Episode 225 – Magna Gets Opel, GM Chairman To Appear In Ads, Daimler & Renault Team Up

September 10th, 2009 at 12:28pm

Runtime 7:28

General Motors finally sells Opel to Magna. GM’s chairman will show up in future advertisements for the company. Renault and Daimler are in talks about teaming up to make a four-door version of the Smart. All that and more, plus a look at what Peter De Lorenzo thinks is the greatest piece of ad copy ever written.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. Is the Opel saga finally over for GM? This just in, GM’s chairman will show up in future advertisements for the company. And Renault and Daimler team up to build a four-door smart car.

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

This is Autoline Daily for Thursday, September 10, 2009. I’m Peter De Lorenzo, the Autoextremist, filling in for John who’s out of town today. Anyway, on with the news.

GM’s Opel dance may finally be done. European reports from both the Associated Press and Reuters are saying that the Canadian auto parts group Magna is the winner, with conditions. The official word comes out in a scheduled press conference with GM and the Opel Trust so we don’t know exactly what strings are attached to the deal at the time of our taping . . . but with the way this story is going we’ll have to wait and see if this is the final chapter or, if like movie villain Michael Meyers, you just can’t kill it.

Meanwhile, over on the North American advertising scene, it looks like the “wanted posters” that GM’s new sheriff is printing up will — SURPRISE! — have his picture on them. Bloomberg News is reporting that General Motors’ Chairman Ed Whitacre will dust off his best Lee Iacocca impression and be front man to a series of upcoming television ads spotlighting some of the company’s best products. GM has yet to confirm the new spots but word is supposed to come “officially” before the end of the week. I wonder if the soundtrack they use will go a little something like this . . .

Lotus will unveil a Volt-like powertrain at next week’s Frankfurt Auto Show. It consists of a 1.2-liter three-cylinder engine that weighs just 123 pounds and is mated to an electric motor and battery. The engine can run on methanol, ethanol, or gas. Lotus plans to offer the powertrain to other automakers and says it can be put into production quickly because it has sourced parts from other suppliers instead of developing them in house.

Renault and Daimler are in talks about teaming up to make a four-door version of the Smart. Really? Why? According to the AP, the two companies would design and produce the model together. Smart currently offers only a two-door version, the fortwo, although the company did offer a four dour version between 2004 and 2006 which it developed with Mitsubishi. It stopped production because it wasn’t profitable.

And now for some two-wheeled news. Honda has developed a fully-automatic, dual-clutch transmission for motorcycles. Starting next year, the company will introduce the new six-speed gearbox on some of its high-powered sport bikes. It should deliver lightning-fast gear changes and fuel economy that’s equal to or BETTER than a traditional manual transmission. Interesting that Honda is doing it on their bikes, before their cars.

More big reveals expected at Frankfurt. Mercedes-Benz is set to unveil a PLUG-IN hybrid version of its S-Class flagship. The Vision S550 features a 44-kilowatt lithium-ion battery pack that should deliver an electric-only range of 18 miles. Backing up the battery is a 3.5-liter gasoline V6. The company claims the car should achieve a CERTIFIED fuel consumption rating of just 3.2 L/100 km, or about 74 miles per gallon, and it should sprint from 0 to 60 in 5.4 seconds. Details on the drop-top version of the Audi R8 have finally come out. Thank you Autoblog. The R8 Spyder looks every bit as gorgeous as the two-door version, maybe even better without its characteristic sideblades. Expect V10 power under the hood, or rather, hatch since the engine is mounted in the back. Any way you slice it, the car looks delicious in chocolate brown.

Coming up next, a look at what I think is the greatest piece of ad copy ever written, we’ll be back right after this.

As many of you who follow my column on AUTOEXTREMIST.COM already know, I reminisced this week about one of the greatest – if not THE greatest – pieces of ad copy ever written.

“The Penalty of Leadership” was written by Theodore MacManus for Cadillac, and it first appeared in the Saturday Evening Post on January 2, 1915.

Dramatic, compelling and provocative, that piece of ad copy ran just twice, but remarkably it seared the image of the Cadillac brand in the minds of generations of consumers to come as the best there is.

Fast forward to today and Cadillac has built up a decent reputation with some excellent products on the ground now and some intriguing new entries coming – like the sensational CTS Coupe – but it will take more than great products in order for Cadillac to achieve greatness again.

The question is, can Cadillac and the people responsible for Cadillac’s stewardship get there? Do they really get it and understand what it will take?

Right now Cadillac has managed to claw its way back to respectability. But it will take an all-consuming passion, a total commitment, a relentless want to, if you will, on the part of the entire organization to achieve the next level.

It will take a clear understanding of who they are and a clear vision as to where they want to go.

It will take a focused consistency in their design and engineering regimens and particularly in their product execution.

If Cadillac wants to get back, all the way back, to the reputation it once enjoyed and thrived upon then it must put its stake in the ground and understand that the brand image that was seared in the consciousness of consumers for decades has to not only be renewed, it must be embellished and enhanced for this new age.

If Cadillac revolves its existence around its famous ad theme from long ago, it will be forced to will themselves to greatness, to soar beyond their competition and occupy a plateau all their own.

In short, Cadillac needs to become The Standard of the World once again. If it strives for anything less than that, it will be a travesty.

And that’ll do it for today’s top auto news, but don’t forget to check out Autoline After Hours, tonight, starting at 7:00 p.m. Eastern Time. McElroy’s still out of town so I’ll be hosting AGAIN. Anyway, thanks for watching, I’ll see you tonight.

33 Comments to “Episode 225 – Magna Gets Opel, GM Chairman To Appear In Ads, Daimler & Renault Team Up”

  1. Nick Stevens Says:

    “McElroy’s still out of town so I’ll be hosting AGAIN.”

    Good, but still no word on the GUESTS, will there not be any???

  2. Darron65 Says:

    He may look like Peter De Lorenzo, but he sure speaks faster. Interesting.

  3. Nick Stevens Says:

    I thought he was far more careful reading this day’s news than everywhere else I have seen or heard him, and esp. on “Autoextremist.com”

  4. Pedro Fernandez Says:

    Peter drinks a 5 hour energy drink in the morning and by the time AAH comes on, its effect is gone and he’s just chilling and crashing, At the next GM news conference Rep Wilson should stand up and shout “You lie”.

  5. John V Says:

    Maybe I am just crazy, but I do not think Ed Whitacre will be received like Lee Iaccoca was.
    First, this is not the late 1970s. Significant numbers of people did not react with such anger and disgust then as today about the government offering low cost loans to an automaker in trouble. Even if Whitacre is as charismatic as Iaccoca, I think it will be received poorly.
    Second, the brands need to define themselves without the distraction of being defined as part of GM. That has been discussed many times on this website.
    They must make sure it is one of the greatest ads ever.

  6. hermann the german Says:

    Hey Peter, now you know what it feels like to be substitute teacher for a day. You reading these comments?

  7. Alex Kajdi Says:

    Peter,

    Your Advice to Cadillac is dead on! Great Product inspires great material for advertising. Ed Whitacre and the reach of GM’s Board needs to slim down GM into two components, Cadillac(Luxury Brand)and Chevy (Bread and Butter Brand). In this way GM can cut product development and production costs. This will leave more dollars available for advertising and warranties / promotions. Whitacre needs to focus all their efforts on the product so that they can rebuild General Motors in the eyes of the American Consumers. Hyundai and KIA have been both raising the bar as it relates to both product offerings and warranties. The Hyundai Assurance Plan might be one of the greatest advertising programs ever developed.

    Buick died once Tiger Wood’s contract was not renewed. Buick needs to be sold off to China and GMC should become the Medium to Heavy Duty Truck and Bus Divison for GM. If Holden is GM’s brand in Australia, leave Buick to live on in China. I would love to see a business plan with an Ad campaigne which fuses all the current and past GM Brands into the “New General Motors” – Post US Government Led Bankruptcy. One Corporate Identity with the best products and warranties on the face of the planet. The Consumer is going to buy the product which gives them the best Bang for the Buck! Great Products with outstanding Warranties and High Residual Values are what the majority of consumers are looking for.

    You are right Peter, “Smart for Four” what for? The Smart Car was designed for areas outside North America. A four door version will again be unprofitable when it competes against the Civic, Corolla, and the KIA New Forte.

    I believe the Obama Administration should tell the German Government to stop pressuring GM to sell Opel to Magna, since the the US Federal Government is GM’s major stakeholder!

    Have fun tonight on AAH.

  8. Nick Stevens Says:

    If the success of Buick relied on having Tiger Woods, a person who is an expert on GOLF and NOT on Autos as a spokesman, it speaks badly for both Buick and its prospective buyers.

    I will make a point of intentionally NOT buying ANY product some idiot celebrity sells, EVEN if it is a product in their areas of expertise! Because even in that case, I would be a damned fool to pay the huge premium on a pair of sneakers that Michael Jordan touts, as opposed to an IDENTICAL Generic pair whose makers did not have to pay the greedy athlete $10,000,000.00 to endorse it.

    But I understand I am a minority on this..

    Also, the rest of the world ALREADY had a SMART forfour model, an extremely ugly POS that was not even a new design, it waas one more example of dishonest badge engineering, as it was identical to some POS Mitsubishi sedan.

    No wonder the UGLY as sin POS failed miserably.

    And now the damned fools want to repeat their blunder?

  9. Dan Clemons Says:

    Peter, nice job! I could not agree more with you on the future of Cadillac and what GM needs to do to be on top again. Ford is already well on their way to becoming the best American automaker. GM can no longer wait for the market to improve before they do.

  10. Chuck Grenci Says:

    Pretty big news day. Hey Peter, you did a pretty good job too; see you tonight for AAH.

    I hope GM’s strings on Magna are the right ones.

    I think I’d have more faith if Lutz was making the commercials (but the substance is more important than who presents it, I hope).

    Honda’s double clutch transmission is going to debut on their VFR-1200 (I believe); this transmission is either fully automatic or paddle-type shiftable). Being a traditionalist, I believe I’ll keep my clutch (at least for now).

    I believe M/B’s S-class hybrid may be leaning towards the optomistic with 74mpg; but I’ll keep an open mind and do a wait and see.

  11. Nick Says:

    Peter well done (it’s tough) I look forward to after hours tonight.

    You may want to take a little of the starch out when reading the prompter, it kinda came off a little “animatronic De Lorenzo.” But good stuff man.

  12. Jim Sachetti Says:

    Chuck: Heads up: Since the Mercedes S-class hybrid is a “PLUG-IN” (see above), the 74 MPG is not just optimistic as most Euro MPG estimates are, compared to our far tougher new EPA MPGs (2008 on),

    It is completely MEANINGLESS. It is like the silly 230 “MPG” of the stupid Chevy Volt.

    With its badge engineering and now its patently false MPG claims (PLUG_IN Hybrid estimates DO NOT include the cost of the ELECTRICITY rechargings, in most or all cases!), it seems that a lot of car people in Stuttgart as well as in Seoul think we must be a bunch of uninformed idiots!

  13. Chuck Grenci Says:

    Absolutely Jim. I think as these vehicles get more main-stream the numbers will make more sense as they become more assimilated by us human-types.

  14. Kit Gerhart Says:

    I would have expected Honda to do the DSG on the Gold Wing first, but it should be great on the sport bikes, if the people who buy sport bikes will accept it. They will need to do a lot of fancy “power management” tricks to keep the bike under control and front wheel on the ground with an automatic big-engine sport bike.

  15. Kit Gerhart Says:

    I was hoping GM would somehow keep Opel; they need them for future designs, but it sounds like the Magna sale is now a done deal.

  16. Jonathan of Dallas Says:

    I’m so far not a fan of hybrids or especially the malnourished SMART car, but I would bet if there was a way to put “Kick in the pants power” to accelerate it to 60mph in less than 6 seconds for keeping up with traffic and still get the economy of a typical 4cyl car, I would consider one as a weekly commuter. I’m sure many others would too.

    Here’s a thought…

    The 1.0L Smart4-2 is 1,850# and has 70HP. If it only had a slightly larger engine like the Honda Civic 1.8L 140HP, it would to have the same power to weight ratio as a Vette, Mustang or Camaro V8 and still get 30+ combined MPG. The 4door would need something like a 2.0L 200HP engine if you ever planned to haul some American sized passengers anywhere over 45mph. Your friends should think you were smart for buying the car, not have to push it up the driveway slope to the lunch choice of the day.

    Speaking of fuel efficiency, here is another rant for the DOT folks reading. I’ve had discussions with a DOT friend of mine to understand this one and still don’t get it. If the city, state and local governments really wanted to help with fuel economy, they would replace all stop signs with signal lights and use the sensors in a smart way to keep the traffic lights green for most of the traffic. I find myself in the Dallas area sitting with many other people while NO traffic is coming in the perpendicular direction. This is a HUGE waste of resources. Cities need to use the technology they have to encourage hyper-miling without the commuter trying.

    All lights are supposed to have the sensors to pick up when you are sitting there, but they also have sensors in the road to see you coming from longer distances, they just choose not to use them.

    Governments need to get out of the mindset of waste and start thinking about efficient use of their time, technology, staff and equipment.

  17. G.A.Branigan Says:

    So whitacre is gonna try to polish the gm turd on tv……yawn.You build garbage,you sold garbage,and now you wanna call your products something else.GM has no idea what quality is with a very few exceptions.Your going down gm,along with your polished turds.

  18. Salvador G. Says:

    Nice Job Peter, filling for JohnMc today (Who I can’t believe is hiking down on Argentina again)

    To answer your question on Cadillac I like to ask the following…

    What do you think Cadillac is trying to be???
    -is it a sport sedan brand??
    -a luxury brand?? Or let me put it like this
    Is Cadillac the American version of…
    BMW or Mercedez or Rolls Royce or Even Toyota?

    As I see it (and I accept I might be wrong) Cadillac today is trying to be close to BMW as possible but, between making a wagon, crossover’s and trucks; Cadillac is nothing more than a expensive american version of Toyota.

  19. Kit Gerhart Says:

    With the CTS and STS, it would seem that Cadillac is trying to be an American BMW, but beyond that, it is hard to figure. The DTS which, the last I read, would be replaced with another largish FWD sedan, so that isn’t BMW-like at all. Then, there are the various versions of Escalade. I never would have thought of it, but an article in Rolling Stone a year or two ago pointed out that, for 50 years, Cadillacs have been the car of choice for newly-rich musicians. In the 50′s, it was Elvis with Cadillac convertibles. Now, it is various rap stars in Escalades. That is actually true.

  20. Jim Sachetti Says:

    Kit,

    Given that Cadillacs put more attention to interior luxury than BMWs and that,although their V versions have ample power, they are not as talented handling wise on the track vs the M5s and M3s,

    a better comparison would be between Caddilacs and Jaguars, as well as for the V Caddilacs and the supercharged Jags.

  21. C-Tech Says:

    Hey Jim as far as CTS-V handling vs. BMW you should check out the Autoweek comparison. The Caddy beat the M% in every category. Oh by the way, it costs less too.

  22. Willi Says:

    i think the obama administration should tell the german government to go to hell …

  23. Jim Sachetti Says:

    # C-Tech Says:
    September 10th, 2009 at 10:37 pm

    Hey Jim as far as CTS-V handling vs. BMW you should check out the Autoweek comparison. The Caddy beat the M% in every category. Oh by the way, it costs less too.”

    Hey C-tech: There is a reason it costs more, you get what you pay for.

    and there are 100 or more different auto journals, I am sure you will find one in Detroit that likes the Caddy better. But even Car and Driver, no german mag, tested them and fully confirmed my suspicion: The V has much more power and was faster on a straigth line, but the M5 ate it for lunch on the test track.

    And it is not just about the stats and numbers, I doubt that decades of research and refinement can be attained by a few years and just putting a bigger motor and making a few modifs on an otherwise unremarkable chassis.

  24. Jim Sachetti Says:

    Willi: could you elaborate? Are you upset about Angela’s meddling in the Opel case?

  25. Jim Sachetti Says:

    PS C-tech, why dismiss the jaguar (the XJR and XKR versions) comparison? It reveals that you prefer to compare with the Bimmer, and it reveals that in this class of vehicles, it is the M that is the Standard of Excellence.

  26. Willi Says:

    any gov medling in the automotive business is a detrement to our economy – i believe in free enterprise within our borders, once you extend your business overseas, you’re on your own, bound by the laws of that country – vise versa

    is our government protecting our interests?

    let GM board deal with Opel as they see fit, unfortunately our administration has purchased part of the business with my money, so i say to Merkel: that may be the way it’s done in your country, but i want government to stay out of it

  27. Kit Gerhart Says:

    The real comparison between BMW and Cadillac is the standard CTS vs. the 528. The CTS is a bargain. Cadillac has a car with as much room as the 5 series for 3 series prices, and has performance and cabin luxury to compete well.

    The CTS-V and M cars are very different in their engines, and automatic transmissions when so equipped. They are both fast sedans, but are quite different.

  28. Nick Stevens Says:

    “The CTS is a bargain”

    I test-drove the first Gen CTS. I wanted to drive a manual to take full advantage of its then meager power. The only manual they had in stock was a bare-bones interior, cheap plastics everywhere. The exterior was good looking and striking, but once you are in the cabin, you see the interior, and it was not good. Performance, ergonomics etc were also far inferior than the corresponding, pre-Bangle, 528 of 1997-2003, which was hailed by most enthusiast nags as the best sedan in the world in its class.

    BMW lost its way design way after th eaccursed Bangle meddled with it, to such an extent that none of the current 3, 5 or even the $100k 7 exteriors appeal to me. The 3 coupe looks beter on the outside.

    I have driven the 3, it was the 328 xi, wuth auto, and did not like it one bit, but I did not do many miles on it, and I am partial to bigger, more powerful Bimmers. But if you want high MPG, the 3 easily gets over 30 HWY, and the 335 Diesel is the best of both worlds, outstanding performance AND 35+ Highway actual MPG.

    But no Bimmer is cheap. If first cost is what you worry about, get the Caddy. If total cost incl depreciation and resale, then it’s different. Anyway, few shop the BMW against the domestics, for those who want the best in this class, th ecompetition is Merc and Audi, and to a lesser extent Jag and maybe Saab. But these two have dwindled to next to nothing in sales, and Caddy sales also are off the cliff, despite the clunker benefits.

  29. Nick Stevens Says:

    Here are the numbers, for August and for the first 8 months of 2009, US auto sales for these vehicles:

    CTS: 2,584; 25,526
    STS: 337; 4,609 only!!

    3-series: 9,833; 60,697
    5-series: 3,536; 26,829

    If the CTS is such a good bargain, why aren’t these sales numbers reversed? It makes no sense.

    (I got the nos for other competing makers if you’re interested)

  30. JOHN Says:

    Peter De Lorenzo is a very cool guy…..

  31. Kit Gerhart Says:

    The CTS is a bargain compared to the 5 series if you look at things objectively. Few people buy cars that way, except the people who buy Toyota Camrys because of what Consumer Reports says.

    Actually, in real terms, no $40K+ car is a bargain, if you look at it simply as a transportation appliance. A $27K Chevy Impala will transport 5 people about as comfortably as a CTS or 5 series, and has a bigger trunk. The Impala is a very unexciting car, though.

  32. Nick Stevens Says:

    “The CTS is a bargain compared to the 5 series if you look at things objectively.”

    NO, it is only if you compare applkes and oranges and proclaim the CTS the winner because it is an inch wider, half an inch taller, two inches longer, 100 lbs heavier or lighter, 25 HP mor epowerful, and so on and so on.

    This is NOT a serious way of choosing a major purchase. If this was the case, we would all be driving stupid Impalas and Cobalts too, they too ‘exceed” the acccord and the camry and the civic and the corolla “on paper”, but only with these primitive metrics.

    It is a HUGE case of DENIAL to explain away the vast superiority in sales between the BMW and the CTS by invoking…. COnsumer Reports!

    And it is 100% factually WRONG, Because, if you ever bothered to actually read their recommendations, CR is brutal on BMW as well as on Caddy and recommends neither, and in fact tells consumers to stay away from such masterpieces such as the BMW 7 series etc.

  33. Kit Gerhart Says:

    Nick says:
    “NO, it is only if you compare applkes and oranges and proclaim the CTS the winner because it is an inch wider, half an inch taller, two inches longer, 100 lbs heavier or lighter, 25 HP mor epowerful, and so on and so on.”

    No, the CTS is a bargain compared to the 5 series because it works as well, and COSTS SUBSTANTIALLY LESS when comparably equipped.

    I did not “invoke Consumer Reports” when talking about BMW’s and CTS’s. I was talking about a different group of buyers, those who buy Camrys as simple transportation appliances on the basis of what CR says.

    Sales numbers are not that much of an indicator of how good a car is; it’s an complex mix of things, including the image a vehicle presents. The Jeep Wrangler doesn’t sell as well as it does because it’s a good car, except for the handful of people who actually drive them off-road. The Wrangler sells fairly well because of its “fun” image. BMW’s sell as well as they do because of their “classy” and “sporty” image, never mind that most BMW drivers seem to be busier talking on cell phones than driving the very nice machines they have.