Episode 213 – Germany Threatens GM, Toyota Issues Major Recall, Gas From Your Garbage

August 24th, 2009 at 12:00pm

Runtime 6:34

Germany gets mad at and threatens General Motors because it can’t decide who to sell Opel to. Toyota recalls 700,000 vehicles in China due to a quality defect. E-Fuel starts selling stills so you can make ethanol from garbage. All that and more, plus a look at how Honda is being forced to change its strategic plans.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. Germany gets mad and threatens General Motors. Toyota issues a big recall in China due to a quality defect. E-Fuel starts selling stills so you can make ethanol from garage. And our feature story looks at how Honda is being forced to change its strategic plans.

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

This is Autoline Daily for Monday, August 24, 2009. And now, the news.

Germany is getting pretty impatient with General Motors, because it still hasn’t decided whether to pick Magna or investment firm RHJ to buy part of Opel. Now, German Chancellor Angela Merkel is weighing in on the issue. The Wall Street Journal reports she’s telling GM to act soon (subscription required). The head of the state of Hesse, where Opel is located, says there’s no justification for a postponement. Reuters quotes the head of the Opel union of threatening and I quote “spectacular measures” if GM doesn’t decide soon. But the GM board doesn’t like the deal the German government cooked up with Magna.

The Wall Street Journal reports that Jim Press, the co-CEO of Chrysler, will leave the company in November (subscription required). Press spent 37 years at Toyota where he rose to the highest position of any non-Japanese executive, even being elected to the company’s bBoard of directors. He shocked the industry when he left Toyota to join Chrysler, then owned by Cerberus, presumably for a ton of money. Earlier this year he begged Chrysler dealers to buy vehicles from the factory to save the company. Many of those dealers felt betrayed when Chrysler announced it was getting rid of 789 of them. And now, with Press leaving, there is no doubt that Fiat CEO Sergio Marchionne is the only one who is truly running Chrysler.

Chinese company Tengzhong is a step closer to buying Hummer. Reuters says opposition to the deal from the Chinese government has died down, and a deal is only weeks away. It’s been rumored that Tengzhong will purchase Hummer for about $200 million.

And speaking of China, Toyota is recalling nearly 700,000 vehicles there due to a defect with power windows. According to the AFP, Toyota is recalling the Camry, Yaris, Corolla and Vios due to excessive lubricant used in the electronic controls that may interfere with the opening and closing of windows or cause short circuits.

Maserati is unveiling a new model at next month’s Frankfurt Motor Show. The GranCabrio is a Pininfarina-styled, cloth-top convertible, and the brand’s first four-seat cabrio. The company says the car’s designed for men and women that love to live life in an “understated but sophisticated” manner, whatever that means. Behind the trident emblem it features a 4.7-liter V8 engine with 323 kW of power – that’s about 433 horsepower! Look for the GranCabrio to go on sale next spring.

The LA Times reports that a company called E-Fuel is developing a home system that allows you to turn organic waste into fuel. The $10,000 MicroFueler is designed to convert stuff like grass clippings, cardboard and beer into cellulosic ethanol. The plan is to have tanker trucks pick up waste from breweries and food processors and drop it off at home stations. Owners are charged $2 per gallon as they pump the distilled fuel. With a special permit, it’s legal to distill up to 10,000 gallons of ethanol per year FOR FUEL, as long as you do it on your own property and don’t sell it to others.

Coming up next, a look at how Honda has been forced to change its strategic plans for alternative cars.

We’ll be back right after this.

Honda is a company that marches to the beat of a different drummer. It likes to do things its way, no matter what the experts think. For example, it has stuck with front-wheel-drive models for its Acura brand, despite the fact that the luxury segment is dominated by rear drive cars. And it has never gone with V8 engines for Acura, even though the luxury segment is dominated by V8s.

But every now and then Honda has to back-track on its plans. About 15 years ago I had dinner in Tokyo with Hiroyuki Yoshino, then president of Honda, who told me Honda would never build a diesel engine. But then, when diesels became so popular in Europe that you almost couldn’t sell cars without one, Honda came out with a terrific diesel.

More recently Honda said it would not build electric cars because so many countries in the world, notably China and India, use coal to make electricity. And since those coal plants have next to no emission controls, Honda argued that electric cars would actually make emissions worse, not better. But now reports out of Japan say Honda will show an EV at the Tokyo auto show this fall. And its opposition to EVs could leave it lagging behind everyone else. The Associated Press says Honda’s EV will not show up until the first half of the next decade.

And all this calls into question all the effort Honda has been pouring into hydrogen fuel cells. While they could emerge as the cleanest cars out there, there simply isn’t the infrastructure to distribute hydrogen for the transportation sector. So this is another example of how Honda is going to have to change its strategic plans.

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

31 Comments to “Episode 213 – Germany Threatens GM, Toyota Issues Major Recall, Gas From Your Garbage”

  1. Thor Says:

    The only interesting news piece today was the segment about Honda. Not that I expect that their EV will ever amount to anything, as well as anybody else’s silly EV. But because

    1. Honda wanted to introduce a diesel in the US in several of its models last year, when gas went above $4/gallon, but after gas prices retreated, it myopically (short-sightedly) reversed itself again and is not bringing its excellent Europe Diesels to the US. These engines would make the Accord get 40 MPG Highway easy and the Civic maybe even 50 MPG..

    2. Honda blew it with Acura. Few remember todaY that Acura was in fact the FIRST and Successful attempt of the Japanese to enter the near-luxury market segment, with their ecxcellent original Legend sedan and coupe. But that was 25 years ago. Now Acura is dying a slow death, it never convinced buyers that it is a true luxury brand, and its problem is basically that its cars are Honda Clones at $5-%15k more a piece. When Hondas are already so good, why give a rat’s behind about Acura?

  2. G.A.Branigan Says:

    Kudos to Honda…….a diesel,very cool.As far as GM doing a stalling tactic,for once I can’t blame them,sorta.They’re holding out to be assured that they can buy it back when they get their act together.Too bad for GM cause I don’t believe they will ever get it together.

  3. Pedro Fernandez Says:

    I also like to live in an understated but sophisticated manner, so I’m keeping my 98 Corolla. Too bad about Honda not sure which way to go, because they make really good products, but their poor decision making has held them back. Like why not a flagship V8 for the Acura brand like Lexus and Infinity did? Most luxury buyers don’t even consider Acura. And have some guts and bring diesels here.

  4. Alex Kajdi Says:


    Maybe Obama should tell the Germany Government to Cool It, since we the American People are the majority stakeholders in GM! If the Germany’s want to threathen GM well maybe it’s time for us Americans not to buy Germany cars.

    I have written to Honda that the Hydrogen fueled highway is unobtainable for atleast twenty to thirty years because of the required changes to the fuel distribution infra-structure. Also it takes four times the electricity to generate hydrogen then simply plugging in your Electric Vehicle. Honda needs only to replace the hydrogen tank in it’s Hydrogen vehicles with a battery pack mated to an electric powertrain. To extend the range of the vehicle, I bet one of those Portable Honda generators would do the trick. The Generator would be able to recharge the batteries and even prove enough electricality to power the vehicles on a as needed basis. The generator should be tuned for all types of fuels form gasoline, E85, E15 to Bio-Fuels. This would allow to sling shot into the front of the pack when it comes to electric vehicles. Asimo is a perfect example to all the knowledge Honda has in sophisticated electronic controllers and elctric motors needed in an EV.

  5. Tony Gray Says:

    I just see that John did not address the growing clamor over last week’s Corvette vs Suburban contest answer.

    Just wait until the AP gets THAT on the wire….

  6. dcars Says:

    I would bet that GM wanted to sell Opel to RHJ, but the German government made such a stink that it made that choice impossible. A plan to take them thought bankruptcy, thus cancelling all contracts including a labor agreement, seams like a plan. My boss would take them through Bankruptcy. GM made an alternative agreement with RHJ that would have saved jobs in Germany and made most parties happy. Since they are choosing to not cooperate on racial grounds (anti-US) then why not make the best deal for GM.

  7. Thor Says:

    The Germans are tough negotiators and major cheapskates, where $ is involved. But John has no evidence to repeatedly use the word “mad”. His other word, “impatient” was far more accurate.

  8. paulstewart Says:

    The hillbilly comic book hero/thor has spoken.

  9. pedro Fernandez Says:

    Oh, here we go again! in the words of Rodney King: “Can we all just get along?”

  10. G.A.Branigan Says:

    @Thor:Since this is John’s show,he can phrase it anyway he wants too.Let us know when you get your own show,we’ll be sure to watch.

  11. Tony Gray Says:

    This just in….

    The AP Story on the Corvette/Suburban controversy was bumped for a full page paid ad on the upcoming Thor/paulstewart cage match.

  12. paulstewart Says:

    O’ to be True.

  13. pedro Fernandez Says:

    WE should have a 2 man demolition derby: Thor in a 7 series and Paul in a GM car.

  14. paulstewart Says:

    Sorry guys I won’t give in to a internet (lower case)b ully even if he comes equiped with a hammer from asgard. Who is always right & never wrong.

  15. Rafi Says:

    Another Excellent Show! Thanks Mr. McElroy and everyone else at Autoline.

  16. Max Christensen Says:

    @ Thor

    To echo G.A. Branigan’s words, this is John’s show and we (including you, or maybe especially you) are just invited guests. John could shut this forum down at any time, but apparently has chosen not to, if for no other reason than he’s a gentleman who obviously can take criticism ……. something we can’t say for you.

    Also, still waiting for the little itty bitty apology to everyone from you for last week. Takes a pretty small person to not be able to say they are sorry, shake hands, and act like a man, even if they believe they were not wrong. Tsk tsk……….

  17. dcars Says:

    I looked up the phrase “hammer from Asgard” thats cool! It’s difficult to judge tone on the internet, but we should all try to keep our comments as sociable as possible.

  18. John Says:

    John McElroy,

    Thank you for another great Episode of Autoline Daily.

    All the Best.

  19. Alex Kovnat Says:

    The proposed brew-your-own-ethanol idea is not a good idea, IMHO. For obvious sociological reasons, I don’t believe private individuals should be encouraged to brew ethanol. I think brewing ethanol-based automotive fuels should be left to experts who know what they’re doing, with proper quality control to assure nothing gets into my car’s gas tank that doesn’t belong there.

  20. Jim Sachetti Says:

    McElroy wrote a more detailed article in Autblog the other day where he extolled the benefits of the cash-for-clunkers program. His comments relied almost exclusively on comments from a number of dealers, who of course were ecstatic with the freebie (except that they were not paid even 2% of what they were owed by the Govt and some had serious cash shortages).

    Some of the dealer comments were that the people that showed up with clunkers were new customers, who normally would buy used, but now could afford a new vehicle. But some other dealers today in Automotive News speculate that the sales will result in a large number of repos, as these buyers may not be able to keep up with the payments.

    The Council of Econ Advisers in DC estimates the program may help US GDP grow by an extra 0.3-0.4% in the 3rd Quarter 09, but of course others point out that the downside is that future demand will go down by a similar amount. The COuncil does not care much about that, since now is the time the economy needs help.

  21. Thor Says:

    # paulstewart Says:
    August 24th, 2009 at 1:28 pm




  22. Thor Says:

    “# pedro Fernandez Says:
    August 24th, 2009 at 1:51 pm

    WE should have a 2 man demolition derby: Thor in a 7 series and Paul in a GM car.”

    No we should not!

    Do you seriously suggest that I smash this work of art “magnificent 7″ untimate driving machine against some StupidUglyVehicle breadvan on stilts GM SUV or obese 5,000 lb Crossover?

    Especially when the current 7 series platform has already been used to produce the new ROlls ROyce “Silver Ghost”?


    But if you want to smash your Corolla against Paul’s clunker, be my guest.

  23. G.A.Branigan Says:

    @Thor:You are wrong about everyone always agreeing with John.There are a number of things that we disagree with John about.It’s the way one disagrees that makes a difference.Your just boorish.

  24. Thor Says:

    “Your just boorish. (SIC!)”

    Learn to spell, then criticize. YOU are the bullies, the 4-5 of you in THIS forum that, INSTEAD of complaining about that Village Idiot’s UNPROVOKED attack, AFTER 7 SERIOUS posts, INSTEAD attacked me and made the ridiculous claim that just because this is John’s show, I do not have the FREEDOM OF SPEECH to disagree and criuticize WHAT EVER I FEEL LIKE.

    and in any case, it is JOHN’s forum, so I will answer to JOHN and JOHN ALONE, NOT the likes of PaulStewart and Christensen.

    You may want to ask THEM to contribute anyTHING of substance to this group, instead!

  25. G.A.Branigan Says:

    @Thor:I spelled boorish correctly,look it up.

  26. Thor Says:

    G.A. Read my post carefully, I did not claim you spelled “boorish” incorrectly. Your spellchecker did not catch your error because it was also a valid word. Your error was the “your” in “your just boorish”. It should be “you’re”.

    PS You can claim that helping you out here is boorish too, for all I care….

  27. G.A.Branigan Says:

    @Thor:You should worry about your own spelling.You just don’t play well with others do you?

  28. Max Christensen Says:

    @ Thor

    Go back and re-read some of your past posts ….. you’ve had as many misspelled words and grammatical errors as anyone in here, but nobody has complained about it. Spelling and grammar are not a sign of intelligence.

    But to again echo Mr. Branigan:
    “You are wrong about everyone always agreeing with John. There are a number of things that we disagree with John about.It’s the way one disagrees that makes a difference.Your just boorish.”

    He is so correct. I don’t think any of us totally agree with all that John says, but it’s the way you disagree and your tone that make the difference.

    And two more things ………..

    ONE: Why don’t you set up your own web show so that all of us can come in and criticize the hell out of you and your comments the same as you do with John.

    TWO: Still no kind of apology. I sure wish I could be as perfect and high and mighty as you so I would never have to apologise to anyone every again. No, on second thought, I’m glad I’m not like you – in ANY way!

  29. Thor Says:

    In Woody Allen’s 1975 “Love and Death” movie, located somewhere in Russia, a village is hosting a Village Idiots COnvention.

    At the entrance of the village, a big banner is held high, welcoming the attendees.

    It says “WELCOME, IDIOTS!”

    Now why did the last few replies in this forum remind me of this?

  30. Max Christensen Says:

    Because YOU are an idiot?

  31. John Says:

    Does anybody know where Thor is from ?