Episode 224 – GM To Move Out Of Detroit, GM’s CFO In Trouble, Paice Lawsuit on Toyota Hybrids

September 9th, 2009 at 12:00pm

Runtime 7:29

General Motors could abandon its headquarters building in the city of Detroit. Reports indicate GM’s Chief Financial Officer, Ray Young, will be fired from the company. More details on the lawsuit Toyota lost over hybrid patent infringement. All that and more, plus John answers viewer questions in the “You Said It!” segment.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. GM could move its headquarters out of Detroit. It could also get rid of its CFO. And more details on the lawsuit Toyota lost over hybrid patent infringement.

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

This is Autoline Daily for Wednesday, September 9, 2009. And now, the news.

General Motors could abandon its headquarters building in the city of Detroit and move its operations to the company’s Tech Center in Warren, Michigan. Grapevine sources tell Autoline Daily that OnStar will be the first GM operation to make the move. These rumors had surfaced earlier this year, and it sounds like GM’s new board of directors is reviving the concept.

Along with that, the Detroit News is reporting that GM’s Chief Financial Officer, Ray Young, will be fired from the company. It says GM has already hired a search firm to find his replacement. I would point out that GM’s CEO, Fritz Henderson, held that CFO job before Ray Young, and there are more than a few industry observers who question if Henderson will survive the wrath of the new GM board of directors.

Last week we reported that the Paice Company filed suit with the International Trade Commission to prevent Toyota from importing anymore hybrids into the American market. We pointed out that Paice had successfully sued Toyota over patent infringement and now Autoline Daily has more information on that law suit. In April of this year, Paice was awarded by the Federal district court in the Eastern District of Texas a future royalty of $98 for every Prius sold. So far, Toyota has sold over 1 million Priuses worldwide since it first came out. If this stands up under appeal, Toyota could face a big fine, but more importantly, it would lose face over having infringed on someone else’s patents in bringing hybrids to the market.

The U.S. Congressional Oversight Panel says it’s unlikely taxpayers will get all of the $81 billion back from bailing out GM and Chrysler. According to the AP, the panel said what the government recoups will depend on each company’s stock price when they go public again. The report also recommended that the Treasury Department create a trust to put its holdings in, to avoid a conflict of interest. And it said that the legality of using TARP funds to provide aid to the auto companies should be looked into.

Chrysler began building minivans at its Windsor plant in Canada for global markets. According to The Detroit News, the vans being built are right-hand-drive and are equipped with diesel engines. Previously, Chrysler built minivans for export in St. Louis, but it closed that facility last year. And the company used to contract Magna Steyr to build minivans for the European market at Magna’s plant in Austria. Plans to move production to Windsor were under way before Chrysler was forced into bankruptcy. Last year the company sold over 21,000 minivans outside North America.

According to Ward’s, Indian company Mahindra is targeting the first week of December as Job One for the launch of U.S.-bound pickups (subscription required). The company’s American distributor, Global Vehicles U.S.A., is expected to start selling trucks in the Southeast U.S. early next year. The TR20 and TR40 models feature a 140 horsepower, 2.2-liter clean-diesel engine with urea injection and a six-speed automatic transmission.

McLaren released details about its long-awaited new supercar. Autoblog reports the MP4-12C was developed entirely in-house and features F1 technology, especially involving carbon-fiber. It’s powered by a 3.8-liter twin-turbo V8 with … 600 horsepower! That should be good for a top speed well north of 200 miles an hour, with 0 – 60 times in the low threes! The MP4-12C – gosh, that’s a clunky name – is expected to carry a £165,000 – roughly $273,000 – price tag.

More on the upcoming Frankfurt Motor Show. Photos of the new Gullwing Mercedes, the SLS AMG, have made their way onto the internet. This menacing sports car should be powered by AMG’s spectacular 6.3-liter V8, no surprise there, with somewhere north of 560 horsepower. It should sticker for around 180,000 euro, about $261,000! On a greener note, Peugeot has revealed details about its upcoming all-electric car. Nothing groundbreaking to report here, the iOn is a rebadged version of Mitsubishi’s iMiEV, and should deliver a range of 81 miles.

Coming up next, it’s time for You Said It!

And now it’s time for some of your feedback.

This is “You Said It!” Every day we get dozens of comments and questions from you, our viewers. “You Said It!” gives me a chance to respond.

Salvador G. saw our report on the president of Audi of America, Johan De Nysschen saying the Volt was a car for idiots and wrote in to say, “Do you know if anybody has leased a Volt for testing or something of the sort? I’d like to know what kind of feedback GM is getting for this car. I really hope for them to prove the President of Audi U.S. wrong.”

Salvador, no one has a lease on the Volt yet. The car is still under development. I did see one on the road this weekend near GM’s proving grounds, which shows they’re doing real-world development on this car even on holiday weekends.

Nick Stevens saw our report on the Hyundai Genesis coupe and had this to say, “As for the Hyundai so-called ‘Genesis’ Coupe, it is an utter FRAUD by Hyundai to name this vehicle a ‘Genesis,’ as it has little in common with the real Genesis (the Sedan), and far more in common with the non-luxury coupe, the Tiburon.”

Nick, I could not agree more. I would not call it a fraud, but to me it makes absolutely no sense, especially from a marketing standpoint, to use the same name for both of these very different cars.

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

36 Comments to “Episode 224 – GM To Move Out Of Detroit, GM’s CFO In Trouble, Paice Lawsuit on Toyota Hybrids”

  1. Nick Stevens Says:

    Hi John (McElroy)

    I was so pleased that you stated how much you agree with me on the misnaming of the “Hyundai ‘Genesis’ Coupe”, that I am willing to follow your lead (that you would not call it a fraud) and just call it misleading advertising.

    You wondered why Hyundai chose the above “gimmick”, and we discussed it here too. I am convinced they did it on purpose, to mislead the consumer, and to take advantage of the great feedback they got on the Genesis Sedan.

    I (unfortunately) predict that they will be very successful in having tens of thousands of buyers willingly part with the pittance they ask for the coupe ($21k-$25k for the two engines) if it shares the same name with the sedan that is almost TWICE as expensive!

  2. paulstewart Says:

    Thar’ she goes… Boys rumors at GM are facts. There just delayed a little. The 1st day that rumor started a few momths ago about GM leaving town made sense then as at does now. It’s just a matter of time. Hey’ if Nissan could do it from California why not GM. Sad to say. Auburn Hills next on the list.

  3. Tony Gray Says:

    The other day I said Ray Young was one to watch. I suppose we can watch him go out the door!

    It also looks like McLaren hired a guy from BMW to name their new car. I’m surprised it isn’t the mDriveP4-12Cxi

  4. paulstewart Says:

    sorry… months

  5. Nick Stevens Says:

    Mark LaNeve is next. The GM VP that makes your average farm animal seem bright, and Young seem like a Genius by comparison.

  6. Pedro Fernandez Says:

    At this point I don’t believe that even Alan Greenspan could do anything for GM,the future looks bleak, my fellow forum contributors.

  7. Mike Hawkins Says:

    GM is leaving the Renaissance Center? OK, when will the real story be that GM is leaving Michigan with its high taxes and union environment?

  8. Tony Gray Says:

    GM should throw money at the attractive lady who runs the finances at Ford. She always impressed me on the interviews with John.

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  10. Alex Kajdi Says:

    John,

    I believe Ray Young is an honest man based upon the recent interviews he has done with the media regarding the state of affairs at GM while Pre, During and Post Bankruptcy. His knowledge of the inner workings of GM will make him an asset to any of GM’s Competitors.

    Best of Luck Ray!

  11. Jim Sachetti Says:

    But Alex, GM itself does not compete any more. In the immortal words of Monty Python’s parrot sketch, it is a dead parrot. A stiff. Deceased. a Corpse. (from memory)

  12. Jim Sachetti Says:

    It was worth googling. For best results, see the whole thing on U-Tube:

    “…C: Look, I took the liberty of examining that parrot when I got it home, and I discovered the only reason that it had been sitting on its perch in the first place was that it had been NAILED there.

    (pause)

    O: Well, o’course it was nailed there! If I hadn’t nailed that bird down, it would have nuzzled up to those bars, bent ‘em apart with its beak, and VOOM! Feeweeweewee!

    C: “VOOM”?!? Mate, this bird wouldn’t “voom” if you put four million volts through it! ‘E’s bleedin’ demised!

    O: No no! ‘E’s pining!

    C: ‘E’s not pinin’! ‘E’s passed on! This parrot is no more! He has ceased to be! ‘E’s expired and gone to meet ‘is maker!

    ‘E’s a stiff! Bereft of life, ‘e rests in peace! If you hadn’t nailed ‘im to the perch ‘e’d be pushing up the daisies!

    ‘Is metabolic processes are now ‘istory! ‘E’s off the twig!

    ‘E’s kicked the bucket, ‘e’s shuffled off ‘is mortal coil, run down the curtain and joined the bleedin’ choir invisibile!!

    THIS IS AN EX-PARROT!!…”

  13. Pedro Fernandez Says:

    So who’s got more job security: a GM exec or a 39yr old Bunny Ranch employee?

  14. Nick Stevens Says:

    Pedro:

    If they have the same job insecurity, the difference is that the one of the GM exec is far more deserved than that of the far nicer, smarter (!!) and substantially better looking Bunny,

    and in addition the bunny does not cost us, the lonmg-suffering US taxpayers one dime of her very modest salary, while we have to cough up LaNeve’s entire, and wholly undeserved, million-dollar pay (benefits extra!~!)

  15. Chuck Grenci Says:

    I think that the only letters that the McLaren MP4-12C left off were: F-R-E (Ferrari) lol

  16. Pedro Fernandez Says:

    Henderson to LaNeve: Au revoir, Frenchie and watch your ass as the door closes behind

  17. Pedro Fernandez Says:

    Nick: the difference is that the GM execs have to blow a lot of hot air!

  18. Pedro Fernandez Says:

    So who’s the guest tomorrow night?

  19. Nick Stevens Says:

    “GM execs have to blow a lot of hot air!”

    There was little difference between the isolated, clueless GM execs in their “Ivory Tower” and the former Soviet “Politburo” in the Kremlin. It is disturbing how similar many multinational corporations are to inefficient, dinosaur-like former dictatorships, whether “of the proletariat” or other flavored.

  20. Tony Gray Says:

    Rumor has it Thor is the surprise guest on tomorrow’s AAH.

    Just a rumor.

  21. John Says:

    John McElroy,

    “The TR20 and TR40 models feature a 140 horsepower, 2.2-liter clean-diesel engine with urea injection and a six-speed automatic transmission.”

    30 mpg combined, 2633 lb payload, 2 or 4 wheel drive basic work truck…
    from:
    http://wardsauto.com/ar/mahindra_pickup_late_090731/

    Do you know what it will cost ?

    Do you think any U.S. Manufacturers will compete and produce a “no frills” diesel at a economical price to just “get the job done ?

  22. Pedro Fernandez Says:

    Question for AAH guest Thor:Where does that hatred for Buicks and their owners come from? As a Child were you run over by an Electra or left inside a hot Roadmaster for hours or perhaps got a bodily part caught in a Riviera’s mechanical headlight assembly? Please we need to know.

  23. JIm Thykeson Says:

    GM is running to Warren as an austerity measure. The gov’t. botched the CFC program by allowing the parasitical foreigners to high-jack a program that was supposed to rescitate the domestics (our auto industry) not the ones who are putting us out of business! You can’t expect help from people that don’t understand the only way out of this is protectioism. After all, the Japanese, Germans, and Koreans all practice this, so why not us?

  24. Rodney Baker Says:

    John
    With problems looming on the horizon for all Toyota’s hybrids including their top seller the Prius . Could this make Honda(the Insight) the premiere hybrid builder in the North American market?

  25. paulstewart Says:

    I wish to state for the record your honor, I did not bring up the name “Thor” this time. It was the honorable Tony Gray. However the non-apolegitic Larsweenie a.k.a. lower case( thor )is on the mission to brimg the GM hq to mainland China with the help of BMW.

  26. G.A.Branigan Says:

    To answer a question about pricing on the Mahindra clean diesel pickups:The starting price for a 4×4 diesel is something like 22k.This will totally kick detroit’s ass.I am seriosly considering getting rid of my JK to get a Mahindra.Actually,I can sell my JK for more then I paid for it due to all the incentives etc that was around the first of this year.It seems fiat/chrysler doesn’t respond to the customers,ala GM,so I have no more loyalty to them.I will have a small diesel 4×4 pickup.I would rather it be jeep or ford,but they sit around with their thumbs up their asses wondering what to do.In the auto bidness,you snooze-you loose.

  27. C-Tech Says:

    Let’s see, most year one product offerings are usually problem prone, but you’re willing to go with the “no frills” diesel from India? A mechanic’s suggestion, wait for the second generation Mahindra.

  28. Pedro Fernandez Says:

    GA perhaps you should wait to make sure Mahindras are at least reliable and well made b4 committing your hard-earned $

  29. G.A.Branigan Says:

    I won’t run off and jump in one as soon as they are out,but I will check into it very seriously.I am really burned out on the lameass excuses from the once big 3.They (big 3) really don’t listen to loyal customers.They produce what they want and then try to create the demand.I said 4 or 5 years ago,the first one with a small diesel 4×4 truck will rule the market,and I really believe that.Many of us need a small truck,and want it diesel powered.You guys would be surprised at the market size here for just such a vehicle.Maybe it won’t sell to good in a city setting,but us country boys have been asking and asking for this forever it seems.As for “first year” problems,we had a brand new 06 liberty crd(second year of production),and it was a great engine/tranny combo,but suffered software problems that the factory just couldn’t,or wouldn’t address.The way I see it,Mahindra is going to be brand new here in our market,as such I’m willing to bet they will back up their trucks better then the big 3 ever did.It’s simple,if they try to pawn off third rate junk,it won’t take long to hear about it,and they will be out of here like fiat was back in the day,but faster.

  30. Jim Sachetti Says:

    Wow.. I see this character Thor has assumed legendary proportions here. Should I begin to feel jealous?

    I went back a bit and read some of his comments on Buicks, and, Pedro, I did not detect any hatred for the brand, his point seemed to be the contrary,

    that it those who buy Buicks (lil old ladies etc) who hate to enjoy driving, or, in the best case, could care less about driving pleasure.

    His other point, which was shared by others, including myself, in this forum, was that it was a horrible mistake by the clueless bureaucrats who run GM today,

    that they shut down Pontiac, and esp. such fantastic vehicles as that 4-door corvette, the Pontiac G8 with the Corvette engine, which will not even become the next Buick GNX, and kept Buick going, with its utterly dismal sales (despite new and good product!)

    BTW, have you seen ads for the current Buick in various mags? They have a rather extravagant interior, not my taste, but I was amazed that there was HAND-STITCHED Leather, as if these were Rollses, not only on the seats, but all around the dash and doors. Not even Thor’s “Magnificent 7″ (LOL) has such luxuries, I have seen its interior (the 95-01 version), they have small areas of hand-stitching around the side airbags, but most of the dash and the sides are plastic. (The new 7 is far better, with hand-stitching all over the place as well)

    .

  31. Nick Stevens Says:

    “# Rodney Baker Says:
    September 9th, 2009 at 8:54 pm

    John
    With problems looming on the horizon for all Toyota’s hybrids including their top seller the Prius . Could this make Honda(the Insight) the premiere hybrid builder in the North American market?”

    Rodney, it pains me to say it, as I enjoy Hondas far more than Toyotas in general, but the new Insight is a cheapo Hybrid with far inferior MPG in most tests than the new Prius, which is an amazing machine. I saw one parked near my home last night, too, in electric blue or sth, and it looked great. Except that from a distance its wheels looked too small compared to its high sides, up close it is very high-quality and good looking. It is worth the $28k (with leather and all options), if the dealer does not slap a $5,000 overcharge exploiting its popularity (they got three DAYS of inventory! as compared with GM and Chrysler’s recent four MONTHS on their fleet, and two YEARS for the Aveo-derived Pontiac. But these have also fallen after the cash for clunkers sales)

  32. Scott Says:

    Tony, in response to your query in blog #7, here ya go:

    Ellen Hughes-Cromwick joined Ford Motor Company in 1996. Her role as Chief Economist at Ford is to direct the corporate economics group with major responsibility for the company’s global economic and automotive industry forecasts used to support business strategy, finance, and planning. She leads the group’s effort on special industry studies and strategic issues that provide input into Ford’s evaluation of business risks and opportunities in global markets. Ms. Hughes-Cromwick serves on the company’s Treasury Matters Committee, Global Risk Management Committee and advises the finance team on business issues relating to the global external environment for the automotive industry.

    She rocks! She’s been on Autoline several times and she has presents her comments in a professional, very informed manner that leaves others in the dust.

    No wonder Ford is gaining traction – they have the right people in the right positions.

  33. Alex Kovnat Says:

    Mr. J. Thykeson:

    I would just as soon let each individual American road-going citizen use his or her own concience, in deciding whether or not to practice protectionism when buying a car.

    Its bad enough we have to have air bags whether we like it or not, ever more stringent roof crush standards whether we like it or not, ad infinitum. So please, don’t tell me I can’t have a Toyota Corolla or some other non-Big 3 car, just to suit someone else’s emotional and ego needs.

  34. Pedro Fernandez Says:

    GA I thought it was a good move for Mahindra to begin selling here in the SOutheast where the diverse population is more receptive to trying out new brands. Also you have your mix of city/suburban use and also country-style driving also. If it doesn’t succeed here, then I don’t think it would do well in Mid-America.

  35. Nick Stevens Says:

    GA: Have you seen pics of the interior and read detailed reviews of the MAhindra? This sure is not a 21st century vehicle, and the interior is both spartan and very cramped (but it does have good visibility, the review said). Also, you are taking a huge risk re the reliability. Even when they copy Japanese designs, as the “Maruti” (=Suzuki) small cars they even exproted, the Indians did a very poor job on reliability. I have a friend overseas, a successful dentist, who could have any car she wanted, and bought one of these for driving around town, and it was an utter nightmare, total junk.

    The Mahindra will not just be marketed to the Southeast, but in particular to pockets of deep poverty in rural areas where trucks are popular, such as the Ozarks/Appalachians, and where people are not as demanding consumers. But I wonder if they will have good enough credit to be able to get as loan for the $20k truck. And even if they do, if they will be able to make the payments.

    I don’t expect to see many of them in FLorida or the wealthy parts of GA or SC.

  36. Kit Gerhart Says:

    If they sold a really basic version of this truck with a manual transmission for about 15K, it would be a hit. I can’t see that many people paying near-Tacoma prices for it, though.

    The Indian vehicle I’m familiar with is the Enfield motorcycle that has been sold here for a few years, and while it is cool to be able to buy a new, 50-year-old motorcycle, the quality is very poor, with wiped cam problems and other major issues.