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Episode 208 – Steel Shortage Looming, VW Threatens To Drop Magna, Bentley’s New Mulsanne

August 17th, 2009 at 12:00pm

Runtime 8:51

The American auto industry faces a steel shortage that could hurt automakers just as they plan to boost production. Volkswagen threatened to stop doing business with Magna if it becomes a part owner of Opel. Bentley unveils its new flagship sedan. All that and more, plus some more of Jim Hall predictions on what will be the classic cars of the future.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. Automakers face a steel shortage in the American market. VW threatens to drop Magna as a supplier. And Bentley unveils its new flagship sedan.

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

This is Autoline Daily for Monday, August 17, 2009. And now, the news.

Autoline Daily has learned that the American auto industry faces a steel shortage that could hurt automakers just as they plan to boost production. When automakers began cutting production late last year steel demand plummeted and many steel mills slowly closed down, and now there’s a shortage. It can take an integrated steel mill several months just to fire up its furnaces. One buyer tells us, “There just isn’t any steel out there.” I’m sure we’ll hear more about this story in the weeks to come.

Reuters reports that Toyota will close down the NUMMI plant in California next March. Citing reports in the Japanese newspaper Asahi Shimbun, Toyota will move production of the Tacoma pickup to its Tundra plant in San Antonio, Texas, which has been crippled by the sales collapse of full size pickups. Toyota will move production of the Corolla to its plant in Ontario, Canada. You know, the media in Japan are different from over here. If the Asahi Shimbun suggests Toyota is going to do something, it’s not rumor or speculation. You can take it to the bank.

More drama over the sale of Opel in Germany. According to Reuters, Volkswagen threatened to stop doing business with Magna, one of its parts suppliers, if the Canadian company becomes a part owner of Opel. Suppliers always get to see the future plans of automakers, and VW is afraid Magna might slip its future plans to Opel. This did not sit well with the head of the Opel’s union which called the threat blackmail.

A report in Sweden says that Volvo’s engineers have made a bid to purchase the company from Ford. According to the AFP, the engineers want to prevent Volvo from being sold to Chinese automaker Geely which has been rumored as the primary buyer. The $2 billion dollar bid is backed by the head of the Volvo Group, Leif Johanssen. Volvo Cars employees have also been asked to join the consortium with a stake equivalent to two months’ pay.

More news about automotive bankruptcy, this time from Russia. Ward’s reports that carmaker OAO IzhAvto has filed for bankruptcy because it can’t repay its debts (subscription required). The company builds some older Kia models as well as the Lada 2104, a rear-wheel-drive station wagon that looks like it’s right out of the Brezhnev era. In other Russian news, Chinese automaker Chery is accusing OOO Russlegavto of illegally building its Tiggo (subscription required) sport utility vehicles. They’re supposed to be building them, but Chery is accusing them of selling extra ones on the side.

Yesterday Bentley revealed its brand-new flagship, the Mulsanne, at the Pebble Beach Concours in Monterey, California. The new model is set to replace the Arnage, which is a pretty cool car, but can trace its roots back to the 1950′s. Right now not much is known about the Mulsanne other than it’s all-new and should go on sale around the middle of next year. We’ll have to wait for more details which the company should release at the Frankfurt Motor Show next month.

Coming up next, some more of Jim Hall’s predictions on what will be the classic cars of the future, we’ll be back right after this.

Last week Jim Hall gave his thoughts as to what cars we’d be seeing 30 years from now on the Pebble Beach Concours. Today, his thoughts on what we’ll see at the 2039 Woodward Dream Cruise.

Big concepts for a couple of car events that started, in the case of Pebble Beach, as a support event for a local road race around the Del Monte forest and with the Woodward Dream Cruise as a fundraiser for a soccer field in Ferndale, Michigan.

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

25 Comments to “Episode 208 – Steel Shortage Looming, VW Threatens To Drop Magna, Bentley’s New Mulsanne”

  1. Thor Says:

    While we don’t have the engine details for the Mulsanne yet (they will be unveiled at the Frankfurt auto show in the Fall, I believe), we do have some info about its dimensions, it will be much biogger than the Arnage, by about a foot in length, so it can compete against the also big Rolls Royce Phantom (until now, Bentley did not have a car of the phantom’s size)

  2. paulstewart Says:

    Hi John, saw you at the Autozone store on Thurs. Great show I might add. I gave a polite/diplomatic earful to a Ford Rep from the proving grounds at Mustang Alley in Ferndale on Sat. About the 4200 lb weight and the o’so affordable price of the new Taurus. The top price of the next Gen. Focus eco-boost equiped will start at over 25K late next year I got out of him. Goodbye Ford, hello Hyundai I say. And I WAS a Ford buyer too.

  3. Thor Says:

    The new Taurus is both ridiculously expensive and unnecessarily obese. It is a textbook example of a STUPID design, when its exterior dimensions are far greater than those of its far superior competition (Accord) but its interior spaces are SMALLER!!! And in addition, it may sound incredible or a joke, but its headroom seems very limited, an un-believable feat of stupidity of design for a 60 inch high car!!!

    TO put the final nail on its coffin, the Taurus is $4k MORE expensive than the Accord. Guess which one will be the best seller, John!

  4. Thor Says:

    As for the FOcus at $25k, it is even more ludicrous. Even in Europe people do NOT pay that much for a little focus! Consumers in the US will vote with their feet, which will leave thwe Ford Dealers, and open their wallets at their neighborhood HONDA and TOYOTA dealers instead.

  5. pedro Fernandez Says:

    The Mazda 3 is basically the same car as the Focus, why is the Focus going to be more expensive then? The Fiesta will be priced like the current Focus. That is precisely why Ford held up the intro of the Focus here, cause it’s going to be priced close to the Fusion, they will then raise the price on the Fusion I guess, and they will just lose even more customers.

  6. Dave Says:

    gee the gushing over the VOLT is just over the top. A 40000+ chevy Cobolt that GM will sell a hand full of..GREAT, HAPPY DAYS ARE HERE AGAIN..ya right

  7. G.A.Branigan Says:

    If in fact Ford holds to that priceing structure,we will look elsewhere.I am on the Ford X plan too,but they seem to be cutting back on that as well.Too bad.

  8. thor Says:

    The Fiesta is one class smaller than the Focus or the Mazda 3. It is a Yaris/Fit sized vehicle instead of a Corolla/Civic/Focus/Mazda3 one. In Europe, it is also sold as the Mazda 2.

    There is no justification for the Fiesta selling for as much as the current Focus. And if in addition the MPG is far below the expected 40, people will just not buy the little POS.

    Off-lease used cars will become more expensive, if new cars are sold at such ludicrous prices. and the buyers of off-lease used cars will prove once again how econ literate they are vs the buyers of new cars. Why not wait 3 years and save 35-55% of the price of the car, and still get an essentially new car?

  9. Chuck Grenci Says:

    Here’s my prediction for the year 2039: the 1969 Camaro will still be at the “Woodward Dream Cruise”……………..but here’s the kicker, the 1969 Camaro will be at Pebble Beach as well. “Karnak” (pun intended) has spoken………….lol

  10. pedro Fernandez Says:

    Maybe by building the Fiesta in Mexico, they will keep the price down a bit, but the tendency to just keep adding more things to cars and raising the price everytime a new model comes out to replace the previous one will continue until they realize that most people are not willing to pay so much for things that are really not that important. Do you really need controls on the steering wheel?

  11. pedro Fernandez Says:

    Funny, I don’t remember seing any EV-1′s at any classic car show!

  12. paulstewart Says:

    Thor your right, I can’t believe I’m saying that but Yes your right. That 25K will be for the top line Focus Ecoboost only.The typical new redesigned Focus will be around 20K, while the new Fiesta will slide up to about 15K, the former price spot of the Focus. They will only make only 100,000K Taurus on the line in Chicago on 1 shift while the new totally re-designed Explorer based on the new Taurus platform will be made on the 2nd shft OR intermingled in the production line of the Taurus late next year. The “Glass House in Dearborn” has spoken, so shall it be. But they seem to have a very short memory when the last Major re-design of the Taurus was made. And it fell from 1st to 3rd place in production. Don’t worry,be Happy.

  13. Thor Says:

    I liked the exterior styling of the original Taurus, which was a huge hit and saved Ford in the mid-80s. Then something possessed Ford Execs and designers and they came up with that frog/catfish-like rounded jellybean design of the 2nd gen taurus, which was both more obese and had less interior and esp. trunk space. What a failure. Then a new big taurus emerged (originally called the 500), with lots of space but rather boring, like an inflated Passat on the outside, and that did not do too well either. Then we come to the brand new TAurus, and it does not look as good as the original.

    As for the explorer, WHY keep biulding it? It used to sell 450,000 a YEAR and make huge $ for Ford, but that was 8 years ago, now it barely sells 50,000! Who needs more StupidUglyVehicles or Crossovers? People need a small station wagon with AWD and a 45 MPG Diesel, and so far only VW (Jetta Sportswagen) got it!

  14. Willi Says:

    i like that : POS – sell it in Europe, it’ll take ‘em awhile to figure out what it means …

  15. Ron Paris Says:

    Jim Hall was absolutely right in predicting 2 current models of the Mustang to become future collector cars, but there’s more to his comments than meets the eye. Ford nailed it with the redesigned Mustang in 2005. Every time I see one of those cars, even the lowliest base model secretary’s car, I swoon over its clean lines. And I’m not even a Mustang fan! Yes, the interior needed some work, but what they did with the front and rear of the 2010 model is unconscionable! It’s like they felt they had to do something…ANYTHING, rather than just leave it alone and fix the dash. Ford’s decision to screw up their classic ponycar when they finally got it right as well as bring to market a “new and improved” Chrysler 300 in the form of the 2010 Taurus makes me question whether Mulally and Co. really deserve all the accolades they’ve been getting as of late.

  16. William R. Walling Says:

    John,
    “While everyone (industry, media and public) is championing recent ‘cash for clunkers’ success has ANYONE observed it being a U.S. Government supported ‘clear the facilities’ of unsold 2008-2009 vehicles?”
    Happily my decades ‘seasoned’ NISSAN (V-6) does NOT qualify as a ‘clunker’ delivering 20-26 M.P.G. since new!
    PROGRESS? It’s 2009 progeny does NOT achieve similar numbers!

  17. motorman Says:

    all future cars will be a lot more expensive especially the small ones because if they are going to be the car that the feds wants you to drive the car companies will have to sell them at a BIG profit to stay in business.

  18. paulstewart Says:

    Hey’ Thor, the new Explore that comes out late next year, is radically different. And does look beter, it’s on the same uni-body that the Taurus uses, it’ll have a the same the Eco-boost 6 as the rest of Ford’s line up, a standard 6, & possible a eco-boost 4 banger too.

  19. pedro Fernandez Says:

    @ William, if you pass by any car dealer you will still see plenty of big trucks and SUV’s so while the clunker plan has cleared a lot of cars, those sold are the easiest to sell,small cars and crosssovers while the big ones will go on sitting there until they can be sent overseas, where the demand for those vehicles is still pretty good.

  20. Salvador G. Says:

    JohnMc., let me ask something a bit off topic…

    in the past few weeks (in a close to work) Ford truck dealer, I’m been noticing the new Ford Transit Connect, so I was wondering…

    Do you plan or are planning to test drive the new Ford Transit Connect in the near future???

    -

  21. Pedro Fernandez Says:

    cnn.money has an article today which among other things it says that GM will lose approx $5500 on every Volt it sells, so why bother?

  22. Dave Says:

    Well at the price GM is going to ask for the the Volt and the dealer mark up GM will not loose much….they are not going to sell many

  23. Thor Says:

    “all future cars will be a lot more expensive especially the small ones because if they are going to be the car that the feds wants you to drive the car companies will have to sell them at a BIG profit to stay in business.”

    The government cannot force anybody to buy a new car. They do not even have the guts to impose a gas tax to make people buy higher MPG cars. If future cars are too expensive, people will hold on to their cars for much longer, and fix them. Outside the snowbelt, cars can last 50 years if well maintained. Used car prices will rise too, if the new cars are not what the customer likes, and/or if they cost too much.

  24. Thor Says:

    “Hey’ Thor, the new Explore that comes out late next year, is radically different. And does look beter, it’s on the same uni-body that the Taurus uses, it’ll have a the same the Eco-boost 6 as the rest of Ford’s line up, a standard 6, & possible a eco-boost 4 banger too.”

    Even the current Explorer is much better than the older models, who were uncomfortable (body on frame), wasteful (low MPG) and unsafe (too narrow, rollover risk). But the SUV fad is over, and Ford already has too many crossovers and SUV-like vehicles, so the new Explorer will sell few copies. If it wants to save the brand name, it should not have introduced the Flex, the Edge, and all these other low-volume failures.

  25. Dave Peterson Says:

    Jim, Great report on the future Dream Cruise. But did you actually say 1908 San Francisco earthquake? It was 1906. In 1908 all the noise was in Chicago when the Cubs last won the World Series. In any case, the Bullit Mustang rumbles.