Episode 197 – CARS Out of Cash, Honda Stops Making Bikes in U.S.A., Buffett’s Billions

July 31st, 2009 at 12:00pm

Runtime 6:32

The Cash for Clunkers program is such an overwhelming success that there’s no more cash for the program. Honda is closing its motorcycle plant in Marysville, Ohio. Warren Buffett turns a billion-dollar profit on Chinese car company BYD. All that and more, plus a preview of this week’s installment of Autoline Detroit.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. Cash for Clunkers is out of cash. Honda stops building motorcycles in the U.S. And Warren Buffet turns a billion-dollar profit on BYD.

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

This is Autoline Daily for Friday, July 31, 2009. And now, the news.

No doubt you’ve already heard because it’s all over the media this morning. The Cash for Clunkers program in the American market is such an overwhelming success that there’s no more cash for the program. In less than one week the program burned through a billion dollars. They thought it would last until the end of the year. Now there’s a mad scramble going on in Congress to see if they can come up with more money to continue the program.

On Monday we reported that Mark Reuss would be returning from Holden in Australia to play a significant role in product development at General Motors. Little did we realize how significant. Yesterday GM announced that Ruess would become vice president of global engineering, replacing Jim Queen. GM also announced that Chet Huber, who had been running OnStar since its inception will retire. He will be replaced by Walt Dorfstatter who was running engineering operations at OnStar.

They may only be paper profits but they still look pretty impressive. Less than a year ago billionaire investor Warren Buffett, the Oracle of Omaha, bought $200 million worth of stock in Chinese car company BYD. Today that stock is worth over $1 billion, a 500-percent return in less than 12 months, Reuters reports. Buffett is attracted to BYD’s plug-in and electric car technology. The company is also the largest in China making rechargeable batteries for cell phones and lap tops.

Yesterday Suzuki took a step towards trying to be known for more than just small cars and motorcycles with the introduction of the mid-size sedan, called the Kizashi. The vehicle was 100 percent developed by Suzuki and shares the name with the concept from last year but sure looks a lot more conventional than the concept. Under the hood is a 2.4-liter four-cylinder that’s available with a CVT or six-speed manual. Pricing hasn’t been announced yet, but look for the Kizashi in showrooms later in the year.

Could Korean-built Samsung cars be coming to the U.S.? Wards reports that members from the Penske Automotive Group visited Renault-Samsung headquarters in Korea (subscription required) recently about importing vehicles to the U.S. Reportedly Penske is interested in the SM3 compact sedan but the entire line-up is under consideration. The cars are based on technology from the Renault-Nissan alliance.

When Honda first started manufacturing in America it began making motorcycles. Now Autoblog reports that Honda is closing its motorcycle plant in Marysville, Ohio. Completed in 1979, the facility is the first one the company opened in the U.S. Since then, more than 1 million Gold Wing motorcycles have been assembled there. Moving forward, just about every Honda bike will be imported from Japan.

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

This week on Autoline I’m joined by Dr. David Cole of the Center for Automotive Research, Tom Krisher from the Associated Press, and Ed Lapham of Automotive News. Together we discuss that despite all the unemployment right now, the country faces a shortage of skilled workers.

As always, you can watch the entire episode of Autoline – and a whole lot more – on our website right now.

Alright, it’s Friday, and you know what that means . . . it’s time to announce the winner of this week’s trivia contest! We challenged you to identify the car pictured here – it’s an oldie, but a goodie. And the correct answer is . . . the Fiat Topolino, Fiat Topolino. As always, we randomly selected this week’s winner from the pool of correct responses. And the lucky person is . . . Tom Layton of Eagle Point, Oregon. Congratulations Tom, you’ve just won an Eyes on Design Poster.

Anyway, that’ll do it for today’s show and this week’s programming. Thanks for watching, we’ll see you Monday.

15 Comments to “Episode 197 – CARS Out of Cash, Honda Stops Making Bikes in U.S.A., Buffett’s Billions”

  1. JFD Hamilton Says:

    John,
    If Honda is going to cease motorcycle production in the USA, would now not the time to put a “tax” (I know the word is dreaded in America) on M/C’s made abroad ? This might promote H-D and Polaris (Victory) sales and give domestic production a boost.
    JFDH

  2. Dan Clemons Says:

    Hi John:

    Your After Hours show this week was a good one! I missed the first 10 minutes but I’ll go back and watch it from your archives.

  3. pedro Fernandez Says:

    John, I think your AAH last night was the best yet. Seeing that the clunker program has been so successfull, maybe the govt should have started it earlier, funded it better and perhaps those billions that were given to the pathetic 2 could have been saved and the results would have been better for the economy. More car sales:everyone benefits, Am I wrong on this?

  4. John V Says:

    Does anyone know why Honda is no longer making bikes in the US? Is it no longer profitable?

  5. Dcars Says:

    Is Honda’s plant closing mean that they aren’t selling well in the US and thus a sign of strength for H-D and Polaris?

  6. Salvador G. Says:

    _

    John Mc, I know all autoline shows are mostly (99.9%) about the car industry, but the news of Honda closing its motorcycle factory in the US begs the question…

    – How is the motorcycle industry doing since the recession began here in the USA and around the world???

    _

  7. jeff mohr Says:

    ahhhhhh– just give the cash for clunker money to AIG and the big bank types, they can manage the money better than the rest of society, who the hell needs newer cars with better gas mileage anyhow. Cash for clunkers could just start up the auto industry here in America, according to cnbc’s Larry Kudlow we can just outsource all that auto stuff to China and India etc.—free market system will handle itself.

  8. pedro Fernandez Says:

    Jeff: I hope you’re joking,giving money to these corporations so they can give their execs big fat bonuses and benefits. The only fault I see with this clunker plan is that it should include only vehicles made in America.

  9. jeff mohr Says:

    Pedro yes I am joking – not in the best mood today–Kenosha engine plant got another nail in the coffin today but still there is some hope of Fiat using the facility possibly one day –yes I work at KEP—We must keep manufacturing at a high level here in America, We can not loose the enormous knowledge of the auto industry, it must be respected.

  10. G. Richard Says:

    Many Americans would like to know the breakdown of cars bought with ‘Clunker Money”. How many American (GM, Ford, Chrysler) vs off-shore owned companies.
    Thanks

  11. John Says:

    Dr. David Cole of the Center for Automotive Research, Tom Krisher from the Associated Press, and Ed Lapham of Automotive News. Together we discuss that despite all the unemployment right now, the country faces a shortage of skilled workers….

    What needs to be done is to develop a SOLUTION to the “shortage of skilled workers” AND the JOBLESS RECOVERIES! It is the same problem.

    http://en.wikipedia.org/wiki/Jobless_recovery

  12. jeff mohr Says:

    Good point—The educational system needs to be full of working knowledge, a learning process that enables a lifetime of usefull skills, not just trivial memorization. The reorganization of the big 3 is a perfect example of this, not to mention our large financial organizations with lame mathimatical solutions to cover gross miscalculations. Programs for apprenticeships are costly up front but pay society big dividends, I know we need to bring them back. I have witnessed this shortage for years and totaly agree with the skilled trades shortage issue.
    Federal and/or state apprenticeship programs have been replaced with 2 or 4 year degree programs, but little actual hands on real life experience, one can not learn a trade totaly from a book.

  13. John Says:

    Thanks Jeff,

    These multinationals are too concerned with Wall Street “short term ENGINEERED earnings” to beat by a penny every time.

    They are only fooling themselves.

    This outsourcing and off-shoring and H1B Visa abuse has destroyed the “earning power” of the U.S. Consumer since the early 1990′s .

    The gap between a flat line standard of living and the decline in real wages (earning power) of the U.S. Consumer IS WHAT CREATED THE GROWING DEMAND FOR THE FINANCIAL INSTRUMENTS that blew up last fall.

    The SOURCE OF THE “FINANCIAL CRISIS” is the “JOBLESS RECOVERIES”.

    Wall Street filled the demand from the decline in standard of living of the U.S. Consumer caused by decades of “Jobless Recoveries”.

    Our MORONIC leaders in business and DC are just too stupid to see the big picture. So, they are busy spending money we don’t have on a 782 BILLION DOLLAR Stimulus plan with no Stimulus in it.

    There will be no real recovery until the “Jobless Recoveries” in the U.S. are reversed, and part of the solution could very well be “Programs for apprenticeships are costly up front but pay society big dividends,…(Jeff Mohr).

    Listen-up all morons. If you continue kill off the U.S.Consumer that is 70 PERCENT of the U.S. Economy, your Wall Street “penny per share” won’t matter.

    http://en.wikipedia.org/wiki/Jobless_recovery

  14. G.A.Branigan Says:

    It is sad that american businesses for the most part are only concerned per quarter.A ten year or 20 year plan that doesn’t show immediate results is for the most part considered useless…..if considered at all.Too bad.The loss or decline of AMERICAN skilled labor will come back and take an even bigger bite out of our lives then it has already.Corporate greed and lack of forsight has resulted in the rapid decline of our whole american base.That is sad.The “cheaper to do it overseas” mentality that still prevails is killing our great country.

  15. pedro Fernandez Says:

    Looking around a few So. Fla Chrysler/Dodge dealerships, they had run out of the lower priced Caliber, Avengers and Sebrings so I know of a couple of people that wanted to take advantage of the “clunker plan” and they were too late. They should have done this when factories were up and running again, otherwise they will run out of cars to sell, this is nonsense