Episode 146 – Toyota Shake-Up Coming, Luxury Dealers in Trouble, Contracts Switched
May 18th, 2009 at 12:00pm
Runtime 6:27
Toyota will replace 40 percent of its senior managers and half of its board of directors when Akio Toyoda takes the helm of Toyota next month. Import luxury brand retailers could face big problems in the American market. Chrysler tells its suppliers how it plans to switch its contracts to the new company formed when the alliance with Fiat goes through. All that and more, plus an in-depth look at Ford’s new EcoBoost engine.
Transcript and Story Links after the jump . . .
Here are today’s top headlines. Management shakeup coming at Toyota. Luxury brand dealers face hard times. Chrysler tells suppliers how contracts will switch to Fiat.
Up next, we’ll be back with the news behind the headlines.
This is Autoline Daily for Monday, May 18, 2009. And now, the news.
It looks like some sweeping changes are going to take place when Akio Toyoda takes the helm of Toyota next month. According to Autoblog, the company will replace 40 PERCENT of its senior managers and half its board of directors. Toyota reported its worst loss in its 71-year history last quarter, a $7.8 billion loss, which is more than GM lost.
The German government may send a team to the U.S. to discuss solutions for GM and Opel, Reuters reports. The German government is interested in forming a trustee arrangement to protect Opel from creditors. So far Fiat and Magna are interested in buying Opel, and possibly a company called RHJ, the European part of Ripplewood, the private equity firm. Supposedly, we’ll learn Wednesday who is officially bidding on Opel.
And if Magna gets it, Opel could build cars for other manufacturers. According to Reuters, Magna does not plan to close any of Opel’s plants in Germany and if they have to reduce output, could offer production capacity to other brands.
As it charges through bankruptcy, Chrysler is getting ready to mail letters out to 1,200 suppliers (subscription required) about how it plans to switch its contracts to the new company formed when the alliance with Fiat goes through. The letters will also detail how it can be “cured” of its contracts and the process by which suppliers can start receiving payments.
Former Wall Street analyst Maryann Keller says that import luxury brand retailers could be the next ones to face big problems in the American market. Keller tells Autoline Daily that a number of dealers for Mercedes-Benz, BMW and Lexus built enormously extravagant dealerships, some costing nearly $40 million. She says these facilities, derisively referred to as Taj Mahal stores, were built on the assumption the luxury segment would keep on growing. Keller says it’s now impossible for these stores to turn a profit.
Ford will end production of the Mercury Sable this Thursday. According to the Detroit News, Ford decided not to bring out a new Sable so that it could invest more money into the new Taurus, the car it shares a platform with. This leaves Mercury with four models and two of those, the Mountaineer and Grand Marquis, are scheduled to end production in the next few years as well.
Coming up next, an in-depth look at Ford’s new EcoBoost engine, we’ll be back right after this.
Automakers are turning to a variety of technologies to meet the next wave of fuel economy and emissions regulations. In the long run, powertrain diversity will be key, with hybrid, advanced internal combustion and electric all playing a part. But there are some interesting near-term solutions.
One of the most exciting is Ford’s EcoBoost. The company has been touting the technology for a couple years now, and finally we got a chance to drive some EcoBoosted vehicles. Last week Ford invited us to its Romeo Proving Ground to put it to the test.
On the surface, EcoBoost is all about doing more with less, but if you only focus on the fuel economy benefits you’re missing out on all the fun.
The first EcoBoost engine the company’s releasing is a potent V6 based on the three-point-five-liter Duratec. It kicks out 355 horsepower and 350 pound-feet at 12 PSI of boost. The torque curve is literally flat from 1,500 RPM to 5,500 RPM.
Part of the reason for the flat power delivery is that the engine has twin-turbochargers and direct fuel injection. A pair of small turbos spin-up faster than one big one. DI also cuts lag.
But I’m sure you really want to know how it performs. We tested it in the Lincoln MKS and the new MKT crossover. Both vehicles were very fast right off the line with ZERO turbo lag. Top-end power is strong, too. It pulls stronger than a V8 but sips fuel like a small six. On flat portions of the test track the MKS registered 28 miles per gallon with the cruise set at 70 miles an hour. On the same test, the MKT indicated almost 24.
Refinement is another big part of the EcoBoost formula. There’s no whooshing from the turbos and no clatter from the direct injection. Icing on the cake is that the whole shebang runs on 87 octane regular gasoline.
The only real downside to EcoBoost is the sound. It has a nice snarl to it, but it’s no substitute for a V8′s rumble. Later in the week we’ll bring you a review of the new MKT, crossover so tune in.
Don’t forget to tune into Autoline After Hours this Thursday night at 7 p.m. That’s live and uncensored!
And that’s it for today’s top news in the global automotive industry. Thanks for watching, we’ll see you tomorrow.
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Comments (20)
May 18th, 2009 at 12:09 pm
Thanks for the daily stuff. It’s great.
/td
May 18th, 2009 at 12:58 pm
Hi John,
Your fan from Canada is still tuning in! Keep up the great work, excellent reporting, and positive attitude. I don’t know how things are going to work out for all the American and Canadian auto workers but at lease the news from you is straight. One thing I am sure of is that in North America we all have a chance to do a great job. We probably can work out a way to do it within some of the existing Union / Management set ups, but if it takes starting over in some cases the people, the drive and inventiveness is strong here. I also know you will be there to report it all.
Best regards,
Keith
May 18th, 2009 at 1:38 pm
The Ford EcoBoost’s flat torque curve must offer some interesting AT shift programming opportunities. Also zero turbo lag would be new experience for me.
Sounds like a great engine.
Engineers Rule!
May 18th, 2009 at 1:51 pm
Yes, great engine, and
yes, Engineers rule!
BUT unfortunately this engine is placed in two butt-ugly, obese (the MKT is 5,200 lbs! HELLO? is anybody listening at Ford Design??) creatures with ugly and uglier, toothy cow-catcher grilles respectively.
May 18th, 2009 at 2:00 pm
24 to 28 miles per gallon at 70 miles per hour? Wow! If one were to reduce one’s speed to 60 MPH, then rough calculations reveal that in theory, fuel economy would be ~25*(70/60)**3 (i.e., 25 times 70/60 raised to the third power) or just about 40 miles per gallon. And that’s with a Lincoln MKS, not an itty-bitty hatchback.
All well and good, but how big a percentage of our driving is at a steady speed? The nice thing about a car like the Prius is, you don’t have to maintain a steady pace with no traffic lights, stop signs, etc to get fantastic fuel economy.
So we still need to pursue hybrid-electric or hydraulic hybrid technology.
May 18th, 2009 at 2:18 pm
I agree engineers rule and that must be the case at Toyota with a 40% cut in management! I’m mangament also that is too bad.
I like the idea of 40 miles per gallon on the highway, most of my commute is highway driving and would rather do it in a Lincoln.
May 18th, 2009 at 3:01 pm
While I understand the logic of Ford phasing out various Mercury models and, eventually, the entire marque, I find it ironic that most of the redundant Mercurys involved are better looking than their Ford counterparts! Case in point, the sleek Mountaineer vs. the mundane Explorer.
May 18th, 2009 at 3:05 pm
“And that’s with a Lincoln MKS, not an itty-bitty hatchback.”
I think you are confusing the MKS, which is largely a Fusion clone, to the much heavier, obese,(a ridiculous 5,200 lbs), ugly-grilled POS MKT, also tested here.
(The fusion may not be as small as a Yaris, but it is smaller than an Accord!)
May 18th, 2009 at 3:06 pm
Ford is in the right area with the eco-boost.True they are starting it off on two butt ugly vehicles,more then likely trying to boost sales of those two models.However,in my world,4×4 work trucks need BIG attention in the engine/fuel economy dept.Some of us need those vehicles,and indirectly,so does most people when you think about it.Tradesman still need trucks to do business.How about it Ford,can ya hear me now?
May 18th, 2009 at 3:07 pm
“the sleek (SIC!!!) Mountaineer vs. the mundane Explorer.”
The Mountaineer is as ridiculous, obese breadvan on stilts StupidUglyVehicle as the Explorer. They are CLONES of each other, as are all Mercurys clones of Fords, with only MINOR Cosmetic and badge differences.
May 18th, 2009 at 3:08 pm
“However,in my world,4×4 work trucks need BIG attention in the engine/fuel economy dept”
The max MPG in that category is with a Diesel Hybrid, but the cost will be high, as both the diesel and the hybrid will add significantly to the cost.
May 18th, 2009 at 3:24 pm
@ Thor: yeah,diesels,maybe even a diesel hybrid work truck would be the way to go.I would settle for a 1/2 ton diesel pickup.Yes,the initial cost would be higher,but so would that be true for the eco-boost powerplant for right now,although not quite so much.I would opt for the diesel for the overall economy of operation,and the longivity ie:250k plus miles with normal maint followed.I’d buy one in a heartbeat.
May 18th, 2009 at 4:18 pm
Welcome Back John Mc.!
I wonder what would Henry Ford himself would think of how his company is doing right now?
You guys know that you don’t have to buy the MKS right??
Ford is really coming out with good cars… the Fiesta, the new Taurus, the Transit (well not the Transit — which is really good, but I don’t like it ) and a new Focus,
That is a Car Company.
May 18th, 2009 at 4:44 pm
Since Ford decided not to build the Mercury Sable.
Which leaves Mercury with just four cars and two of the four are going out of production in a few years. The countdown has started for Mercury; the brand will be gone in a few years.
May 18th, 2009 at 5:28 pm
Ford does need to dump Mercury, and concentrate on Ford and Lincoln only, they were smart to dump all those European brands. Now lets see what they can do with just the two brands to concern themselves with. As far as Toyota, they wanted to be the new GM, be careful what you wish for.
May 18th, 2009 at 9:47 pm
When I see turbo chargers – I walk the other way. Not interested. Too many bad memories from the old Chrysler days. All I can think of is an expensive repair bill looming in the future – after the warranty has expired. Diesel (non-turbo) – now your talkin’
May 18th, 2009 at 10:12 pm
You teased me with the IS-F being the first thing you see on the video, but no mention in the video itself. I was hoping for some news on the IS-F or F division itself.
Otherwise, this episode was informative and enjoyable as usual.
May 19th, 2009 at 10:12 am
@ Robert Byerley:Non turbo’d diesels are okay for small equipment,but vehicles that are street legal pretty much have to have them.If you’ve ever driven a diesel vehicle without a turbo,or a supercharger you would know what I mean.This is especially true at higher altitudes.I know what you mean about the repair costs,but vehicles with factory TC’s have come a long way since the shadow etc.Another thing that really helps the turbos last longer is the technology in the new synthetic oils.It’s now a beautiful thing.
May 19th, 2009 at 11:31 am
I’m anxious to see EcoBoost, but I read that it costs $5K on the Lincolns. It boosts acceleration and increases mpg by 1-2 mpg. Not sure if that’s worth $5K. It might be OK for a Lincoln, but adding $5K for a $25K car will be far too expensive.
May 19th, 2009 at 6:40 pm
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