Episode 131 – GM Makes More Cuts, Chrysler Gets Union Concessions, Norway to Ban Petrol?

April 27th, 2009 at 12:00pm

Runtime 7:00

General Motors confirms it is killing off Pontiac by the end of next year and cutting 2,800 dealers. Chrysler reaches agreements with the UAW and CAW unions. Norway’s finance minister proposes a ban on gasoline-powered cars. All that and more, plus a look at some of the technology being developed by auto supplier Continental.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. GM axes Pontiac. Chrysler gets union concessions. And Norway wants to ban gasoline powered cars.

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

This is Autoline Daily for Monday, April 27, 2009. And now, the news.

General Motors confirmed today it is killing off the Pontiac brand by the end of next year. It is also going to cut 2,800 dealers it has in the U.S. market, a 42 percent reduction. It will get rid of another 7,000 to 8,000 hourly employees. This is all on top of the plan GM submitted to the government on February 17, and the company claims it will now be at a break-even basis if the U.S. car market only reaches 10 million units. And let’s hope it gets up to that level.

BONUS: John and Jeff Gilbert of WWJ Respond to Questions and Comments on the End of Pontiac.

Chrysler reached agreements with the UAW and CAW unions, and now the pressure builds on the company’s banks and bondholders. Chrysler has until Friday to put together a viable plan that will get it more government money. CAW workers have already ratified a new agreement that cuts labor costs by $19 an hour. The Wall Street Journal reports that this did not cut wages. Instead, it eliminates a Christmas bonus, reduces health care benefits and allows temporary workers and supplier employees to do some work in Chrysler plants.

Germany’s economic minister will meet with Canadian auto parts supplier Magna this week, to discuss the company’s interest in Opel. According to Reuters, Magna and several others are interested in buying Opel from General Motors, including financial investors and Fiat. GM must sell Opel for the company to receive financial aid from the German government.

Ward’s reports that VW will build its new lineup of low-cost minicars in its plant in Bratislava, Slovakia (subscription required). The new generation of vehicles will be based on the Up! concept the company debuted at the Frankfurt Auto Show in 2007. The first of VW’s new-generation small cars are expected to roll off the line in early 2011. They’ll be sold under VW, Seat and Skoda brands. The company also builds the VW Touareg, Audi Q7 and Skoda Octavia in its Bratislava facility.

Here’s an interesting story. Reuters reports that in Norway over the weekend, the country’s finance minister proposed a ban on gasoline-powered cars. The proposed petrol prohibition would start in 2015. Carmakers could only sell new vehicles that run on a combination of electricity, biofuels or hydrogen. Hybrids using fossil fuels and electricity, maybe would still be permitted. Maybe this is all about letting Norway export more oil. After all it is the world’s sixth-largest exporter of that vile, polluting energy source that powers its economy.

And maybe Norway needs this. Two hydrogen-powered Ford E-450 buses began operating at Detroit Metro Airport at the end of March. According to the Detroit News, the buses will run 5 days a week for 6 months and drop people off between terminals. The buses are powered by an internal-combustion engine and have a range of 150 miles. Ford has been testing the buses at other sites in the U.S. and Canada since 2006.

Coming up next, a look at some of the technology coming out of the supplier industry. We’ll be back right after this.

As one of the biggest automotive suppliers in the industry, Continental manufactures everything from tires and brakes to complete safety systems.

Its diversity is a real asset in today’s challenging times. But despite how tough things are right now, the company is still optimistic.

Continental sees the safety and convenience feature side of the business as a major area for growth. Since not every car has stability control or even ABS, the company is looking at increasing the installation rates of these items, particularly in developing markets like China and India.

Beyond basic safety systems like these, Continental also supplies OEMs with much more advanced technology. Volvo’s City Safety crash-avoidance system uses some of the company’s sensors, while Continental hardware enables street sign recognition on the new BMW 7 Series.

Sophisticated technology like this really fits in with its altruistic philosophy on safety.

Surprisingly, even in today’s market the company sees areas for growth. We’ll have to wait and see what they come out with next, particularly in the area of driver assistance systems and safety.

Join us again Thursday night for Autoline After Hours. Joining me and Renzo and Vines will be Robert Farago who publishes the website, The Truth About Cars. That’s 7 p.m. eastern or 2300 hours GMT Thursday night.

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

22 Comments to “Episode 131 – GM Makes More Cuts, Chrysler Gets Union Concessions, Norway to Ban Petrol?”

  1. Tom Martin Says:

    Don’t buy what I buy!!

    I’ve owned a Pontiac 6000 STE and an Eagle Vision TSI. I’ve also owned a Mercury Cougar, Ford Pinto, Buick Rivera, Chevrolet Citation, and Honda Prelude.

    I currently own a “Chrysler 300M Special.”

    Thing is that I loved them.

    The jury is still out on the Nissan Maxima that I bought my wife.

  2. Kit Gerhart Says:

    It looks like the G8 will not continue life as a Chevy, according to a news report I saw on the web. That’s a little disappointing, but I guess it hasn’t sold very well as a Pontiac, so there is no reason to think that would change much if sold as a Chevy.

  3. Richard Swanson Says:

    Thank you for your entertaining and informative program. I never miss!
    Can you define on your criteria for your “thumbs up/down” evaluation of the brands from the different auto manufacturers? As I listened to the evaluation of the GM, Ford and Chrysler brands, I thought your comments were based on economically viability. Some of the brands you rated as “poor” have some very good vehicles. However, your comments on Toyota brand seemed to be based on your opinion of the vehicles, not its ability to emerge intact from this current economic quagmire. Face it…Toyota WILL come out of this with a strong balance sheet, so as a viable brand, Toyotas will be around for many years.
    What, exactly, are you evaluating?

  4. Jonathan Says:

    What if Chevy market the G8 platform as the Chevelle SS, kind of like the family man version of the new camaro.

  5. ej Says:

    Maybe oil-importers should start with a ban on advertisements for petroleum products. It’s in place for tobacco. Governments should disallow stoking the public’s appetite for problematic products.

  6. Salvador G. Says:

    Tom M.

    You know the Nissan Maxima I believe is one of the top/if not the top/ most stolen cars in America, so I say thats a good jury. :)

    Also, John Mc. since I watched yesterday NASCAR crash, it occur to me that you haven’t talked about NASCAR on Autoline Afterhours, so here is my question…

    Do you think NASCAR will allow the FIAT logo on their cars?

  7. Tom Geauvreau Says:

    It’s kinda sad about Pontiac when you look back at what the brand used to be like years ago.
    But Pontiac has become a badge engineered shadow.
    Even the very good G8 is actually a Holden.
    Oh well, welcome to my world. I’m an AMC/Jeep owner from way back. Except for a couple of Dodges from the 60′s and a nice little Pontiac I owned for awhile…
    Gee, maybe I’m jinx.

  8. Tom Martin Says:

    I think rebadging the G8 as a Chevelle is a great idea.

  9. Alex Kovnat Says:

    Re Ford’s hydrogen powered E-450′s: It would be interesting to conduct a study of E-450′s powered by hydrogen versus E-450′s powered by compressed natural gas. I would like to see how the two compare regarding oxides of nitrogen and total carbon footprint.

    I know that hydrogen results in zero carbon dioxide from the vehicle itself, but remember that the hydrogen has to come from somewhere. That “somewhere” is most likely, reformed natural gas. So the hydrogen-powered van might well result in a greater carbon footprint, as a result of the process needed to make hydrogen from natural gas.

    It may be better to use natural gas directly.

    Finally, if you want to go the biofuel route, remember that if you feed various bio-raw materials (sewage, food wastes, animal leavings) into an anaerobic chamber, the gas that comes out of the process is methane (the principal constituent of natural gas), not hydrogen.

  10. pedro Fernandez Says:

    I don’t think anyone is gonna miss Pontiac. It was a brand of memories, tne G8 as good as it is, has not caught on,the rest of the lineup is forgettable I do believe if the g8 was redesigned as an Impala SS or maybe as a Buick if it survives it should be called Roadmaster. I think it would do better though if it became the Impala.

  11. Dennis Clark Says:

    With the government and the UAW owing 89% of GM the company is looking like the next Amtrak and a welfare program for the UAW.

  12. Kit Gerhart Says:

    Does anyone know which type engines the hydrogen-fueled buses are, spark ignition or compression ignition?

  13. Episode 131 - GM Makes More Cuts, Chrysler Gets Union Concessions, Norway to Ban Petrol? | Personal Financial-About My financial story Says:

    [...] is the original post:  Episode 131 – GM Makes More Cuts, Chrysler Gets Union Concessions, Norway to Ban Petrol? Categories : finance | [...]

  14. Alex Kovnat Says:

    @Kit: Spark ignition.

    The only way you can use a gaseous fuel in a compression ignition (Diesel) engine, is if you were to induct a hydrogen-air or natural gas-air mixture, compress it to a high ratio, then use a pilot injection of fuel oil to ignite said mixture in a dual-fuel arrangement.

  15. motorman Says:

    V-8 cars are done with the new feds 35 MPG across the whole line. if you want a V-8 performance car BUY IT NOW as they will be gone in less than 5 years. i got mine a 2008 corvette.

  16. JIm Thykeson Says:

    Alex is right on. The truth is Europe is moving towards a gasoline (petrol) free market. The big oil consortiums that drill the north sea also control the huge gas fields. Royal Dutch Shell, BP, Elf, Esso and others are shifting their refinery production to natural-gas caused by environmental concerns and pressure from Russia’s Gazprom. By doing this shift it shows their real concern for the planet’s future while allowing them to kiss off the middle east and that huge imbalance of payments. You can see this Russian-European plan by going to the ‘pickensplan.com’ He is trying to do the same thing in this country.

  17. G.A.Branigan Says:

    CNG or 100% biodiesel and the sand people can then eat their oil.

  18. C-Tech Says:

    Hey Tom, except for the Cougar, Riviera, and the Pinto (substitute Vega, Toronado, and 2 Audi 5000′s)we have the same tastes (or luck). Why are the U.S. automakers choosing to design boring cars?

  19. C-Tech Says:

    Bonneville (64-70) Grand Prix (63-67,70-77) Trans Am (67-95) GTO (64-72). Some of GM’s most beautiful designs. We’ve been missing Pontiac for a long time.

  20. W72 Says:

    When I realized Pontiac was being held together buy sales to rental fleets, I knew it was a matter of time before my favorite brand was deep sixed. I feel like I lost a friend.
    Why can’t we look at cars like refrigerators; we could pick one up on a dent sale and be happy with it. I hope I can put my CanAm back on the road.

  21. JIm Thykeson Says:

    Ah, my 61′ Pont. Ventura ‘bubble-top’ black, with the ivory and maroon vinyl interior powered by a 61′ ‘MacKeller 389′ after market package. I loved that car, and still lust for it today! Dumping Pontiac instead of GMC is a big mistake.

  22. Tim Ludvigsen Says:

    I’m a mopar person. But I love all muscle cars. To me the best looking cars were made from 1954-1974 with some exceptions in the later years 1975-1985 I think (AMC)Chrysler,GM,Ford Started building crap in the 80′s this is there demise. But to have for instance:
    GM Having Cadillac,Chevrolet,Buick,Pontiac,Oldsmobile(saturn) building the same crap car under different name plates and shoving it down our throat.
    Couldn’t For example:
    Chrysler Make cars/minivans, dodge trucks/fullsize vans/ specialty car, Jeep suv’s
    GM: Cadillac Luxury cars, chevrolet pickups 1500 2500 3500, Hummer suv’s, GMC Heavy duty truck over one ton/ Fullsize van, Buick minivasns, Pontiac specialty car, Saturn small car.
    Ford: Lincoln car, Mercury Minivan Ford Truck/Fullsize van/Specialty car

    And have one dealer ship With all there products.

    I remember when you could order a car with what you wanted and not settle for 3-5 different packages with crap you didnt want. Yes I know this keeps price down. So was to manufacture Front wheel drive. But the car prices didn’t drop Thank you UNIONS. And to repait these fwd pieces of crap!!! Thank you for sticking it to the consumer. Isn’t the saying The screwing you get is the screwing you got.

    What ever happened to A CHEEP RELIABLE AUTOMOBILE.
    AND DONT TELL ME IT IS A IMPORT IM A MECHANIC and there parts are expensive!!!