Episode 175 – Opel Talks Hit a Snag, GM Drops Out Of NUMMI, Ford Boosts Production

June 30th, 2009 at 12:06pm

Runtime 8:45

General Motors’ talks to sell part of Opel to Magna have hit a snag. GM is backing out of the NUMMI joint venture with Toyota. Ford announced it will increase production in the third quarter this year. All that and more, plus John takes the Pontiac G8 GXP out for a test drive.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. GM talks over Opel hit a snag. GM drops out of NUMMI. And Ford is boosting production.

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

This is Autoline Daily for Tuesday, June 30, 2009. And now, the news.

The Financial Times reports GM’s talks to sell part of Opel to Magna have hit a snag. The FT says Magna’s Russian partners want access to GM’s global technology so they can build Opel’s in Russia, which GM isn’t too keen to see happen. Also, GM wants a clause to be able to buy back some or all of Opel. RHJ International, a Belgium-based investment firm related to Ripplewood has improved its offer to buy Opel, paying more attention to saving jobs in Germany, a critical political issue determining who will get part of Opel.

GM is backing out of the NUMMI joint venture with Toyota, an assembly plant in California that both companies shared for over a quarter of a century. The plant built 340,000 vehicles last year, including 150,000 Toyota Corollas, 120,000 Toyota Tacoma pickups, and 70,000 Pontiac Vibes. There had been discussion of rebadging the Pontiac Vibe as a Chevrolet, but GM decided not to do that. Instead, GM is using its bankruptcy to get out of the joint venture.

Toyota is moving forward with plans to build another factory in Brazil. According to Bloomberg, the company decided to proceed with plans after Brazil extended a tax cut to help boost vehicle sales. Construction begins later this year and expects it to be completed by 2011. The plant will build compact cars with an annual capacity of 150,000 vehicles.

Ford announced it will increase production in the third quarter this year. According to the Detroit Free Press, the company will build 15,000 more cars and 10,000 more trucks than originally planned. Ford cites growing consumer confidence, reduced rate of jobless claims, and the new cash for clunker bill as reasons to increase production. Whenever a company announces production increases before it releases its latest sales, that’s a good sign.

The Hyundai Assurance Program lets you walk away from a new car if you can’t make the payments, but now the company is heaping on the benefits. Called Gas Lock, it guarantees a year’s worth of fuel at $1.49 per gallon, that’s about a half a euro per liter. Consumers are allowed a maximum number of gallons equal to 12,000 miles divided by the combined fuel economy of the car. Hmmm. We’ll see June sales tomorrow, and when ever a company heaps on sales incentives just before it announces sales, it’s generally not a good sign.

In other Hyundai news, Autoblog reports that the company is bringing its flagship Equus sedan to the U.S. According to an anonymous source, the luxury model is expected to arrive July of next year and sticker for around $60,000. Obviously at that price it’s not likely to be a high-volume model, but instead a halo car for the brand. Hyundai is targeting the similarly priced Lexus LS460 while offering more luxury amenities.

In a scene reminiscent of a the UAW’s Battle of the Overpass, Ward’s reports that some 900 weapon-wielding Ssangyong workers forced 4,000 company mangers and non-union employees out of a plant (subscription required) on Saturday. The workers are striking because of a court-ordered restructuring plan that cuts jobs. They beat some people and threw fire bombs in several violent clashes. More than 70 workers were injured, most of whom were hospitalized. Ssangyong is now controlled by Chinese automaker SAIC.

Coming up next, I take a test drive of the Pontiac G8 GXP. Here’s a sneak preview.  Wow! Back in a moment.

The Pontiac brand is going away just as the G8 is really starting to hit its stride. I just finished test driving the GXP version, the high performance version, and here’s my verdict.

The base price of the Pontiac G8 GXP is $38,000. The one that I drove cost just about $41,000, which includes a $1,700 gas guzzler tax. It’s rated at 15 miles per gallon, but according to the readout in the car I averaged 18 mpg. That’s 13 L/100 km.

Don’t forget to tune in Thursday night for Autoline After Hours. It’s the only live webcast covering everything about cars and the automotive industry. And it’s possible we’ll have something of an announcement to make that night. That’s Thursday at 7 p.m. Eastern, 2300 GMT.

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

12 Comments to “Episode 175 – Opel Talks Hit a Snag, GM Drops Out Of NUMMI, Ford Boosts Production”

  1. Dave Says:

    GM will not rebadge the VIBE? The VIBE is one of the best selling cars in all GM’s line up and has great mpg numbers. Just yet another dumb idea from GM. That will leave GM no true cross over / tall wagon small car. I guess Toyota will get more matrix sales!!

  2. Tony Gray Says:

    Another outstanding episode John. I especially appreciate your explanation of the differences in production/incentive changes announced by Ford and Hyundai prior to their sales figure release. It is that kind of information that those of us who are not industry insiders appreciate…and we ONLY get here.

    Spent some time talking with a few GXP owners at the recent All-GM Nationals in Carlisle. They LOVE the car, and I came away very impressed. Come on GM, rebadge it as a new Impala SS…don’t let this jewel die!

  3. pedro Fernandez Says:

    It doesn’t seem to matter who’s running GM, the bonehead decisions continue, they get rid of two of their best products , the Vibe and the G8, when all they have to do is rebadge them, which they are infamous for doing. They won’t though because the G8 is a gas guzzler and it doesn’t fir Lord Obama’s great plan and the Vibe, well they’re embarrased by the fact that, like the Prizm before it, consistently came in ahead of other GM models in reliability and quality surveys year after year. John, why test a car headed for oblivion?

  4. Alex Kajdi Says:


    I agree with Dave, GM should continue sharing the NUMMI Plant with Toyota to continue building the Vibe either as a Chevy or as a Saturn for the Penske Group. You know that once the production of Vibes ceases Toyota will either build more units of both the Corollas and Matrix to fill the void left by GM. I have heard that because GM is pulling out of NUMMI, Toyota will start build 3rd Generation Prius at the NUMMI Plant. If Toyota does this the Chevy Volt will be a failure. How can you justify a $40K Chevy Volt to a Fully Loaded $25K Prius?
    I bet Toyota already has plans to grow the Prius to a similar size as the Volt in it’s 4th Generation with a dedicated EV powertrain with advanced battery, on-board ICE for recharging and solar cell technology. GM will be a years late and billions of dollars short to compete.

  5. paulstewart Says:

    Thanks John for testing the G8 GXP. G.M. MUST concentrate on vehicles in the near future that will make a profit while not losing any $$$ in the exchange rate AT all. Thank goodness my President is elected OR voted out unlike some Americans who have a Lord who oversees them !

  6. Tom Martin Says:

    In five years, it will be difficult to find a 4,000 lbs sedan with as much room and performance as the GXP for under $50K. In ten years, you won’t find one at any price.

  7. Eric Soto Says:

    To all above,if GM would realy listen to the public and faithful Pontiac owners,the brand would never die but thanks to the bean counters and the goverment,GM will never shine no more as it did inits glory days.In my opinion, GM should bring people from GM over seas to help and manage GM in the states. You dont see them closing brands and dealers!

  8. C-Tech Says:

    Since I get the last word today, why are all of you blaming the U.S. Government, and President Obama for GM’s management failures? I do agree with the majority of you that the Vibe and G8 should be saved (make the Vibe the entry level Buick Skylark, and the G8 the Impala SS). The reversal of this decision should be one of Ed Whitacre’s early moves.

  9. Rafi Jaan Says:

    The Pontiac G8 may be a great car, but it’s existence would mean it would take away sales from the Cadillac CTS. After all, wasn’t in-house competition one of the reasons GM got rid of so many of it’s dealers?

  10. thor Says:

    To close down Pontiac and keep Buick running was another moronic decision from the GM beancounters.

    The Vibe=Toyota Matrix was an excellent practical car-wagon. I liked the matrix styling a bit better.

    The G8 was a GREAT car, and the GXP even better, and a HUGE value.

    If they do not make v8s in 10 years, I can sell you my 1998 BMW 740 il 4.4 v8, and for peanutstoo. But if it works, I’ll probably keep it. You can find a TON of them in the used market today, the 95-01 series I own, and the ugly but impressive successor the 02-08 generation. DEPRECIATION. It allows even the poor drive GREAT cars. Worship it!

  11. G.A.Branigan Says:

    At least GM is consistent.They make one bad move after another.Wonder who will get the blame this time.I am already used to the “big 2″ automakers,I see it coming unless they really get someone in there that actually uses common sense.Hmmm,I wonder if thats possible?

  12. Chuck Says:

    I say save the G8, but push for the GT model. Why test the GXP with the big block and poor gas mileage. Go for the lessor model and eliminate the Impala…