda, Nissan, Toyota, VW, Porsche, Jag, Volvo, BMW, Kia, Mitsibushi, Hundyai, Mazda, etc., etc. Maybe some of these guys should go instead of our own! By the way…do any of those guys pay retirement and health benefits after your worklife is over? I didn’t think so. God we’re so damm dumb!

  21. Salvador G. Says:

    I like the idea of making the hybrids and electrics sounding like muscle cars, but when you think of a Prius… do you really think ‘hey! look a musclecar? We need to be more specific.

    A Prius ‘sounds like:
    A Smart ‘sounds like:
    A Lexus SUB-hybrid ‘sounds like:
    A Honda Insight ‘sounds like:
    A Chevy Volt ‘sounds like:
    A Tesla ‘sounds like:
    something a long those lines.
    Besides, the whole adding sound thing suppose to be for safety, although; I really dont care about that. You GO Wild People.

  22. JIm Thykeson Says:

    Kajdi is right. Pretty soon (after we close our manufactuering base) the only people with money will be the ones drawing unemployment, s/s:, or welfare! Hes right to worry about this country going from a ‘make-sum’thin’ to a ‘take sum’thin’ economy! In our false assumption that we’re the smartest, brightest, and most innovative we preached capitalism to the world never thinking that THEY would come to the table with a product that could compete. Well, guess what!! They did, they have, and I guess…they won. But it will be a sad day if Obama lets the Asians have are whole manufactuering base. Its getting close…

  23. R.J. Williams Says:

    I’ve yet to see a commentor, on this website, address the fundemental problem : The Obama administration along with the Bush Administration, prodded on by the Dimocrat Congress of 2007&8, presented America’s BIG 3, with what’s known as an “Unfunded Mandate”,in the form of the 35mpg CAFE Standard. After giving hundreds of billions, if not a trillion $ to AIG and the banking & mortgage industries as they endeavored to be compliant with the government mandated CRA, Community Reinvestment Act, where these industries went overboard in exceeding compliance and got us all into trouble, the least the Obama administration could do is fund the BIG 3 adequately in an effort to help them over the hump, so to speak.
    Naturally adjusting production and negotiating with the union are logical follow-on activities, but just think where we would be had the Dimocrats supported off-shore exploration for oil, a simple three letter word, I doubt Obama himself hasn’t uttered more than twice since his inauguration. Oh, we can explore for oil 100 miles out. But as everyone knows, the prime opportunities lie within the first 50 miles.
    And finally,as the API has indicated,there was 16 trillion barrels of oil out there. Over the past 100 years, all we’ve done is consume the easiest to get first trillion. So who’s the real dummy? I say it’s the current occupant of the Oval Office who I refuse to embellish with the “P” word.
    And as far as oil contributing to global warming, “Bah, Humbug!” If that were true Algore & the Dimocrats would have allowed Christopher Monckton to testify before their committee yesterday on global warming.
    Wake-up People !!!

  24. JIm Thykeson Says:

    R.J. don’t worry about not having enough oil. The rest of the world is getting off the stuff and moving on to sophisticated diesel and natural-gas, thats why the per barrel price is dropping. We will soon be the last country still using the stuff, so don’t worry…be HAPPY!, there’ll be plenty! But when those big A/C units at the ends of our globe go down because of that warming that you don’t believe in, all of that oil will still be here. The only difference is you won’t.

  25. R.J. Williams Says:

    Thykeson, sorry to learn that you’ve drunk the “Kool-Aide”. Re the “big A/C units at the ends of our globe” and you were down there last …? I’ve been there. I’ve lived there for a year, north, 3 weeks south. Acquaint yourself with some facts. If you were familiar with the works of Christopher Monckton, Richard Lindzen, Ph.D Climatologist @ MIT, Professor Wm Grey @ Colorado State and the Heartland Institue, at the very least, you wouldn’t have written the rubbish that you did.

  26. JIm Thykeson Says:

    Enjoy the hurricane R.J., oh I mean’t the fire thats burning down your house, oops I really was talki9ng about the tornado that wrecked your neighborhood! You conservative types just can’t see the forest for the trees. ‘Ocean-spray’ wake up! The world is going away. Jeez, take off the blinders you jerks!!

  27. R.J. Williams Says:

    “The world is going away.” Right, just like it did a billion years ago when there were volcanos everywhere. Thank you for finally fully exposing your ignorance!

  28. Tom Martin Says:

    I think that they should make the Prius sound like a Formula 1 car.

    The Ford Escape Hybrid should sound like a Hummer.

    The Ford Fusion Hybrid should sound like a NASCAR racer.

    The Cadilac Escalade Hybrid should sound like a MAC truck.

    :)