Episode 186 – Germany Pressures GM, Laid-off Workers Revolt, VW and Porsche Merge?

July 16th, 2009 at 12:00pm

Runtime 6:47

The German government is threatening to not give aid to Opel unless GM sells part of it to Magna. Laid-off French autoworkers threaten to blow up a plant. VW reaches a deal to merge with Porsche, however Porsche denies those reports. All that and more, plus a look at the last Horch ever built.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. Germany tells GM to sell Opel to Magna or else. French autoworkers threaten to blow up a plant. And VW reaches a deal on Porsche, or not!

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

This is Autoline Daily for Thursday, July 16, 2009, the 100th anniversary of Audi. Happy Birthday, Audi! And now, the news.

The Wall Street Journal says the German government is threatening not to give aid to Opel (subscription required) unless GM sells part of it to Magna. With GM coming out of bankruptcy so soon, the Journal says it’s now cool to the idea of selling out to a supplier that may allow other automakers access to GM’s technology. GM seems more interested in selling to the investment firm RHJ. Here’s my analysis why. If and when GM becomes profitable again in the future it could buy back RHJ’s holdings in Opel. But if GM sells part of Opel to Magna or Beijing Auto, it will never get that back.

Speaking of GM, its vice president of communications Steve Harris, one of the most respected PR executives in the industry will retire in October. He will be replaced by Chris Preuss, who has been with the automaker for a decade and who will report to Bob Lutz. And while we reported earlier this week that the head of R&D at General Motors, Larry Burns is retiring, we forgot to mention he will be replaced by Alan Taub, who has been with GM since 2001.

Desperate times call for desperate measures. The Detroit news reports that roughly 200 laid-off French workers are demanding that both Renault and PSA pay them 15,000 euro apiece for ruining their lives. If they don’t get what they want, they’ve threatened to blow up the plant, located southwest of Paris. They’re taking turns guarding 20 canisters of acetylene and butane spread-out around the outside of the factory.

Reuters reports that Toyota and Mazda are talking about sharing hybrid technology. Mazda wants some of Toyota’s core hybrid systems. Both companies declined to comment, but the Nikkei Business Daily reports that a deal between the two automakers is likely to be announced shortly. A Mazda hybrid could go on sale as early as 2013. Why isn’t Mazda using Ford’s hybrid technology? Good question, it probably has something to do with Ford having sold off half its holdings in Mazda.

The White House criticized legislation in the U.S. House of Representatives that would prevent GM and Chrysler from closing dealers. According to Reuters, the bill would force GM and Chrysler to reinstate franchise agreements. The House is expected to vote today or tomorrow on it, but if passed, the provision faces an uncertain future in the Senate.

There were reports earlier today from Germany that Volkswagen reached an agreement with Porsche for a merger to reduce Porsche’s debt. But according to Reuters, Porsche is denying those reports. It prefers to cut its debt by issuing new stock and selling a stake of the company to investors in the country of Qatar. Reuters reported yesterday that Porsche’s debt has grown past 10 billion euros, or $14 billion, from borrowing money to acquire a majority stake in VW.

To commemorate Audi’s centennial, coming up next, a look at the last Horch, we’ll be back right after this.

Sometimes car collectors unearth hidden gems. They’ll run across an old car rusting away in a field, or discover an even rarer treasure buried in a suburban garage. The chances of finding a one-of-a-kind car built by an extinct, European manufacturer are slim at best.

But not impossible. Texas car collector Al Wilson beat the odds and uncovered an extraordinary automobile that was thought to be lost to history.

Four-decades ago he bought this. Even back then it was rusty and falling apart – like most of the cars in this “auto rancher’s” herd. Unlike the rest of his collection though, this is no run-of-the-mill classic. As it turns out, it’s the last vehicle ever built by defunct German automaker Horch. Assembled in 1953, it’s also a one-off model. How did it end up in the Lone-Star State? Well, an American soldier stationed in Germany purchased it and brought it to the U.S. Eventually it went up for sale and Al Wilson had a chance to buy it. He sensed that it was special, and paid $500 to save it from getting crushed.

Over the years, he contacted museums and historians to try to find out more about the car, but nobody could tell him anything, so it sat in a field with the rest of his collection.

Today, the last Horch is home in Germany. His sons eventually figured out what it was and he sold it to Audi. Why Audi? Because Horch was one of the four original automakers that eventually became Audi as we know it. Today, each brand is represented by a ring in its logo. The company plans on restoring the car to original condition, but not before putting the rundown classic on display in its museum – complete with a diorama of the West-Texas prairie.

If you want to hear more about this amazing story, jump over to the John’s Journal page of our website. We’ll have a video that Audi produced posted a little later today.

And that’s it for today’s show, but join us this tonight for another edition of Autoline After Hours. We go live at 7 p.m. sharp on our website. Joining us this week is Michael Sprague, the head of sales and marketing at Kia, a brand that seems to be almost immune to the sales down turn. And we’ll also be announcing the winner of the GM Bankruptcy Contest, where we asked you to guess how many days GM would be in bankruptcy.

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

15 Comments to “Episode 186 – Germany Pressures GM, Laid-off Workers Revolt, VW and Porsche Merge?”

  1. Alex Kajdi Says:


    Maybe General Motors should consider sells it’s Opel Divison to one of its Chinese partners.
    GM is already heavily invested in the Chinese Market. GM’s Technology is already available to the Chinese. This will keep GM Technology out of the hands of the Russians. The “Cold” Auto Technology War begins!

  2. Tony Gray Says:

    Aristrocrat to King Louis: Sire, laid off French workers are revolting!

    King: You’re right…they stink on ice!

    (Apologies to Mel Brooks)

  3. G.A.Branigan Says:

    Thats quite a find on the Horch.I remember when I was a kid in west germany the DKW Autounion brand.That was back in 59 to 64.

    What’s up with the frogs?? If they don’t get paid off,they blow the factory up.Would that be the same factory that might hire them back when things pick up?

    I wonder if they considered that after blowing up the factory,they would have put their fellow auto workers out of work? Wonder what the folks that worked in the factory will do to those despots?

    Ya know what?The auto business is playing out like it was Payton Place or Dallas.Whoda thunk that?

  4. pedro Fernandez Says:

    Looks like the government now wants to micromanage GM and Chrysler, boy, those Ford execs must be laughing their asses off!

  5. Episode 186 - Germany Pressures GM, Laid-off Workers Revolt, VW and Porsche Merge? Says:

    [...] View original post here: Episode 186 – Germany Pressures GM, Laid-off Workers Revolt, VW and Porsche Merge? [...]

  6. jd dagsda Says:

    can you gave me more info on honda

  7. John V Says:

    Great story on the PSA/Renault workers. It show’s how different the French are about citizen behavior. If workers tried such a stunt here in the US, they would probably find themselves locked up for terrorist activity before they ever set up flammable material to guard. To me, threatening to blow up a plant, and especially setting up potentially explosive materials, is terrorist activity.
    Upon reading the story, I found the stories about workers kidnapping managers and removing equipment from the plant to burn on the plant grounds interesting. I am sure all that will help their cause a lot.

  8. JIm Thykeson Says:

    Then German/French revolution shows the devotion those countries have when their respective manufacturing facilities are under siege. Its amazing how apathetic we are when it comes to allowing our whole basis for working-class middle class employment to be scrapped. They know how important auto industries are to the health and wealth of their countries, and their willing to fight, in order to hold on to them!

  9. pedro Fernandez Says:

    For decades now, we have seen manufacturing jobs leave this country, thru different administrations. It is the corporate greed that seeks out cheap labor and lax regulations which allows them to manufacture their products abroad for a lot less money w/o any regard for the economy of the US. Some genius figured we could get by just being a service only economy, you know I scratch your back and you scratch mine. Well, hate to tell you it ain’t working.

  10. G.A.Branigan Says:

    France,among some other countries actually works to keep as many jobs there as possible.OUR govt does not.case in point:after being bailed out with out tax money,who is going to shift production of a model to mexico?

  11. pedro Fernandez Says:

    @G A, is it GM by any chance? But remember Mexico is part of us now, thanks to NAFTA.

  12. John Says:

    Jim and Pedro,

    I totally agree.

    If you listen closely to the news, you will hear more of what I have been saying for the past six months….JOBLESS RECOVERY.

    see: “Bernanke to lawmaker: Jobless recovery may loom ”
    Mon Jul 13, 2009 4:42pm EDT

    Here it is again:

    There will be no lasting recovery until the morons driving us off the cliff deal with the JOBLESS RECOVERY.

  13. C-Tech Says:

    As far as the situation at the auto plant in France, as Chris Rock would say “I don’t agree with it, but I understand!” G.A. Branigan, there is no need for the racial slurs. There has been no news from Chrysler, besides saving Viper (minor news) is that good or bad? Is there any scenario where GM keeps Opel?

  14. Episode 186 - Germany Pressures GM, Laid-off Workers Revolt, VW … | Germany today Says:

    [...] Here is the original post: Episode 186 – Germany Pressures GM, Laid-off Workers Revolt, VW … [...]

  15. Kit Gerhart Says:

    Somehow NAFTA didn’t seem to work properly. Why is Mexican beer still more than twice as expensive as Old Milwaukee?